Making a Living from Trading

[Cornix]

Those were on my friend's account - I think he did complain about one, and they chalked it up to market volatility. I didn't push the issue (maybe I should have), seeing as how it was a very small order and I assumed it was pointless since there's no time and sales one can point to for reference.

OK. At times of high volatility they indeed widen the spread and it can be an issue if you are not prepared (usually they do it around economic releases, schedule of which is known in advance).

I trade at least several times a day through Oanda with tight stops and definitely cannot say I get my stops "run". If even I do sometimes and don't know about it, that's not critical and lower deal costs more than compensate for that (I hope so ).

 

[equalizer]

It was actually in the middle of the night, but I guess they can hit a stop if the bid drops to that price, even if there's no execution at that bid. I still agree with you though, I felt comfortable with Oanda overall, just not sure if I would recommend them for someone with enough capital to use an ECN for frequent trading. For real swing trades on hourly charts or higher, sure, I would recommend them.

 

[Cornix]

It was actually in the middle of the night, but I guess they can hit a stop if the bid drops to that price, even if there's no execution at that bid. I still agree with you though, I felt comfortable with Oanda overall, just not sure if I would recommend them for someone with enough capital to use an ECN for frequent trading. For real swing trades on hourly charts or higher, sure, I would recommend them.

I used to trade spot FX with IB, but experienced slippage, sometimes as serious as 1-3 pips (or even more in the fast market) even on relatively moderate volume (200-300K notional).

So ECN can also have it's hidden costs if liquidity is limited.

 

[equalizer]

I guess I will have to see for myself. IB told me they work with 16 or more liquidity providers who comprise 65% or more of the daily spot FX volume, so it surprises me to hear of that much slippage - in all my searches for reviews of past experience, I have only heard good things on their FX execution. (I am assuming it was a major pair you were trading in - if not, I guess there is always room for slippage.)

Part of me wonders how much any retail entity can be trusted in terms of execution speed - like with FXCM, it's very fast, but I've definitely had my fair share of times when the moment I place a market order, I get filled, but simultaneously the market shifts against me by up to a few pips. Coincidence of timing, or was I seeing old (old as in tenths of a second) data... (and thus part of my shift to IB is to also be able to trade the FX futures)

 

[Cornix]

I guess I will have to see for myself. IB told me they work with 16 or more liquidity providers who comprise 65% or more of the daily spot FX volume, so it surprises me to hear of that much slippage - in all my searches for reviews of past experience, I have only heard good things on their FX execution. (I am assuming it was a major pair you were trading in - if not, I guess there is always room for slippage.)

Part of me wonders how much any retail entity can be trusted in terms of execution speed - like with FXCM, it's very fast, but I've definitely had my share fair of times when the moment I place a market order, I get filled, but simultaneously the market shifts against me by up to a few pips. Coincidence of timing, or was I seeing old (old as in tenths of a second) data... (and thus part of my shift to IB is to also be able to trade the FX futures)

Yes, sure, you should try that. My experience is a couple of years old, who knows, maybe things changed since then.

But back then I was not alone who incurred slippage using their IDEALPRO platform.

 

[VielGeld]

It should be noted Oanda widens the spread at various times during one day's cycle. When liquidity is high during the day, Eur/Usd will be at 1.2 pips. At night, I think it widens up to 3 pips+, but don't quote on that since I haven't verified it. It may be the reason.

They also widen the spread anytime liquidity goes down or during big news events. You have to watch out for those if you don't want your stop to be touched.

 

[Jason Rogers]

Yes Oanda is in that category. FXCM, Alpari etc etc etc they're all the same.....and they can change the quote to whatever they want whenever they want even after the fact and you have no recourse.

Hi lewis,

If you're trading against a dealing desk or maket maker, then this may be the case. FXCM uses No Dealing Desk forex execution, and the best bid/ask price from 10+ liquidity providers is automatically displays on the platform with FXCM pip mark-up. So we don't have control over where the pricing moves as a market maker would. Let me know if you have any questions.

-Jason

 

[Lord Flasheart]

If you want to make a living trading then your first step is to stop trading forex with a retail broker. There are plenty of people who make decent livings trading and there are many who are rich, but there are none who do it trading retail forex.

can you explain why this is the case Lewis. The prices are pretty much the same these days for retails traders, whether using SB or not, i cant get much better than 1 pip for EU can i,so please explain how I cant possibly be ahead as a retail trader

 

[brasil2000]

can you explain why this is the case Lewis. The prices are pretty much the same these days for retails traders, whether using SB or not, i cant get much better than 1 pip for EU can i,so please explain how I cant possibly be ahead as a retail trader

lord Flasheart, Lewis will not explain anythink he says,he makes the most ridiculous statements and then ignore you when you ask for an full explanation.

 

[VielGeld]

^ That's what I've seen so far, though he pointed me in the direction of futures rather than anything related to FX.

So the retail trader has to deal with a dodgy establishment, rip-off spreads, unknown prices, no order book, etc., etc. Fair enough.

But he claims there's a supposed FX alternative to that. I haven't seen him post it anywhere.

 

[c6ackp]

you can trade currency futures through CME (6E for EUR/USD) - this is an exchange/listed product

 

[neil]

you can trade currency futures through CME (6E for EUR/USD) - this is an exchange/listed product

Don't you need $25000 pot to daytrade forex?

 

[wackypete2]

Don't you need $25000 pot to daytrade forex?

No. Neither spot or futures requires that much.
If you were referring to the US pattern day trader rules they only apply to equity accounts trading stocks and options.

Peter

 

[Jack o'Clubs]

Don't you need $25000 pot to daytrade forex?

Not that I recall, but if you're trading for a living then you're going to need a £25k pot anyway unless expectations for a standard of living are much lower than mine (similar to my daughter's hamster maybe) or you can make ROIs that would shame any professional.

I used to trade fx futures when I was more active in forex and found it a great product if you stuck to the major pairs, liquidity became an issue if you started to go off-piste.

 

[equalizer]

In one of my posts I alluded to this - but do you guys who have experience with both spot and futures for FX find that the futures are preferable (or vice versa)? It would seem maybe the sweet spot is to have a good DOM for the futures, and then trade the spot (if small position size is important, or if one's commissions are lower in spot than futures). Or pure spot for longer term trades (but my intent is intraday only on currencies). I suppose spot might be also preferable for non-majors or any time of day where the futures equivalent is not so liquid/higher spread (??).

Any thoughts on this?

 

[Cornix]

It should be noted Oanda widens the spread at various times during one day's cycle. When liquidity is high during the day, Eur/Usd will be at 1.2 pips. At night, I think it widens up to 3 pips+, but don't quote on that since I haven't verified it. It may be the reason.

They also widen the spread anytime liquidity goes down or during big news events. You have to watch out for those if you don't want your stop to be touched.

Yes. I mentioned news events, but forgot the dull time of the day indeed, because only trade the London session myself.

 

[Cornix]

In one of my posts I alluded to this - but do you guys who have experience with both spot and futures for FX find that the futures are preferable (or vice versa)? It would seem maybe the sweet spot is to have a good DOM for the futures, and then trade the spot (if small position size is important, or if one's commissions are lower in spot than futures). Or pure spot for longer term trades (but my intent is intraday only on currencies). I suppose spot might be also preferable for non-majors or any time of day where the futures equivalent is not so liquid/higher spread (??).

Any thoughts on this?

Aside from DOM, T&S and the need to roll over with futures (which makes them less suitable for position trading or investing in the currency) there is simply no difference.

But DOM and T&S on derivative can be very deceptive. You never know if someone is buying for real or just shows the buy hand in futures to simultaneously sell in the spot market or even say in OTC options. Bots arb 6E vs. spot all the time, that's why they are so correlated and that's why 6E T&S has not much of a value.

I do not pretend I am the voice of the only truth, but IMO, price action shows more clear picture, because when the market goes somewhere, it goes, that's objective information unlike order flow.

Also most of the large orders in DOM are pure fake and just part of the games.

 

[singhpavitra]

If you want to make a living from trading then you need at least £100,000 war chest to start for. what could be an average return for an average trader? i guess somewhere around 15% per year. Do your math and you will know where you stand. Other possibility is to trader with £20K+ account and get your performance published at Managed Futures and CTA Program Performance to attract clients who are willing to invest on your trading sys. It will take time. Anyways got to go. Good luck mate.

 

[zaq1]

It is interesting to look at who is actually making profits from trading and/or success stories from real life:

First of all brokers and various providers od supporting infrastructure. No particular individual ever appeared in Forbes charts though. However running a brokerage could be perhaps a good business.

G. Soros: from a poor and starving immigrant in London to the top of the charts. Interestingly, he recently said he was glad he had retired from managing his capital because he would struggle a lot to figure out how to invest nowadays. If he would have difficulties, what about us others then? He started his fund only after a long period of employment at an investment firm doing arbitrage, starting with a substantial own capital and a lot of effort incorporating the fund legally (just imagine the know how he had to acquire only for this) and fundraising the first 4 Mega$ to begin with. Gigantic losses happened to him as well and what is so admirable for me, he took a one way ride and ran his investment vehicle with a large scale in mind straight from the beginning. Finding partners and investors must have had been an enormous task for him too, especially as he was an immigrant and had to start up from absolutely nothing.

Then another story - RSJ Algorithmic Trading (the largest player in futures markets) founder Karel Janecek: coming from a poor family in Czechoslovakia, he managed to get a scholarship for mathematics at Harvard and made his first 1 Mega$ playing poker in US casinos. Nowadays he is a professor of mathematics at Charles University in Prague and his company makes 35 Mega$ a year running market making algorithms at exchanges around the world. There are three partners in the company: Mr Janecek develops the algorithms, another partner is an IT specialist and the third partner cares for the relations with the exchanges. As it is not possible to further expand turnover in algo trading, they also run their own hedge fund. Total investment for the algo trading was about 400 kilo$ (setup fees and infrastructure).

So there are various ways to the top and obviously one needs to take it a step further in order to move ahead from a sitting room trade station. Which on the other hand gives one an excellent experience to begin with (of course more experienced forum participants can judge it much better than I can).

 

[EulerFourier]

If you want to make a living from trading then you need at least £100,000 war chest to start for. what could be an average return for an average trader? i guess somewhere around 15% per year. Do your math and you will know where you stand. Other possibility is to trader with £20K+ account and get your performance published at Managed Futures and CTA Program Performance to attract clients who are willing to invest on your trading sys. It will take time. Anyways got to go. Good luck mate.

No reason to be making 15% a year if you're trading. 15%-25% a month or more, maybe not every month but most if you know what you're doing.

$15,000 a year????....$1250/month = 25points a month or ~4-5 ticks a day on a 1 lot in the ES. You better be doing better than that!