Sorry to hear about that Nathan. One of the benefits of CMC is fixed spreads, but it's not without its shortcoming as well. 
Better luck next time!
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Anyone here into FOREX?
- Thread starter Music_Producer
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Thanks Shard.
Tha GBP interest rate stayed the same this morning and the EUR interest rate moved up by 25bp which was expected so I didnt trade either of those.
It would be cool, one day, to be able to go buy a forex broker, and implement fixed spreads and instant execution and make it just for the mac...I just dont want the responsibility of running the company after that.
Tha GBP interest rate stayed the same this morning and the EUR interest rate moved up by 25bp which was expected so I didnt trade either of those.
It would be cool, one day, to be able to go buy a forex broker, and implement fixed spreads and instant execution and make it just for the mac...I just dont want the responsibility of running the company after that.
That's allright nathan.. spreads will most probably widen more than the usual 10 pips especially on pairs like AUD/USD. I have seen a 25 pip spread on GBP/USD on Oanda.. I think a lot of members left Oanda on that day
I just traded Trichet's speech.. bagged 12 pips. This was the first time I traded a 'speech' and he was hawkish about the Euro, so the EUR/USD rose by about 30 pips or so.. I got out pretty early. I didn't trade the GBP and Eur interest rate decisions because they came out the same.
I think trading this speech was fairly easy.. CMC execution was instant, and I believe even on Oanda the spreads remained small (2 pips on eur/usd) This is probably because its not really a news event.. rather just a 'direction' offered as to regarding rate cuts/hikes.
Tomorrow is the notorious Non farm employment change for the USD. This report moves the currencies a lot, but it also whipsaws like nuts because of 'revisions' to previous month's data.
I just traded Trichet's speech.. bagged 12 pips. This was the first time I traded a 'speech' and he was hawkish about the Euro, so the EUR/USD rose by about 30 pips or so.. I got out pretty early. I didn't trade the GBP and Eur interest rate decisions because they came out the same.
I think trading this speech was fairly easy.. CMC execution was instant, and I believe even on Oanda the spreads remained small (2 pips on eur/usd) This is probably because its not really a news event.. rather just a 'direction' offered as to regarding rate cuts/hikes.
Tomorrow is the notorious Non farm employment change for the USD. This report moves the currencies a lot, but it also whipsaws like nuts because of 'revisions' to previous month's data.
I checked out CMC but for now, I'll have to stick with oanda until I've got the $2000 minimum. Do you run CMC in parallels?
The only reason I can think of that they raise the spread is to cover their bandwidth charges, but if they're geting 2-3 pips already, it shouldnt matter because I doubt it costs 10 cents per trade even during news time. Maybe they're just greedy.
I read that article you linked to, but Im still new to all this. I dont know whether to think "this is just some guy going off an a tangent" or "this is the overall feeling of the market". I also dont know whether the USD is just now getting to this point or whether its happened before and this was the result or if every country is always on the edge and its a constant battle to maintain stability.(im only 20 years old which is why i dont know this stuff already)
So much to learn! ...its fun though.
The only reason I can think of that they raise the spread is to cover their bandwidth charges, but if they're geting 2-3 pips already, it shouldnt matter because I doubt it costs 10 cents per trade even during news time. Maybe they're just greedy.
I read that article you linked to, but Im still new to all this. I dont know whether to think "this is just some guy going off an a tangent" or "this is the overall feeling of the market". I also dont know whether the USD is just now getting to this point or whether its happened before and this was the result or if every country is always on the edge and its a constant battle to maintain stability.(im only 20 years old which is why i dont know this stuff already)
So much to learn! ...its fun though.
I traded the US #s this morning and nabbed 4 pips on the EUR/USD. Nothing spectactular and only $100K, but hey, better than nothing. I still want to get more experience before I start using larger lot sizes - I'll save that for next year.
Yeah, Oanda has more granular real-time charting than CMC and a better news service so I have Oanda running on my Mac for the instant charting and news alerts, and then CMC on my PC for actual trade execution. Works quite well!
I think it's the latter, not the former...
Exactly. Realize also that Music_Producer hasn't been doing this very long either, and I have been trading for only a couple months myself, so don't feel intimidated - in some respects, this isn't something that requires years and years of experience or a CFA to do. Just do your research, observe, carry out your pretend trades as if it were your own real money, learn form your mistakes, and you can succeed as well.
I still want to get more experience before I start using larger lot sizes - I'll save that for next year. Yeah, Oanda has more granular real-time charting than CMC and a better news service so I have Oanda running on my Mac for the instant charting and news alerts, and then CMC on my PC for actual trade execution. Works quite well!
I think it's the latter, not the former...
Exactly.
Realize also that Music_Producer hasn't been doing this very long either, and I have been trading for only a couple months myself, so don't feel intimidated - in some respects, this isn't something that requires years and years of experience or a CFA to do. Just do your research, observe, carry out your pretend trades as if it were your own real money, learn form your mistakes, and you can succeed as well. I think it's the latter, not the former...
LOL!
I made 1/2 a pip on USD consumer credit. I thought it would move more because
the numbers were way below expectations, so I traded, but afterwards it looks
like it was already priced in a few mintues before.
Nathan, that article was actually quite appropriate and well written. It's what the market is feeling.. in the sense - the thousands of banks and hedge funds all over the world. When there's a fear that the USD will keep going down, everyone starts selling .. and that just leads to panic.
I remember when everyone would claim that the housing market would never 'crash' or prices would remain the same. Yeah, sure That was 2 years ago, and I told a few of my friends not to get into that business.. or they'll be screwed. Needless to say, they did not heed my warning and now they're sitting with a loss of an average around $85,000+. It's just plain stupid to defy logic and be optimistic all the time - especially when it comes to money! Always, always take into account the worst case scenario and act accordingly.
The only way to stop the USD slide is to increase interest rates. Like the article stated, it's better to slow down the domestic US economy than risk a plunge in the $'s value internationally. If the USD keeps going down, you know how much more everything will cost? That will slow down the economy more than a series of interest rate hikes.
Everything you buy (almost everything) comes from China. If the US dollar keeps going down in value compared to the Chinese Yuan, all the stuff you buy from Walmart to Apple.. will get more expensive..not to mention oil. This will lead to people spending less money.. and just becomes a vicious cycle.
Now, China can obviously step in (because they want the US to buy more chinese goods for their own economy's sake) and either reduce the value of their own currency.. or buy billions of USD to make the USD go up.
Funny, isn't it? You can't predict where the $ will go. Common sense and fundamentals state that it should go down.. but financial entities.. indeed entire countries might not want that happening. So the $ might go up. It's a very delicate situation.
The USA is basically a consumer nation now.. while China is the supplier (well, other countries too) You want to keep the consumer happy and you want him to buy more products.. so it's in your best interest to lower your currency value or increase the consumer's buying power.
This is why I do short term trades (few seconds) I never risk any long-term trades because I have no way of predicting where a currency will be after a few weeks or months.
I remember when everyone would claim that the housing market would never 'crash' or prices would remain the same. Yeah, sure
That was 2 years ago, and I told a few of my friends not to get into that business.. or they'll be screwed. Needless to say, they did not heed my warning and now they're sitting with a loss of an average around $85,000+. It's just plain stupid to defy logic and be optimistic all the time - especially when it comes to money! Always, always take into account the worst case scenario and act accordingly.The only way to stop the USD slide is to increase interest rates. Like the article stated, it's better to slow down the domestic US economy than risk a plunge in the $'s value internationally. If the USD keeps going down, you know how much more everything will cost? That will slow down the economy more than a series of interest rate hikes.
Everything you buy (almost everything) comes from China. If the US dollar keeps going down in value compared to the Chinese Yuan, all the stuff you buy from Walmart to Apple.. will get more expensive..not to mention oil. This will lead to people spending less money.. and just becomes a vicious cycle.
Now, China can obviously step in (because they want the US to buy more chinese goods for their own economy's sake) and either reduce the value of their own currency.. or buy billions of USD to make the USD go up.
Funny, isn't it? You can't predict where the $ will go. Common sense and fundamentals state that it should go down.. but financial entities.. indeed entire countries might not want that happening. So the $ might go up. It's a very delicate situation.
The USA is basically a consumer nation now.. while China is the supplier (well, other countries too) You want to keep the consumer happy and you want him to buy more products.. so it's in your best interest to lower your currency value or increase the consumer's buying power.
This is why I do short term trades (few seconds) I never risk any long-term trades because I have no way of predicting where a currency will be after a few weeks or months.
Ok, half an hour to go for the NFP. Remember to trade a small lot, this thing whipsaws.. and you can lose quite a bit if the spike goes the opposite way (due to revisions or just plain insanity) I have considered not trading this report quite a few times, but I think I'll jump in.. simply for the adrenaline rush!
25 pips baby!!!! Man, NOW I wish I had traded a bigger lot.. heh! Good week.. very good week. How did you guys do?
PS - GBP showing strength but keeps getting smacked down. I am so tempted to trade on these spikes.. but that can wipe out my profits so I just shut the platform down.
Man, NOW I wish I had traded a bigger lot.. heh! Good week.. very good week. How did you guys do? PS - GBP showing strength but keeps getting smacked down. I am so tempted to trade on these spikes.. but that can wipe out my profits so I just shut the platform down.
Yeah, look at where it is now.. GBP/USD went up by more than a 100 pips after 15 minutes (100 pips in 12 minutes)!! Hence, trade for only a few seconds.. not more. Obviously some banks who didn't want their GBP/USD trades to get stopped out.. stepped in and bought a ton of GBP. Geez, they must have bought millions to make that spike go up by 100 pips.
The NFP this time though, wasn't that crazy as it usually is.
The NFP this time though, wasn't that crazy as it usually is.
I was watching EUR/USD but I just compared the charts and theyre roughly the same, so I guess it doesnt matter either way.
Yeah, it was just crazy at first. Every time I thought "oh i should sell but it could go up" it did, and then back down, up, etc. and it was about 5 pips every time. glad I didnt trade. Im learning not to trust my "instincts" with this and its wierd because every time I trade on logic, I make make money and when I trade on "feeling" I lose money-every time. -just like you said at the beginning of this thread.
Yeah, it was just crazy at first. Every time I thought "oh i should sell but it could go up" it did, and then back down, up, etc. and it was about 5 pips every time. glad I didnt trade. Im learning not to trust my "instincts" with this and its wierd because every time I trade on logic, I make make money and when I trade on "feeling" I lose money-every time. -just like you said at the beginning of this thread.
Urgh, how frustrating! But what a rush...
Well, I experienced my first “requote” with CMC this morning – and honestly, I’m not faulting them, as things were moving at stupid speeds this morning. Anyway, I traded the EUR/USD and GBP/USD (perhaps biting off more than I could chew...) Made money on the EUR/USD (of course) however my SELL order didn’t take on the GBP/USD to close out my trade, and it just happened to be when it was on one of the initial down swings! So, instead of bagging a few pips (this was all before things sky-rocketed afterwards) I was down on that trade. And then, honestly, a bit of panic set in – my trade wasn’t closed when it should have been, it was now dropping since it was actually still open, and I needed to bring up a new trade window as I saw my money going down each second! I closed out the trade and luckily only ended up down $350. But, this wiped out my profits from my EUR/USD trade. Normally this wouldn’t bug me as much, however it’s more frustrating than anything since the currency pairs spiked huge afterwards (100 pips!) If only I would have stayed in my GBP/USD trade I would have made my loss back and then some! But, hindsight is always 20/20, and it could have just as easily gone the other way.
I did have a fun ride on the EUR/USD afterwards though, and made back some of my loss - I rode it from 280 to about 312 and got the f*ck out of Dodge. I was only trading a $50K lot at that time though to minimize my risk, as I know trading those spikes is chaotic at best.
So, as I said, a bit frustrating since I know I could have made way more money, but there’s always next time.
Oh, and I was only initially trading $50K GBP/USD and $100K EUR/USD – small lot sizes in case, well, things like this happen. But, I’m getting more and more experienced each trade, am learning each time and am fine with having a few losses initially if it will make me better (and profitable) in the long run. It’s all about attitude and not letting your emotions get the better of you.
If something is worth doing, it’s worth doing wrong initially so that you can learn how to do it right.
Well, I experienced my first “requote” with CMC this morning – and honestly, I’m not faulting them, as things were moving at stupid speeds this morning.
Anyway, I traded the EUR/USD and GBP/USD (perhaps biting off more than I could chew...) Made money on the EUR/USD (of course) however my SELL order didn’t take on the GBP/USD to close out my trade, and it just happened to be when it was on one of the initial down swings! So, instead of bagging a few pips (this was all before things sky-rocketed afterwards) I was down on that trade. And then, honestly, a bit of panic set in – my trade wasn’t closed when it should have been, it was now dropping since it was actually still open, and I needed to bring up a new trade window as I saw my money going down each second! I closed out the trade and luckily only ended up down $350. But, this wiped out my profits from my EUR/USD trade. Normally this wouldn’t bug me as much, however it’s more frustrating than anything since the currency pairs spiked huge afterwards (100 pips!) If only I would have stayed in my GBP/USD trade I would have made my loss back and then some! But, hindsight is always 20/20, and it could have just as easily gone the other way. I did have a fun ride on the EUR/USD afterwards though, and made back some of my loss - I rode it from 280 to about 312 and got the f*ck out of Dodge. I was only trading a $50K lot at that time though to minimize my risk, as I know trading those spikes is chaotic at best.
So, as I said, a bit frustrating since I know I could have made way more money, but there’s always next time.
Oh, and I was only initially trading $50K GBP/USD and $100K EUR/USD – small lot sizes in case, well, things like this happen.
But, I’m getting more and more experienced each trade, am learning each time and am fine with having a few losses initially if it will make me better (and profitable) in the long run. It’s all about attitude and not letting your emotions get the better of you.If something is worth doing, it’s worth doing wrong initially so that you can learn how to do it right.
Phew.. you didn't get slaughtered that bad Shard.. you could have been pulled down a 100 pips.. believe me, NFP reports are nuts.
Seriously though, NFP should not be traded. Not even with small lots. It's not worth risking all the profits made on other trades, and then wiping them out with one NFP trade. I have seen it happen every time.. NFP moves are always wild. People who 'straddle' get their stop losses hit within the first 2 seconds.. all the time. I got lucky that my order was accepted and I got out fast (and that it didn't spike up fast enough)
Why trade something so volatile when there are so many other easy trades?
Seriously though, NFP should not be traded. Not even with small lots. It's not worth risking all the profits made on other trades, and then wiping them out with one NFP trade. I have seen it happen every time.. NFP moves are always wild. People who 'straddle' get their stop losses hit within the first 2 seconds.. all the time. I got lucky that my order was accepted and I got out fast (and that it didn't spike up fast enough)
Why trade something so volatile when there are so many other easy trades?
Phew.. you didn't get slaughtered that bad Shard.. you could have been pulled down a 100 pips.. believe me, NFP reports are nuts.
Seriously though, NFP should not be traded. Not even with small lots. It's not worth risking all the profits made on other trades, and then wiping them out with one NFP trade. I have seen it happen every time.. NFP moves are always wild. People who 'straddle' get their stop losses hit within the first 2 seconds.. all the time. I got lucky that my order was accepted and I got out fast (and that it didn't spike up fast enough)
Why trade something so volatile when there are so many other easy trades?
Yeah, as I said, I chock it up to experience - perhaps I will just be an observer next month.
As you say, when there are easier trades out there, it's probably best just to stick to those. So what's on your radar screen for next week? UK PPI/CPI? FOMC Meeting on Tuesday? (How do you think that will go?) US Sales and CPI later in the week? I'll also be watching the OPEC meeting Thursday...
What would be the best place to practice forex? forex.com? I've been "virtual trading" with optionsXpress for about a year now. I really want to start for real, but am just a little hesitant. I'm not too sure about what I'm doing. I need some confidence. Anyone got any suggestions?
You can practice right on Oanda if you like. Just set up a practice account and they will fund your account with $100K in play money (or some stupid amount) and there you go! As has been said many times in this thread though, I cannot stress enough how you have to treat that play money as real money - your real money. Only then will you truly benefit from practice trading. Don't do anything in your practice account that you wouldn't do with your own hard-earned money. Trust me, it will benefit you in the long run.
And if you have any questions which have not been answered in this thread yet, feel free to post them and we'll do our best to answer them.
You can practice right on Oanda if you like. Just set up a practice account and they will fund your account with $100K in play money (or some stupid amount) and there you go! As has been said many times in this thread though, I cannot stress enough how you have to treat that play money as real money - your real money. Only then will you truly benefit from practice trading. Don't do anything in your practice account that you wouldn't do with your own hard-earned money. Trust me, it will benefit you in the long run.
And if you have any questions which have not been answered in this thread yet, feel free to post them and we'll do our best to answer them.
Awesome man. Thanks a lot. I've made close to $4,000 in "vurtual" money with optionsXpress. I kind of had an idea of what I was doing, but not really. I'd just like to make a nice little side income. I go to school full-time and have a part time job on the weekends. I just got done paying my Spring tuition today and my checking account is looking a little bare. I'd like to use a good majority of the money I pull in from my fairly well paying pt to invest a little. Still have enough left so that even if I don't succed at first I won't be hurting too bad. Anyway, thanks again.
Not a problem at all.
Again though I cannot stress how careful and disciplined you have to be when doing this type of trading. Many people make lots of money in their practice accounts because they are a little more cavalier about things and aren't treating things seriously enough. And I'm not saying that this is the case with you, but I do want to warn you that forex trading isn't easy - the only easy part is losing money. And it does concern me when you say you "kind of had an idea of what you were doing" - to me, that sets off a huge red flag. I would suggest being a bit more careful, honest and smarter with your trades. I only say this because I don't want to see you get margin called.
Further to this, if you are still unsure of many aspects of forex trading, if you do not understand basic economics or financial models and theories, then I would advise you not to put your own money on the line. In general, whether it's this type of investing or playing around on the stock market, it basically ends up being educated gambling, and with that in mind you should never put more on the line than you're willing to lose. (It's what I do at the poker tables as well.) In your situation, you'll have to decide how much that is - obviously myself and Music_Producer are in a different financial situation than yourself, so please bear that in mind.
You also need to identify your risk tolerance and how well you can avoid becoming emotionally affected by high-pressure trading. It's not easy, trust me.
I would recommend you read this entire thread for starters, but also do a lot of your own research as well and become educated. Trying a practice account is definitely the best way to start.
And as I said, if you have questions and so forth, just let us know. I am not trying to lecture you or scare you off - I am simply looking out for your best interests.
Again though I cannot stress how careful and disciplined you have to be when doing this type of trading. Many people make lots of money in their practice accounts because they are a little more cavalier about things and aren't treating things seriously enough. And I'm not saying that this is the case with you, but I do want to warn you that forex trading isn't easy - the only easy part is losing money. And it does concern me when you say you "kind of had an idea of what you were doing" - to me, that sets off a huge red flag. I would suggest being a bit more careful, honest and smarter with your trades. I only say this because I don't want to see you get margin called.
Further to this, if you are still unsure of many aspects of forex trading, if you do not understand basic economics or financial models and theories, then I would advise you not to put your own money on the line. In general, whether it's this type of investing or playing around on the stock market, it basically ends up being educated gambling, and with that in mind you should never put more on the line than you're willing to lose. (It's what I do at the poker tables as well.) In your situation, you'll have to decide how much that is - obviously myself and Music_Producer are in a different financial situation than yourself, so please bear that in mind.
You also need to identify your risk tolerance and how well you can avoid becoming emotionally affected by high-pressure trading. It's not easy, trust me.
I would recommend you read this entire thread for starters, but also do a lot of your own research as well and become educated. Trying a practice account is definitely the best way to start.
And as I said, if you have questions and so forth, just let us know. I am not trying to lecture you or scare you off - I am simply looking out for your best interests.
Once again, thanks Shard. I'll be the first to admit I'm not the most educated person when it comes to investing. I do have a business oriented mind and some common sense if that helps. I think I'm just going to stick to the practicing for a few more months and see where I am financially and then reconsider doing it for real.
Your welcome, thanks for heeding my advice and not taking offense.
It sounds like you're approaching things the right way. Just have patience, practice for a few months as you say (or however long it takes) and continue to follow along in this thread - as you can tell, we post our trading experiences here on a frequent basis.And don't get too discouraged either - you have to start somewhere and we were all beginners at some point. Although I have been investing in stocks, commodities, CDs, trusts, you name it, for many years now and am fairly experienced with them, I'm constantly learning - and as for forex, well, I just started a few months ago myself!
Gnarley.. open a real account with $50.. not more. Make that into $100 - no rush .. take your own time. But, keep practicing till you get it done.. even if it means investing $50 multiple times. If you can't make that $50 into $100.. then analyze what you are doing wrong and work on it to make it right.
Don't buy forex books, don't listen to other people's advice regarding what they think will happen to the Euro at 2.15 pm because their gut tells them, don't even trade according to what UBS or Barclay's or Bloomberg or whatever analyst recommends.
See the news, decide accordingly.. and trade. Simple. You have a choice - to either sit in front of a computer screen all day long.. and trading and losing.. or .. by fluke, making a profit. Or you can trade at news time.. make your money in a couple of seconds and live your life.
I've read stories about people having 5 monitor setups with various charts and graphical stuff.. makes it look like a space shuttle control room! I have used one computer, with 2 monitors (simply because i don't like stuff cluttered up) On one monitor is the news screen, and the other is the trading window. I don't even have a chart open. The only time I have ever opened charts was *after* trading.. to see how the currency moved, take a screenshot.. etc. Happy trading!
Don't buy forex books, don't listen to other people's advice regarding what they think will happen to the Euro at 2.15 pm because their gut tells them, don't even trade according to what UBS or Barclay's or Bloomberg or whatever analyst recommends.
See the news, decide accordingly.. and trade. Simple. You have a choice - to either sit in front of a computer screen all day long.. and trading and losing.. or .. by fluke, making a profit. Or you can trade at news time.. make your money in a couple of seconds and live your life.
I've read stories about people having 5 monitor setups with various charts and graphical stuff.. makes it look like a space shuttle control room! I have used one computer, with 2 monitors (simply because i don't like stuff cluttered up) On one monitor is the news screen, and the other is the trading window. I don't even have a chart open. The only time I have ever opened charts was *after* trading.. to see how the currency moved, take a screenshot.. etc. Happy trading!
Sound advice Music_Producer (hmm, I suppose that was a bad pun now that I think of it...) - that's an excellent method of learning without risking your shirt. Keep in mind though, Gnarley, that you're playing with margin, and that is a double-edged sword. Sure, maybe you'll only have $50 in your account, but that could quickly turn into a $500 loss if you are not careful - please, don't get margin called.
Oops.. forgot to mention that.. Shard's right.. make that $50 into $100 - $2 at a time! Not in one trade obviously
Hi everyone! I found this thread a few weeks ago, read the entire thing (!), and have been watching it ever since. I briefly looked at FOREX a few months ago, but couldn't find any good explanations for trading techniques, etc. This thread has been immensely helpful in explaining things, and pointing out some other website which may help. I've opened up a practice Oanda account, but haven't been able to practice any news trades due to class schedules.
Now, I'm wondering about this last statement:
"Sure, maybe you'll only have $50 in your account, but that could quickly turn into a $500 loss if you are not careful - please, don't get margin called."
I thought FOREX brokers had a built-in safety which prevented one from losing more money than they have in their account. In the above example, if your trade took your account under $0, it would automatically close the trade - as they can't expect someone to pay money they don't have. And I imagine collection agencies would be a hassle.
Again, thank you all for such invaluable information!
Now, I'm wondering about this last statement:
"Sure, maybe you'll only have $50 in your account, but that could quickly turn into a $500 loss if you are not careful - please, don't get margin called."
I thought FOREX brokers had a built-in safety which prevented one from losing more money than they have in their account. In the above example, if your trade took your account under $0, it would automatically close the trade - as they can't expect someone to pay money they don't have. And I imagine collection agencies would be a hassle.
Again, thank you all for such invaluable information!
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