Anyone here into FOREX?

[smunderdog]

Ran across this thread a few weeks ago after doing a search on Google for FOREX trading. This thread came up on about the 3rd or 4th page...have enjoyed reading it and learned quite a bit along the way!

Have to admit that I'm a total newbie to on line trading, but just got tired of that infomercial for the FOREX software that is on all weekend and finally decided to see what FOREX was all about. Don't see myself "buying into" the hype of the informercial, but the way you are all playing the game seems to appeal to me...

I've opened a practice account on Oanda and have only played around long enough to understand how to put an order in...haven't practiced on any actual news reports yet.

One question - is there an easy way to see what the spread is? I understand that the width of the line on the graph represents the spread, but is there somewhere numerically that shows it?

Also - I've noticed the thread isn't as active as it was...has everyone migrated over to the mac user group that was mentioned a few pages back?

What is the concensus now about the Oanda spread increase...since I'm not tied to any platform at this early stage in my learning curve, what other platforms should I try out?

 

[~Shard~]

Also - I've noticed the thread isn't as active as it was...has everyone migrated over to the mac user group that was mentioned a few pages back?

I can't speak about the Mac user group, as I haven't joined up myself, but I am still an active viewer if nothing else in this thread. I used to post more as well, but I've been so busy lately that my trading has taken a back seat. Hopefully that will change in a month or so.

Regardless, glad you found the thread educational.

 

[savar]

Also - I've noticed the thread isn't as active as it was...has everyone migrated over to the mac user group that was mentioned a few pages back?

I'm still lurking. I haven't seen any news to trade on recently that wasn't while I was at work. (Bernanke today, e.g.)

What user group are you referring to?

Also, anybody played around with MT4? I was interested in coding a trading strategy platform, but then I found MT4. Looks pretty cool as a way to model trading strategies and then backtest. Any experience with it? The documentation isn't great and I have yet to dig in and do any real development with it.

 

[Music_Producer]

I've opened a practice account on Oanda and have only played around long enough to understand how to put an order in...haven't practiced on any actual news reports yet.

One question - is there an easy way to see what the spread is? I understand that the width of the line on the graph represents the spread, but is there somewhere numerically that shows it?

Also - I've noticed the thread isn't as active as it was...has everyone migrated over to the mac user group that was mentioned a few pages back?

What is the concensus now about the Oanda spread increase...since I'm not tied to any platform at this early stage in my learning curve, what other platforms should I try out?

Hey smunder.. this thread gets active when I post When there are no trades.. I usually don't post. Today was good (the GBP CPI numbers) and I traded the GBP/USD multiple times in a few seconds/minutes for a total of about 12 pips. I got most of my profit on the second spike.




You can see the spread in Oanda.. you see where the quote section is? Where you see the 1.2456/1.2459 kinda thing for currencies.. there's a little arrow on the top.. when you click on that, it 'expands' the window so you can see the spread. Actually, let me show it to you graphically - oops.. i can't do that here.. so i am going to do it in the next 2 posts (i cant post more than one picture at a time in a post it seems)

 

[Music_Producer]

Normal view

Here's the normal view of the quote panel -



Edit : Never mind, both pictures show up. The second one is where you can see the spread. All I did was click on that arrow on the top (before F) You see 2.8 is the spread for GBP/USD.. 1.5 for EUR/USd etc.

 

[Music_Producer]

For the rest of your question.. yes, Oanda has crappy spreads during news trading.. but it's still (in my opinion) very good for trading.. because they execute when you click 'buy' or 'sell'

I have had quite a few experiences with MB trading, etc.. where I click 'buy' and the bloody thing doesn't execute till a few seconds.. by that time.. the price starts dropping.. and then it executes. Then when i hit sell because i don't want a loss.. it takes a few seconds to execute.. that pissed me off. So much for all the advertising they do and the promises of instant trading.

So if Oanda jacks up the spread between EUR/USD to 15 pips, and you get in at the spike (or before) and the EUR moves up 30-40 pips.. you can still make a lot of profit. If it moves up only 15 pips and then back down.. you'll make a loss. Lately Oanda has been keeping their spreads reasonable though, like today the GBP/USD spread was 2.8 instead of 15. I was a little surprised.. maybe they have had a lot of members leave, so they have decided to play nice. Who knows?

During unexpected interest rate decisions.. currencies can move by 80-100 pips.. so a 15 pip spread is nothing compared to the profit you can make. Having said that, I still have to find a broker who gives me instant executions combined with low spreads. I don't mind paying a commission per trade.

Please stay away from FXCM. They are the worst. They will freeze your trades during news time.. it's just ridiculous. Or, they will accept your trade, and not release it for a few minutes. So you could end up making tons of profit or losses. The 400:1 margin ration is also dangerous.

A lot of newbies have come to this thread and asked me if I could manage their money or start a 'forex service' where I give a 'buy' or 'sell signal'..or sell them forex trading info. Please don't ask me to do that.. I will not manage anyone's money. I don't have the balls to trade using someone's funds Also, all my info is right here on the threads.. I don't have any 'secret formula' for the trades that I carry out. You simply have to practice, be quick (quick at trading and analyzing the news)

I couldn't even possibly launch a site where I give real time signals. For one, latency is a big factor. I can't buy or sell my own trades and type 'buy' or 'sell' on the site in a chat window.. trades are to be executed in seconds (more like half a second) so that won't work.

I have been thinking of launching a site where I can hold a conference call of some sorts.. skype maybe? I just say 'buy' or 'sell' and accordingly people trade. It would be entirely free of course, but i have no idea how i can manage that!

 

[Music_Producer]

Another trade.. @ 8.30 am EST.. made only 7 pips, but traded huge lots.. so it was all good. Very choppy market.. GBP went down, and then back up a second after i got out.

 

[Music_Producer]

5 pips this time, I was a little slow in closing the trade..the US trade balance report @6.00 am EST

 

[smunderdog]

Thanks for pointing out where I can more easily see the spreads...

Missed testing a few opportunties this morning, but want to use them as learning experiences. I've been watching the calendar on www.forexfactory.com and they "rate" each data release as having the potential of high, average or low impact. It logically seems to make sense to focus on high impact releases, right?

For instance:

9 AM Canadian interest rate decision. Predicted to stay at 4.25 and it did. Based on what has been discussed on this thread, we would predict the CAD to weaken - and it did.

Attached a screenshot of this - how do I place the image directly in a post so we can see it like MP does?

 

[smunderdog]

Another question -

Do you stay away from timeframes where more than one data release is going to take place?

For instance:

At 8:30 AM there was a US PPI and US Core PPI announcement and they seemed to go in opposite directions.

US PPI - forecast was .7%, came out at -1.3%. We would expect the dollar to weaken.

US Core PPI - forecast was .2%, came out at .6%. We might expect the dollar to appreciate in value.

So when these two reports (or any two reports for that matter), come out at the same time, do we typically want to stay away from trading on it?

 

[Music_Producer]

Smunder.. yep, it makes more sense to focus on the important releases. but I have seen some reports which .. deviated a lot.. and thus produced a lot of fluctuation in currencies. However, generally I stick to the major reports.

When there are two or more reports.. like the PPI one.. you have to concentrate on the most important one.. in this case, it was the Core PPI.
You also have to watch out for revisions.. if they revise the previous month's report by a big number.. you will see the trade quickly go the opposite way. That's what happened with the US non farm roll and everybody got screwed.. because the USD dropped by 40 pips in one second, and then the next second.. it shot up by 40 pips and gained a lot more. All this, because of a revision (a huge one)

Currencies move based on their interest rates. No one wants to put their money in a country where they don't earn any return on their money (e.g. Japan) So you will see the Yen always lower compared to the USD, GBP, etc. If the US starts reducing rates, the USD will start dropping. It has nothing to do with the state of a country's economy.. how else would you explain the strength of the US dollar? Warren Buffet has been 'short' on the US$ since more than a year.. but he's been proved wrong (either that or he was just lying!)

The USD offers high interest rates, so its still strong. I have a feeling that there is a lot of political pressure by the govts (and OPEC) to keep the Japanese Yen's interest rates very, very low. So these guys can all borrow the Japanese Yen, put it in their banks and earn interest.

 

[~Shard~]

Well, I finally got around to making a trade again!

I know this morning didn't provide the ideal trading conditions, due to the multiple announcements, but I gave it a go anyway and ended up with positive results.

I basically used today as a test on my CMC Markets account. From my practice trades and so forth I confirmed that they never change their spreads, but I still had concerns over their execution speed. Well, my doubts were squashed today – I traded the US CPI and housing news this morning and traded EUR/USD – the spread remained at 2 pips and my order was executed instantly at the exact price I wanted! Due to what happened this morning (anyone watching the charts knows what I mean!) I only made 6 pips, but hey, better than nothing! I didn’t want to take too much risk being it was my first real forex trade on this platform and as I said, I was unsure about order execution speed. As a result, I also used a smaller lot size –next time it will be bigger.

So yeah, it was a bit risky, since the different reports went in different directions, so to speak, but I still managed to capitalize on it.

And I am very impressed with the CMC platform so far. It’s been great for me for all my CFD share, commodity and index trading, and now I can add forex to the list. Unless this first time was a fluke.

And although it only runs on Windows, it actually worked out quite well for me. CMC's charts don’t update every 5 seconds like Oanda, nor does their news ticker report as fast as others, so basically, on my Mac I have Oanda and my news service going, and then on my PC, I have CMC going. Pretty sweet actually.

Anywho, I don’t have any screenshots, as CMC doesn’t work that way – about all I could post pictures of would be shots of my respective buy and sell orders, but I somehow doubt that would be too riveting to see.

Did you trade at all this morning Music_Producer?

 

[Music_Producer]

hey Shard, that's terrific! If CMC keeps giving you instant executions.. let us know.. I'll switch for sure.

I did trade this morning but didn't post here, because I was so sleepy, just went off to bed right after. Last 2 days have been crazy trades.. but there's one thing I've noticed for the American session.. if the USD is strong, or there is USD+ve news.. the GBP/EUR will keep dropping for half an hour to one hour. There will be spikes in the middle, but the general direction stays the same.

I made about 18 pips total.. but it was not in one trade. I traded multiple times.. as soon as GBP would spike.. I would sell.. and then buy as it went down. I kept doing that till I finally thought.. 'ok, that's enough for the day'




Oh, and my MacBook apparently has the shutdown problem. It was a good thing it started acting up after I was done with my trades. It seems to shutdown on its own when the power adapter is not plugged in. I don't want to send it for service yet, but ugh.. it wasn't giving me any trouble till now.

I'll be trading the GBP retail sales next, if it deviates quite a bit.

 

[~Shard~]

hey Shard, that's terrific! If CMC keeps giving you instant executions.. let us know.. I'll switch for sure.

Will do! I want to execute several more trades though before I'm convinced. And even then, as I said, I wouldn't recommend switching solely to the CMC platform. It is excellent in many ways, however as I indicated, their charts do not update every 5 seconds (5 minutes is the smallest interval which is useless for news traders!) and their news service doesn't appear to be the best. I used Oanda to help with my trade this morning and I wouldn't have had the same results if I had only used CMC.

there's one thing I've noticed for the American session.. if the USD is strong, or there is USD+ve news.. the GBP/EUR will keep dropping for half an hour to one hour. There will be spikes in the middle, but the general direction stays the same.

Good to know, thanks for the head's up - I'll keep an eye on it the next time some +ve USD news is released.

I'll be trading the GBP retail sales next, if it deviates quite a bit.

I'd like to watch it too however that announcement comes out at about 2:30 AM for me (09:30 GMT, correct?) - past my bedtime on a weekday.

 

[Music_Producer]

Shard, sometimes it's worth it to stay up for these GBP reports The retail sales came out weaker than expected and their budget had the biggest deficit of all times.. so it was a double whammy..

Made 20 pips on the first spike, and around 6-8 on the 2nd.. the GBP is still dropping.. but I'm done for tonight. I would expect the GBP to continue its downward trend till the American session. There's nothing much going on in the US markets this morning.. but whatever little news could affect the GBP/USD movement.

 

[~Shard~]

Shard, sometimes it's worth it to stay up for these GBP reports The retail sales came out weaker than expected and their budget had the biggest deficit of all times.. so it was a double whammy..

Made 20 pips on the first spike, and around 6-8 on the 2nd.. the GBP is still dropping.. but I'm done for tonight. I would expect the GBP to continue its downward trend till the American session. There's nothing much going on in the US markets this morning.. but whatever little news could affect the GBP/USD movement.

Nice trade Music_Producer! Yeah, I can see what you mean. In the future I might just have to set the alarm clock and give it a try! Although I'm not sure if my wife would like that too much... Meh, I'll just tell her I'll be making money as a result, that should make her feel better...

What's the next big announcement you've got on your radar screen? CAD CPI tomorrow? The FOMC meeting next Wedneaday?

 

[smunderdog]

Yeah, yesteday's announcements were a mess and I would have stayed out since I'm still feeling my way through. This morning's GBP retail sales report was much more clear cut though and I would have probably given it a go if I would have been awake. Of course, I'm still practicing in my game account on Oanda...

Problem is, when I logged on this morning and pulled up the Oanda Fx News reports, I don't see where they announced the results of the GBP retail sales report at 4:30 EST. There is a report that the pound is down due to the retail sales coming out lower at 5:09 EST, but of course that doesn't help.

Since I don't plan on subscribing to a news service initially and there have been favorable reviews of the Oanda news being "quick enough" I had planned on using it for now. What happened on this one?

Am also curious as to which reports I should key into next...

 

[Music_Producer]

Shard, just tell your wife you're making some more money so she can go shopping.. she'll be more than happy to stay awake and make you sandwiches at 2 am while you trade

GBP trade was quite tepid.. the GDP came out robust.. at 2.8% way better than expected.. but the pound went up by only 15 pips. I grabbed about 8.. which was good considering the lame spike. I'm thinking that the move was limited because the GBP had already risen pre-release..so it was priced in.

Never mind, I just checked the levels and yes, the pound is still rising.. so far a 30 pip rise from the report level. Still, with this kind of news, it should have gone up by 50-70 pips. Of course, there must be a lot of banks selling the pound at the 1.88 level (resistance)

 

[Music_Producer]

Just an update.. pound continues to rise.. Shard.. this is a classic example of how the currency trend continues its course.. if the news is positive. This also represents a very good chance to make healthy profits, especially because the spreads fall back to minimal levels.

 

[Music_Producer]

Traded the Canadian CPI.. both numbers conflicted each other, but the core cpi is more important.. so canadian $ went up against the USD by 8-10 pips.. I grabbed 5. Had both numbers come out higher, obviously CAD $ would have responded more strongly.

time for me to get some good sleep now.. see you all later in the day

 

[Hoef]

Hi guys, been quite from my front but back and ready for action! My MB suffers from sudden shutdown too , all after installing 10.4.8, even though most people say it has nothing to do with it.

Going to trade live from this moment on

 

[~Shard~]

Good luck to you Hoef - keep us posted on how it goes!

 

[Music_Producer]

Yup Hoef.. my shutdowns began after I updated the OS to 10.4.8.. but then again, if people with 10.4.7 have the same problem.. it would have to be a hardware issue. What's annoying is that after all the ipod crap that Apple are so obsessed with, the hardware products seem to have taken a backseat.

I understand that sometimes you could land up with a defective product, but *everyone* I know.. in studios, recording, trading, etc.. who has a macbook.. has this problem. I've been borrowing my wife's Averatec laptop recently for work .. it sounds like an airplane about to take off.. but it doesn't shut down abruptly.

Anyway, I'm going to try and format my hard drive, and reinstall OS X.. hmm.. sounds like something I used to do on my pentium 2 desktop.. a very long time ago

 

[~Shard~]

So which announcements are you focusing on this week Music_Producer? AUD CPI tomorrow evening? FOMC? (I doubt anything will come out of that...) Lots of USD news on Thursday, perhaps too much to trade confidently due to conflicting results? How about the JPY announcements Thurs evening? Just curious what looks good to you this week.

 

[~Shard~]

Well, I traded the AUD CPI results about half an hour ago. Consensus was +0.9% and that's exactly what it came out at, however since I was all geared up to trade and was using a smaller lot size, I figured what the heck... So, I made 4 pips on the AUD/USD - not too shabby. I was using this as a bit of an experiment as well to see how the AUD/USD moved versus the AUD/JPY. Looks like the AUD/JPY moved more, but meh, it's all good.

Music_Producer, I know it's been discussed before here, but what do you think about doing a carry trade on AUD/JPY? Not quite as attractive as it used to be due to Japan raising the interest rate from 0%, but still a nice differential. I thought if I did a smaller lot size (i.e. so I could cover a price swing) but still brig in a few bucks a month there would be nothing wrong with that. Thoughts?