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Anyone here into FOREX?
- Thread starter Music_Producer
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Hey guys! I've been following this thread with interest. I want to get into short term stock trading or forex and have been investigating both.
I have a question about (United States) capital gains tax. Let me set up an example.
Say you buy $1000 in USD/EUR and sell out, making $1200. That leaves you with a $200 profit. After the pip spread has been deducted, say that leaves you with $100 profit.
At this point, are you paying capital gains tax on $200, or $100? What is the tax rate on those profits? I've read about a 60/40 long-term/short-term split if you decide to forgo Section 988 IRS rules (for an overall 23% tax rate). Can you fill in some of the details here?
I have a question about (United States) capital gains tax. Let me set up an example.
Say you buy $1000 in USD/EUR and sell out, making $1200. That leaves you with a $200 profit. After the pip spread has been deducted, say that leaves you with $100 profit.
At this point, are you paying capital gains tax on $200, or $100? What is the tax rate on those profits? I've read about a 60/40 long-term/short-term split if you decide to forgo Section 988 IRS rules (for an overall 23% tax rate). Can you fill in some of the details here?
GBP Trade
I've been having quite a bit of fun shorting the GBP/USD today. The pound has been hammered anyway because of all the political chaos going on in England, on top of that.. the Bank of England did not raise interest rates.
So I've been shorting.. and buying back.. at 5 pip profit intervals. Total profit = 40 pips 😀
And Oanda has been playing very nice. The spread on GBP/USD was 2.8 pips! 😱 I was expecting 15 as always.. for a few seconds I thought something was wrong with my platform.. but the spread remained at 2.8 all throughout.. enabling me to execute these multi-profitable trades.
I expect the GBP to go through some crazy ranges today.. especially when UK prime minister Tony Blair is expected to speak (9am ET-10 am ET) The pound has the potential to move up or down by 50-100 pips (I'm guessing) I won't be trading though.. because I have no idea what the exact time will be when he speaks.. and its too late for me anyway. Besides, I'm very satisfied with 40 pips for the day.
Apparently he is going to announce that he will quit by next year..
I've been having quite a bit of fun shorting the GBP/USD today. The pound has been hammered anyway because of all the political chaos going on in England, on top of that.. the Bank of England did not raise interest rates.
So I've been shorting.. and buying back.. at 5 pip profit intervals. Total profit = 40 pips 😀
And Oanda has been playing very nice. The spread on GBP/USD was 2.8 pips! 😱 I was expecting 15 as always.. for a few seconds I thought something was wrong with my platform.. but the spread remained at 2.8 all throughout.. enabling me to execute these multi-profitable trades.
I expect the GBP to go through some crazy ranges today.. especially when UK prime minister Tony Blair is expected to speak (9am ET-10 am ET) The pound has the potential to move up or down by 50-100 pips (I'm guessing) I won't be trading though.. because I have no idea what the exact time will be when he speaks.. and its too late for me anyway. Besides, I'm very satisfied with 40 pips for the day.
Apparently he is going to announce that he will quit by next year..
Hoyboy.. the capital gains tax is only the profit that you make .. not on any spreads that the broker earns. If you made $5000 profit for 2006.. you have to pay tax on that $5000.
I am not sure what the rate is.. I let my software do all the work.. I merely fill in the details.
I am not sure what the rate is.. I let my software do all the work.. I merely fill in the details.
Hey folks! I traded the GBP today (at 4.30 am EST) The GBP PPI came out worse than expected.. and the pound dropped by 30 pips.. and continued to drop to about 40-50 pips or so. I bagged 15 out of those (Oanda took another 15 via their crazy spread) The UK trade balance also came out slightly worse than expected.
Canadian housing starts (at 8.15 am EST) was a no-trade.. there was hardly any deviation on the report. Tomorrow, the US Trade balance is due at 8.30 am EST.. and that should be a good trade (provided it deviates a bit)
I posted on Friday regarding my USD/CAD trade.. but for some reason, it doesn't show up here. 😕 That was a really good trade because the Canadian $ dropped by 40-50 pips against the US$. Canadian employment reports came out pretty disappointing.. I think the prediction was -0.1% and it came out at -1.2% .. so a pretty big deviation. Even though the spread was 15 pips on USD/CAD it was fairly easy to snatch atleast 15-20 pips out of that one. Good luck for tomorrow!
Canadian housing starts (at 8.15 am EST) was a no-trade.. there was hardly any deviation on the report. Tomorrow, the US Trade balance is due at 8.30 am EST.. and that should be a good trade (provided it deviates a bit)
I posted on Friday regarding my USD/CAD trade.. but for some reason, it doesn't show up here. 😕 That was a really good trade because the Canadian $ dropped by 40-50 pips against the US$. Canadian employment reports came out pretty disappointing.. I think the prediction was -0.1% and it came out at -1.2% .. so a pretty big deviation. Even though the spread was 15 pips on USD/CAD it was fairly easy to snatch atleast 15-20 pips out of that one. Good luck for tomorrow!
~Shard~
macrumors P6
Music_Producer said:
As always, thanks for the updates Music_Producer! You continue to provide us with great insight, and seeing your results, and how you trade based on the news continues to provide concrete examples to the rest of us - I, for one, appreciate it. 🙂
Things have been hectic the past little bit here, but I hope to do some more trades myself (pretend of course) soon. 😎
Hoef.. the US CPI is the trade to look out for.. (trade the retail sales too.. as they might deviate) like today's GBP trade.. (GBP shot up by 60 pips 😱 ) The UK CPI came out much higher than expected so the pound practically hammered the dollar.
I made 38 pips .. my best trade in a long time. 😀 *But* I am switching from Oanda to GFT Forex. Oanda had the spread on GBP/USD at 15 pips.. and kept it at 10 pips for a FULL 8 minutes! If only they could hear me on the phone right now. Yes, I made a profit.. but a 10 pip spread for so many minutes is unheard of. Usually the spread falls back to 3.5 pips within a couple of seconds after a news release.. or at the most - a minute. I am guessing Oanda is getting greedy and I am quite apalled by this.
Executions on GFT were instant, and the spread remained at 5 pips.
I made 38 pips .. my best trade in a long time. 😀 *But* I am switching from Oanda to GFT Forex. Oanda had the spread on GBP/USD at 15 pips.. and kept it at 10 pips for a FULL 8 minutes! If only they could hear me on the phone right now. Yes, I made a profit.. but a 10 pip spread for so many minutes is unheard of. Usually the spread falls back to 3.5 pips within a couple of seconds after a news release.. or at the most - a minute. I am guessing Oanda is getting greedy and I am quite apalled by this.
Executions on GFT were instant, and the spread remained at 5 pips.
Geez.. just when i think of quitting Oanda.. made 20 pips on the EUR/USD. The US trade balance came worse than expected (man, i already knew that.. i wish i had placed a trade before the news report) and the eur jumped by 40 pips.
I got out, and almost a couple of seconds later, the EUR tanked.. back to where it started its rise.. and dropped by 30 pips gradually! Its always a good thing to get out early.
I got out, and almost a couple of seconds later, the EUR tanked.. back to where it started its rise.. and dropped by 30 pips gradually! Its always a good thing to get out early.
Curren~Sea
macrumors regular
Just an update from me since I haven't posted for awhile:
1. I am trading announcements on Oanda and it's going very good. While the profits aren't mind-boggling, I realized a modest 5% return in August and I'm currently up another 5% in Sep. Compounded, that's pretty good.
2. I am also trading a different account using various strategies and this account realized 50% in Aug and is well ahead in Sep so far.
Keep learning and you'll find a strategy and style that works for you!
1. I am trading announcements on Oanda and it's going very good. While the profits aren't mind-boggling, I realized a modest 5% return in August and I'm currently up another 5% in Sep. Compounded, that's pretty good.
2. I am also trading a different account using various strategies and this account realized 50% in Aug and is well ahead in Sep so far.
Keep learning and you'll find a strategy and style that works for you!
~Shard~
macrumors P6
Curren~Sea said:
I think that's a good point - do whatever works for you. For some of us, it's getting up early and making trades that last 10-15 seconds on news spikes. For others, perhaps it's long term trades based on fundamentals. Others prefer using technical analysis to dictate how they will trade. Some trade forex, as we do here, others stocks, others commodities - there's lots out there!
In the end, if it works for you, it's all good. 😎
njmac
macrumors 68000
I hope everyone is doing well. 🙂
I have not traded since my stellar 28 pips 😉 because I have been working. (I'm a freelancer and have a very busy September month...) But will be back in the swing in October. I check this thread everyday though to keep up on what's going on, tips etc.
I have not traded since my stellar 28 pips 😉 because I have been working. (I'm a freelancer and have a very busy September month...) But will be back in the swing in October. I check this thread everyday though to keep up on what's going on, tips etc.
Two trades today to look out for if there is deviation - UK Retail Sales and USA Retail Sales. Hope these deviate by a big number 🙂
Wow.. just wow. Made a 2 pip profit on GBP/USD. Guess what Oanda's spread was?
25 pips. See Ya OandA
25 pips. See Ya OandA
Awesome trade! USD retail sales came out better than expected.. a big deviation (exp was -0.2%.. came out at +0.2%) The eur has dropped 40 pips so far.. and still falling...sorry, make that 50 pips! MB trading filled me in quite nicely and I got 29 pips.
This, despite the fact that the EUR was appreciating because of ECB comments that EUR interest rates will likely be hiked. I love news like this when its totally unexpected, because this is what moves the markets the most. 😀
This, despite the fact that the EUR was appreciating because of ECB comments that EUR interest rates will likely be hiked. I love news like this when its totally unexpected, because this is what moves the markets the most. 😀
~Shard~
macrumors P6
Thanks again for the updates Music_Producer - I hope to be back in the trading game with ya soon! 😉 😎
That's crazy about Oanda's spreads. I have signed up for a full-fledged CMC account and will let everyone know how it goes. As well as forex though, I'll be trading stocks, indicies and commodities, so I am not using it solely as a forex platform. But one thing that I do know is that they NEVER widen their spreads. EUR/USD is always 2 pips, always. 😎
That's crazy about Oanda's spreads. I have signed up for a full-fledged CMC account and will let everyone know how it goes. As well as forex though, I'll be trading stocks, indicies and commodities, so I am not using it solely as a forex platform. But one thing that I do know is that they NEVER widen their spreads. EUR/USD is always 2 pips, always. 😎
Hoef
macrumors 6502a
Music_Producer said:
Excellent .... just made 3 but with the insane spread I am not complaining. Can we have a tally of what trading platform people are using? I am about to say goodbye to my game account and go live but still not set on a platform (only tried Oanda). Music_Producer, did you make the switch to GFT Forex and are you using that in Parallels?
Hoef and Shard - I've tried almost every broker who maintains a fixed spread on all currency pairs.. during news times, but I have found out that almost 99% of them will never fill your orders when the market is volatile. So, I have to give that honor to Oanda.. they have never failed me when it comes to instant execution. I've tried forex.com, fxcm, fxdd, deutsche bank (they use fxcm.. who would have thought?) hotspotfx.com, interbank fx.. lol.. you name it.
GFT was a *little* slow at market executions.. Mb Trading performed very well last night for the US trade that I carried out. I have a live account with MB trading Hoef, GFT is still a demo one. For sure though, I will choose between GFT and Mb Trading.
I use parallels for both GFT and MB Trading software. Parallels runs great. no complaints at all. I've heard people say that Oanda is keeping their spreads high to scare off news traders.. and that it might be a temporary move. Lets see.. when they're back to resonable spreads, I might just go back.. but for now, no thanks.
Shard, if you've noticed.. the price of oil has started to drop.. now that the elections are coming up in November. Coincidence? 😛
GFT was a *little* slow at market executions.. Mb Trading performed very well last night for the US trade that I carried out. I have a live account with MB trading Hoef, GFT is still a demo one. For sure though, I will choose between GFT and Mb Trading.
I use parallels for both GFT and MB Trading software. Parallels runs great. no complaints at all. I've heard people say that Oanda is keeping their spreads high to scare off news traders.. and that it might be a temporary move. Lets see.. when they're back to resonable spreads, I might just go back.. but for now, no thanks.
Shard, if you've noticed.. the price of oil has started to drop.. now that the elections are coming up in November. Coincidence? 😛
Disappointing data.. CPI came out as expected.. so EUR jumped 15 pips and then down.. and then up again. I traded with MB, got about 7 pips and got out. Execution was a little slow, but when you click on' buy' or 'sell' you get filled in at the rate that you see on the screen.. its not like they change the rate due to the delay.. so I was very happy.
These USD bulls are ridiculous.. the EUR, in my opinion.. should go to 1.2900 or atleast 1.3000. There are greater chances of the Euro interest rates being hiked, the EUR economy is faring better as well.
Hoef, did you trade? The spread went up to 15 pips on Oanda.. so if you got in early, you probably made a loss (unless you sold after the first spike)
These USD bulls are ridiculous.. the EUR, in my opinion.. should go to 1.2900 or atleast 1.3000. There are greater chances of the Euro interest rates being hiked, the EUR economy is faring better as well.
Hoef, did you trade? The spread went up to 15 pips on Oanda.. so if you got in early, you probably made a loss (unless you sold after the first spike)
Hoef
macrumors 6502a
Music_Producer said:
Confirmed
I sent them an email asking what was going on, this was their response...
OANDAs FXTrade spreads vary over time depending on a number of factors,
including the currency pair in question, the time of day, the day of week,
general market conditions, timing of anticipated announcements, etc.
Typically, during normal market conditions you will find the spreads to be
in the 1.5-3 pip range on most of the currency pairs.
As you know, we have increased the spreads at the time of newsreleases.
We expect them to continue to be increased at news releases,and we'd
like to give you some additional background on why this occurs:
Today,traders and market makers execute the bulk of their
transactionselectronically. This has increased the speed of trading.
Even thoughthis development is a good thing overall, it has had the
negativeeffect of increasing the peaks of transaction volume at the time
ofnews events. Not just at OANDA, but everywhere. Whenever this
happensglobal liquidity dries up and exchange rates literally jump to a
newprice level.
From a risk management point of view, at times ofnews events, when
there is relatively tight liquidity coupled withpotentially large
volatility, the situation is more problematic thanover the weekend,
where liquidity might be very tight but there is novolatility in the
common case. Market makers, globally, have toresponded to this
development by widening there spreads at the time ofimportant market
events. Given the overall level of uncertainty in thefinancial markets,
OANDA has been forced to follow this development andalso increase
spreads at the time of news releases.
We atOANDA can assure you that having tight spreads lies very close to
ourheart. We will do everything in our to power keep the spreads as low
aswe possibly can, and in particular, to minimize the magnitude and
timeof spread increases. We encourage our clients who typically use
tightstops widen their stop loss bands prior to news releases. Also,
clientswho trade at news events should understand that prices can
movequickly, with large gaps, and that considerable slippage can ensue.
If you have any further questions, please feel free to contact us.
Kind Regards,
The OANDA FXTrade Team
New Poster
Hello All,
I'm a new poster to this board. I've delved in Forex a little in the past. Only with game accounts though. I've used Forex.com and it's not that bad, in my opinion. However, I have nothing to compare it against. Now I'm trying Oanda. I've read this forum a bit and I'm impressed with much of the insight on these boards.
I like the concept of trading on news. Tomorrow (Monday) will be my first trade on news. I am looking at Forex Factory's calendar and I'm looking at:
EUR Industrial Production m/m
My question is, how do I know what the announcement is? Some of you use paid services like tradethenews.com, but at 5AM, when it's announced, how do I know what it will be?
Hello All,
I'm a new poster to this board. I've delved in Forex a little in the past. Only with game accounts though. I've used Forex.com and it's not that bad, in my opinion. However, I have nothing to compare it against. Now I'm trying Oanda. I've read this forum a bit and I'm impressed with much of the insight on these boards.
I like the concept of trading on news. Tomorrow (Monday) will be my first trade on news. I am looking at Forex Factory's calendar and I'm looking at:
EUR Industrial Production m/m
My question is, how do I know what the announcement is? Some of you use paid services like tradethenews.com, but at 5AM, when it's announced, how do I know what it will be?
Hey honamos.. welcome to the thread. 🙂 You can get the news on Oanda.. just click on 'resources' and then 'news' .. a separate news window opens up. Tradethenews is not all that reliable.. sometimes they are faster than Oanda, sometimes they're the same.
Remember, that any major deviation in an expected result .. causes major moves in the currency. If the news comes out more or less the same, the currency might move maybe 15 pips at the most (up or down)
A definite trade to watch out for is during interest rate decisions (US, EUR and GBP) Most of the times, the interest rates are announced as expected i.e. if the UK bank is expected to keep interest rates same at 4.5%.. they will not change. However, if the banks surprise the markets by announcing a rate hike(or cut) you can expect that currency to move by 80-100 pips. For sure, 100%.. without a doubt.
I am not trading the EUR industrial report because it doesn't move the currencies that much. Its also a m/m (monthly report) so the markets don't take note of it that much. Of course, if it deviates by some insanely crazy number then the markets will take notice.. but usually it doesnt.
I'll be trading the US Current Account at 8.30 am EST..if it deviates quite a bit, I'll enter the trade. Before a trade.. (usually 15 mins before) I make a note of what the forecast number is going to be.. and memorize it... That way, when i see the news come out.. i know if it deviates by a lot or not much and accordingly I can trade.
Oanda was great for every trade, but lately they have increased their spreads, so you might actually make a loss on small deviation trades..because the spread will eat up your profits.
Hoef, thats the usual reply they give everytime someone asks about their spread policy. I would love to ask them why GFT, MB Trading, etc dont raise their spreads during news time. Oanda seriously has no excuses, I am just tired of whatever reason they might give to justify their spreads.
Remember, that any major deviation in an expected result .. causes major moves in the currency. If the news comes out more or less the same, the currency might move maybe 15 pips at the most (up or down)
A definite trade to watch out for is during interest rate decisions (US, EUR and GBP) Most of the times, the interest rates are announced as expected i.e. if the UK bank is expected to keep interest rates same at 4.5%.. they will not change. However, if the banks surprise the markets by announcing a rate hike(or cut) you can expect that currency to move by 80-100 pips. For sure, 100%.. without a doubt.
I am not trading the EUR industrial report because it doesn't move the currencies that much. Its also a m/m (monthly report) so the markets don't take note of it that much. Of course, if it deviates by some insanely crazy number then the markets will take notice.. but usually it doesnt.
I'll be trading the US Current Account at 8.30 am EST..if it deviates quite a bit, I'll enter the trade. Before a trade.. (usually 15 mins before) I make a note of what the forecast number is going to be.. and memorize it... That way, when i see the news come out.. i know if it deviates by a lot or not much and accordingly I can trade.
Oanda was great for every trade, but lately they have increased their spreads, so you might actually make a loss on small deviation trades..because the spread will eat up your profits.
Hoef, thats the usual reply they give everytime someone asks about their spread policy. I would love to ask them why GFT, MB Trading, etc dont raise their spreads during news time. Oanda seriously has no excuses, I am just tired of whatever reason they might give to justify their spreads.
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