Anyone here into FOREX?

[Music_Producer]

Just curious to see if there are any members here to dabble in the Forex markets.. :) How much of a loss/profit have you made?

Note : Thanks to sjshaw.. for compiling most of the pages here, in a pdf file.

Link - http://www.mediafire.com/?26z5emrctgt




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Mod note
Thread closed: Thread v2.0 http://forums.macrumors.com/showthread.php?t=626033


:)

[Curren~Sea]

Made lots... but I'm switching to a Mac and looking for a Mac trade station - any suggestions?

Thanks.

[~Shard~]

The only time I ever did futures trading on Forex I made $20K in fifteen minutes and then lost $15K five minutes after that. :eek: That was enough of that. ;) :D So, nowadays I just stick to shorting indicies and doing covered calls and puts on the options market on the higher risk side of things. For the most part though, I just stick to trading stocks, doing limited partnerships, income trusts, flow-through entities, convertible debs and the like. I'm risky, but not reckless anymore. :cool:

[OutThere]

The only time I ever did futures trading on Forex I made $20K in fifteen minutes and then lost $15K five minutes after that. :eek: That was enough of that. ;) :D So, nowadays I just stick to shorting indicies and doing covered calls and puts on the options market on the higher risk side of things. For the most part though, I just stick to trading stocks, doing limited partnerships, income trusts, flow-through entities, convertible debs and the like. I'm risky, but not reckless anymore. :cool:

Naturally. I do that too.


;) :eek:

[Chundles]

Awful tasting beer XXXX is, terrible stuff.
http://www.lion-nathan.com.au/our+companies/beer/australia/castlemaine+perkins/xxxx_bitter_left.jpg

You do know why they call it XXXX don't you?



It's because Queenslanders can't spell "BEER."

[Music_Producer]

Made lots... but I'm switching to a Mac and looking for a Mac trade station - any suggestions?

Thanks.

I currently use Oanda, they have the lowest spread for EUR/USD (1.5 pips) and it works with Safari (java based terminal) Its not that colorful as other forex trading software, but it works just fine and I've never experienced any glitches.

Shard, well yeah, the market can move quite a bit within a few seconds, but I usually trade for a minute after breaking news, make about 6-10 pips and I'm out. I don't like to stay put after a trade because you never know when another central bank will buy millions and just wipe your account out :p

[Curren~Sea]

Oanda is a good firm. I am also considering Realtimeforex.com. However, I may stick with my current provider and run it in a Parallels window.

As for the forex market being risky, I completely disagree. It's one of the most transparent markets out there. Risk is all about the person, not the market and with online currency trading, you have more control over the amount of risk you take than anything else that I know of.

I encourage anyone interested in making money from their own home, from their own computer, on their own time, to consider forex trading. For years, I wondered how I could legitimately make money from my computer - and now I know.

[njmac]

I encourage anyone interested in making money from their own home, from their own computer, on their own time, to consider forex trading. For years, I wondered how I could legitimately make money from my computer - and now I know.

Why does that sound like an infomercial? :rolleyes:

You say you made lots from Forex trading - do you do it for a living or just as a side investment strategy?

[Music_Producer]

Oanda is a good firm. I am also considering Realtimeforex.com. However, I may stick with my current provider and run it in a Parallels window.

As for the forex market being risky, I completely disagree. It's one of the most transparent markets out there. Risk is all about the person, not the market and with online currency trading, you have more control over the amount of risk you take than anything else that I know of.

I encourage anyone interested in making money from their own home, from their own computer, on their own time, to consider forex trading. For years, I wondered how I could legitimately make money from my computer - and now I know.


True, it all completely depends on the person trading and his/her trading skills.. and more importantly, his margin! When I was an 'emotional' trader, I would frequently get a margin call, but hey, you learn from your mistakes. Now I'm a better trader and I don't try to get greedy.

I'm not sure what your strategy is, but I can never trade on a technical basis.. all those charting things never work (well most of the time) Atleast they sure didn't work for me.

[Curren~Sea]

If it were an infomercial then I would be trying to sell you a specific product or service, but I'm not. I would just like to see more people learn about the real deal.

FX trading takes time, education, practice, and patience. Just like anything, the more time and effort you spend the better you will become. But, the financial benefits are worthwhile, therefore I pursue it.

Most people (~80%) who try FX trading fail because they are just trying it out. It takes a more serious effort to succeed.

I trade mainly longer term typically 1 day to 1 week. Short term traders are in and out within a few minutes but that doesn't work well for me. I trade mainly on chart patterns and the Elliott Wave - both systems qualify as technical analysis. Right now I'm a part-time trader and still holding down a full-time job but I see myself transitioning to a full-time trader within the next 12 months.

I've been looking at the various Java based platforms and none of them look very good to me so I am likely to do the following:

iMac on my desktop, my other 19" LCD on the desktop connected to my iMac. My old PC in the basement with a wireless card. Run Remote Desktop on the iMac and drag it over to my LCD and maximize it. I'll have my FX charts and trade station on the XP box/LCD. I think that'll work.

[Chip NoVaMac]

Why does that sound like an infomercial? :rolleyes:

You say you made lots from Forex trading - do you do it for a living or just as a side investment strategy?

I wouldn't mind trying something that would give me an edge on doing the travel that I want.

But my luck is bad. I could invest in a company that never has had a loss, and the stock has done double digits for 20 years (with no loss); and I would buy and the stock tanks in less than 6 months. :eek:

[Music_Producer]

I wouldn't mind trying something that would give me an edge on doing the travel that I want.

But my luck is bad. I could invest in a company that never has had a loss, and the stock has done double digits for 20 years (with no loss); and I would buy and the stock tanks in less than 6 months. :eek:


Hey Chip, the stock markets are absolutely different from currency trading markets. Any individual stock is susceptible to multiple failures - from rumors, bankruptcies (duh) and so on.. while currencies are relatively stable. I mean, when I bought 10,000 shares of Global Crossing, and it tanked from $1.50 to $0.30 in 2 days, that just put me off the stock market. You don't see the US $ dropping like that against the Japanese Yen.

I just wait for significant financial news that come out at usually 5.30 am EST. For e.g. a few days ago, the Canadian CPI was supposed to come out at some 0.4% or something, can't remember.. but it came out to more than 2% or of that range. That was a huge number, so I immediately sold USD/CAD (sell US$ and buy Canadian $) Needless to say, the USD/CAD went down by 80 points and I made a nice profit, enough to buy maybe a Nikon D50 from you Chip :p That profit was all made in 10 minutes.

I have made losses as well, especially when I do 'revenge trading' :D If I buy something like EUR/USD and the damn thing moves way down.. I buy some more EUR/USD to average out my buying price.. but its a vicious cycle. I don't do that kind of silly trading anymore, I just look out for important news and trade accordingly.

June 29 will be a big one, the USD interest rates are supposed to go up by 25 points, but rumors are that it might go up by 50 points. That alone will move the market like crazy. Lets see..

[Music_Producer]

Curren~Sea, I use Parallels running windows xp on my macbook, connected to an external monitor. Works great, I don't use my amd laptop anymore at all. So maybe when you get a intel mac, you can just do everything on one system.

[Chip NoVaMac]

Hey Chip, the stock markets are absolutely different from currency trading markets. Any individual stock is susceptible to multiple failures - from rumors, bankruptcies (duh) and so on.. while currencies are relatively stable. I mean, when I bought 10,000 shares of Global Crossing, and it tanked from $1.50 to $0.30 in 2 days, that just put me off the stock market. You don't see the US $ dropping like that against the Japanese Yen.

To show you my luck, my trip to Iceland in February is a good example. The US Dollar gained in the day leading to my trip by maybe 5%+ (given the costs there, this was good news). Once I arrived it went back down to like 63 Kornas to the US Dollar.

Given that the lowest cost items (like a cup of Pepsi 12-16oz) was 200KIS, my cost was $3.17US. Would have loved having an extra savings of that 5%. :D

Joking aside, I trust you that there is money to be made. Some of us though are not able to weather the ups and downs as well. From a financial standpoint, as well as an emotional one.

Heck, when I go to the casinos, I second guess what my loses would have bought me instead. My loses out weigh my winnings, but it is great to win.

[Music_Producer]

But there you go, the USD gained 5% and then went back down! thats not your luck Chip (yeah well, you just had to go to iceland when that happened huh? :p ) If you actually look out for news on the day the USD went up, there must be some financial results at that time, for the USD to appreciate by 5%.

Another thing I love doing is, earning interest on my funds. For e.g. lets say you have $1000 in your account, and a 50:1 margin. Oanda pays you interest every second, and the daily interest is posted in your account accordingly. So i buy 50,000 AUD/JPY (i.e. i borrow japanese yen and buy aussie dollar) I make about 5.2% interest on 50,000. Of course there will be fluctuations in this currency for e.g. AUD/JPY will be 84 one day.. sometimes 85.. etc.

Since the last month though, its been at an average of 84-85. As long as you have enougn money in your account to accomodate for the fluctuations in currency levels, (I have factored in the variations for AUD/JPY from 59.9 to 89 - all from 1995-2006) you're good. I've made $216 in the last 30 days, in interest alone.

$216/month on a $1000 investment ain't bad eh? :D


This is, of course, because Japan has a zero interest policy. If they changed that to say 0.15% .. the Yen would appreciate considerably, and my AUD/JPY would go down. But it won't tank down to ridiculous levels, because thats just not possible. All currencies are inter-related, and they don't tank like stocks do. Just as your money is at stake, all the banks' money is at stake too .. and they intervene to halt such slides.

Now if they had iceland krn/jpy , that would be fantastic, as the interest rate in iceland is 10-11% i believe?

[njmac]

I guess I'm just a little leery because of the Forex scams (http://en.wikipedia.org/wiki/Forex_scams) that are so prevalent.

Anyone interested in Forex needs to do extensive research to see if it really is for them and is legit. Another option is to trade currencies in the future's market where that industry is the most regulated industry in the country.

[Chip NoVaMac]

$216/month on a $1000 investment ain't bad eh? :D

No, not bad for someone that has learned the hard way, by your own accounts. That I give congrats to you.

I will explore this FOREX option, but some of us just feel that there is this dark cloud over us when it comes to making the best of any market.

The only time I "won" was last year when I was forced to sell my TH. I lived there for 13 years or so. My "investment" remained flat for most of my time there. It was only in the last 4 years or so during the "real estate bubble" that I gained anything of value in the property.

My excess profits from the sale of the TH is in "safe" investments, that allow me to splurge on my desires. Would I like a greater return, heck yes! Am I willing to take a loss? For me at this time, no.

[Music_Producer]

Yup, real estate is the best investment, but you have to be patient. The recent gains we have seen in the last 2-3 years have already peaked. Rates won't go down (maybe a little) but not to the pre-boom rates. You may have to wait anywhere from 5 to 50 years for your real estate property to appreciate.

Chip, I recommend you play with a "Forex Game" account, with virtual money. I played with a game account for 1-2 months, and then opened a real account with only $50. I used to make profits of 10-20 cents, loss, etc.. just for experience.

As for forex scams, yeah, if you sign up with a shady company that has absolutely no listing.. of course you will get scammed. I mean, people get scammed with spoof emails all the time :rolleyes: I've seen several forex sites which look rather shoddy, so I stick with the big guys.

[Chip NoVaMac]

Yup, real estate is the best investment, but you have to be patient. The recent gains we have seen in the last 2-3 years have already peaked. Rates won't go down (maybe a little) but not to the pre-boom rates. You may have to wait anywhere from 5 to 50 years for your real estate property to appreciate.

Chip, I recommend you play with a "Forex Game" account, with virtual money. I played with a game account for 1-2 months, and then opened a real account with only $50. I used to make profits of 10-20 cents, loss, etc.. just for experience.


Thanks for taking the time to respond. I will look in to these "game" accounts to get better knowledge and skill in doing FOREX.

I think I am seeing that you understand my personal biases and experiences.

I sometimes look at the gains in the stock indices, and wonder why I don't get in on a 2% gain for the day. Never mind the 4% loss's on a day. :D

Thanks for trying to educate us here. The "game" will tell us perhaps whether we have what it takes.

[Music_Producer]

Thanks for taking the time to respond. I will look in to these "game" accounts to get better knowledge and skill in doing FOREX.

I think I am seeing that you understand my personal biases and experiences.

I sometimes look at the gains in the stock indices, and wonder why I don't get in on a 2% gain for the day. Never mind the 4% loss's on a day. :D

Thanks for trying to educate us here. The "game" will tell us perhaps whether we have what it takes.

You're welcome :) I do understand your experiences, as mine are almost similar, but we should learn from our 'losses' and try and analyze them to death.. and change accordingly, instead of just letting it go as bad luck.

Who knows, if you get good at it, maybe you'll make a million before Nikon actually has plentiful supply of the 18-200mm VR! :D

[Chip NoVaMac]

You're welcome :) I do understand your experiences, as mine are almost similar, but we should learn from our 'losses' and try and analyze them to death.. and change accordingly, instead of just letting it go as bad luck.

Who knows, if you get good at it, maybe you'll make a million before Nikon actually has plentiful supply of the 18-200mm VR! :D

LOL

From your lips to God's ears!:)

What i haven't shared in this thread is my Depression Era parents values.

That is why when I do have a loss, I go through such turmoil. I can never have fun in doing gambling because of the "values" that I was raised with. For I am ever haunted by - "what could you have done with that money". Sad really. :)

[Curren~Sea]

Real estate is usually a good investment if you buy right. Lots of people have lost fortunes in real estate, for sure. But for most people, when they buy their own home, that's the best investment they'll ever make.

What I like about forex is that it has a substantially lower cost of entry. 1) you can start with a "game" or demo account which is free. 2) you can open a real account with as little as $300. 3) you can work on building your skill as a trader without jumping into the deep end. With real estate, you're in or you're out, there are not many opportunities to just dip your foot into the pool. And, unless you have a really good idea of what you're doing it can end up being a costly venture. My long term goal is to take the money I make from forex and invest it into real estate.

One important key to remember is that forex trading is a skill. Like any other skill, if it is worth doing then it is worth doing poorly at first until you become good at it. I think it would be difficult for someone who is new to try and make sense out of all the forex babble that's on the web right now. There is a ton of stuff out there and it is not very cohesive. I think it would be confusing to try and make sense of it all and come up with a good strategy. However, if you can hook up with a reputable company or a person who can set you on the right path, that would be the way to go.

The first book I would suggest is:

Trade Your Way to Financial Freedom (http://www.amazon.com/gp/product/0070647623/ref=pd_sim_b_1/002-2407276-2027229?%5Fencoding=UTF8&v=glance&n=283155)

[Chip NoVaMac]

Real estate is usually a good investment if you buy right. Lots of people have lost fortunes in real estate, for sure. But for most people, when they buy their own home, that's the best investment they'll ever make.

What I like about forex is that it has a substantially lower cost of entry. 1) you can start with a "game" or demo account which is free. 2) you can open a real account with as little as $300. 3) you can work on building your skill as a trader without jumping into the deep end. With real estate, you're in or you're out, there are not many opportunities to just dip your foot into the pool. And, unless you have a really good idea of what you're doing it can end up being a costly venture. My long term goal is to take the money I make from forex and invest it into real estate.

One important key to remember is that forex trading is a skill. Like any other skill, if it is worth doing then it is worth doing poorly at first until you become good at it. I think it would be difficult for someone who is new to try and make sense out of all the forex babble that's on the web right now. There is a ton of stuff out there and it is not very cohesive. I think it would be confusing to try and make sense of it all and come up with a good strategy. However, if you can hook up with a reputable company or a person who can set you on the right path, that would be the way to go.

The first book I would suggest is:

Trade Your Way to Financial Freedom (http://www.amazon.com/gp/product/0070647623/ref=pd_sim_b_1/002-2407276-2027229?%5Fencoding=UTF8&v=glance&n=283155)

Some of us bought our homes as mid to long term investments. I bought my TH back in '92. For about ten years it did not gain anything in real value or value in property taxes. Was feeling sick by this. Even as my neighbors and I sough to improve our properties.

I was lucky to sell my TH for 3.5x my original purchase price. Much of that gain in just 5 years. But because of "debit" because of my significant other - I could not afford to buy anything else that was compatible with my needs. Meaning that I don't want a 45+ mile commute. Or my not wanting a zero/down payment principal loan that might force me to be feed for the vultures down the road.

We are being driven in to a class based society of the haves and have nots. Where those of of that provide services and goods that are not welcomed in the community we serve. I had a customer lament the high cost of housing in their new home purchase.

I lamented that I was forced to give up on the idea of owning a home of my own. Their comment was I could always move to WV! :eek: Sorry, I never use the term here on MR - but WTF? :eek:

Have we become so greedy that the notion of a "working community" is foreign to us? A Community in which the rich and poor are needed to make things work?

[Hoef]

The only time I ever did futures trading on Forex I made $20K in fifteen minutes and then lost $15K five minutes after that. :eek: That was enough of that. ;) :D So, nowadays I just stick to shorting indicies and doing covered calls and puts on the options market on the higher risk side of things. For the most part though, I just stick to trading stocks, doing limited partnerships, income trusts, flow-through entities, convertible debs and the like. I'm risky, but not reckless anymore. :cool:

Everytime investments comes up, ~Shard~ has his/her say .. I am almost calling for a mac user investment sub forum to exchange ideas. I generally trust mac users more than the average grapevine set at finance.yahoo.com :D . Please tell more about LP's.... I am very interested in that.

[Chip NoVaMac]

Everytime investments comes up, ~Shard~ has his/her say .. I am almost calling for a mac user investment sub forum to exchange ideas. I generally trust mac users more than the average grapevine set at finance.yahoo.com :D . Please tell more about LP's.... I am very interested in that.

There are always winners and losers in investments.


I can only count my loss for not doing Apple in the past 5 years.

What I know s what one is safe to lose. For some, it may be a good deal, For others it is very little.

Who wins in then end is another matter....

[Music_Producer]

Today, or rather tomorrow (jun 29) is a HUGE day for Forex traders.. the interest rate decision comes out at 2.15 pm EST. Who knows how much they'll raise the interest rates by.. 25 basis points is expected.. but there are rumors of hiking it by 50 points. If that happens, buy the USD and sell it off for a quick profit. :D

[Hoef]

Today, or rather tomorrow (jun 29) is a HUGE day for Forex traders.. the interest rate decision comes out at 2.15 pm EST. Who knows how much they'll raise the interest rates by.. 25 basis points is expected.. but there are rumors of hiking it by 50 points. If that happens, buy the USD and sell it off for a quick profit. :D

Arghh sell your stocks...... :p

[Hoef]

There are always winners and losers in investments.



Hi Chip NoVaMac ... I ment it positive. I enjoy ~shards~ posts, we have similar interests

[~Shard~]

Please tell more about LP's.... I am very interested in that.

The LPs I'm involved with are real estate ventures - a few local businessmen have been developing and leasing properties, and have been looking for investors in the form of an LP, so it's been a pretty good deal - I can honestly say I have part ownership in many of the buildings around town. ;) :cool: Basically all a Limited Parntership is, is two or more partners who join up to conduct a business jointly and in which one or more of the partners is liable only to the extent of the amount of money they have invested. As a limited partner, I do not receive dividends, but instead enjoy direct access to the flow of income and expenses. I've done quite well off these investments so far.

I, too, would love to have a finance/investing/trading sub-forum here. :cool:

[Curren~Sea]

We all play the game of money, whether we like it or not. Unfortunately, not everyone learns the rules. I'm sure you've heard it before that the public school systems are generally void of any type of real world financial training.

This may sound incredibly simplistic but for most people the keys to growing your nestegg are discipline and planning. Some people have a great idea and become rich from it. Other people acquire highly desirable skills and it makes them wealthy. For the rest of us, we need to be prudent with our money and plan for the long term.

My grandfather, rest his soul, was extremely risk averse. He went through The Depression and WWII and knew about hardship. However, on his modest salary he raised seven kids and managed to invest in a few blue chip stocks here and there that he just hung onto for many, many years. It made him a very wealthy man by the time he retired. +2% a year, +5%, -5%, +8%, etc... with compounding that adds up. The point is that most North Americans can probably afford to save, invest, plan, and be patient.

The stock market isn't the only way to go, obviously. My preference is the currency market. There are many other vehicles, as mentioned. However, just working hard every day probably isn't going to cut it, nor will it allow you to retire comfortably or early.

My plan is to consistently make 5-10% per month in forex and compound my earnings. Additionally, I am investing in real estate when I find a good opportunity. Over time, this should provide good cash flow in the coming years.

[Music_Producer]

Just as I had stated in my previous post.. today was a chance to make a huge profit.. and luckily I did. The Feds raised the interest rates by only 25 bps, and there was 100 pip drop in the US$. Made about $800 (80 pips profit) in 15 minutes :D

Had the Fed raised the interest rates by 50 bps.. the USD would have shot up instead..not for too long though, as that would have signalled the end of interest rate hikes.

[Music_Producer]

Hey curren~sea.. whats news alerting software do you have? I envy the Bloomberg users as they get their news rightaway.. and get in on the action much earlier than the rest of us!

[Curren~Sea]

Sounds like we had about the same kind of day :) I was underwater on a YEN sell that ended up being quite nice by the time I closed.

I have news coming up on my trade station (FXCM News Plugin) but it is not reliably fast. I don't necessarily trade the news for quick pips. I tend to setup my positions based on fibo's and the Elliott Wave. Interestingly enough, today matched exactly what my expectations were based on this analysis. A major announcement does not have to make me money during the announcement - it can make me money the following week or two.

My feeling right now, however, is that we are establishing what our summer channel will be. And, we can make a lot of money on a 300-400 pip channel!

[Chip NoVaMac]

Can't help to feel that FOREX trading is like the "old" day stock trading. Meaning that unless you devote full time and attention to it, then one can have nothing to show for the efforts.

[Counterfit]

You do know why they call it XXXX don't you?



It's because Queenslanders can't spell "BEER."
Let me take a crack at it:


B-U-D-erm, ****. :(

[Music_Producer]

Can't help to feel that FOREX trading is like the "old" day stock trading. Meaning that unless you devote full time and attention to it, then one can have nothing to show for the efforts.

Not true at all Chip, but you might feel that if you're a beginner. Its very easy to get overwhelmed by all the movements of currencies (imagine looking at 10 currecny pairs.. all moving differently at the same time, in real time) , looking at the charts, the news, etc etc.. and of course, people like me chatting :D

You have to narrow it down to the currency pair that you feel comfortable with.. most of the times I only trade EUR/USD. So there's only one pair on my screen, and one chart. I trade on news releases.. so I almost never look at the charts at all.

And for the full time and attention bit, I logged into my forex account 15 minutes before the interest rate announcement.. took my profit of 80 pips, and logged out. That was it! I don't have my forex account active right now.. I will log in later on tonight, when the UK GBP is released.

Yes, when I was a n00b, I used to sit in front of the computer ALL day.. watching everything, quite bewildered with what was going on. And all those graphics tempt you quite a bit to 'sell' or 'buy'.. but you have to be practical. DON'T listen to your gut feeling.. that never works.

Trust me Chip, I spend more time out here on macrumors and with my Nikon than on Forex :D

[Hoef]

Music Producer & Curren~Sea .... Give us also downsides... you can't make money all the time. A good trade seems to bring in $800... What does a bad trade do and how many positive trades do you have over bad?

[~Shard~]

Music Producer & Curren~Sea .... Give us also downsides... you can't make money all the time. A good trade seems to bring in $800... What does a bad trade do and how many positive trades do you have over bad?

That's the million dollar question with a lot of investors I know. They're more than willing to tell you about their wins, however they never seem as eager to tell you about their losses. ;) I'm always honest in all my results if anyone asks, whether it be gains or losses. (Not saying these guys are like that either, btw, just making a general comment...)

[njmac]

That's the million dollar question with a lot of investors I know. They're more than willing to tell you about their wins, however they never seem as eager to tell you about their losses. ;) I'm always honest in all my results if anyone asks, whether it be gains or losses. (Not saying these guys are like that either, btw, just making a general comment...)

coincidently, that's the same question gamblers try to avoid. They love talking about their big wins, but losses, eh... they'll make them up next round of course!

[~Shard~]

coincidently, that's the same question gamblers try to avoid. They love talking about their big wins, but losses, eh... they'll make them up next round of course!

Exactly - there are many parallels when it comes to investing and gambling. And I have seen similar "tactics" as well, as you eluded to - chasing losses, trying to "make it up", "doubling down" in some cases... quite intriguing... :cool:

[njmac]

...

[Music_Producer]

Music Producer & Curren~Sea .... Give us also downsides... you can't make money all the time. A good trade seems to bring in $800... What does a bad trade do and how many positive trades do you have over bad?

Sure, I've lost about $3,000 (in 2005) and made over $15,000 in Forex. There are always ups and downs, but you restrict your losses with 'stop-loss' limits. Luckily, (or rather, by using my head) I haven't hit a stop loss in the last two months.

I lost those $3000 because I was a newbie, and I didn't have a clue what I was doing! More like "Oh.. today the chart is going up.. so maybe it will go down tomorrow.. let me buy this" or I would buy/sell based on other people's suggestions.. or even 'software alerts' which I would subscribe to for $99/month. :D ON top of that, I used to "Revenge Trade".. if i bought EUR/USD.. and it went down by 50 pips .. I would get mad and buy more EUR/USD to reduce my losses.. but then the bugger would go down another 50 pips!

I didn't look at the reason why the EUR/USD was going down.. no wonder I made losses. And I didn't implement stop loss limits either.

All these are stupid mistakes which EVERY trader makes. The thing is, once you lose $2000-$3000.. you're scared and you never want to do it again. And I didnt.. for a year.. until I came back, got myself a 'game' account and started trading logically. Since the day I opened my account 2 months ago, I haven't had a single loss.

I can't say the same about the stock market.. I've lost $80,000 in stocks because of Enron/Worldcom like bastards. That doesn't happen in currency markets.. its a currency, not a stock. Its not managed by a bunch of greedy corporate jacks.. and it doesn't go from $30 or whatever to $0.30!

[Hoef]

but you restrict your losses with 'stop-loss' limits. Luckily, (or rather, by using my head) I haven't hit a stop loss in the last two months.

Thanks .... good info. So you keep money at stake for longer times (rather than in and out quickly)?

[Music_Producer]

Thanks .... good info. So you keep monay at stake for longer times (rather than in and out quickly)?

Oh no.. the maximum amount of time that I spend on a trade is 1-5 minutes. Let me give you an example:

Canadian CPI (Consumer price index) is expected to be 0.6% and the exact numbers will come out at 8.30 am EST. Now if the CPI is >0.6%.. the CAD (canadian dollar) will go up against the USD. If the CPI numbers are low.. then the CAD goes down against the USd.. remember, all this happens really fast. If the CPI comes out to exactly as estimated, then I don't do anything.

Since I'm in California, I'm up at like 5.15 am :mad: . and I set up my macbook, and parallels running win xp before the 5.30 am news announcement. By 5.27 am I'm absolutely concentrated in front of the computer, with a trade open (5000 units of USD/CAD).. and my finger ready on the trackpad.. I will hit either 'buy' or 'sell' depending on the CPI number.

At 5.30 am the Canadian CPI on my win xp news screen comes out to 2%. Thats way more than the expected 0.6% .. so I hit 'sell' rightaway(I'm selling the USD/CAD which means sell USD and buy CAD). In the next few seconds, the Canadian dollar goes up by 50 pips (or conversely, the USD goes down by 50 pips against the CAD). I don't want to be too greedy.. so I hit 'close' and I make my profit of 50 pips. Depending on how much money you put, 1 pip = 1 cent or 10 cents or 1$ or 100$ or 10000000000$ :D

Sure, the CAD went up still more by about 20-30 pips after I closed my trade.. but I'm happy with the profit I made. I usually try to make about 5 pips profit (everyday) so a profit of 50 pips is great.

The funny thing is, even before I hit 'sell' I can see on the charts that the CAD went up by 30 pips (at exactly 5.30 am)! Why is this? Did someone get the news before I did? Yup, the investment officers who subscribe to Bloomberg news services ($1500 or something per month) get the news instantly.. and they get to make way more pips than I.. or the average trader does.

Read my earlier post about the US interest rate decision.. I mentioned if they raised it to 50 points.. the USD would rise like crazy.. but they raised it only by 25 points.. which was highly expected. That wasn't good news for the US$ (good news for the stock markets though.. stocks and currencies are quite different in trading terms) The USD dropped by 100-150 pips against other currencies.

This is how I trade.. I'm in a trade for no longer than a few minutes. Other traders use charting, technical analysis.. etc. But honestly, I don't have the time and the patience to read a chart and start plotting. I can never understand the logic behind predicting where a currency is going to go based on charts.

I mean, you can't predict what will happen to oil prices by looking at a chart, right? Atleast I can't. On the other hand, if the US invades Iran, then oil will shoot up to $100 per barrel and all your charting logic will fly outta the window.

When you open a Forex account, you have to be careful about the margin they give you. When I first started, I had a 200:1 margin, and $300 to start with. So I could buy $600,000 with that $300.. and obviously, when the market moves against you.. you lose your money that fast.. and I wiped out my $300 in 5 minutes! Thats because I had no clue what my margin was, what a margin call was.. etc. etc. Now I do, and my account is set at 50:1 margin.

If you have $1000 sitting in your forex account, don't use all of it on one trade.. keep $500 as a backup.. to accomodate a margin call. But you *shouldnt* get a margin call in the first place, thats why you should always employ stop-loss. My stop loss is set to 10 pips.

The best advice I can give you is : 1. Don't trade emotionally.. always use your brains, and know financial terms, or rather economic terms like CPI, PPI, Interest rates, Unemployment numbers, Jobless claims, New Home Sales.. etc.. all these affect currencies.

2. Use a Forex demo or game account.. they give you $50,000 'virtual money' Treat is as though its real.. people have a tendency to bet all $50,000 on a trade.. and then if they make a profit they get excited and open a real account.. and lose their money.

3. Trade with the game account for atleast 2-3 months, and see what mistakes you've made. See how a news release affects the currency. You can have great US job results at 8.30 am EST, but if the news conflicts with some news regarding terrorism (e.g. some bomb blast in new york at the same time) then don't trade!

4. always use a stop loss.. your goal is to make profit.. and not to *wait* for it to happen. If you know what you're doing and you're confident.. then you *will* make a profit. If you made a mistake, then atleast the stop loss will limit your losses.

5. If you make enough profit, you can always buy me a beer :D

[Chip NoVaMac]

Oh no.. the maximum amount of time that I spend on a trade is 1-5 minutes. Let me give you an example:

Canadian CPI (Consumer price index) is expected to be 0.6% and the exact numbers will come out at 8.30 am EST. Now if the CPI is >0.6%.. the CAD (canadian dollar) will go up against the USD. If the CPI numbers are low.. then the CAD goes down against the USd.. remember, all this happens really fast. If the CPI comes out to exactly as estimated, then I don't do anything.

Since I'm in California, I'm up at like 5.15 am :mad: . and I set up my macbook, and parallels running win xp before the 5.30 am news announcement. By 5.27 am I'm absolutely concentrated in front of the computer, with a trade open (5000 units of USD/CAD).. and my finger ready on the trackpad.. I will hit either 'buy' or 'sell' depending on the CPI number.

At 5.30 am the Canadian CPI on my win xp news screen comes out to 2%. Thats way more than the expected 0.6% .. so I hit 'sell' rightaway(I'm selling the USD/CAD which means sell USD and buy CAD). In the next few seconds, the Canadian dollar goes up by 50 pips (or conversely, the USD goes down by 50 pips against the CAD). I don't want to be too greedy.. so I hit 'close' and I make my profit of 50 pips. Depending on how much money you put, 1 pip = 1 cent or 10 cents or 1$ or 100$ or 10000000000$ :D

Sure, the CAD went up still more by about 20-30 pips after I closed my trade.. but I'm happy with the profit I made. I usually try to make about 5 pips profit (everyday) so a profit of 50 pips is great.

The funny thing is, even before I hit 'sell' I can see on the charts that the CAD went up by 30 pips (at exactly 5.30 am)! Why is this? Did someone get the news before I did? Yup, the investment officers who subscribe to Bloomberg news services ($1500 or something per month) get the news instantly.. and they get to make way more pips than I.. or the average trader does.

Read my earlier post about the US interest rate decision.. I mentioned if they raised it to 50 points.. the USD would rise like crazy.. but they raised it only by 25 points.. which was highly expected. That wasn't good news for the US$ (good news for the stock markets though.. stocks and currencies are quite different in trading terms) The USD dropped by 100-150 pips against other currencies.

This is how I trade.. I'm in a trade for no longer than a few minutes. Other traders use charting, technical analysis.. etc. But honestly, I don't have the time and the patience to read a chart and start plotting. I can never understand the logic behind predicting where a currency is going to go based on charts.

I mean, you can't predict what will happen to oil prices by looking at a chart, right? Atleast I can't. On the other hand, if the US invades Iran, then oil will shoot up to $100 per barrel and all your charting logic will fly outta the window.

When you open a Forex account, you have to be careful about the margin they give you. When I first started, I had a 200:1 margin, and $300 to start with. So I could buy $600,000 with that $300.. and obviously, when the market moves against you.. you lose your money that fast.. and I wiped out my $300 in 5 minutes! Thats because I had no clue what my margin was, what a margin call was.. etc. etc. Now I do, and my account is set at 50:1 margin.

If you have $1000 sitting in your forex account, don't use all of it on one trade.. keep $500 as a backup.. to accomodate a margin call. But you *shouldnt* get a margin call in the first place, thats why you should always employ stop-loss. My stop loss is set to 10 pips.

The best advice I can give you is : 1. Don't trade emotionally.. always use your brains, and know financial terms, or rather economic terms like CPI, PPI, Interest rates, Unemployment numbers, Jobless claims, New Home Sales.. etc.. all these affect currencies.

2. Use a Forex demo or game account.. they give you $50,000 'virtual money' Treat is as though its real.. people have a tendency to bet all $50,000 on a trade.. and then if they make a profit they get excited and open a real account.. and lose their money.

3. Trade with the game account for atleast 2-3 months, and see what mistakes you've made. See how a news release affects the currency. You can have great US job results at 8.30 am EST, but if the news conflicts with some news regarding terrorism (e.g. some bomb blast in new york at the same time) then don't trade!

4. always use a stop loss.. your goal is to make profit.. and not to *wait* for it to happen. If you know what you're doing and you're confident.. then you *will* make a profit. If you made a mistake, then atleast the stop loss will limit your losses.

5. If you make enough profit, you can always buy me a beer :D

Dooh! You may have lost some of us. Keep in mind some of us are used to stocks. And we hear about future products and such. I mean how many of us don't wish that we had jumped on Apple over the past few years.

You are talking about short trading for those of us that have basic knowledge of the stock market. Between those of you in the "know"; how did you fair in the Fed's rate increase? And how did you hedge your bets?

[Music_Producer]

Dooh! You may have lost some of us. Keep in mind some of us are used to stocks. And we hear about future products and such. I mean how many of us don't wish that we had jumped on Apple over the past few years.

You are talking about short trading for those of us that have basic knowledge of the stock market. Between those of you in the "know"; how did you fair in the Fed's rate increase? And how did you hedge your bets?

Sorry Chip.. I tried to make it as simple as I could.. but I guess I got carried away :rolleyes:

Just visit this link, it will explain the basics :

http://www.fxcm.com/what-is-forex-trading-overview.jsp

For now, let me try teaching :p

In the stock market, you're dealing with one stock.. and not pitting it against another. For e.g. you bought AAPL at 28.. and you sold it at 60.

With currencies, they are all paired. Lets take EUR/USD for example.

So when I "Buy" EUR/USD.. I am buying Euros and selling dollars. If I "Sell" EUR/USD then I'm selling Euros, and buying dollars.

One currency is always the 'base' currency.. EUR/USD will always be EUR/USD and never USD/EUR.

Lets take USD/JPY. If you want to buy dollars, you just buy USD/JPY. If you want to sell dollars, you sell USD/JPY. If you want to buy Yen, you SELL USD/JPY and if you want to sell Yen, you BUY USD/JPY. Get it? Come on, tell me you get that :D Its a lot easier than taking a panorama pic with crazy exposures!!!! :p


Just like in the stock market, when you buy something at a low price, and sell it at a higher price.. you make a profit. Similarly, you can 'short' or sell a stock at a high price.. and later on, buy it at a lower price to make a profit as well.

The example I gave about the Canadian CPI was that of fundamental trading.. or trading on the news.

As for the interest rate decision, if the Feds had raised it by 50 points, I would have bought the USD, because I know its going to go up. How do I do this? I "sell" the EUR/USD ..which means I am selling euros and buying dollars.

Now they raised it by only 25 points. And this was absolutely anticipated. The markets had already 'factored' this in their trading.. but they were hoping for more. There were even rumors of a 50 point raise. So when it came out 25 points, the markets were disappointed, and the USD dropped. Additionally the Fed chairman didn't sound too worried about inflation. Had he said "Inflation is a definite risk and we will raise the interest rates again" etc etc the USD would have gone up. Which is why i traded a couple of seconds after the news.. to see what the Fed chairman had to say about the dollar.

The same thing happened almost a month ago, when the ECB (the european feds) raised the Euro interest rates. They raised it by 25 points.. and that was already expected.. and the EUR dropped by 300 points against the USD (gradually.. not in one day)

Here's a tip Chip.. whenever the next interest rate thing comes up.. I'll let you know.. have your demo or game account ready. Wait for the news, and if the interest rates are raised as per expectations.. see what happens. Also, look at the chart (a 5 second interval chart) and you will see the reaction immediately. The chart will begin to move upward/downwards depending on the news.. and you will know how the market has reacted.

To make this simpler, I am going to paste a picture of my trade regarding the GBP/USD (british pound vs dollar) I did this trade on friday morning.. or thursday i'm not sure. I think it was friday morning.

The GBP GDP numbers were to come out at 4.30 am EST.. quarterly and yearly. They came out better than expected, and bam! The GBP started rising against the US dollar. In the picture, see those two triangles? The blue one on the bottom, is where i bought the GBP.. the orange one on the top is where i sold it and made a profit of 7 pips. If you look at the chart, the GBP went up waaaaaaay more after I sold it.. I could have made a profit of 70 or more pips.. but its ok. I like to get in and out fast.. I don't like surprises.

http://web.mac.com/vishalj/iWeb/Site%202/Images/gbp.jpg

As a newbie, I recommend you do NOT trade when interest rates decisions are announced. Just watch.. and the forex news ticker will let you know of analysts' expectations, etc. Its like a 'chatter' when they expect how much rates are expected and so on. If I told you that Hey Chip, I'll raise interest rates in August by 25 points. You say Ok.. cool. As july and august pass.. there are signs of increasing inflation, and its clear that I should raise rates by 50 points if i want to control inflation. But I dont.. I stick to what I said and I raise it by 25 points. The market thinks thats crap, because it wont control inflation at all. so the USD dives.

I would suggest that you trade on smaller news.. like Jobless claims, home sales, retail sales, etc etc. Once you're seasoned.. you will *know* how the market will react when it comes to interest rates decisions. I personally love trading on interest rates decisions because currencies move by a huge margin - 100-300 pips..so thats an opportunity to make a lot of profit.

I'm sorry if I can't explain this that well.. I should be there in person. Anyway, visit that link I posted, and check out the basics. And don't pick up a book on forex from your bookstore.. they're crap!

[~Shard~]

Just wanted to say thanks for that excellent post Music_Producer. As a "seasoned investor" myself, I appreciate you sharing such information and in such detail. It's great to see fellow investors here on MacRumors so that we can engage in such discussions - and hopefully help someone while we're at it. :cool:

[Music_Producer]

Oh yeah, you're more than welcome! All the fine folks here are always willing to help when I have a mac problem or a rather retarded question.. so I'm always ready to give back.. and more. :)

Now if you're a PeeCee user on the other hand.. hehe :D

[Hoef]

Excellent posting Music_Producer!! So you trade the moment the news becomes available to you and not before ?.... (which is more like betting on the news I suppose).

What news product are you using again? Obviously a windows product :D At work I use reuters sometimes. I wish I had it at home....

[Music_Producer]

Excellent posting Music_Producer!! So you trade the moment the news becomes available to you and not before ?.... (which is more like betting on the news I suppose).

What news product are you using again? Obviously a windows product :D At work I use reuters sometimes. I wish I had it at home....

Exactly, I trade as soon as the news comes out. I never trade before.. that would be betting or gambling, just like you said. I use Tradethenews.com.. they offer a $39.99 per month service (text only) and yeah.. its windows only.. which is why I use parallels.

But like I mentioned earlier, keep the chart open (5 second interval) Lets say the news is supposed to come out at 8.30 am. At exactly 8.30 am *before* YOU get the news, the chart moves up or down.. so those investment officers have already got it before you. Another few seconds and *ping* you get the news alert, and its still not late to jump in.


Also, you have to make sure you're trading on some good/bad news. If jobless claims come out as expected, then don't trade.. you need a strong deviation for the market to really move like crazy. Even a 0.2% deviation in most cases works. There are about 15 important economic releases per month, so you can practice quite a bit. It all depends on how early you can wake up! (if you're on the west coast)

Hopefully one day I will subscribe to bloomberg News Anywhere .. its $1750 per month :eek: I'm sure I will be able to afford it based on my profits.. but its just.. paying that much money for just news when I could buy a macbook with that every month!! :p

[Music_Producer]

The last trade I placed was the EUR/USD before the US interest rate announcement. I am pasting the graph of my trade, and I have added those arrows and numbers in photoshop:

http://web.mac.com/vishalj/iWeb/Site%202/Images/eur.jpg

1. This is where the professional traders who subscribe to Bloomberg News Anywhere got the interest rate alert, and started buying Euros by the bucket.

2. This is where I (poor average trader) got the news and jumped in.

3. This is where I got out (like maybe 5 seconds from the entry)

4. This is where I wish I had gotten out!! :D

Honestly though, I prefer to make a small profit and get my butt outta there.. because the market is really volatile. Its fun to 'ride' the wave though.

The total from point 1 to point 4 is almost 300 pips. If you had $2500 and a 50:1 margin, and bought 100,000 units of EUR/USD when the news broke.. and exited at the top.. you would have made $2480 on that $2500. Not bad huh? :p

If you had a 200:1 margin, and bought 500,000 units.. you would have made $12,400 :eek: :eek:

[~Shard~]

Just wanted to say thanks ponce again for all this Music_Producer - it's appreciated. As I said earlier, although I'm not currently into Forex, I'm big into investing myself, so if you ever want to chat, discuss strategies, "hot tips" and so forth, please don't hesitate to PM me. :cool:

[njmac]

Hopefully one day I will subscribe to bloomberg News Anywhere .. its $1750 per month :eek:



If you get to that level, where the $1750.00 price tag makes you more money to recoup that, do you still stay with your trading platform, or is there a more direct way to trade that gets orders filled quicker and more accurate at a better price?

You sound passionate about this and you have given a great run down of what its like to trade forex, but it still makes me nervous that it is an industry that is so rife with fraud and get-rich-quick schemes. That being said, I'm glad your doing something that makes your money work for you. I believe that is the only way to get ahead in this world and believe it or not, most people have a plan to get wealthy. The lottery. Very sad.

Good luck, and thanks for such detailed info.


ALSO: you trade on news, is there news to trade on every day or is it more like monthly?

[Music_Producer]

You're welcome Shard.. I'll surely bug you when I need more investment ideas :D

njmac.. I'm passionate about Forex because its worked for me.. just like I'm passionate about macs! As for the fraud part, I would guess that every industry has its share of that. As long as you trade with a reputable dealer, I don't see why you should be screwed. Currency trading probably goes back way before the stock markets ever came into existence.

The thing that really got me interested was that our banks trade Forex all the time. Yup! Bank of America, Citibank, etc.. use our money and invest in Forex (which is where investment officers and the big money management companies come in) and sheesh.. with their balances.. even a few pips equals millions of dollars in profit.

I think I'll still stay with my trading platform, because its as good as a direct instant trading platform and the pip spread is fixed. The minute I hit 'buy' or 'sell' the order gets filled. There's no waiting.. no lag.. nothing. As long as you have a decent internet connection, you're fine. How do these forex brokers make money? They make their money on pip spreads. for e.g. the EUR/USD is 1.2500.. if i want to buy it.. i get it for 1.2503 (they make 3 pips) and if i want to sell it, the price i sell it at is 1.2497.. you get the idea.

Some forex brokers charge crazy pip spreads.. and they are not 'fixed'. When important news releases come out..they jack up the pip spread to 6-10 pips because they know thats when people will trade the most.. and thats really not fair..but the average trader doesn't know this. (the average newbie trader just looks at the charts and all the blinking lights.. and trades on 'gut feeling' or on what various forex forums have suggested)

As for trading on news, just go to a good forex site like www.oanda.com and download the economic calendar for the month of July. Its a pdf file I believe, and print it out. It has a summary of countries, the economic indicators to be released, the dates and the time (in GMT) You don't have to sit in front of the computer all day, just see when the news release is expected to be announced.. and be prepared for trading on that day.. at that time. I don't trade everyday.. more like 15 days in an entire month.

It greatly helps if you understand economic indicators and what they do to currencies. You can look for that online.. at the US Department of Labor website as well.. there's a nice explanation of everything.. jobless claims, wholesale price index, gdp, inflation, etc etc.

The guys who subscribe to Bloomberg news anywhere are handling billions of dollars.. so its imperative for them to get the news rightaway. If you read about how these news results are prepared (with absolute security) .. and the room in which they are displayed to reporters (no cellphones, pagers allowed, and crazy security stuff) you'll be amazed.. its pretty exciting.

The next US interest rate decision is in August, I think. If they raise the interest rates by 25 points and announce "Thats it! No more hikes".. I expect the USD to tank really really low..if inflation is still a concern. End of hikes usually means bad news for the dollar.. because the higher the interest rate, the greater the amount of investment from foreign countries (into our banks)

Open a 'demo' account or a 'game' account.. they come with a news plug-in which provides real time news (not as fast as bloomberg though) Practice, practice, practice.. thats the only way you'll get good at it.

[Curren~Sea]

I haven't read all of the posts but I will tomorrow... I just wanted to address one specific question real quick...

I average 5-10% profit on my full account balance every month. Of course I have losing trades but I am only concerned with maintaining long term consistency. 5% per month compounded is about 80% profit on your original balance per year, i.e. $1000 in Jan 2005 is worth $1795 in Jan 2006. I manage my drawdown (the amount I can lose in any given trade) to about 5%. If you look at the numbers that way, I am only ever risking 5% of my capital and it is returning 5% per month, which is 100% profit.

More comments tomorrow...

[Crimson]

Hi,

Very giving thread!! I'm a complete newbie, determined to learn forex. My biggest hurdle have been being a Mac user and all the brokers who don't support Mac. Arggghh! So if I'm getting it right from this thread Oanda is the way to go? How long have you been trading with them? Any other recommendations? I just want to get my feet wet but want to find a reliable platform/broker first!

Thanks again for a great thread!

[njmac]

I found a great Forex tutorial site HERE (http://www.babypips.com/) that provides great info for beginners.

I'm still not convinced... but Music Producer gives pretty sound reasoning and advice. I still maintain that you must be more caution with Forex than regulated futures/securites, so be careful!

[Hoef]

I average 5-10% profit on my full account balance every month. If you look at the numbers that way, I am only ever risking 5% of my capital and it is returning 5% per month, which is 100% profit.

If you are willing to guarantee these returns for a year I'll give you a six figure sum to manage and pay you a percent of profit :D

[Chip NoVaMac]

So as in the stock market where you have brokers that work on index funds, are there the same for FOREX issues? Meaning that I would not mind an affordable "fee" to have someone like Curren~Sea manage my "trades"

[Music_Producer]

Hi,

Very giving thread!! I'm a complete newbie, determined to learn forex. My biggest hurdle have been being a Mac user and all the brokers who don't support Mac. Arggghh! So if I'm getting it right from this thread Oanda is the way to go? How long have you been trading with them? Any other recommendations? I just want to get my feet wet but want to find a reliable platform/broker first!

Thanks again for a great thread!

Hey Crimson, as of now I like Oanda because their platform works on java, so it works with safari, firefox, etc. Every other trader's software is based on windows xp.. so that would be painful to work with. There are a couple of reasons why I like Oanda -

1. Fixed spreads.. as I quoted earlier. EUR/USD pip spread is 1.5 pips, and does not change
2. Oanda pays interest every day. For e.g. if I have $1500 in my account, just balance (i.e. no traders, nothing) they pay 4.5% interest (per year) and this interest is deposited in my account everyday (as in daily interest.. whatever 25 cents etc)
3. If I make a interest positive trade and hold it.. for e.g. I buy say 50,000 AUD/JPY (Aussie dollar vs japanese yen) I will make 5.2% interest on that 50,000 units - thats roughly $210 per month. A lot of people (including me at times) do this 'carry' trade.. and earn the interest.

Lets say AUD/JPY is 84.50 today. I buy 50,000 units. Tomorrow it goes to 84.. thats a loss of 50 pips ONLY if I sell it (i.e. I unload my 50000 units) But I have no intention of selling those units, until it goes up.. because i am busy collecting interest. So after a month or so.. it finally goes to 84.60 or 84.70.. thats when I sell off the 50,000 units. I make a profit of 10 pips (albeit after 30 days) but at the same time, I have collected quite a bit of interest.

I have tried trading with other forex companies, and they don't pay interest.. they only "collect" it from you!

Another hypothetical example - say you have $50,000 in your forex account. You use $25,000 to buy 1,250,000 units of AUD/JPY (at 50:1 margin).. then you make about $5000 in interest per month. I mentioned using only half the account balance, because you need the other half to accomodate for any 'dips'.

Right now I am not in this carry trade, because the Bank of Japan *might* raise interest rates next month, or this month. Currently the interest rate is 0% :rolleyes: ..yup.. zero. If they raise it to 0.25 or 0.15% the Japanese Yen will shoot up against every other damn currency. They have kept their interest rate at 0% for too long.. and almost every country in the world is taking advantage of this interest rate. They 'borrow' from japanese banks at 0% and invest in Aussie banks which pay them 5.2% or more interest.. its a nice game.

As for people here jumping into looking to invest money in 'managed funds'.. all I can say is , be careful. Nobody can manage your money (in forex) better than you can.

[Hoef]

Are there any forex blogs out there that you recommend (a google search revealed many many)? ....

[Curren~Sea]

Hoef: :eek: No way am I to the level of managing other people's money! I've been learning about the currency market for about 16 months now and I still feel like a noob. I fully plan to make this my main source of income but I am not quite there yet. I've spent countless hours studying and I'm committed to doing whatever it takes to succeed. Maybe someday I'll move into money management - I have actually been asked that question before... but not yet.

Trading, as my mentor states, is a marathon not a sprint. I'm happy with small consistent wins. They add up.

The irony of trading is that there are hundreds of successful strategies out there but they are very difficult to find. And, it is even more difficult to follow a strategy consistently due to our human nature. Successful trading is more about how you approach it than it is about what you actually do. That's why you can see so many good traders that have completely different styles. For example, if you read some of the interviews from, "New Market Wizards", it is evident that the traders have vastly different strategies yet they are all extremely wealthy from their trading.

Music_Producer and I have different strategies. I believe that I can in fact predict the market based on technical indicators. Sometimes I'm wrong, sometimes I'm right but my money management skills ensures that I always end up moving ahead. That is to say that I limit my losses and I let my winners ride. I may have 5 losses out of 10 trades but if my 5 losses are for 25 pips each and my 5 wins are for 100 pips each then how does that look at the end of the month?

By the way, I like trading announcements also. And the grandaddy of them all is Non-Farm Payrolls which will occur this Friday (the first Friday of each month). But, I don't need to make money on the announcement for the announcement to make me money. If the announcement sets a trend that I follow, I can ride it for a long way.

One other thing for Music_Producer... Oanda does in fact slide their spreads. That's one thing that bothers me about them. During periods of high volatility they will increase their spreads. See the following link:

http://fxtrade.oanda.com/spreads/recent_spreads.shtml#eur_usd

As a trader, we want to be diligent about what broker we choose. Oanda has a good reputation. My broker, FXCM, does not have a good reputation but I have not had too many problems with them - but enough that I'm looking for a better solution. The thing I like about FXCM in Canada is that because they're Canadian, my account is insured by the government which is unlike most other brokers. Having said that, the best brokers out there have systems in place to protect your money. And, if you get real serious you can use a Swiss or Danish broker and you won't have to worry about it.

Anyway, this is much too long of a post but I'll wrap up by saying that I appreciate the dialogue here and hope we can all learn something from it.

[njmac]

As for people here jumping into looking to invest money in 'managed funds'.. all I can say is , be careful. Nobody can manage your money (in forex) better than you can.

Thank you for saying this. Very true! No one cares about your money as much as you do.

[Music_Producer]

One other thing for Music_Producer... Oanda does in fact slide their spreads. That's one thing that bothers me about them. During periods of high volatility they will increase their spreads.

Oh yeah CurrenSea.. that holds true for GBP/USd, etc.. but never EUR/USD. I have never seen EUR/USD cross 3 pips even during the interest rate announcements. Obviously during the weekends, pip spreads shoot up for all currencies because Forex markets are closed.. this is true for every forex broker. For me trading EUR/USD, Oanda gives me the best deal.

I wish we had a broker who would offer a 1 pip spread on all currencies.. regardless of market conditions :D

[Music_Producer]

Another example of how news affects currencies..

Every currency shot up against the JPY today when the missile launch news was announced.. obviously the japanese yen sunk because NKorean can easily target Japan. You can't 'wait' for these kind of news.. but when you're trading, you should always take them into consideration.

[njmac]

And, if you get real serious you can use a Swiss or Danish broker and you won't have to worry about it.



What benefit does having a Swiss or Danish broker give you and what exactly won't you have to worry about? Is it risky to deal with a company overseas with your money?

[Crimson]

I am currently pretty set with using Oanda.com, but came across http://www.ac-markets.com and was told they support Mac via their java application. Anyone have any experience? Anyone used both Oanda and ACM?

Thanks! (And extra thank you to Music_Producer for your reply!)

[njmac]

I am currently pretty set with using Oanda.com, but came across http://www.ac-markets.com and was told they support Mac via their java application. Anyone have any experience? Anyone used both Oanda and ACM?

Thanks! (And extra thank you to Music_Producer for your reply!)

SCAM ?

LINK (http://www.forexbastards.com/Ac-markets.shtml)

.... and this is what I hate about the Forex markets. As music_producer has been showing us, it can be profitable.... but only if you are careful. Thanks for posting here first and asking. You could've been a victim. (http://en.wikipedia.org/wiki/Forex_scams)

[Curren~Sea]

Actually, it is quite possible that forexbastards.com is the scammer. I certainly do not trust that site. It is obvious that whoever maintains it spends an enormous amount of time and energy advertising and promoting (and probably not trading).

The more I surf around the more garbage I find on the net regarding forex. It's hard to sort out who is legit and who are the scammers. Since this market is not regulated, some accounts in the U.S. are not secured. However, in other coutries such as Canada your funds are secured by the government. In Switzerland, they have very strict laws and accounting procedures that virtually assure that a bank or broker will not conduct fraud. 35% of the world's money is in Swiss accounts. Additionally, there are no capital gains tax on Swiss accounts.

[~Shard~]

Since this market is not regulated, some accounts in the U.S. are not secured. However, in other coutries such as Canada your funds are secured by the government. In Switzerland, they have very strict laws and accounting procedures that virtually assure that a bank or broker will not conduct fraud. 35% of the world's money is in Swiss accounts. Additionally, there are no capital gains tax on Swiss accounts.

Apologies if you have mentioned it already, but who exactly do you recommend using here in Canada? In order for your money to be protected does it have to be through a Canadian company in Canadian funds? Based on Music_Producer's comments, I started looking at Oanda, but would like to hear your thoughts on the matter...

Also, can anyone open a Swiss account then? What are the details around doing this? Do they have huge service fees, or a minimum account balance in the millions? ;) :cool:

Thanks in advance. :cool:

[njmac]

I would love to have a numbered Swiss bank account :cool:

[njmac]

The more I surf around the more garbage I find on the net regarding forex. It's hard to sort out who is legit and who are the scammers.



I know, me too. That is the thing I hate about forex. Its just too damn easy to get taken. I like the idea of making money off the foreign exchange market but its so hard to seperate the BS get rich quick scams from the legit outfits. I did see somewhere else about ac-markets that it is a scam... I'll have to see if I can track down a link other than forex bastards. (I don't really know whether to trust them either, and certainly wouldn't spend a dime there, but a lot of their broker reviews are spot-on when it comes to scams)

[~Shard~]

From all these discussions, I assume Oanda is relatively safe, at least in terms of all these "scam" entities? Just wondering who I should go through if I decide to get into this aspect of investing... :cool:

(I guess I sort of asked the same thing in my previous post as well... :o ;))

[njmac]

From what I can tell, Oanda is not perfect, but they are reputable. If you open an account with them, will you please report back here how you found them to be? And of course how successful you are ;) :cool:

[~Shard~]

From what I can tell, Oanda is not perfect, but they are reputable. If you open an account with them, will you please report back here how you found them to be? And of course how successful you are ;) :cool:

Will do! ;) I wouldn't mind hearing a bit more from Music_Producer and Curren~Sea first though... :)

[savar]

If you had a 200:1 margin, and bought 500,000 units.. you would have made $12,400 :eek: :eek:

does the idea of trading on 200:1 margin frighten you? or are the currencies stable enough that in practice you wouldn't get wiped out?

also, how did you come to be aware of the timing of economic releases. is it just something that you follow in the newspaper?

edit: also, the japanese 0% interest rate, is that real interest or nominal interest?

[Curren~Sea]

I'm not sure which brokers/bankers in Switzerland would be the best. I am doing a lot of research now. But to be quite honest, with my style of trading I don't have much trouble with FXCM (actually it is MAN financial in Canada). I'm a longer term trader and my stop losses are generally out of range for a bucket shop to phish. If I have a 50-100 pip stop loss, it is very difficult for a dishonest broker to spike it.

I don't know this for a fact, obviously, but I suspect that most people who complain about their stops being taken out by a broker probably have only themselves to blame for putting it at a vulnerable spot.

It is folly to arbitrarily put your stops at some round number such as 10 or 25 or 50 pips without taking historical highs and lows into account. Doing so will virtually guarantee that your trade is stopped out. And it's not necessarily the broker who will stop you out but the mob mentality of the market.

For sure, announcements move the market. But how far the move travels is a function of technical points of resistance. If a trader is scalping pips off announcements then yes, you need a platform that will let you trade during the few seconds or minutes of major volatility - FXCM does not. But they do honor your trades. If you put in entries, limits, and stops before a major announcement, your trade station may be locked for a few minutes but you'll eventually see that they executed your trades.

As for Canadian brokers, I know many traders who are very happy with FXSolutions, and you can use them anywhere but BC. Another that I have started researching is QuestTrade out of Toronto.

To deposit funds with just about any broker you can simply wire transfer the money. Personally, I funded mine from my credit card (got air miles) which I always pay back every month to avoid interest charges. There are a lot of other papers to read, sign, and fax or scan and email. But, by the time a person is ready to open a live account they should be comfortable with all of the legal mumbo jumbo.

[Curren~Sea]

Here's another true story...

When I started trading forex, I was excited and I told my brother about it. I said that I thought he'd make a good trader and that he should take some courses like I have. Well, he didn't want to pay for training so he did some research on the net, read a couple books from the library then opened up a demo account. He was phenomenal in his demo trading. He took his 50k free account to 75k within a month on momentum trades.

He opened a little live account with $1000 and it was gone in two weeks.

Of course he is not interested in trading anymore....

I asked him what happened? He said that he changed his strategy when he went live. I said, WHAT?! Why on earth would you do that? He didn't really have a good explanation and that's the end of that for him.

I have a good explanation, though. Demo trading is nothing like live trading. Demo accounts have no real value and we attach no emotional value to them. It's easy to make money in a demo account. Go live and it's a whole different ballgame.

The morals of this story are: 1) Get some real, professional training. 2) Practice on your demo account at least for 3 months and try very hard to treat it like it is your real, hard-earned money. 3) Find a system that works for you and stick to it.

[Hoef]

I'm a longer term trader and my stop losses are generally out of range for a bucket shop to phish.


Curren~Sea, so are you more trading on fundamentals? Why are there so many forex trading sites in Canada?

[Music_Producer]

Savar, most forex brokers set the default margin rate to 200:1..thereby making it pretty easy to lose money if you're a newbie and have no idea what a margin call is. My margin is set to 50:1. Oanda does not allow me to set a higher margin than that, and in a way thats good.

For economic releases, just download the economic calendar from any forex site.I don't read the newspaper for that.. the newspaper's only for the comic strips :p

As for dealing with swiss brokers, I don't know. I feel safer dealing with forex traders who are based in the United States.. because thats where I live. If I were in Canada, I would probably deal with a canadian broker and so on. Oanda's based in NY, and a couple of offices around the world of course.

My first forex account was with Refco FX. They were pretty big.. but they went bankrupt and were bought by another forex broker. Everyone panicked, thinking their money was gone.. but I received my money back (in the form of a check) I only had $48 in there, but they did return it. Thats also because they were based in the US, if it were a Swiss company.. I am not sure how that would work. Maybe I'd have to fly to Zurich to get my money back? :rolleyes:

The best way to check if a forex site is for real or not.. is their contact information and the way the site is set up. I mean I have seen some seriously amateurish sites.. and the best giveaway is "Minimum requirement is $30,000 deposit" Lol.. yeah, sure.

You can deposit $10 in oanda and trade with that.. my first deposit was $50 to practice.

Curren~Sea, your brother made the grave mistake of changing his strategy. *Everyone* does well with a demo account! I converted $50,000 into $120,000! Why? Because its fake money. I would simply trade for the heck of it.. for 'fun'. And also, $50,000 gives you a lot of collateral in the event of a margin call.

Which is why I always say.. treat the demo account like a real account! Also, don't go around looking for forex forums or blogs.. there are a lot of idiots out there who give retarded advice "OMG!! SELL GBP/JPY RIGHT NOW!!!! MAKE $$$$" and crap like that.

Sometimes, when you're out of trading strategies.. you will look to adapt anything that anyone says.. and that will usually burn you.

[Curren~Sea]

Hoef: I trade on technical indicators such as chart patterns (http://chart-patterns.netfirms.com/) and the Elliott Wave (http://www.elliott-wave-theory.com/). I do not follow the fundamentals at all. I am aware of fundamentals, and I am aware that announcments occur but I do not really care what they are other than their relative importance, i.e. how much are they likely to move the market.

I care where the market is currently going and I use the Elliott Wave to predict market turn arounds.

Basically, predicting the markets is an odds game. This may sound like gambling but it isn't. It's more like the process of elimination. If you do things that increase your odds then you'll be more successful. This concept is no different than buying stocks or real estate. You take a chance that your investments will move in the direction you expect but you don't really know. However, if you do your homework and make intelligent decisions based on solid facts then you stand a much better chance of succeeding.

I doubt that Canada has more fx brokers than anyone else. I think many of the companies are subsidiaries of larger US or multi-national firms. I have played around with the Oanda FX Game and it's ok. I don't really like the platform itself but I like the concept and the mechanics behind it. I pay for professional charts that originate from FX Trek, and they're unparalleled in my opinion. So, my broker doesn't need to provide charts, they just need to have a good system that is reliable.

[Curren~Sea]

Margin, spreads, leverage, pips... it can all be confusing. Well, it still confuses me!

But I am of the opinion that the higher the leverage the better.

With 200:1, it costs $50 to secure $10,000 USD worth of a currency, which is one lot (10000 / 50 = 200). At 200:1, one lot is worth $1. If the currency goes your way by 10 pips, then you make $10. You can buy 10 lots, which would cost you $500 and each pip is worth $10, so a 10 pip move would make you $100.

At 100:1 it costs you $1000 to secure 1 lot but each lot is actually $100,000, and each lot is worth $10. Each pip is worth $10.

So with 200:1 it costs 500 to control 100,000. At 100:1 it costs 1000 to control 100,000. In either case, each pip is worth $10. Which makes the most sense?

You will never lose your margin, i.e. the 500 you use to secure 100,000. The most you can lose is your stop loss, which you should always enter at the same time as your trade. If you get margined out, you'll get your 500 back and everything else will be gone. This is just an example and the numbers can vary.

Example of a worst case scenario: You have a 2000 account, you buy 10 lots for 500 (first silly mistake). That leaves you 1500 worth of pips. You forget to enter a stop (second silly mistake) and you go on a cruise to Alaska. The market goes against you by 150 pips and you get a margin call (150 * 10 = 1500). The broker takes your 1500 and gives you back the 500. You get home, see your mistakes, take your 500 and buy lots of beer and chips.

I still haven't figured out how Oanda calculates its fractional lots but I have only heard good things from people who use them.

Personally, I am all about simplifying. And generally a few pips doesn't mean much to me because I'm after hundreds.

[Music_Producer]

There's an ECB meeting today at 12.45 GMT.. (next 15 mins) Lets see if they raise interest rates or leave it where it is..

[njmac]

There's an ECB meeting today at 12.45 GMT.. (next 15 mins) Lets see if they raise interest rates or leave it where it is..

How did you do?

[Hoef]

How did you do?

Also let us know how you are going to approach the non-farm payroll tomorrow. Good stuff!

[Crimson]

Hi again everyone,

I realize I'm so much newer at this than most of you guys in here but you have given me some good advice so I'll figure I can ask some more. But please forgive the lack of the right terms. I am reading all the beginner material I can find on Forex but am yet to come across answers to what I'm really curious about.

If I buy Euros when they seem low, after looking at the bigger picture" chart (on Oanda 1 day charts) and they look low in comparisson to where they've been. Now I'm thinking that they will go back up to where they've been at some point... so why would I put a stop/loss order on it? I mean, can I not leave the order active until it does? Theoretically, for days, weeks... or months? I guess what my question is; does currency go low and stay that way forever? Doesn't it always spring back at some point? What is the reason for taking the loss early and not waiting it out?

OK... probably a really silly question and completely gives away my amature status but I would really appreciate your help!! (and no... im not trading real money yet... phew!):)

[Curren~Sea]

In theory, everything balances out over time.

However... a smart trader should ALWAYS use a stop loss to protect their capital. What if it doesn't come back for a long, long time? What if you bought the EUR in Jan of 1999, well it took you 4.5 years before it came back.

What if there is a major catastrophe or a major accomplishment? For example, you are in a trade that you expect the USD to go down and they nab Osama, what do you think the US dollar will do? Or you're in a trade and you expect the YEN to go up, and a North Korean missile lands in Japanese territory? What do you think the Yen will do? There are just too many variables that are completely out of our control and you don't want to blow through your whole account on something like that.

Success in forex is as much about protecting your trading capital as it is about profit. Always use a stop loss, that's how you control your risk.

[Curren~Sea]

Another way of looking at it is your risk vs. reward. This is a very important concept in trading. A stop loss number is your risk. And you should have some idea what your reward will be based on chart patterns or based on what your goals are.

If I use a 20 pip stop and I expect a 20 pip profit, that is a 1:1 risk vs. reward ratio. Are you happy with that? I can make one good trade and one bad trade and be even.

If I have a 50 pip stop and I expect 100 pip profit, that's 2 to 1. I can make 2 bad trades and one good trade and be even.

A huge part of trading is learning that it's ok to lose as long as your wins outpace your losses. Most people hate to lose (me included) so it takes a lot of discipline to stick with my stop losses, take a loss and move on to my next trade. But it works out well in the long run.

[Music_Producer]

How did you do?

Well, nothing happened.. the interest rates were not touched. The Euro went down by a few pips and I made about 8 pips.. thats it though. The Bank of England didn't raise rates either. Quite a boring day. :p

Crimson.. yeah, thats what I used to think too.. that at *some* time the currency will come back up. In theory you can be fine if you don't use a stop loss.. but when you see that "-700$" sign in your account.. you won't be able to sleep that well :D

Additionally, you're paying interest if you have a interest negative trade. For e.g. if you buy EUR/USD.. you are paying daily interest. If you sell EUR/USD however, you are getting interest.

Just like I stated about the AUD/JPY.. I buy it and hold it (if it goes down) because it pays me interest. Eventually when it goes back up, I sell it and make my profit. Right now I am *not* doing that because the bank of japan is expected to end its zero interest rate policy next week.. but with all these Korean missiles flying around, I don't quite know what's going to happen.

Crimson, lets assume you bought the EUR/USD at 1.2900 before the interest rates were announced last month. If you even bought only 5000 units, you'd have a -$108 pending loss (if you sold it) Lets say you bought 15000 units..you'd have -$325. In addition you are paying $1.4 interest everyday. Now the EUR has still not come back to 1.29.. in fact, its at 1.278.. and goes to 1.27 at times.

So yes, theoretically.. if you have enough balance in your account to accomodate for these swings.. you will be fine.. as the currency will come back to its level.. but it might take years! One thing's for sure.. the currency will never go to zero like stocks do! But then, those units which are making a loss (which you are holding on to) also reduce your ability to buy more units to make a profitable trade, and so on. Plus the interest..its better to employ a stop loss, and forget about it when you make profit later on.

I'll post about today..er..tomorrow's news this evening and let you know what I think

[Crimson]

Hi Music_Producer,

Being new at this I've discovered how hard it is to find really good newbie books in this topic - just wanted to say the more I read, the more impressed I get with your way of explaining this to someone who is just starting out, and all I can say is the bookstores NEED a book written by someone like you!! Thank you again. I've gotten more useful info from you than books and sites I've read! Be prepared for more silly questions down the road! :)

[Music_Producer]

Hi Music_Producer,

Being new at this I've discovered how hard it is to find really good newbie books in this topic - just wanted to say the more I read, the more impressed I get with your way of explaining this to someone who is just starting out, and all I can say is the bookstores NEED a book written by someone like you!! Thank you again. I've gotten more useful info from you than books and sites I've read! Be prepared for more silly questions down the road! :)

Hey Crimson, you're welcome! All I can say is, I don't know why these damn books always 'try' to explain things.. but they never really do. Sure, they explain the basics of forex trading, and all the 'mistakes' you shouldn't make.. but honestly that's already there on every forex site.

All those charting patterns, analyzing stuff is good in theory.. but I find that I can never predict a 'trend'. My trades last for a few seconds, and they work, well they have worked so far. Hey, maybe I'll write a book in the future.. so right now you're kinda seeing a work in progress :p

[Music_Producer]

No, they're not characters from a cartoon strip...:D ..thats just the term they use all the time in forex.. when the Fed chairman is 'hawkish' that means he's more willing to raise interest rates. He will usually talk like "Yes, inflation is a threat and we will be raising rates in the future".. something of that sort. Dovish is when it seems like they are done with raising rates, or will do nothing to the rates.. something like "Inflation is well contained, the economy's strong.. we see no reason to hike rates anymore"

So lets look at the graph for this morning-

http://web.mac.com/vishalj/iWeb/Site%202/Images/eurtoday.jpg

1. This is when the ECB announced that the rates were not hiked.. this was expected.. so kinda boring.. but I sold the Euro anyway as i expected it to dip a little .. and it did

2. I closed the trade (by buying euro at a lower price) for about 8 pips. This was all before 5 am. Traders also look for what the ECB chief has to say about the Euro during their meeting.. i.e. whether he is hawkish or dovish (sounds silly i know!)

So at 5.30 am, a bunch of reports came out.. and he was very hawkish.. mentioned that on Aug 3, there won't be a teleconference (as ppl expected) but a real conference.. and a possibility that rates might be hiked. This was huge.. because nobody expected them to really meet again on Aug 3 (I dont know why they waste so much money on meetings..just meet once and raise the rates damnit!! :p )

When that news came out.. the Euro jumped .. and as you can see .. its been at that level pretty much the entire day (towards 1.2780) I didn't expect that the ECB would announce Aug 3 to be their next meeting, so I went to sleep before this report came out.. damn!

Anyway, hope this explains how even simple comments made by the Feds/ECB can affect the currency. Which is why they used to say Alan Greenspan was so powerful.. because he could move markets simply by talking.. obviously the same holds true for every Fed chairman. And you thought you had the best job in the world huh? :p

If the US non farm payrolls come out strong, then the USD will go up.. remember, you need a good deviation from the standard 'expectation' If the market expects 310k jobless..and the number comes to 313 or 309k.. thats not going to move the market much. If the number comes to something like 350k or 250 k.. the market will move.. a lot!

And while you're paying attention to all that, don't forget our psycho friend Kim Jong and his missile threats! Its funny though, as the markets have 'factored' these threats.. they apparently don't think Nkorea can be a real danger. I sure hope they're not.

[njmac]

Thanks again for the info. It does make sense the way you explain it. :)

I am very curious to know how you learned the fundamentals? Like how did you learn what specific news will cause a specific spike up or down in the markets. How do you learn what affects other countries currencies? If you read Trade the News, how exactly do you know what that news will do?

[Music_Producer]

Thanks again for the info. It does make sense the way you explain it. :)

I am very curious to know how you learned the fundamentals? Like how did you learn what specific news will cause a specific spike up or down in the markets. How do you learn what affects other countries currencies? If you read Trade the News, how exactly do you know what that news will do?

Hey nj, pretty simple.. trading for months with a demo account, I followed the news and wrote down everything.. whatever effect a certain segment had on that particular currency. Some releases have small impacts, some in turn - huge. I find that interest rate decisions move currencies the most.. even 'rumors' or simply statements about interest rates.

[~Shard~]

Once again, thanks Music_Producer. Thanks to you, I might just get back into this crazy Forex game one of these days... ;) :cool:

[Music_Producer]

Hey Shard! Almost forgot about your country's news release today! At 7 am new york time.. Canadian unemployment rate and change in employment comes out. I usually like trading CAD (canadian dollar) as its less volatile compared to Euro and the like. :)

So..

7 am - CAD change in employment report
8.30 am - non farm payrolls - affects USD

[~Shard~]

Hey Shard! Almost forgot about your country's news release today! At 7 am new york time.. Canadian unemployment rate and change in employment comes out. I usually like trading CAD (canadian dollar) as its less volatile compared to Euro and the like. :)

So..

7 am - CAD change in employment report
8.30 am - non farm payrolls - affects USD

Yep, I'm always well aware of the economic news, being the active investor that I am, however I'm not in the position to benefit from it as I do not have one of these fancy schmancy Forex trading accounts... yet... ;) I follow all that news closely as well, it would be nice to capitalize on it... ;cool:

So, you'll be ready to go with your hand over the BUY or SELL button for CAD/USD? ;) :) Let us know how it goes, if you decide to act...

[Music_Producer]

Yup Shard.. I'll be ready to trade the USD/CAD at 7 am EST (4 am PST in Cali) I am so used to staying awake now till 6 am.. :)

I will be trading the EUR/USD as well.. but the non farm payroll seems a little weird.. expectations are ranging from 135k to 185k.. and thats a pretty huge range. :eek:

[Music_Producer]

If I buy Euros when they seem low, after looking at the bigger picture" chart (on Oanda 1 day charts) and they look low in comparisson to where they've been. Now I'm thinking that they will go back up to where they've been at some point... so why would I put a stop/loss order on it? I mean, can I not leave the order active until it does? Theoretically, for days, weeks... or months? I guess what my question is; does currency go low and stay that way forever? Doesn't it always spring back at some point? What is the reason for taking the loss early and not waiting it out?

OK... probably a really silly question and completely gives away my amature status but I would really appreciate your help!! (and no... im not trading real money yet... phew!):)

I know I have replied to this earlier but I wanted to post an additional comment on your question.. based on personal experience. During my first few months of trading recklessly i.e. no stop loss, gut trading and so on.. I tried the same thing. At that time I had a 200:1 margin, so I bought EUR/USD and didn't have a stop loss.

The next morning, I was at a $400 loss.. with little margin left. So I panicked, and wired some more funds into my forex account. The funds showed up the next day, and everything was good (well, that $400 loss was still staring at me in the face) I was hoping the EUR would go back up and everything would be sunny again.

24 hours go by.. the Eur's gone down again.. and I'm looking at a possible $950 loss. I still have some margin left, so i don't worry about it. In a few hours, it tanks to -$1200. Again, I have hardly any margin left, so i wire more money into my account. Too late.. i get a margin call and *poof* I just realized a $1200 loss.

no problem right? I'm the oh-so-wannabe-George-Soros trader. So I got pissed off.. and wired more money and bought EUR at that level. Hey, it tanked so low.. it has to go up! Wrong. The bastard tanked again.. and I went through the whole frikkin cycle again.

Had I employed a stop loss, I would have lost about $100, instead of $2400. AND the interest I had to pay on top of that. So Crimson, if you make the same mistake that I did, or intend to make the same mistake.. please wire me your money and I will take more care of it than you will :p

[Music_Producer]

Assume you have $10,000 in capital. Use $5,000 (keep the other 5000 in the forex account as collateral) and buy AUD/JPY at 50:1 margin. That gives you about 334,000 units to buy at the current usd/aud rate.

You will fetch $36 every 24 hours in interest. Not bad for using only $5000 of your capital. Lets say you bought the aud/jpy at 86.00.. anda fter 30 days, it dips to 83. This is absolutely possible, because in one month aussie has jumped from 83.50 to almost near 86. So the reverse can happen too.

At 50:1 margin, you are looking at a -$8717 loss. But you have $5000 collateral.. so you need to pump in atleast $4000 extra in your account to accomodate for that dip.

The bank of japan eliminates their zero interest rate policy. The Yen skyrockets.. Aussie dips to 79 (can easily happen in 24 hours)

Whats your loss looking like? -$20,340. So you're gonna pump in more money to accomodate for it? you cant.. you wont! To make $36 per day in interest, you just spend a hell lotta money! This is where a lot of newbies mess up too.

The aussie can go up too.. say from 86 to 90 (if the bank of japan does not end the zero interest policy, korea launches more missiles so the yen tanks etc etc) then you stand at a $11,000 profit PLUS your $36 per day interest.

So if you're going to operate a carry trade, be careful and be aware of what can possibly happen. Banks don't have to worry about this as we do, since they have billions in collateral (until they go bankrupt :p )

[Music_Producer]

Just finished my trade a few minutes ago (at 4.04 am.. its now 4.10am) CAD employment came out to -4.6k vs expectations of 10k.

http://web.mac.com/vishalj/iWeb/Site%202/Images/cad.jpg


1. This is where I bought the USD/CAD - as you can see I got in a little late:rolleyes:
2. This is where I sold it .. for 4 pips profit (4 pips *20 = $80)

3. This is where the bloomberg/reuters crowd got their news, and bought the USD.. so they made 40 pips i.e. I could have made $800, instead of $80. So yes, subscribing to bloomberg news would be worth it.. but I'm not ready for it yet.

The USD went up by a few pips more after I exited.. about 6 more I think.. but I always get out fast especially considering that the main event today is going to be the US non farm payrolls in about an hour and a half.

Oh, now rumors are that the market is 'expecting' 200,000 for non farm payrolls.. so the range is 135-200,000.. ridiculous! Will be interesting to see what happens..

[njmac]

How many seconds is that chart?

Also, I'm a little surprised how much it dipped a few times. Did that stop a lot of people out do you think, or is that normal?

[Music_Producer]

Not too sure about the chart interval.. didn't notice that when i took the snapshot with the grab tool.

The dips occur after every spike (the big spike grabbed 40 pips.. ) they are merely corrections.. I didn't place a stop loss on this one at all, because I knew USD had to go up against the CAD. -4.6 k is pretty bad when they were expecting 10 k.

Stay alert for that payroll report..

[Music_Producer]

US non farm payrolls came out to only 121k or so.. market was expecting from 135 to 200 k (200 k rumors came up during the last 3-4 hours) EUR shot up by 77 pips against the USD!

I was a little faster at getting in the action this time ..so I grabbed 32 pips .. made $640 in 2-4 seconds :D

http://web.mac.com/vishalj/iWeb/Site%202/Images/eurjul7.jpg

Its going to be a nice weekend :D

[Music_Producer]

Njmac.. the 'dips' are also due to profit taking. When all the banks bought the EUR like whores at the base level.. they all also sold a lot of EUR at the highest level.. so that does affect the EUR.. and you see 'dips'. Then collectively, they will buy EUR again.. who knows after how long.. maybe a few seconds.. maybe a few minutes.. and then the whole thing repeats itself.

As long as I got my profit.. I'm outta there.. the banks can then play with themselves :p

[njmac]

I was a little faster at getting in the action this time ..so I grabbed 32 pips .. made $640 in 2-4 seconds :D



:eek: good for you!

Thanks again for all of the great info. You make it sound so easy ;)

[~Shard~]

Question for ya Music_Producer.

Obviously you sit with your trading window open just before these announcements come out - but do you actually have some real-time news "ticker" or source running at the same time so you can actually see the #s, or do you just go off of the pre-news spikes by the Bloomberg/Reuters crowd?

As you say, those who subscribe to Bloomberg get the news before everyone else, so you can see the currencies get affected before anything is officially released, but I am wondering if that is solely what you base your trades on, or if you wait to see the actual #s as well. (i.e. something spikes, so you assume the #s were way off and then confirm that later...)

For instance, on the CAD employment #s, you said you didn't place a stop loss on it because you knew USD had to go up against CAD, since -4.6k is pretty bad compared to the expected 10k. But did you make that trade before the news came out, and then learned about the actual #s afterwards, or did you know the #s in real-time as well, hence why you didn't put a stop loss in? I thought if you wait for the #s it's too late due to all that pre-trading. ;)

Sorry if I'm not explaining things clearly, hopefully you understand what I am getting at.... ;) :cool:


Second quick question - how close to the scheduled times do these results come through? Right at 6AM on the nose, or sometimes earlier, sometimes later?

[Music_Producer]

Hey Shard.. I subscribe to tradethenews.com, its a news alerting service, and it costs $40/month. It works with win xp only so i have parallels running, and I have the volume pushed up (every news alert comes with a siren sound!)

I click on buy or sell as soon as the news shows up.. I do NOT trade before that! Currencies jump around quite a bit, especially if the market is volatile.. lets look at the payroll situation. Everyone was expecting 135.. then it went to 150..then 185.. then 200k. Why? There were 'expectations' based on some payroll company.. in fact, there was even a number of 385k going around :eek:

So if you had bought the USD based on these rumors.. and the news of 121k came in.. lets just say you would have quit forex the same day :rolleyes:
Never trade before a news announcement.. I get in late on the action because tradethenews.com is not nowhere as fast as Bloomberg or reuters is.

I would gladly subscribe to bloomberg news anywhere, but its $1700 a month, with a 2 year contract.. and you have to pay quarterly amounts, so I would have to pay somewhere around $5000 rightaway :eek:

I'm really really fast though.. if something's coming out at 5.30 am (pst).. by 5.28 am i absolutely stop breathing! You can't take more than a second or two to analyze the news, and trade.. and get out!

[~Shard~]

Thanks Music_Producer - again, it's apreciated. :cool:

Sounds high risk and high stress - what can I say, I like it. ;) :D

[Hoef]

US non farm payrolls came out to only 121k or so.. market was expecting from 135 to 200 k (200 k rumors came up during the last 3-4 hours) EUR shot up by 77 pips against the USD!

I was a little faster at getting in the action this time ..so I grabbed 32 pips .. made $640 in 2-4 seconds :D

http://web.mac.com/vishalj/iWeb/Site%202/Images/eurjul7.jpg

Its going to be a nice weekend :D


I actually opened a demo account on OANDA and played with it. I also tried to time the EUR/USD "game" this morning. However I wasn't fast enough .... I noticed the spike, pulled the trigger immediately and was too late.... The whole jump lasted less than a second it seems. I noticed it took a while for the order to go through .... busy times.


How to ever time this correctly ?

[Music_Producer]

I actually opened a demo account on OANDA and played with it. I also tried to time the EUR/USD "game" this morning. However I wasn't fast enough .... I noticed the spike, pulled the trigger immediately and was too late.... The whole jump lasted less than a second it seems. I noticed it took a while for the order to go through .... busy times.


How to ever time this correctly ?

It wasn't less than a second buddy.. it was atleast 4 seconds, the oanda news came out after tradethenews alert came out.. so i got in the action earlier. My order went through rightaway.. and I closed it fast as well. I tried FXCM (with a $300 deposit) and was absolutely annoyed, as when I clicked on 'buy' I got a "Waiting for dealer.." pop up. I just clicked 'cancel'.. I can't afford to wait for a loss, so I'll be closing my fxcm account and sticking with oanda.

Also, its a friday, and the forex markets close today till sunday afternoon.. so trading is relatively dull.. on the other hand if there were some EUR reports coming out today (later on) you would have seen the EUR surge up even more.

I can't possibly explain how fast you have to be when it comes to trading, I reset my dsl modem and router half an hour before i am going to trade, just to make sure that i don't have any 'dropouts' in my wireless connection.. make sure everything is running great. I wish I had 2 cursors.. one on either 'buy' or 'sell' and one on 'submit'. Kinda like a duel during the old wild west times :p

[Hoef]

It wasn't less than a second buddy.. it was atleast 4 seconds, the oanda news came out after tradethenews alert came out.. so i got in the action earlier. My order went through rightaway.. and I closed it fast as well. I tried FXCM (with a $300 deposit) and was absolutely annoyed, as when I clicked on 'buy' I got a "Waiting for dealer.." pop up. I just clicked 'cancel'.. I can't afford to wait for a loss, so I'll be closing my fxcm account and sticking with oanda.

I didn't use the news but watched for the "breakout". I guess by the time the breakout was obvious on my Oanda screen, 4 seconds had past...

[~Shard~]

Just curious Music_Producer do you physically have 2 trade windows open simultaneously? One to buy/sell (whatever you're doing initially) and then another one open to do the opposite to close the trade a few seconds/minutes afterwards? Just trying to get a good idea of how you streamline the prpocess. Timing definitely appears to be everything! :D

[Music_Producer]

Just curious Music_Producer do you physically have 2 trade windows open simultaneously? One to buy/sell (whatever you're doing initially) and then another one open to do the opposite to close the trade a few seconds/minutes afterwards? Just trying to get a good idea of how you streamline the prpocess. Timing definitely appears to be everything! :D

Nope, just one window open. That's the trading window, or the order window.. it has the currency pair "EUR/USD", Buy or sell, and "Submit".. and other stuff like stop loss, take profit, etc but i dont select those. As soon as the news comes out, I have to click either 'buy' or 'sell' (one of them is selected anyway) and then hit 'submit' Thats where I lose most time - like maybe 1-2 seconds for the whole thing.. and thats too much!

Once the trade has been submitted, I just click on it, to 'close' it.. as soon as it hits a profit. So its one window open for buying/selling.. when thats done.. it closes.. and then you click on the trade to close it. Closing it is the easy part, its deciding between 'buying'/selling and hitting 'submit' that takes time. Oh, and analyzing the situation doesn't take me any time at all now (it used to earlier) since I'm used to it now.

At any given point of time, I have multiple scenarios running in my head.. this morning it was "US payroll comes out.. talk of EUR raising rates.. JPY rates next week.. EUR might go up because of hawkish tones by the ECB chief.. so the USD seems weaker.. but lets wait till the payroll report comes out" So the EUR was poised to go up because of rate rumors anyway, but it received that needed boost from the disappointing payroll report.

[~Shard~]

Cool, thanks. :)

Kay, a couple more for ya, if you don't mind... ;)

Do you have to pay any monthly account fees with Oanda? How about commissions on your trades? Or is it simply just a 3 pip charge (or whatever) in and out, just like how the banks always take their little cut when doing currency conversion for you... ;) Also, do you receive buy and sell slips in the mail for your record keeping just as you would a stock trade? Are your taxes a nightmare with so many trades? You must have sizable capital gains.... ;) :cool:

And last one, I promise... for now... :o

How aware of the actual exchange rates are you? Do you have a "cheat sheet" telling you what the conversion rates are, give or take, or is that detailed information somewhat immaterial to you? Just wondering if you know "off the top of your head" how much AUD you can buy with x lots considering your account is in USD, etc. etc. - I think you know what I'm getting at...

[Music_Producer]

Cool, thanks. :)

Kay, a couple more for ya, if you don't mind... ;)

Do you have to pay any monthly account fees with Oanda? How about commissions on your trades? Or is it simply just a 3 pip charge (or whatever) in and out, just like how the banks always take their little cut when doing currency conversion for you... ;) Also, do you receive buy and sell slips in the mail for your record keeping just as you would a stock trade? Are your taxes a nightmare with so many trades? You must have sizable capital gains.... ;) :cool:

And last one, I promise... for now... :o

How aware of the actual exchange rates are you? Do you have a "cheat sheet" telling you what the conversion rates are, give or take, or is that detailed information somewhat immaterial to you? Just wondering if you know "off the top of your head" how much AUD you can buy with x lots considering your account is in USD, etc. etc. - I think you know what I'm getting at...

Hey shard.. don't mind the questions at all :)

There are no monthly fees with any forex broker.. their commision is the pip spread (2-3 pips or whatever) No account inactivity fees or anything of that sort.

I don't receive the account activity stuff in the mail, but I do print them out from an online statement. You can request paper statements of course, but I just hate receiving paper in the mail.. I have too many statements anyway. For taxes, you just declare them as capital gains, I don't think there's any confusion there.. fairly simple. I declare 2 things - the interest earned, and the capital gains (or losses as in my first year of trading forex)

The exchange rates really don't matter to me.. but since I trade EUR/USD almost all the time, I kinda have a general idea of what the rates are. Same with AUD/JPY. I can't calculate how many units I can buy with my balance.. I just use the Oanda calcular for that, check their "FX Calculators" sections.. you can calculate stuff from available units, to margin calls, profit calcs, and interest calculators.

I just wish I worked at an investment bank so I could do all my forex trades without the spreads.. and of course, get 'hints' on the economic indicators :D

[~Shard~]

Thanks again. I'm seriously going to get back into Forex (as I mentioned way back at the beginning of this thread, I did it once, years ago, realized I didn't know what I was doing, and have never done it since) and I sincerely appreciate such valuable advice. Once I get into it (probably not until this fall, just too busy right now) I'll PM you with further questions if you don't mind.

I'm big into the stock market right now, and play it with options, convertible debs, income trusts, a few limited partnerships, and flow-though entities to supplement my general stock trading. If you ever need any tips, etc., just PM me. I have a couple models I follow which have made me significant amounts of money the past few years with a great deal of consistency - a rarity, I find, in the stock market these days. :cool:

[Crimson]

Hi again,

Music_Producer, you have mentioned you use www.tradethenews.com with your PC. Have you ever come across something similar for the devoted Mac user? (Probably silly question since you would probably use it if you had!) I had not planned on buying another computer so I'd love to hear some alternatives for us neglected Mac-fans! :p

[Music_Producer]

Hi again,

Music_Producer, you have mentioned you use www.tradethenews.com with your PC. Have you ever come across something similar for the devoted Mac user? (Probably silly question since you would probably use it if you had!) I had not planned on buying another computer so I'd love to hear some alternatives for us neglected Mac-fans! :p

No such love for us Mac fans :( I have no choice but to use Parallels running XP .. so I can access tradethenews software. I guess everyone thinks Mac users are just creative.. and nothing else :p

I'm actually getting ready for this week (Friday).. the Bank of Japan will announce their interest rate decision. If they raise the rates, it will be the first time in 6 years.. right now its at 0%.. so they might raise it to 0.25%. Anyway, this one's going to be a little weird to trade.. here's why..

The Bank of Japan has been going on about this rate hike since the last month ("Time has now come for us to raise our rates".. "Conditions are perfect for the end of zero interest rate policy" etc) I mean, geez.. like they're telling us everyday that they might end the zero interest rate policy. Ok.. so we get the idea.. and so have the markets. I would think that the markets have already anticipated this move, and I've seen AUD/JPY..USD/JPY drop steadily (but not like crazy)

I would think this will keep going on.. until Friday. If they raise rates, the JPY (Yen) *might* go up on that day.. or it might fall..depending on market conditions. It might fall because it has already been appreciating all this time.. and markets will say "enough". On the other hand, if the bank of japan does NOT raise their rates (I'm hoping for this :D ) then..Oh boy! Watch the Yen drop like crazy, because everyone will be selling the Yen.

I don't quite trust the bank of japan.. they always talk about raising rates but never do anything.. then again, this time might be different. So, if they raise rates.. I'll just watch the market reaction and will be hesitant to trade.. but if they dont.. you can be assured that i'll be drooling and submitting my 'sell yen' offer like a mad man ;)

[Music_Producer]

The Bank of Canada announced at 9 am EST today, that they are going to leave their interest rate unchanged. Markets were expecting a 0.25% increase, so obviously this was a disappointment..

http://web.mac.com/vishalj/iWeb/Site%202/USDCAD_files/usdcad.jpg

I got in, and out fairly quick.. but I should have held on. It moved up about 50 pips after I got out! I traded a huge lot, so 6 pips profit = 6*200 = $1200 :D
But I'm still hitting myself for not staying in longer.. 40*200 could have been $8000:eek: Sometimes I seriously think, when I look back at all my trades.. if I had put in huge lots..I could have made enough money to buy a house by now :p

I've got to stop being such a chicken.. especially when it comes to interest rate trades, because they really move the market.

Once again, watch out for this friday bank of japan's rate decision.

[Crimson]

Music_Producer - Another silly question... You talked about the lot size in your last post. I find I get confused because Oanda lets you buy in units. Is it always 100,000 units or pips? Or is unit and pip not the same thing? You mentioned 200? Was that 200 lots? How many pips is that then? 200x100,000?? I'm sorry, I'm getting stuck on the small details.

Also, you being from CA... other than 5:30am... are there other times that are commonly useful to you? When trading YEN etc?

You're my best source of basic explanations - hope I don't bore you with the fundamental questions. :o

[Music_Producer]

Hey Crimson, units is the term for the quantity of currency you are buying or selling. Pips is the term used for the profit or loss.. for eg. I buy 100,000 units or sell 100,000 units.. and I made 20 pips profit or 20 pips loss.

Now a pip can be anywhere from 0.25 USD to 1 USD to 1,000,000000.. depending on how many units you purchase/sell. For e.g. if I buy 10,000 units of EUR/USD.. 1 pip is equal to 1 USD. So if I make 40 pips profit, I make $40 profit. Similarly, if I buy 100,000 units of EUR/USD.. 1 pip is then $10. So I make 40(pips)*10(value of 1 pip) = $400 profit.

You are not restricted to buying 10,000 or 20,000 or 100,000 units, etc. only. You can buy 15,563 or 5999 or 358333.. whatever.. you get the idea.

Additionally, remember that you have a margin to play with.. I have a 50:1 margin. So if I have $5000 in my account, I can buy 50*5000 = 250,000 units worth of currency (roughly, depending on the rates)

If I'm pretty confident about a trade (for e.g. I know whats going to happen when i see the news report) then I buy a lot of units... from 1 million onwards. When I first started trading.. I would buy/sell only 10 or 50 units, just for experience. Other trading platforms also give you upto 400:1 margin.. so with $20,000 I could buy $8,00,0000 worth of EUR/USD :eek:

Last night (5.30 am PST) the US trade numbers came out.. better than expected..and I knew this would be a market mover, so I sold 2.5 million units of EUR/USD. It went down .. and I got out after a profit of 9 pips. So 2.5 million units make a pip equal to $250. So 250*9 = $2,250 profit that I made in .. well.. a few seconds. The market went down more after a few minutes.. and if I had stuck in there, I could have made 40 pips profit.. thats 250*40 = $10,000. However, you never know when an upswing happens and you're screwed.. so its best to get out early. Don't get too greedy :p Quite honestly, I also do not have the balls to put too much money to make more profit. I mean, its my money.. if I was handling a bank's money.. heck, I would probably put in 1 billion (knowing very well what I was doing of course) Read up about George Soros and how he made 1 billion USD in one day when he traded the Bank of England interest rate decision.


Tonight, well there's nothing happening..only weekly claims and I don't think the markets are going to care for that, they're all waiting for tomorrow. I usually trade only EUR/USD and no other currency pairs.. so for me the USD reports make more sense, and they come out at 5.30 am PST. Sometimes, interest rates meeting decisions and all those come out much later. I don't trade GBP/USD much because the spread between this pair goes upto 10 pips during important announcements, (with almost every broker) and that's obviously not too good.

JPY tomorrow will be interesting.. I'll be ready at 10 pm PST.. lol.. I think its tomorrow.. better check again. If you have a practice account.. be ready.. and good luck!:)

Here's my trade for last night -

http://web.mac.com/vishalj/iWeb/Site%202/EURTRAD_files/eur12jul.jpg

[Crimson]

Great! Thanks... I think it makes more sense now! :)

I was looking at the EUR/USD chart and saw a spike around midnight PST and then another larger dip around 3:30am today. Any idea what caused those?

OK, here's another one for you - I noticed OANDA's quote list gives you the option to deal with EUR/USD (base/quote, right?) but when it comes to the YEN it only gives you the option to deal with USD/YEN, not YEN/USD. Does it matter? Why not quote all currency with the USD as quote currency?

Plus, how do you know how the news will move the curve? I realize you have a firm grasp of financial news and their impact on the currency, but as in the case with the US trade numbers, how did you know which way the curve would move? Are there books you recommend? Sites? I'm about to sign up for www.tradethenews.com (I know... had to get a PC :p ) and am worried I will feel as clueless of what to do with the news. Was it something that you just learned over time?

Big thanks!!!!

[Music_Producer]

Great! Thanks... I think it makes more sense now! :)

I was looking at the EUR/USD chart and saw a spike around midnight PST and then another larger dip around 3:30am today. Any idea what caused those?

OK, here's another one for you - I noticed OANDA's quote list gives you the option to deal with EUR/USD (base/quote, right?) but when it comes to the YEN it only gives you the option to deal with USD/YEN, not YEN/USD. Does it matter? Why not quote all currency with the USD as quote currency?

Plus, how do you know how the news will move the curve? I realize you have a firm grasp of financial news and their impact on the currency, but as in the case with the US trade numbers, how did you know which way the curve would move? Are there books you recommend? Sites? I'm about to sign up for www.tradethenews.com (I know... had to get a PC :p ) and am worried I will feel as clueless of what to do with the news. Was it something that you just learned over time?

Big thanks!!!!

Crimson..nooooo.. dont get a pc just for news! :p Do you have an intel mac or a ppc one? If you have an intel mac just install parallels.. runs extremely fast.. in fact, its faster than my AMD Athlon 64 laptop. :D

I don't know what caused the moves at the times you mentioned.. because I wasn't paying attention. There could be a number of reasons.. news reports come out in various european countries, so that could have affected it.. or just banks buying and selling. The USD is also sensitive to geopolitical news like Israel bombing Beirut.. and I don't quite like whats going on right now in the mideast.. makes markets nervous.

As for currency pairing.. they are set in the way you see them, so that its easier to trade. I mean imagine, if you had to see real time numbers for USD/EUR.EUR/USD.AUD/JPY.JPY/AUD - for just 2 currency pairs.. you have 4 numbers to watch. So it makes sense just to stick to 1 format.. and then you can either buy them or sell them. Now I don't know why they don't have the USD as the base currency for everything.. remember, its a global market.. so they don't really give that much importance to us :D

How do i know what the news will do to the markets? Pretty simple. First, look at the headlines and analyze them.. i.e. have a basic sense of what the report means. Trade numbers are important, so are jobless claims, employment numbers, import and export (thats trade anyway) interest rates, ppi and cpi numbers and so on. A lot of news reports are not that important. Then you compare the current report to the previous one.. and to market expectations. If the markets expect 200 k jobless claims.. and the actual report is 300k.. you can bet that the USD will go down. If it comes out to exactly 200 k.. then I wont trade. If its 180k or lower, I'll buy the USD

For e.g. last night, I mentioned that I won't be trading.. but I noticed the weekly employment claims were due at 5.30 am PST. I didn't think it would be a big market mover, but tempted as I was.. I went ahead with the trade. The employment claims came out a little worse than expected.. and so I bought EUR/USD. A few seconds later.. it went down.. by about 6 or 7 pips and I was thinking to myself "Oh great, my first loss!" I held on as the chart stopped moving.. and after about 10 minutes, it finally went up .. I took my 5 pips profit.. and it still kept going up. I factored 2 things when i went into this trade - 1. Obviously the employment numbers and 2. Israel attacking beirut - thats bad news for the dollar.

And yup, I learned the news stuff over time. I have wasted a lot of money over software signals - like forex indicators and all that crap. They send you text messages on your cell phone.. indicating something is going to happen. So I would wake up at 3 am.. sometimes multiple times during the night.. trade as they wanted me to.. and 90% of the time, they were losses. Of course, if you go to their websites they only advertise the trades which were successful. Dont waste your money on books, or site subscriptions (except news stuff) .. its not worth it. Just practice a lot, regularly.. and look at why the currencies move the way they do. Hope this helps!

[Hoef]

What do you think of the USD/JPY? Is the expectancy of the interest increase in Japan already factored into the price? (USD increasing vs JPY)

[Music_Producer]

I feel like the banks are buying as much USD/JPY as possible before the rate hike.. and when the BOJ raises the rates.. they're going to sell the USD like rabid dogs.. lol.. pardon the expression here. Thats my theory though..

The rate hike would have to be factored in anyway, as talk about it has been going on for months. There are too many things going on today.. the interest rate decision.. and then there will be the actual speech given by the BOJ chairman.. if he's dovish I would see the JPY drop (after it goes up) There are also some rumors of a 50bps hike (I dont think that will happen) and if that occurs.. you'll see the JPY go up and up..

To make matters worse.. there is no exact timing as to the rate announcement.. some say its 12 midnight EST.. 1am..2am..etc. So I just have to wait and watch

[Music_Producer]

ITs been a rollercoaster so far with the USD/JPY but my trade went well! As expected, the BOJ announced 25 bps hike.. ending the 0% interest policy after 6 years. Markets expected this, and the USD/JPY dropped 30 pips. I got in right on top.. but held on.. mistake.. the chart went back up to where I bought it.. and further up.. to about 116.10 or 116.20.

I didn't have a stop loss.. so I have been waiting for the last 2 hours.. it finally went down to 115.60.. and thats when I closed my trade for 30 pips. A good trade, very satisfying.. but had me on the edge of my seat :eek:

I also took into account that when the BOJ decision was announced.. the London markets (and obviously the US) were not open.. so action was relatively lagging. I still expect the USD/JPY to drop to 113.. and the Aussie $ to drop against the JPY as well. I'll be up all night to see where this goes.. and see if I can capture more pips.

[~Shard~]

I know you've discussed it above Music_Producer, but I just wanted to clarify/ask your opinion.

I'll be opening a demo account in the near future now that I've done some more research myself, read your very helpful comments, etc. and want to know who should should go with.

I realize you use Oanda, and from the sounds of it, in terms of their pip spreads and minimal "trying to screw you over" techniques, they sound solid.

I live in Canada though - is there any issue with me using them, or anything I should be concerned about? Would you strongly recommend going with a Canadian firm, or does it really matter as long as the firm is reputable (as Oanda appears to be)?

I have heard of FXCM (thanks to this thread) and FXSolutions as far as what some other Canadians use, but am unsure if they are as reputable, secure and "honest" as Oanda, for instance. The whole thing about changing pip spreads, screwing around with your margin, etc. has shown me that you have to be very careful, pay attention to detail and make sure you're not getting screwed. :cool:

Any further advice or thoughts would be appreciated. I'll eventually use real money with whomever I sign up with (barring a horrible experience), so I'd ideally like to make the right call right off the bat before I begin 2-3 months of demo trading with someone.

[Music_Producer]

I know you've discussed it above Music_Producer, but I just wanted to clarify/ask your opinion.

I'll be opening a demo account in the near future now that I've done some more research myself, read your very helpful comments, etc. and want to know who should should go with.

I realize you use Oanda, and from the sounds of it, in terms of their pip spreads and minimal "trying to screw you over" techniques, they sound solid.

I live in Canada though - is there any issue with me using them, or anything I should be concerned about? Would you strongly recommend going with a Canadian firm, or does it really matter as long as the firm is reputable (as Oanda appears to be)?

I have heard of FXCM (thanks to this thread) and FXSolutions as far as what some other Canadians use, but am unsure if they are as reputable, secure and "honest" as Oanda, for instance. The whole thing about changing pip spreads, screwing around with your margin, etc. has shown me that you have to be very careful, pay attention to detail and make sure you're not getting screwed. :cool:

Any further advice or thoughts would be appreciated. I'll eventually use real money with whomever I sign up with (barring a horrible experience), so I'd ideally like to make the right call right off the bat before I begin 2-3 months of demo trading with someone.

Hey Shard.. I highly recommend Oanda.. last night when I carried out my trade with Oanda.. I tried the same with FXCM and I got that same old "Waiting for the operator" message.. or "This trade was not executed as the market has moved" That was it, I closed my FXCM account and had my money wired back to my account.

I have never had a trade delayed or blocked on the Oanda platform, I don't think it really matters where the forex firm is based.. as long as its reputable. Additionally, your balance earns interest everyday in Oanda, I have yet to see FXCM offer that, they'll take interest from you, but they'll never pay you interest that they owe.

Open your demo account with Oanda and check it out. The platform might take a little while getting used to (its grey and ugly) buy it works great. :)

[~Shard~]

Thanks Music_Producer - as always it's appreciated. :cool:

I'll give Oanda a try then, and unless I'm really disappointed with it (which sounds unlikely based on your feedback) I'll stick with it and txfer some money in in a few months when I'm ready.

P.S You don't work for Oanda and are therefore biased, are you? j/k :p ;) :D

[Music_Producer]

I wish I worked for a trading firm Shard! I'd have so many tips and I could be a billionaire soon enough :p

I'm still keeping an eye on JPY..like I mentioned, trading is great as long as there are no external factors involved.. such as this stupid israeli-lebanon crisis, plus the NK factor. The Yen is being hammered due to high oil prices, and tensions due to North Korea. If these 2 were not present (or are solved soon enough) you will see the Yen go up.

Everyone seeks the US dollar as a safe refuge during war time (and gold of course) Its exactly the opposite for the US stock market though, you will see the stock markets crash.. while the $ goes up.

In fact, last night when the US retail sales came out weaker than expected.. I actually *bought* the USD (when usually i would sell it) and i was right.. the $ still went up! :eek: Apparently no one wanted to sell the dollar before the end of the market day. Lets see what happens on monday, but if this war stuff goes on, the Yen won't be boosted.. not even a rate hike can help. Kinda sucks though, as i was hoping for a 300 pip drop (USD/JPY) The timing of the Yen rate hike and the Israel+Nk combo couldn't have been worse! :mad:

[~Shard~]

Well, I signed up for my demo account with Oanda. Just wondering Music_Producer, what do you usually prefer to have your settings at in terms of time intervals (5 sec?), the overall time period being shown and the vertical pip scale? Obviously this depends what type of trade you're carrying out (as in your trades which only last a few seconds) but just thought I'd ask. Going down to the smallest intervals is good, however it's nice to also see the previous trends over the past few hours or even days I find, so just curious.

And in your case, the second you submit your buy/sell order, you essentially open up another order window and frantically type in the corresponding lots to sell/buy and have your finger on your mouse button as you watch the chart and bid/ask spread? ;)

[Hoef]

And in your case, the second you submit your buy/sell order, you essentially open up another order window and frantically type in the corresponding lots to sell/buy and have your finger on your mouse button as you watch the chart and bid/ask spread? ;)

I have played around with the oanda account and yet have to make a $, but is fun and interesting. I try to contain myself by not playing with insane amounts of money (simlate reallife experience). The nice thing is when you submit your order, you can close it out by clicking the active trade in your trades "tab". Fairly quick (though I am not quick enough ;) )

[Crimson]

Hi again,

I got the news off Oanda for tomorrow and would like your thoughts on it. Is any of these news going to affect the markets? Just want to see how you look at news like these and your interpretation. Then if you don't mind, maybe you can explain why a certain number will move a currency, and how you figure out if the direction will go up or down. Just picking your brain some more! :)

[Music_Producer]

Hey Shard, I have my units already entered in the buy/sell window.. and all I am waiting for is the report.. and i select either buy or sell.. and then hit 'submit'. If I waste time entering the number of units when the report comes out.. it'll be too late! :) I keep my charts at 15 min intervals, to get a picture of what the currencies have been doing all day in the 3 markets - Tokyo, London and US.

Hoef, you will get quicker as you practice enough.

Crimson, I will be looking at all 3 news for tomorrow.. but the industrial production and capacity utilization is more important. The empire survey is just a survey, its not like its a consumer confidence report or anything.

If the two conflict i,e, industrial production is higher than expected, and capacity utilization is lower than expected.. I won't trade. If both of them are higher than expected, I will sell the EUR/USD and if lower.. then I'll buy the EUR/USD. Whenever these kind of news are expected, don't trade (if you're not confident) Usually one news-result type trades work the best.. because you just have to worry about one thing.. and not be concerned with conflicting numbers and all that jazz.

I will also be looking at the charts when the London markets open to see what the USD does.. because of the war in Israel i.e. if there is any effect on the US$ in general.

[Music_Producer]

Oh, and Hoef.. as soon as I buy or sell anything.. and the trade shows up in the 'open trades' sections.. I immediately click on it.. so the "Close Trade" window pops up. I then have my cursor on the 'submit' button.. so that i can close it as soon as i make a good profit.

[njmac]

Music_Producer, you seem to have a real talent for this! You haven't lost a trade in 3+ months right? :)

I opened an Oanda Game account and am hoping to be as successful you are. If I do well I'd be more than happy to buy you a beer for all of the amazing advice you've given here. It's hard to know who to trust and you have never asked anything from us and have answered every question. :cool: thank you!

I hope you will continue to tell us the news to look out for during the week so we can all game trade along with you. I almost feel like I need a degree in economics. :)

[Crimson]

Music_Producer, you seem to have a real talent for this! You haven't lost a trade in 3+ months right? :)

I opened an Oanda Game account and am hoping to be as successful you are. If I do well I'd be more than happy to buy you a beer for all of the amazing advice you've given here. It's hard to know who to trust and you have never asked anything from us and have answered every question. :cool: thank you!

I hope you will continue to tell us the news to look out for during the week so we can all game trade along with you. I almost feel like I need a degree in economics. :)

I couldn't agree more!!! A huge thanks!!!! :)

[~Shard~]

I couldn't agree more!!! A huge thanks!!!! :)

Adding on my thanks as well. :) Please keep the advice coming and the updates on how your trades go. The best way to learn (besides doing of course!) is by example! :cool:

[Music_Producer]

You're welcome guys! :D

Now comes some advance trading..hehe.. somehow I have a feeling that today, even if the US data comes out lower than expected.. the USD will go up (maybe a tiny spike down but thats it) Its 5.35 am PST right now.. waiting for the 6.15 am news.

The USD has gone up like crazy since the last 4-6 hours.. all because of the war. Investment banks seem to be buying gold, the Swiss Franc (CHF) and the USD.. why the US$? Because its a safe investment.. and the US economy doesn't look like its in trouble right now.

Logically, the US $ is supposed to go down during war, and so are the stock markets.. but I assume thats if the war involves the US. Right now its just the middle eastern jazz thats going on, and the Nkorea drama.. so the USD is safer than other currencies.

Well since the last few minutes that I've typed this.. the Euro has gone down by about 15 pips.. and keeps dropping against the USD. So if you have a game account.. trade.. if not, don't put your money on this one. I'm not doing anything.. I'm just going to see.. I think the EUR will go down even if the US news is bad (after, a small corrective spike)

If there was no war going on, I would trade with confidence today, as the currencies wouldn't be affected by anything other than economic data. I hope these idiots resolve their differences.. for humanitarian reasons and for the markets as well.

[Music_Producer]

Music_Producer, you seem to have a real talent for this! You haven't lost a trade in 3+ months right? :)

I opened an Oanda Game account and am hoping to be as successful you are. If I do well I'd be more than happy to buy you a beer for all of the amazing advice you've given here. It's hard to know who to trust and you have never asked anything from us and have answered every question. :cool: thank you!

I hope you will continue to tell us the news to look out for during the week so we can all game trade along with you. I almost feel like I need a degree in economics. :)

Yup, haven't lost a trade in more than 3 months now :) Almost did.. during that JPY interest rate hike.. but thats because I didn't exit fast enough..I was 'waiting' for a 100 pip drop.. without thinking about the war going on. When you get greedy.. thats when you get slammed. I did make a profit though, but it was after a few anxious minutes.

Practice and practice.. and don't listen to people on forex forums and their various 'methods' of figuring out where the currencies are going to be in the next month or so (believe me - they have everything - from crystal balls to emotional index of the currencies.. :eek: )

I won't ask anything from you guys.. just that beer and maybe a few mac related troubleshooting tips :D

[Crimson]

Music_Producer... Living in CA it seems that most trading is done very early in the morning! Do you plan your day around the newsreports? And Monday mornings, what time do you start checking the charts? I guess I still need the dicipline to set my alarm a bit earlier! :o Do you still work full time? And what about vacation... do you actually take breaks at times? (Not bringing the laptop to the beach? :) )

Thanks for the morning update. It's great to look at the charts and read your postings at the same time! Very helpful to gain a better understanding!!!!

[Curren~Sea]

Good job MP, keep up the good work! I think you are a classic example of a person who has found a good strategy and is using it consistently for some nice profits. Also, you seem to have very realistic goals in achieving just a few pips at a time, but your trades are all very high probability.

[Music_Producer]

Crimson, I am a nightowl.. so I was usually up till 3-4am anyway.. when I started doing Forex.. I just thought ' what the heck.. might as well stay up till 5.30-6'. I can never wake up with an alarm ..never that early in the morning :eek: I'd rather stay up all night to catch a 7 am flight.. then sleep at 10 pm and wake up at 5 am and get ready and all that! Also, going to the gym and working out at 2.30 am or so really helps.

Vacation and forex? You must be kidding me.. the wife will probably throw me outta the house :p No I just do forex at home, a lot of people do it full time.. I know I could but I still can't see myself doing that.. not yet. I'm 29 and I don't think I want to be called an 'investor' :D

Curren~Sea.. yup.. with my method the pips are small.. last night, although I didn't trade.. the EUR/USD did go down about 20 pips after the news came out (The industrial production and capacity utilization were better than expected) And just as I had predicted, the EUR/USD has still been going down. I'd rather make small but consistent profits. I mean heck, Bill Gates just lost $600 million in the forex market.. I wonder what the hell he was doing. With that kind of money.. I'd just be investing in forex for the interest trade!

[Curren~Sea]

That was one of the first things I had to learn... if the currency keeps going after I closed in profit - be happy! I used to feel like I was missing out because the "guru's" always say to let your winners run. But if I got out of a trade for good reasons then I learned to be happy with it because I made the decisions with the best info I had at the time.

I'm not there yet... almost... I hope to be a full time trader within the next few months, perhaps by October. But that also leaves me time to work on real estate projects too.

Wasn't it Warren Buffett who shorted the USD a couple years ago and lost about 600million? That was his first (and only) foray into FX trading as far as I know. But even then, he only risked a small percentage of his total account. For people like that, it's just another zero!

[Music_Producer]

I believe both Buffet and Gates lost money in Forex.. well they are best friends apparently. I can just imagine them sitting together in front of the screen going "Ooooh.. lets buy 1 billion lots of EUR/USD and see what happens".. and it goes up.. just before they hit 'close' the PC freezes :p

Here's the GBP trade I placed today.. the pip spread was pretty wide on this one, almost 8 pips, but I went ahead since it was an important event - the CPI numbers from the UK. They came out at 0.3% .. better than expected (0.1%) and the pound quickly shot up by about 35 pips, out of which .. I got to grab 10 pips. You also see a correctional 'dip' and then it shoots back up - bringing the total rise to 45 pips.

http://web.mac.com/vishalj/iWeb/Site%202/GBPJUL18_files/gbpjul18.jpg

The dollar's strength is preventing the GBP from shooting up further, if by some miracle, the war's called off anytime, look for the dollar to fall.

The next trade I am looking for is at 5.30 am PST.. the US CPI and PPI numbers.

[Music_Producer]

Is there any way to prevent the Grab application from saving my selection as a TIFF file? :confused: I'd find it easier if i can save it as gif/jpg so i can attach the pictures here easily.. instead of uploading it and all that.

[~Shard~]

Is there any way to prevent the Grab application from saving my selection as a TIFF file? :confused: I'd find it easier if i can save it as gif/jpg so i can attach the pictures here easily.. instead of uploading it and all that.

You could try doing a screen capture using cmd-shift-3 and selecting your Oanada window as the desired area. That allows you to select what part of the screen you want captured. It should then save the grab to your desktop as a PDF or JPG by default (depending if you're on Panther or Tiger). Even if it's a PDF, just open it in Preview then export - piece of cake...

Let me know if this is easier for you.

[Music_Producer]

Thats great Shard - thanks for the tip! :) Just finished trading the USD PPI numbers and made about 6 pips. I am still pretty slow compared to the other traders.. so here's one more question..sorry to bug you :D

Is there any way I can have 2 cursors on my screen?? You know, so i can have one on 'submit' and one on 'buy' or 'sell'.. logically I don't think its possible.. but you think? That would drastically cut down my lag while trading. One finger would be on the trackpad.. and the other on the mouse button. :p

[~Shard~]

Thats great Shard - thanks for the tip! :) Just finished trading the USD PPI numbers and made about 6 pips. I am still pretty slow compared to the other traders.. so here's one more question..sorry to bug you :D

Is there any way I can have 2 cursors on my screen?? You know, so i can have one on 'submit' and one on 'buy' or 'sell'.. logically I don't think its possible.. but you think? That would drastically cut down my lag while trading. One finger would be on the trackpad.. and the other on the mouse button. :p

No worries - it's the least I can do for all your great advice in this thread. ;) :)

Unfortunately, I know no way of having 2 cursors on the screen as you suggest. The only thing I can think of that would be quicker would be if the Oanda application has some hot keys, or quick key combination to execute commands, like a cmd-whatever. If you're quick on the keyboard, this could be faster than using the mouse, but perhaps not.

[Crimson]

The cmd-shift-3 is great but I also find that cmd-shift-4 works better when I need a specific area of the screen. The cursor will turn into a cross hair that you drag around the desired area!

[Music_Producer]

Thanks Crimson and Shard.. it'll be a lot easier for me to post images now. Oanda apparently has API - so you can program the trading platform? :confused: I am not sure if thats what API means.. but I have heard that a few people have customised their oanda trading platform, and maybe thats how they incorporated the quick keys for 'buy' and 'sell'. I would have no idea about programming though.. maybe if you guys do, you could create a customised solution.

The EUR is still dropping.. been dropping since yesterday like I mentioned.. because the USD is getting stronger (the war) and the Fed chief is going to let us know what he thinks of the economy.. I think thats tomorrow morning, not sure.. will check later.

Also just read that NKorea has put their military on alert. I wonder what the hell they're planning now :mad: Anyway JPY has dropped 50 pips so far because of this news.

[~Shard~]

The cmd-shift-3 is great but I also find that cmd-shift-4 works better when I need a specific area of the screen. The cursor will turn into a cross hair that you drag around the desired area!

Actually, that's the one I was referring to! :o ;) Thanks, I obviously got my -3 and -4 mixed up. :)

For various other hotkeys (at least in Panther) check this (http://davespicks.com/writing/programming/mackeys.html) out. It's a couple years old now, but still a handy resource. :cool:

[Music_Producer]

The Bank of England had a unanimous decision regarding the rates, and they are not going to raise it anytime soon. Unfortunately I got the news a little late, so I jumped in by the time most of the action was over. The GBP dipped 50 pips against the USD.. and I got in at 2 points (sold GBP/USD) .. making only about 4 pips total.. better than nothing though. I would still expect the GBP to fall against the USD..but I am not going to enter the trade now.. its time to go to gym :)

53005

[Music_Producer]

I tried FXDD this time (before the US CPI numbers were due) I had a 'feeling' that the Euro would drop against the USD because of increased CPI (it came out 0.3% instead of expected 0.2%)

So I had 2 windows open.. one was the Oanda window.. and the other parallels - running FXDD and tradethenews. I sold the EUR/USD on FXDD *before* the news came out.. I just had a hunch.. and besides, the Fed chief is going to talk today at 10 am EST.. so the USD should go higher. So I am looking from side to side (macbook screen to 19 inch lcd) The news came out and the Euro dropped a massive 35 pips. It dropped ultra fast.. so I said 'screw oanda'.. let me capture my profits on FXDD.. since it showed a profit of 35 pips. Guess what? I clicked 'close' and it said "Sorry, this trade has not been executed since the market has moved" WTF??

I must have clicked 'close' multiple times.. like a maniac yelling 'Give me my profit!!' Finally it closed, but i got 15 pips instead of 35 pips. :mad: I was pissed, so I turned back to Oanda.. and traded on the 'correctional' patterns. After every dip or rise, usually there are correctional dips (or rises) and I traded those.. and got about 10 pips total.. so 25 pips in all.

Good day today - 25+4 pips = 29 pips (29 * 50 = $1450) but I've been taught a lesson.. don't try stunts while trading :eek: And, I shouldn't have sold the EUR before the news, I know.. I know I made a profit.. but.. had it gone the reverse direction?

Another thing I am looking at.. besides trading the news (where the main spike occurs) is the correctional dip/rise. As soon as there's the big spike/rise.. there's a correction (most of the time) and I am thinking.. what if I trade that as well? Hmm.. just a thought.. let me know what you guys think. I traded the corrections today, and I was lucky.

53015

[Curren~Sea]

I tried trading the CPI news today also on FXCM (Man) and I had to keep clicking on it to execute. When they finally filled my order, the move was over and I was stuck in a losing trade.

Then of course Bernanke opened his pie hole... Needless to say it was a losing day for me thanks to my trade station.

That's it for me... I'm switching to Oanda.

For long term trades FXCM or any other platform is probably fine but for quick pips we need a broker/platform that doesn't screw us around.

[Crimson]

Any thoughts on what caused the completely horizontal section in the chart between 8:30am to around 10am today? Just curious if you had some thougths?

[Music_Producer]

Curren~Sea.. actually you could have made a profit on Bernanke's statement. That was scheduled for 10 am EST.. and I was playing with my Oanda game account (I wish I had logged into my real account.. but i was satisfied with my profit for the day)

So anyway, soon as I got the news.. I jumped in.. and Oanda executed beautifully.. and the Euro soared.. for quite some time, and I made $7100 profit :eek: :D God damn i wish i was trading with my real money!!

I'll stick with oanda too.. their speed of execution is unmatched, AND they pay interest on my balance and trades (interest positive trades) Don't worry curren~sea.. there are lots of opportunities to make that loss back into a profit :)

[Music_Producer]

Any thoughts on what caused the completely horizontal section in the chart between 8:30am to around 10am today? Just curious if you had some thougths?

Crimson, no clue.. I was asleep at that time.. that's just profit taking, the Euro had been sold relentlessly since the last 2 days, so banks figured its time to make some profit. I never enter the markets out of my specified time.. I never know when I can be caught in the upswings/downswings.

Btw.. that rise was nothing compared to the one when Bernanke made his speech (and when i could have made $7100 in real money :mad: ) Here's my game trade:

53055

[Curren~Sea]

Yep, I would have like to trade Bernanke but I was doing *work* (which I hope to someday not be doing).

At first I was put off by Oanda's trade station but I'm getting more comfortable with it and it has some very nice features. Everyone I talk to about it or almost every post on the net about Oanda is positive, which is far better than most other FX brokers/trading companies. The biggest negative is their very low leverage of 50:1. I realize I can trade less than a standard lot (100,000 base currency) but it takes a larger account balance to secure trades. However, this should not be an issue if a person is risking no more than 5% of their account balance on any given position.

I also like the Oanda charts. FX Trek charts are better, for sure, but the Oanda charts are very good for free java based charts.

[njmac]

The biggest negative is their very low leverage of 50:1. I realize I can trade less than a standard lot (100,000 base currency) but it takes a larger account balance to secure trades.


What does this mean? What happens if you trade less than a standard lot?

[Curren~Sea]

If you trade a standard lot, you are trading a $100,000 block of currency and if it goes one pip in your direction then you make $10 per pip.

If you trade less than a standard lot, say a $50,000 block of currency then you're getting $5 per pip.

Oanda lets you determine exactly the size of the currency block you want to trade. So you can trade $23,456, or $198,290, or even $1. Of course, the smaller your block then the less worth for each pip of movement.

Other companies will only let you trade blocks of 100,000 if you have a standard account, or blocks of 10,000 if you have a mini account.

Does that make sense?

The best way to learn about it is to open a practice (game) account and trade trade trade. Don't worry about making or losing money, just learn the mechanics of trading. Once you know how to open, close, modify trades, then you can work on your strategies.

[njmac]

Does that make sense?



Ahh, ok. You mean that without the extra leverage, its harder to trade a $100,000.00 lot?

Thanks for the response. I did get a game account but it is still very, very confusing. :)

[Curren~Sea]

Ahh, ok. You mean that without the extra leverage, its harder to trade a $100,000.00 lot?

Thanks for the response. I did get a game account but it is still very, very confusing. :)

Yes, with 100:1 leverage it would only take 1000 to secure a 100,000 lot. Therefore, with lower leverage you can trade fewer lots. But as mentioned, that should never be a big issue.

Plan to practice and play for a few months at least. I'm a software engineer and most applications come pretty easily to me, but it still took time for me to learn how to navigate around the various trading platforms that I've tried. Plus, learning all of the trading concepts and terminology takes awhile.

[Curren~Sea]

MP, do you ever use Oanda FXNews, and if so is it very fast during announcements?

Or, do you just use Trade the News? And if so, how is that?

I have found that I don't realy need to see the news... all I have to do is watch the charts and the spike tells the story.

[Music_Producer]

Crimson, thats the cardinal sin of forex trading. Look at the few examples above, and you will see the spike in the opposite direction, and then quickly change at the same time. This happens all the time, so don't go on that alone.. you will hit your stop loss quicker than you can blink. Tradethenews is faster than oanda's news - in fact, on thursday night the Canadian data came out way faster on tradethenews than oanda's news server.. and I was able to make 40 pips.

I am sorry I have not posted any trades, thats because there was only trade I did since Wednesday. My wife's pet cat passed away that day - was run over by a car.. and she, as well as I are deeply affected by that. She had him for 13 years, and I just don't feel like doing anything these days..the loss is too much. :(

[njmac]

Sorry about your cat :( My cat was hit by a car a few years ago, and I'm still not completely over it.

Glad to hear you make 40 pips though :) Im having a hard time knowing which news to follow and how it is affecting the prices. I've made about 40 pips just guessing this week - just see how the mechanics of trading works. I'm going to start taking notes on the announcements and will subscribe to trade the news and see if I can make some (pretend)money.

You should start doubling your money on trades because you have such a great track record, you could make some serious money :cool:

[Curren~Sea]

For US announcements, Yahoo has a good calendar complete with rating each announcement's relative importance.

http://biz.yahoo.com/c/e.html

Forex Factory is also good.

http://forexfactory.com/

DailyFX lists both US and Global announcements.

http://www.dailyfx.com/calendar/briefing/
http://www.dailyfx.com/story/calendar/weekly_focus/Weekly_Economic_Calendar_For_Week_1153514863050.html

None of the sites above provide instant feeds for breaking data, but they will let you plan your trades.

Sorry about your cat MP.

[Crimson]

Crimson, thats the cardinal sin of forex trading. Look at the few examples above, and you will see the spike in the opposite direction, and then quickly change at the same time. This happens all the time, so don't go on that alone.. you will hit your stop loss quicker than you can blink. Tradethenews is faster than oanda's news - in fact, on thursday night the Canadian data came out way faster on tradethenews than oanda's news server.. and I was able to make 40 pips.

Curren_Sea, just thought this one was for your post about reading charts.

MP, I'm so sorry to hear about the cat... I accidentally ran over my own a few years back and it still haunts me. I'm really sorry for your loss! Don't forget us all though! We need you! (I'm probably taking a week or so off from Oanda since I'm due to have a baby any day now - today was the expected due date so I'm a bit scatterbrained!) But I'll be back with more questions!!!

[Curren~Sea]

Yeah, I figured that was meant for me. I've followed big announcements for over a year and by far in the great majority of them the first spike tells you the direction. There have only been a couple of times that I remember where it immediately reversed and those were due to corrections in the announcement text. I've been watching Oanda's FXNews and it's pretty fast, certainly fast enough to trade off of. I took a few pips off of the Tuesday CPI and I'm planning on taking more from Thursday morning's slew of announcements.

My Oanda account is setup and fully funded. The more I play around with it, the more I like it. It was a nice greeting when I saw my funds in there along with an interest payment for the day. If nothing else, at least I am getting decent interest on my money.

Good luck with the delivery - I hope everything comes out ok :) I've been through that a couple of times and it's an amazing experience.

[njmac]

What happened today that caused this spike?




The only significant news today seemed to be about gold :confused:

EDIT: aaahhh... I guess it was this (http://www.bloomberg.com/apps/news?pid=20601087&sid=aPh7Mr0lsQ7M&refer=home) news about the feds Beige Book. Its really difficult to understand what news is important!

And just to get a basic straight: The news was not great for the US, so the Euro rose against the dollar? So if the dollar goes down against the euro, we buy (go long) euros/usd? And if the news was good, we would have shorted Eur/USD?

[Curren~Sea]

Basic sentiment that the Fed will not be increasing interest rates, which means the USD is not as attractive for certain kinds of investments. I didn't trade today because I'm waiting for the bigger announcements Thurs morning. I expect to snag a high probability 20-30 pips.

On the EUR/USD chart, you "buy" on US dollar weakness or dollar negative announcements (chart rises). "Sell" on US dollar strength (chart falls). Does that make sense?

[njmac]

Basic sentiment that the Fed will not be increasing interest rates, which means the USD is not as attractive for certain kinds of investments. I didn't trade today because I'm waiting for the bigger announcements Thurs morning. I expect to snag a high probability 20-30 pips.

On the EUR/USD chart, you "buy" on US dollar weakness or dollar negative announcements (chart rises). "Sell" on US dollar strength (chart falls). Does that make sense?

yes, that makes sense. Thanks :)

I am going to trade the thursday morning news. this will be my first news that I will trade on.

[Music_Producer]

Hey guys, started trading again today. Has been a depressing week, but the pain has subsided.. just feels better to know that we gave our kitty a long, loved life.. and that he was happy all the way till the end. :) Have saved his fur though, in the event that they can clone him in the future!! (Yes, my wife only wants him back.. not another cat)

Ok, so I traded the durable orders today, and as a bonus.. the us jobless rate was lower than expected as well.. so the Eur dropped. Only made about 5 pips as I'm still out of it.. but could have made about 25 pips. I don't like waiting too much though.. new home sales are due at 10 am EST.

53648

Crimson and curren_sea.. yes i confused you guys.. sorry about that.. my thinking was a little impaired that day..understandably. Good luck with the delivery crimson! Let us know asap about crimson jr. :p

And nj, just as curren~sea explained.. hawkish and dovish comments really move the market. Here's a funny thing that happens - every time the market 'expects' news that will make the Feds raise interest rates.. they buy the US$. Eventually, the day comes when the Feds do raise the interest rates (widely epected) and what happens? Does the $ rise? No, it falls. Buy the rumors, and sell the news.. perfect example. Remember, its still humans who are doing the trading and they're an emotional bunch.. or rather, a retarded bunch.

[Music_Producer]

Ok, traded a huge lot right now (2 million units).. and got out with 3 pips (3*200 = $600) With that kind of risk, I get out as fast as I can.. I don't care if its a 1 or 2 pip profit. I got in pretty late as well, I saw the news, but for some reason.. had a little brain lag!

53657

Could have made 7 pips if i had waited a few seconds more (and 14 pips if i had got in earlier).. but no biggie. Profit is profit.

How did you do nj? I have a feeling you got in late, and now you're looking at a eur/usd dip after the initial rise. Remember that this was a very small deviation.. the market was expecting 1.16 million.. and it came out at 1.13 million.. which is a pretty lame deviation. If it was 1 million.. the USD would have dropped 20 pips atleast.. if it was 1.2 or 1.3 million.. the USD would have gone up a lot (also aided by the previous news reports of durable orders and jobless reports)

[Music_Producer]

In case anyone is interested, next week is the Aussie interest rate decision (i think, will have to confirm) Its a good time to look at how the currency will react. Right now AUD is rising, because of expectations that interest rates will be raised.

[Curren~Sea]

Made my first live trades in my new Oanda account today. Three trades, two winners and one loser. Net profit $100.

Here's some very simple math that shows the appeal of trading Forex. I was trying to explain this to people yesterday. However, it seems that most people simply do not have the patience, discipline, and money management skills to make FX trading profitable, nor do they want to spend the time and energy to acquire these attributes. Anyway, consider this...

I put $10,000 USD into an Oanda account. Oanda currently pays 4.8% interest on that balance. It is compounded yearly but they pay it every day, so for example, the first day they calculate interest on 10,000 and pay me 1.26, the second day they calculate interest on 10,001.26 and pay 1.37, etc.

The net result, if I don't touch that money, is ~$500 interest in 12 months.

If I take just one extremely high percentage trade per month and I make $100, then I'll make $1200 per year.

Total earnings = ~$1700. This is 17% return for almost no risk. Not bad.

Now, let's say that after a year I can practically guarantee that I will make 10 pips on my extremely high percentage trade every month. So, instead of one lot, I trade 2 lots. Now, I'm getting $200 per month. Now my yearly return is approaching 30%. Not bad. Keep compounding those earnings and it is easy to see how quickly you can increase your account balance.

The key is to be conservative and only take very high percentage trades.

Most people overtrade!

Trading announcements, as MP as proven, and as I have learned is usually a very high percentage trade. Personally, I also supplement this strategy with the Elliott Wave and chart patterns because these indicators will give me a very clear picture of where the market will move to once it starts moving.

Thanks to MP (and many others) for recommending Oanda. I'm happy I switched.

Note: I belong to a trading club and we have a live moderated chatroom. During this announcement today, I heard several people complaining that they could not get into their trades because their trade station brokers (FXSOL and FXCM) wouldn't let them. I did not have any problems with Oanda, and the spread stayed nice and tight at around 2 pips.

[njmac]

How did you do nj? I have a feeling you got in late, and now you're looking at a eur/usd dip after the initial rise. Remember that this was a very small deviation.. the market was expecting 1.16 million.. and it came out at 1.13 million.. which is a pretty lame deviation. If it was 1 million.. the USD would have dropped 20 pips atleast.. if it was 1.2 or 1.3 million.. the USD would have gone up a lot (also aided by the previous news reports of durable orders and jobless reports)

haha, your good... that's exactly what happened to me, I got in late and stayed in too long - the eru/usd dipped and kept dipping all day today.

Good thing I'm not using money yet.

You did well, you have some track record going :) thanks for the input on what really happend with the announcement.




The key is to be conservative and only take very high percentage trades.

Most people overtrade!



Glad you made money today too. It seems very logical, when you are pretty sure how the market will move, get in - capture some pips - get out / all without getting greedy! You're right this is very, very appealing!

The trick is knowing how the market will react and you have to know in a split second. I wish I had majored in economics!

[Crimson]

njmac, Do you use www.TradetheNews.com too? Just curious what else is available. Other than Bloomberg...

[Music_Producer]

Today was a very good trade.. the US GDP was pretty horrid.. 2.5% as compared to expectations of 3-3.2%. I got out early (as always) but sheesh! Look at that spike go up.. after I got out.. and its actually still going up! It went up about 30 pips after I exited.. and that too.. in a nice manner.. no crazy dips or anything. This is the kind of news you want to trade, when expectations get screwed. Grr.. and I had a feeling the US GDP was going to suck.. should have stayed in longer.. but I have that forex trigger happy finger.. to always close my trades fast.

53726

Update - its still on its way up! Nice 80 pips rise.. and I made about 5 pips :o

[Curren~Sea]

I pulled about 20 this morning. Closed my trade station and charts and went back to bed. That's stress free trading! It used to bother me when I saw how the market kept going after I got out. However, I'm over that now. Every day I am exceeding my goals so it is easy to maintain a very positive attitude about my financial well-being. That makes a huge difference in daily life.

Next week is non-farm payroll on Friday, which will be another biggie. There are a few other announcements that may yield some small moves, but the big one will be on Friday, for sure.

njmac, Do you use www.TradetheNews.com too? Just curious what else is available. Other than Bloomberg...

I've found that the news that comes delivered from Oanda (FXNews) is very fast. For me, that's all I need for breaking news.

For the announcement schedule and expectations, I use Forex Factory and Yahoo (linked previously in this thread). I also like to read some of the commentary from DailyFX.

[njmac]

I don't have Trade the News yet because I don't have a pc. I am just using oanda news and bloomberg.com.

So friday is the next big announcement? I swear, I'm not lazy ;) , but can you guys tell me what to expect to happen in detail because I'm really having trouble grasping what is important. I will game trade that news but I want to really understand when to get in, how long to stay in, and how much to wager. The decision to go long/short the EUr/USD needs to made in an instant, so I would love a little hand-holding on this one. THANK YOU!:)

[Music_Producer]

I don't have Trade the News yet because I don't have a pc. I am just using oanda news and bloomberg.com.

So friday is the next big announcement? I swear, I'm not lazy ;) , but can you guys tell me what to expect to happen in detail because I'm really having trouble grasping what is important. I will game trade that news but I want to really understand when to get in, how long to stay in, and how much to wager. The decision to go long/short the EUr/USD needs to made in an instant, so I would love a little hand-holding on this one. THANK YOU!:)

Hey nj.. just look at what the expected news release is.. and if there's a deviation from it, then the currency will move according to whether the deviation is positive or negative.

GDP is fairly simple. It just means the rate of our economy.. if its growing or slowing down (please don't mind my very simple explanations!) They were expecting a GDP of 3% (India has a gdp of 6% or more right now) and the GDP came out 2.5. So obviously that's a significant slowdown and the USD got hammered.

Don't trade interest rate decisions yet, concentrate on the simple stuff. Stuff like jobless reports, home sales, etc. I will let you know beforehand when I am going to trade and what I expect will happen to the market.

Question for you guys - Anyone used a tablet pc? They use a stylus if I am not mistaken.. wondering if it would be possible to be faster on that than a mouse.

[Hoef]

Argh .... Everytime I try to switch the graph to another currency pair in OANDA, all my screens go minimized and still show EUR/USD in the end. Might this be because I installed the latest version of Firefox? :mad:

[Music_Producer]

Hoef.. thats weird. I use Oanda on Safari and it works fine. Oh, and I never open other websites while I am about to make a trade. Cnn almost always crashes safari for some odd reason. I need a mac tablet so i can use two stylii (keep one in each hand.. one ready to hit submit.. and the other to hit buy or sell :p )

[Curren~Sea]

I don't have Trade the News yet because I don't have a pc. I am just using oanda news and bloomberg.com.

So friday is the next big announcement? I swear, I'm not lazy ;) , but can you guys tell me what to expect to happen in detail because I'm really having trouble grasping what is important. I will game trade that news but I want to really understand when to get in, how long to stay in, and how much to wager. The decision to go long/short the EUr/USD needs to made in an instant, so I would love a little hand-holding on this one. THANK YOU!:)

NJ: Go to Forexfactory.com and you'll see very clearly and quickly what the announcements are, their relative importance (red is more important), when the announcement will come out, and what the expectations are. It only takes a few minutes to do your research there.

This week also sees very important BOE (UK) and ECB (European) interest rate decisions. I expect this week to be quite volatile (which is good for momentum trades!).

Also, I have all kinds of windows/applications open when I'm trading and haven't had any problems whatsoever. oh wait, I'm still on a PC... But I plan on getting a new iMac when the latest revision comes out in Aug (I hope)).

[Hoef]

Hoef.. thats weird. I use Oanda on Safari and it works fine.

Yeah ... Safari still works. Would like to have everything in firefox though (used to work until yesterday :mad: )

[njmac]

NJ: Go to Forexfactory.com and you'll see very clearly and quickly what the announcements are, their relative importance (red is more important), when the announcement will come out, and what the expectations are. It only takes a few minutes to do your research there.

This week also sees very important BOE (UK) and ECB (European) interest rate decisions. I expect this week to be quite volatile (which is good for momentum trades!).

Also, I have all kinds of windows/applications open when I'm trading and haven't had any problems whatsoever. oh wait, I'm still on a PC... But I plan on getting a new iMac when the latest revision comes out in Aug (I hope)).

thanks!

so for this announcement, I should be ready to trade this announcement on thursday?

the second they announce that they will raise rates, I should hit buy, then quickly get out?

If they lower rates, I should sell (EUR/USD) then quickly buy again?




http://att.macrumors.com/attachment.php?attachmentid=53883&d=1154349557

[Crimson]

Pardon my ignorance here but which country goes by E-12???

[Curren~Sea]

Pardon my ignorance here but which country goes by E-12???

That's the 12 nations that share the Euro currency.

The euro (currency sign: €; banking code: EUR) is the official currency of the European Union member states of Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal and Spain, also known as the Eurozone. It is the single currency for over 300 million Europeans.

[Crimson]

Thanks Curren_Sea - I thought that might be it but I also had the silly notion they just went by EUR. I should have known that since I'm European...:o

[Music_Producer]

thanks!

so for this announcement, I should be ready to trade this announcement on thursday?

the second they announce that they will raise rates, I should hit buy, then quickly get out?

If they lower rates, I should sell (EUR/USD) then quickly buy again?


NEVER trade interest rate decisions like that! What happened when the ECB raised interest rates? The EUR dropped! What happened when the US raised interest rates? The USD dropped too. Logically, the currency should rise when the interest rate is hiked, but..

This is what happens when you guys don't read my posts :mad:

I mentioned about 'hawkish' and 'dovish' and market expectations. When the market expects a 25 bps hike for a long time.. and that is exactly what happens, most of the time, the currency drops. There might be a very minor spike earlier, but then it drops. This is what I have seen in all cases till now..including the much hyped JPY rate hike.

Trading interest rate decisions is extremely tricky.. you *have* to read the news everyday to see what the market is expecting. Like I mentioned that the JPY rate hike story has been going on for months, so the market was expecting it..and when it finally came.. the JPY dropped and dropped.

Buy the rumors and sell the news. If you're a newbie, don't trade with real money on interest rate decisions.

[njmac]

I need to go back and read all the posts again.

I have a feeling I am making this way more difficult than it needs to be.

[Music_Producer]

I need to go back and read all the posts again.

I have a feeling I am making this way more difficult than it needs to be.

no you're not.. its just the impatient you :D Trading every report is fairly simple *except* for interest rate decisions. Its all on market expectations. Trust me, when I read what you typed earlier.. I kinda reacted like "oh hell no nj! You're gonna lose all yer money mate!"

You will see the market move up and down wildly after an interest rate announcement. One thing's for sure though.. if the finance ministry does exactly opposite of market expectations, the market will move accordingly.

For e.g. people were expecting the ECB to raise interest rates (hypothetical situation) for the EUR to appreciate.. but when the day came.. the ECB did nothing. The EUR will drop.

How do you estimate what the market expectations are? Well I just look at the news (and what the bank analysts say) the day the interest rate decision is to be announced. I read every analyst's opinion.. and they usually reflect the market sentiment very accurately. I don't physically work in a currency trading market, so I have no possible idea of knowing what the expectations are.. so by reading these reports, I get a 'feel' of what the markets have been doing.

[Music_Producer]

Ok, i'm getting ready to trade in a few minutes.. 5.30 am PST and 7 am PST. Doesn't look like there will be much action today, so i might not trade. The one at 7 am is more important than the one at 5.30.. but i doubt i'll be awake till 7!

Also, i forgot to post a trade on the morning of Jul 31.. it was the Canadian GDP.. and it was the same as before, no growth whatsoever. I got out quick, and made about 5 pips..but the USD kept going up for about 20-30 pips. The USD was stronger that morning anyway.. if anyone's awake..post! :)

[Music_Producer]

Well, like I mentioned before.. I expected this report to be dull..and it was. EUR/USD moved up by barely 5 pips.. but hey, I managed to grab 2 pips :) Its easy to grab 2 pips on a 20 pip rise.. but try grabbing 2 pips on a 5 pip rise.. and you'll know what I mean :D

Everything came out as expected.. consumer spending is slowing down (duh.. obvious due to gas prices)

Anyway, I'm glad I made some money on a boring report. Can't wait for the exciting ones..the image is bigger than the usual ones I post, so you can see how small the overall fluctuation was, and where I fit in :eek:

53975

[njmac]

I like your strategy. I watched this trade but didn't get in because I wasn't quite sure anything even happened.

I'll be watching the next report 10am est. to see what happens.


You should start putting more money on these trades... you have this stuff down to science :cool:

[Music_Producer]

I like your strategy. I watched this trade but didn't get in because I wasn't quite sure anything even happened.

I'll be watching the next report 10am est. to see what happens.


You should start putting more money on these trades... you have this stuff down to science :cool:

I know I should, but putting more money also scares me a bit. Maybe in the future when I am absolutely sure of what I'm doing :D

Right now I'm trying out a carry trade in my game account. If you had $100,000 in your forex account, and invested $10,000 of that in AUD/JPY you'd make about $25,000 per year in interest on that $10,000. You need the other $90,000 to stay put to accomodate for the dips and hikes.. (if i bought 500,000 AUD/JPY at 89, and with $100,000 in my account.. I would get a margin call when aud/jpy went down to 66 i.e. i would lose all my money)

So I'm guessing.. quite a few people with huge balances, invest part of it in carry trades, and earn crazy interest. Lets say I'm managing someone's 1 million USD. I would invest only $100,000 out of that in my trade. $100,000 can buy 5,00,0000 AUD/JPY.. thats frikkin $250,000 a year in interest.

Put that 1 million in the bank.. and what do you get? $45,000/year interest :rolleyes: Someday when I have a million to spare, you know what I'll be upto!

[Music_Producer]

I'm beginning to laugh at myself. I have such a trigger happy finger.. that I close my trade rightaway, as soon as I get 2-3 pips profit. I just don't wait for it to go down to 10 pips or more. Anyway, you can see from the chart how early I got out.. but made my profit. The EUR is still dropping, ISM index came out a little better than expected.

53977

[njmac]

I'm beginning to laugh at myself. I have such a trigger happy finger.. that I close my trade rightaway, as soon as I get 2-3 pips profit. I just don't wait for it to go down to 10 pips or more. Anyway, you can see from the chart how early I got out.. but made my profit. The EUR is still dropping, ISM index came out a little better than expected.

53977

Actually, I think that having a trigger happy finger is a good thing if you are making a profit. I just think that since it works for you, you should take the few pips you make, and put huge ammounts of money on them. This way it won't go against your instinct to get in/get out and you still can make as much money with a few pips as someone going for 40 pips but with a small ammount.

[Curren~Sea]

You definitely need to understand the announcements. But this does not need to be overly complicated. Nor does it require a large time commitment once you understand the basics of trading.

The problem I had and that I would spare anyone else is trying to overanalyze the market and trying to use too many indicators. By all means research the various methods of trading... but I'm telling you that successful trading is not rocket science. Keep it simple.

[Crimson]

Another basic question... I did some silly trades today just to test the waters - I pretty much used up my entire margin, and when the trade did the opposite of what I thought, the "Margin Available" dropped to zero. I was expecting a margin call at this point (and was disapointed to see my theory failed) but nothing. I am confused - when do they give you a margin call and does it basically mean they take all your money? You start over from zero? This was all taking place in my game account - would not dare to do this with my real money!

[Curren~Sea]

Another basic question... I did some silly trades today just to test the waters - I pretty much used up my entire margin, and when the trade did the opposite of what I thought, the "Margin Available" dropped to zero. I was expecting a margin call at this point (and was disapointed to see my theory failed) but nothing. I am confused - when do they give you a margin call and does it basically mean they take all your money? You start over from zero? This was all taking place in my game account - would not dare to do this with my real money!

With Oanda, if you have 50:1 leverage then it takes 2000 to buy a 100,000 lot of currency. If you started with a 10,000 account, then you'll have 8,000 left to cover your losses. If you lose 8,000, you will get a margin call. Oanda keeps your 8,000 but gives you back your 2,000 that you used as leverage.

Does that make sense?

With 2,000, you could still buy smaller lots, say a 10,000 mini-lot which would cost you 200 in leverage.

[Music_Producer]

So who's trading today? :) Two interest rate statements.. Bank of England the ECB (for the Euro) The Bank of England is expected to keep rates the same, so I expect GBP to drop a little.. but I won't trade because the GBP/USD spread goes up like crazy before the interest rate announcement.

The last Bank of England statement.. did nothing to raise the rates, and I sold the GBP (also mentioned here in a posting somewhere) and made some profit as it dipped. However, if they *raise* interest rates, I would expect the GBP to go up.

As for the EUR, an interest rate hike has been expected.. so I expect the Euro to dip..and then there is the ECB chief's statement.. so depending on what he says (hawkish or dovish) the EUR will act accordingly.

Whatever I have typed so far.. the exact opposite could take place as well! I'm still not comfortable trading interest rates, but I will be trading anyway. Lets see how it goes..

[Music_Producer]

Wake up ya sleepyheads! :) Beautiful trade today, got 30 pips on the GBP/USD.. GBP Services PMI came out lower than expected. This time i held on to my trigger happy finger.. and I waited for the GBP to drop.. good decision :D

Anyway, now I'm a little nervous because 2 potentially huge trades are due.. the BOE and ECB rate..

54131

[CJM]

Awful tasting beer XXXX is, terrible stuff.
http://www.lion-nathan.com.au/our+companies/beer/australia/castlemaine+perkins/xxxx_bitter_left.jpg

You do know why they call it XXXX don't you?



It's because Queenslanders can't spell "BEER."

That's what I thought this was about... I was just going to moan at them for spelling 'Fourecks' wrong.

[Music_Producer]

Bank of England raised interest rates, absolutely unexpected.. so the GBP shot up.. I was a little surprised as to the decision and then i hit myself "Buy gbp you idiot!" Although i got in late, I got 45 pips! :D :D

Exactly as I mentioned earlier.. if the bank goes against what the market expects.. expect the currency to move.. and boy did it move! Sweet sweet sweet sweet!

54132

Oh boy, its still going up.. just shot up by another 20 pips.. who cares.. I got 45 pips :D :D

[Music_Producer]

ECB announced what was expected.. a 25 bps hike in euro rates, so eur just dipped by 6-8 pips.. nothing major. I didn't trade this one, was hoping for a surprise after the GBP rate hike.. :rolleyes:

I'm very satisfied with Oanda.. before the GBP rate announcement they increased the spread of GBP/USD to only 6 pips.. I assumed they would hike it up to 15 pips or so. Funny how I wasn't prepared to trade gbp/usd.. it was a good thing i had the news program on, and the trade windows ready.. 'just in case...'

[njmac]

I slept late :( Good for you though :)

Thanks for posting the trade.

[njmac]

Bank of England raised interest rates, absolutely unexpected.. so the GBP shot up.. I was a little surprised as to the decision and then i hit myself "Buy gbp you idiot!" Although i got in late, I got 45 pips! :D :D

Exactly as I mentioned earlier.. if the bank goes against what the market expects.. expect the currency to move.. and boy did it move! Sweet sweet sweet sweet!

54132

Oh boy, its still going up.. just shot up by another 20 pips.. who cares.. I got 45 pips :D :D

this was also GBP/USD?

[Music_Producer]

Yup nj.. there were 2 gbp announcements today.. services pmi and the interest rate decision. Don't worry.. there's plenty of trades still to come :)

[Music_Producer]

Just made about 2 pips on the US jobless claims.. they came out a little more than expected..so eur moved up 5-6 pips. Thats it for today.. I'm going to sleep.. phew!

[Curren~Sea]

I took a few this morning also.

I have two accounts. One that I trade strictly announcements with (Oanda) and another that I trade using other methods. Currently, my Oanda account is my less risky account and I expect about 10-20% per month from it. My other account is more aggressive and I expect 100%+ from it. August is young but so far I'm up about 2% in my Oanda account and 32% in my other account. Not bad.

I fully expect tomorrow's non-farm announcement to be dollar positive. I am only trading the EUR and I expect that if it cannot break above 1.2860 prior to the announcement that it'll come crashing down. We'll see, but I'll be ready for anything.

Glad to hear that we're all doing well!

[Music_Producer]

Just a heads up to let you know that the non farm payroll is due today at 8.30 am est. If you're awake, get your demo/real accounts ready. :)

[Hoef]

Got my trigger finger ready :) Out of curiosity, how much did you put into the account when you guys started trading Music_Producer & Curren~Sea ?

[Hoef]

Am I missing something? ... No news on Oanda FXNews on non farm. Still was able to make a 4 pip profit during the volatility

[Music_Producer]

Hoef.. you're missing a lot :eek: The non farm payroll report is at 8.30 am est.. so be careful with your 'trades'!!

[elfin buddy]

Hey guys! I've been following along with this thread ever since its inception, and have been fooling around with an Oanda Game account to get used to things. I think I've got the hang of it, so I'm going to deposit a small amount of cash into a real account sometime soon (like $50) to get used to dealing with real money.

I must say though, Music_Producer and Curren~Sea, you guys are awesome! You give me hope in humanity :p If there's anything you ever need, let me know and I'll help you out :D

I'm going to be trading (game) on the non-farm announcement this morning, so best of luck to everyone!

[Hoef]

Hoef.. you're missing a lot :eek: The non farm payroll report is at 8.30 am est.. so be careful with your 'trades'!!

ARGH ... my time table is messed up :(

[Music_Producer]

Hey Elfin..you're welcome! Btw, we could have made some good money on the Canadian report today (at 4 am EST) but they released the data at 3.58 am.. yup.. crazy! So I missed that trade.. that was an easy 20 pips ..but whatever. Hoef, they must be wearing the same watch as you :p

[Music_Producer]

I have a feeling this one's going to be a little tricky.. because of the August 8 Fed meeting. This is the only important data left that will convince the Fed whether to raise the interest rates, or not. Lets see..

[Hoef]

Got 20 pips in but that was luck. I was too late on the first ride up (I had sell EUR button selected because thought that payroll news was better). By the time I changed to buy and executed, I was too late .... Then a second ride came and I was able to catch 20 pips. OANDA execution was lagging .... can't compare against other platforms bt took more than 5 sec to execute. Maybe because I have game account?

Man this is addictive

No wonder it took ages .... OANDA is swamped :)

[Music_Producer]

Let me know how you guys did.. I nabbed 15 pips. Here's my results:

54212

$1500 in 2 seconds.. I like the sound of it :) :D

And the POS that Safari is, it crashed a minute after I closed my trades! this was a really easy trade.. eur/usd has gone up even more.. could have made 50 pips, but I'll take my 15 pips profit.. never know when a crazy bank would have intervened and drove the currency down!

I'm really really really pissed that Safari crashed. :mad: :mad: What if it was a frikkin million dollar trade.. damn.

[elfin buddy]

I made about 20 pips profit, but I was sh*tting my pants there for a second because the server refused to close my trade and then disconnected me! :eek:

I'd like to think that it's because I was on a game account and the server demand was so high that they allocated all resources to real money accounts, but still...

Either way, a good morning! I went long on 1'000'000 units of EUR/USD, and netted around $2'000 out of it. I'm totally loving this...:D

[Music_Producer]

Got 20 pips in but that was luck. I was too late on the first ride up (I had sell EUR button selected because thought that payroll news was better). By the time I changed to buy and executed, I was too late .... Then a second ride came and I was able to catch 20 pips. OANDA execution was lagging .... can't compare against other platforms bt took more than 5 sec to execute. Maybe because I have game account?

Man this is addictive


Oh yeah, there is no lag on the real account. And here's a tip for you guys.. well i just discovered it last night. Don't have just one window open (the trade window - where you choose buy or sell, and then hit submit) Instead, have two trade windows open, and keep them side by side. On one trade window, select 'buy'.. on the other, select 'sell'. Now all you have to worry about is which 'submit' button to hit i.e. the one on the buy window or the sell window.

The best part is you can overlap the windows so you can move between the 'submit' faster. Let me give you an example, on my game account -

54215

This way you don't waste time moving your cursor from 'buy' to 'sell' and then 'submit' if you had only one window open. Also, navigate to 'tools' in your oanda menu, and then deselect "Show confirmation window"

This way you won't waste time clicking "Ok" when a trade confirmation window opens up.

Btw hoef, that was no luck, the eur was moving up, and you caught it.. so congrats!

[Music_Producer]

I made about 20 pips profit, but I was sh*tting my pants there for a second because the server refused to close my trade and then disconnected me! :eek:

I'd like to think that it's because I was on a game account and the server demand was so high that they allocated all resources to real money accounts, but still...

Either way, a good morning! I went long on 1'000'000 units of EUR/USD, and netted around $2'000 out of it. I'm totally loving this...:D

Lol! Yeah, I can imagine that feeling. Now imagine sitting in an actual investment office, and dealing 100 million units instantly, with no browsers to deal with :p

[Music_Producer]

K, goodnight folks (yeah, this is when i go to sleep!) Will keep you updated over the weekend regarding potential trades. Now stop looking at the forex screens and do something productive :D

[elfin buddy]

Here's a screenshot of Oanda's screw-up.

I was also late to the trade, but managed to catch the second ride just like Hoef. I'm only glad it stabilised after the second ride, or it easily could have gone the other way.

http://wood.synchroverge.com/images/server_reject.png

[elfin buddy]

K, goodnight folks (yeah, this is when i go to sleep!) Will keep you updated over the weekend regarding potential trades. Now stop looking at the forex screens and do something productive :D

Haha, goodnight, Music_Producer! Have a nice weekend :D

I'm looking forward to more trades and moving into small money soon. Now, off to work to make a measly $70 in eight hours...:p ;)

[Hoef]

$1500 in 2 seconds.. I like the sound of it :) :D


Excellent!! ... I netted $200 with 20 pips ...



$And here's a tip for you guys.. well i just discovered it last night. Don't have just one window open (the trade window - where you choose buy or sell, and then hit submit) Instead, have two trade windows open, and keep them side by side. On one trade window, select 'buy'.. on the other, select 'sell'. Now all you have to worry about is which 'submit' button to hit i.e. the one on the buy window or the sell window.


Nice tip! :eek:

[Curren~Sea]

It wasn't a huge move this month. We've seen a lot of volatility in the last few days and often that means the non-farm move won't be a big one. Additionally, we have an even more important announcement next Tuesday when the Fed releases their next interest rate decision (expected to be no hike). But if there is a hike, then the dollar should strengthen a bit (and stocks crumble).

Anyway, I made a few pips this morning, nothing much. I was happy with Oanda's execution. The 10 pip spread was annoying but I still managed to make money. And you know what? It's all about making money and not losing it!! It's waaaay too easy to lose money so if you are a net profitable trader then you're ahead of 80% of everyone else who trades (or traded) Forex.

I'm still of the opinion that the dollar will strengthen in the short term. It obviously didn't happen today but that is my bias. That doesn't stop me from making pips on upward moves though ;)

[Music_Producer]

I don't know about all of you, but I'm more excited about the WWDC on August 7 than the Fed's decision regarding US interest rates :D

[njmac]

I don't know about all of you, but I'm more excited about the WWDC on August 7 than the Fed's decision regarding US interest rates :D

haha :D yes, I can't wait for monday! But I'm anxious to learn this stuff so I can start making real money.

[elfin buddy]

I don't know about all of you, but I'm more excited about the WWDC on August 7 than the Fed's decision regarding US interest rates :D

I'm excited about both, but in different ways :D

On one hand, WWDC is going to be awesome and we'll see the future of the Mac along with some awesome new products.

On the other hand, the Fed's interest rate decision will help me get more money to realise my dreams of buying all the new stuff that'll be announced tomorrow... :p

[njmac]

I just re-read this entire thread! whew... there is a ton of info here and I was taking notes - 15 pages of notes!!

Who is trading the Fed announcement tomorrow? I will be watching just to learn.

What does inflation normally do to currencies and why? I might have missed that somewhere in here, I'm getting a little forex-bleary eyed trying to understand.

[elfin buddy]

I'm planning on doing some more practice trading on the Fed announcement tomorrow...also going to the bank to wire $50 to Oanda tomorrow, so that I can get experience with real money.

There are some announcements coming from Germany early Tuesday too, but they're too early for me to bother getting up and trading. I am curious as to how they'll affect the value of the Euro though. I mean, Germany is only one country that uses the Euro as its currency, so will announcements coming out of Germany have any noticeable effect on the currency at all?

[Hoef]

I mean, Germany is only one country that uses the Euro as its currency, so will announcements coming out of Germany have any noticeable effect on the currency at all?


German economy pulls quite heavy in Europe.... who knows

[Music_Producer]

Count me in.. I'll be trading the EUR/USD on the USD interest rate decision. Markets expect no change (current rate is 5.25%) I expect the USD to drop (I think!) if this stays the same.. or if they raise the rates to 5.50% (totally unexpected) I expect the USD to skyrocket.

Lets hope they surprise the markets.. but knowing the Feds, they probably won't. I mean, look at the real estate market.. its close to collapsing.. if they raise rates you can be sure that the collapse will be imminent. I don't know.. lets see tomorrow..or rather, today.

*DON'T* trade before the news, there will be a lot of volatility, and I mean a LOT .. usually this is true before interest rate decisions. Also, the spread on EUR/USD will widen, because the whole god damn world will be trading on this report. If you're on a demo, trade confidently.. if you're on a real account.. be cautious.

Elfin.. I wouldn't worry about the german reports.. I have never seen any activity related to these news... the currency doesn't move much. I am not saying that the same thing will happen.. but usually, they don't care for reports of individual countries. Only the US news, and interest rate decisions matter. GBP news matter as well, but the spread on GBP/USD gets upto 10 pips or more.. so i don't trade that pair much.

Canadian news matter too.. especially GDP. Again, USD/CAD spread widens a lot.. which is why I stick to EUR/USD. Study one pair, and trade it effectively.

Btw, somewhere in this forum, theres a trade I made last month during the US interest rate announcement (with graph attached) You can see the EUR zoom up against the USD.. because the Fed raised the rates. This was a highly expected move, raising the rates by 25 bps.. so the USD dropped.

Remember, anything *unexpected* moves the market in the opposite direction. So if USD rates stay the same, I expect the USD to drop.. if rates are hiked, USD will rise.. if for some god damn weird reason they *lower* the interest rate.. I would expect the USD to drop.

I still can't get the Mac Pro outta my mind :D

[Music_Producer]

German economy pulls quite heavy in Europe.... who knows

Yeah hoef.. but usually.. nothing happens.. nada. If the EUR does move, its by 6-8 pips. For me, its not worth the stress of getting ready to trade, analyzing the news..doing all that.. and landing up with 0 pips or even a loss.

[Hoef]

Yeah hoef.. but usually.. nothing happens.. nada. If the EUR does move, its by 6-8 pips. For me, its not worth the stress of getting ready to trade, analyzing the news..doing all that.. and landing up with 0 pips or even a loss.


True ... the real pain is to over come the buy / sell spread :mad:

[Curren~Sea]

When the Euro currency was introduced, it was valued based on the German Deutsche Mark, so if you look at a 30 year chart for the Euro, you'll see history there even though the Euro as a currency has only been around for seven years. The German economy is probably the most powerful of all the Euro nations. However, as mentioned, individual Euro nation announcements are not as important as central bank announcements (ECB).

It should be an interesting afternoon of trading. Even if the Fed does not raise interest rates, as expected, the language of the announcement will be closely watched. Any hawkish or dovish verbage will be interpreted by the market as a prediction for future policy.

[elfin buddy]

Yee haw! Made $2'400 on the interest rate decision in FXGame. I grabbed something like 22 pips on that one, and better still, the game account didn't refuse to close my position this time :p :D

Music Producer, I tried that new trick of yours (having two trade windows open at once, one set to 'Buy' and the other to 'Sell'), and it worked remarkably! Great idea!

Now all I need is something bigger than the 12" screen on my PowerBook to make everything even easier, haha...

Good trade!

[Curren~Sea]

Nice.

I didn't actually pull the trigger on this one because I didn't trust it. And even as I type it reverses... Interesting!

[njmac]

Count me in.. I'll be trading the EUR/USD on the USD interest rate decision. Markets expect no change (current rate is 5.25%) I expect the USD to drop (I think!) if this stays the same.. or if they raise the rates to 5.50% (totally unexpected) I expect the USD to skyrocket.



Music_Producer, thanks for the info. I made about $400 in my game account. I hope you put some decent money on the line since, like usual, you were 100% correct!:cool: And you didn't have to be up at 5am ;)


I'm going to put $50.00 into Oanda and start playing (carefully ) for real.

How did everyone else do? And what's next that will be important to trade?


EDIT: good for you Elfin!!! I'm surprised you didn't trade curren~sea, you are usually pretty confident.

[elfin buddy]

Yeah, I was considering not trading too if the interest rate came out the same (5.25%, which it did), but I figured that the USD would drop against the Euro if expectations were met, so I gave it a go. I got out quick too, and it's a good thing because a downswing quickly followed the rise.

It is just play money for me at the moment...were it real money, I probably wouldn't have pulled the trigger just to be safe.

[njmac]

Nice.

I didn't actually pull the trigger on this one because I didn't trust it. And even as I type it reverses... Interesting!

That's why its so important to get the news quickly, get in, get out just as fast.

[Curren~Sea]

The reason I didn't trade is because for me, I am looking for the announcement to be different than what the market expects. That's when I know for sure which direction the market is going to move. It's a high percentage trade and that's what it's all about. It's ok if I miss a big move as long as I'm following my strategy.

For this announcement, it's equally important what the language is, and that isn't known until traders have had a chance to read the report, which is usually a few minutes after they see the number. That's how I explain this whip-saw. Yes, there is no rate increase, but the Fed is "keeping an eye" on inflation. I still expect the USD to strengthen but I'm patient for all the stars to line up.

[Music_Producer]

I just woke up! :mad: I am so used to staying awake till 6 am, so I went to sleep at 4 am thinking I have to get up at 10.30 atleast.. and right now its 12.26 :D

Ahh.. no big deal.. I'll trade the next time.. I am so not a morning person.. lol!

I'm friggin thrilled that you guys got some good trades :) Elfin and nj.. great trades.. and great reasoning. If expectations are met, currency drops. Just like I said.. god damn Feds never surprise anybody. They're lame :p

Also, this is the last time I trust my wife to wake me up.. :rolleyes:

[~Shard~]

It's great to see how active this thread has become - especially since it's technically on a Mac Forum, not an investing Forum! ;) :D

Now that I've returned from my 3 weeks of vacation I am going to start playing as well with my Oanda account. Just play money for the next few months and then I'll dump a few grand into a real account and (as other have stated) carefully see how it goes with real money. ;) :cool:

[Music_Producer]

Welcome back Shard :)

To all of you who traded.. what time did the news come out? At 2.15 or 2.14? Also, I checked the graph.. and it looks like there might have been a 'leak' or a tip.. that interest rates were to stay the same. The spike occured much earlier than it would have at news time (yeah, inspite of security and stuff.. leaks do occur at times)