Change of strategy...

[mike.]

I've been spreadbetting forex through my SB broker for a while now, Briefly my strategy involves a 9 sma, H4, H1, M5 charts for long and short term trends, NVP's correlator and a currency strength meter.

My method is to try to identify the top or bottom of a re-tracement for entry and exit using PA and short term S/R levels.

I have been using a R/R of 1:2 targeting 40 pips. Ok, today i shorted aud/jpy, managed a good entry and 15 pips within mins, then it retraced, then back in profit, then it retraced. This went on all day... It was doing my head in that i closed the trade for +20 at about 21.00 tonight.

My question's fellow traders are... Had i been scalping each pullback i feel as though i could of at least trebled my pip count, Plus I wouldn't of been bored out of my mind. When i do get time to trade( which is not very often) I do like to do some trading.
So how much is this going to cost me through a forex broker say for 10 trades ? I paid a 3 pip spread for the trade today, Are broker fees the same for a mini lot as a standard lot ? and, would i need to go DMA for scalping ?

Im sure i would soon be flagged up if i started scalping through my SB broker plus the spread is a killer.

 

[wackypete2]

If you trade spot forex through a dma broker (recommended) you should be able to get < 1 pip spread. Comm. are usually expressed in terms of $/per some notational value so no matter if you trade a micro lot or 10 standard lots the comm cost would be scaled accordingly.

Scalping is not easy but can be rewarding. Start with small lot size. Even if you use a bucket shop broker, most of them won't bother flagging you if your position turn around time is over 5 minutes. They just want to make sure they have time to aggregate positions and hedge. The low life scum unregulated bucket shops should be avoided at all costs.

Good Luck!

Peter

 

[mike.]

Cheers Pete,
So im guessing, About £6 per round trip x 10 trades = £60 plus the spread. I would need approx £70 profit to breakeven out of the 10 trades, which equates to 70 pips trading 1 mini-lot, Is that about right ? Or have i worked it out wrong ?

 

[wackypete2]

Cheers Pete,
So im guessing, About £6 per round trip x 10 trades = £60 plus the spread. I would need approx £70 profit to breakeven out of the 10 trades, which equates to 70 pips trading 1 mini-lot, Is that about right ? Or have i worked it out wrong ?

Almost! You didn't scale it. Using your example commission rate:
Standard lot = $6x10 trades = $60 = 6 pips + spread.
Mini lot = $0.60x10 trades = $6.00 = 6 pips + spread.
Micro lot = $0.06x10 trades = $0.60 = 6 pips + spread.

No matter how many lots, mini lots or micro lots you trade you still need 6 pips + spread over 10 trades to cover costs. This is only for spot forex. If you try exchange traded currency futures this commission structure is not valid.

Peter

ADDED: You should be able to get better rates than your example.

 

[wackypete2]

This might not be clear so I'll just add on a per trade basis using a standard lot your costs would be (spread = 1pip = $10) + (commission = 0.6 pip = $6) so in your example each trade would cost you $16 per standard lot traded, $1.60 per mini lot traded, or $0.16 per micro lot traded.

Peter

 

[mike.]

Ahh, fantastic, that's where i was going wrong. So $6 for 10 mini lot trades seems cheap enough. So that would be $1.20 for one trade of 2 mini lot's and so on...?

 

[mike.]

Sorry Pete, posted at the same time, That was not a reply to your last explanation..

 

[mike.]

Just looking at Oanda's web site, Im surprised by the lack of information for new customers.
cant seem to find whether or not they are DD or NDD execution, Also account types and min deposit.
They mention that currency is traded in units and not in lot's, but again, cant seem to find a decent example of how this works.
Anybody use them that can give a explanation as to how they operate, As their obviously struggling.

 

[random12345]

Just looking at Oanda's web site, Im surprised by the lack of information for new customers.
cant seem to find whether or not they are DD or NDD execution, Also account types and min deposit.
They mention that currency is traded in units and not in lot's, but again, cant seem to find a decent example of how this works.
Anybody use them that can give a explanation as to how they operate, As their obviously struggling.

Mike if you've got $10k, consider going with LMAX. Smallest (traditional) lot size is 0.01 or $1,000 on the E/U for example and UK based which is always a massive plus for withdrawals in my opinion.

Their free software is very basic though - same ProRealTime skin stuff IG use except an even older version and you can't deal from the chart. Depends on what you are looking for.

 

[mike.]

Mike if you've got $10k, consider going with LMAX. Smallest (traditional) lot size is 0.01 or $1,000 on the E/U for example and UK based which is always a massive plus for withdrawals in my opinion.

Their free software is very basic though - same ProRealTime skin stuff IG use except an even older version and you can't deal from the chart. Depends on what you are looking for.

Thank you Random, Ill have a look around their web site now. Its got to be a plus if they are UK based imo.

just had a nosey around fxpro site, everything explained fully and appears to be a worthwhile broker, One thing putting me off though, Based in cyprus, owned by Russians.

 

[random12345]

just had a nosey around fxpro site, everything explained fully and appears to be a worthwhile broker, One thing putting me off though, Based in cyprus, owned by Russians.

Hey you don't mind giving comprehensive proof of identity and residence information to the Novosibirsk mafia do you?

 

[mike.]

Mike if you've got $10k, consider going with LMAX. .

Ahh, I see, that's their minimum deposit Random, I couldn't justify that amount in a trading account just yet, Im still in the learning process

I've seen some dma brokers with smaller opening deposits.
Ill only be trading mini-lots @ £5/pip max, or less if my DD hits a certain level, Ill keep looking through the broker sites. Many thanks anyway

 

[mike.]

Hey you don't mind giving comprehensive proof of identity and residence information to the Novosibirsk mafia do you?

Im ex-FSB, they know all about me over there

 

[tar]

Just looking at Oanda's web site, Im surprised by the lack of information for new customers.
cant seem to find whether or not they are DD or NDD execution, Also account types and min deposit.
They mention that currency is traded in units and not in lot's, but again, cant seem to find a decent example of how this works.
Anybody use them that can give a explanation as to how they operate, As their obviously struggling.

Oanda :

Oanda is a MM but they don't have a dealing desk : no dealer confirmation , instant execution ...

You can deposit by wire , PP , CC ...

Minimum account balance 0

Minimum trade size 1 unit = 1 euro or 1 pound ... etc example : if you buy 1 unit EUR/USD and the euro for example moves against you 100 pip then you lose 1 cent ! .. etc so if you want to trade a micro lot you should type 1000 , minilot = 10 000 and so on , you can scale it as you wish so you can buy 1102 EUR/USD ... etc , thats if you are using FXtrade platform , but if you want to trade through their MT4 then the minimum trade size is one micro lot = 1000 unit .

Interest paid/earned second by second not at 5 ET like other FX brokers .

If you trade with "Oanda Europe" then you can trade indices , commodities as well ...

Spreads widen at news times and Asian session ...

 

[mike.]

Cheers Tar, there still on my short list at the moment. I was looking at IG's dma account last night, but don't fancy trading off there L2 dealer platform. So, I have fxcm, alpari and oanda on the list, all ndd forex accounts. I don't want to deposit a fortune should things not work out, I would most likely revert back to SB.

 

[tar]

Cheers Tar, there still on my short list at the moment. I was looking at IG's dma account last night, but don't fancy trading off there L2 dealer platform. So, I have fxcm, alpari and oanda on the list, all ndd forex accounts. I don't want to deposit a fortune should things not work out, I would most likely revert back to SB.

BTW re IG DMA : This account is a normal CFD account with DMA feature for stocks only and you may use their regular platform for that , however i think they still have DMA futures at L2Dealer not sure , you can also trade FX DMA "top tier1 banks" at their L2Dealer platform but as i recall the minimum required balance for that is 50K dollars , and the commission is not that cheap , anyway you may drop them an email for better details and updates ...

 

[CityMasterTrader]

I've been spreadbetting forex through my SB broker for a while now, Briefly my strategy involves a 9 sma, H4, H1, M5 charts for long and short term trends, NVP's correlator and a currency strength meter.

My method is to try to identify the top or bottom of a re-tracement for entry and exit using PA and short term S/R levels.

I have been using a R/R of 1:2 targeting 40 pips. Ok, today i shorted aud/jpy, managed a good entry and 15 pips within mins, then it retraced, then back in profit, then it retraced. This went on all day... It was doing my head in that i closed the trade for +20 at about 21.00 tonight.

My question's fellow traders are... Had i been scalping each pullback i feel as though i could of at least trebled my pip count, Plus I wouldn't of been bored out of my mind. When i do get time to trade( which is not very often) I do like to do some trading.
So how much is this going to cost me through a forex broker say for 10 trades ? I paid a 3 pip spread for the trade today, Are broker fees the same for a mini lot as a standard lot ? and, would i need to go DMA for scalping ?

Im sure i would soon be flagged up if i started scalping through my SB broker plus the spread is a killer.

To keep costs down, you’d need to make sure you’ve got the best spread, which will be a case of research and possibly discussions with providers. There are brokers who have a problem with scalping and other who don’t. Costs differ for everyone depending on what you can find and negotiate. Your trade size may be an issue if too big or too small.

 

[Jason Rogers]

I don't want to deposit a fortune should things not work out, I would most likely revert back to SB.

Hi Mike,

Since you mentioned that you're considering an FXCM account, I wanted to make sure you were aware that our spread betting accounts are identical to our non-spread betting accounts when it comes to pricing and execution. The only difference is that since they are designated as spread betting accounts, they have tax-free status for UK residents.

Jason

 

[mike.]

Im getting all mixed up now jason,
Im wanting to trade forex through a NDD so there is no conflict of interest for my scalping strategy. I dont mind a reasonable spread mark up or paying a reasonable commission to trade mini-lots, I understand the spreads are narrower through your dealing desk, But there is obviously a conflict of interest. Im not grasping how this is the same as your SB account.

Just to add,
what price feed is your tradestation demo ? dd or ndd ?

 

[Jason Rogers]

Im getting all mixed up now jason,
Im wanting to trade forex through a NDD so there is no conflict of interest for my scalping strategy. I dont mind a reasonable spread mark up or paying a reasonable commission to trade mini-lots, I understand the spreads are narrower through your dealing desk, But there is obviously a conflict of interest. Im not grasping how this is the same as your SB account.

Hi Mike,

FXCM offers NDD as an option on both spread betting and non-spread betting accounts. Furthermore, the spreads and execution are the same for both spread betting and non-spread betting accounts. The only difference is that spread betting accounts are labeled as such on account statements and therefore provide tax-free status for UK residents. That means if you live in the UK and would like to open an individual account with FXCM, there's no reason not to go with the spread betting option.

Just to add,
what price feed is your tradestation demo ? dd or ndd ?

Here's a link to an NDD spread betting demo on our Trading Station platform.