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Old Nov 18, 2009, 12:24pm   #708
 
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travis started this thread Uh-oh... it seems to me that I still do not grasp half of what I'd need to know about how exchanges and trading work, because your explanation just like the other links provide me with more information and yet more confusion at the same time. How the hell does trading work? We need to start everything from pre-history. Start from the 1800s if possible. This is something that's going to take hours to explain. Or I could look for a nice documentary. You and the other fellas are just giving me bits of scattered information, not the full picture. Don't worry about having to tell me how everything works. Thanks for the part of the picture you provided. I will try to put together the puzzle in my own head, as more information will come to me.
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Old Nov 18, 2009, 1:04pm   #709
 
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Originally Posted by travis View Post
Uh-oh... it seems to me that I still do not grasp half of what I'd need to know about how exchanges and trading work, because your explanation just like the other links provide me with more information and yet more confusion at the same time. How the hell does trading work? We need to start everything from pre-history. Start from the 1800s if possible. This is something that's going to take hours to explain. Or I could look for a nice documentary. You and the other fellas are just giving me bits of scattered information, not the full picture. Don't worry about having to tell me how everything works. Thanks for the part of the picture you provided. I will try to put together the puzzle in my own head, as more information will come to me.
It shouldn't matter to you; If you trade FOREX FUTURES; in which case, you don't need to think about bucket shops or ECN - Because its exchange-traded.

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Old Nov 18, 2009, 1:25pm   #710
 
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travis started this thread Oh yes, I've realized a long time ago that I don't need to understand almost anything about finance in order to make money but just to make a good call on whether it will go up or down, and I've realized that it might be a waste of time or even a handicap to understand some stuff. But since I have time and I am at the office doing nothing, I took time to learn something. I want to know. I know I don't need to know.
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Old Nov 18, 2009, 1:53pm   #711
 
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Oh yes, I've realized a long time ago that I don't need to understand almost anything about finance in order to make money but just to make a good call on whether it will go up or down, and I've realized that it might be a waste of time or even a handicap to understand some stuff. But since I have time and I am at the office doing nothing, I took time to learn something. I want to know. I know I don't need to know.
Thats not really what i meant; Ofcourse you should learn about such things anyway; but in relevence to your trading of Forex (which is futures?) you may read on the internet about ECN and retail; but as you trade on the CME exchange - You don't trade ECN nor retail... Whereas most FX traders trade via a bucket shop or an ECN market place...

In terms of learning more about trading though; yeah, you should try to learn this stuff - Just make sure you distinuigh between retail FX and the type of FX you trade... Because they aren't the same (Same markets yes)
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Old Nov 18, 2009, 3:04pm   #712
 
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travis started this thread PUZZLE WITH PIECES MISSING
I'll ask you when I'll meet you on MSN, because there's many more questions that need to be replied to, and on a forum it would be an endless series of posts, totally inefficient. You either give me all the pieces of the puzzle in perfect order and synthesis or I need to ask you a lot of questions to put the puzzle in order in my head. Besides, don't worry about it, because wikipedia does a good job at synthesis: all i have to do is read it carefully.

WHAT SECURITY AND WHAT EXCHANGE
One very good thing you did help me understand: what exchange and what security. Everything needs to be analyzed and synthesized in terms of what security you are trading and at what exchange. In "bucket shops" the terms "off-exchange" only means it's not an official exchange. The exchange is the broker itself (who's not properly a "broker"). The security is the contract he sells you by his rules, at his price, with the expectations of the case. Exchange and security. Exchange and security... I gotta remember this.

Last edited by travis; Nov 18, 2009 at 3:56pm.
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Old Nov 18, 2009, 7:02pm   #713
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I think the differences can be summed up with two questions:

1) When you trade are you allowed to make prices as well as take them (e.g. you can make prices when trading futures on an exchange); and

2) If you have to take prices, then who is on the other side of your trades? Is it another trader or is it the broker/bucketshop.
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Old Nov 18, 2009, 7:09pm   #714
 
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travis started this thread Awesome. You're very gifted at synthesis. And then my question would be: if you answer "no" to both of your questions, and we're dealing with a bucket-shop off-exchange type of trading, is it generally bad or does it depend? Can we generally say that it's better (more convenient, in terms of profit and risks) to stay away from bucket shops and stick to exchanges or not?
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