Anyone here into FOREX?

[~Shard~]

Also, building websites can bring in some money. It's more work than forex but there's a lot of people that make very substantial money from websites. I use Sitesell for mine.

Yeah, there is definitely good money in building websites. One of my friends in the States is one of the head designers for 2 Advanced Studios, which does some awesome work. Specifically, he was one of the main designers for their "version 2 homepage" (they're up to version 5 now, I think). Slick stuff - it's an art when you get to the level they are at....

 

[Music_Producer]

Shard.. you play the sax and clarinet? Damn, i'm jealous! (wind instr+electronica reminds me of house music in paris) I've always wanted to play a wind instrument.. and nhallmark.. I've wanted to play the guitar. I tried, but I gave up.. I got too bored of only one 'sound' coming out of a guitar.. so i immersed myself into keyboards. Shard, btw.. I make a lot of electronica .. i'll pm you (and i'm bloody more jealous that you guys had a tr 808!!)

If I get my tunes up on itunes one day, please donate 99 cents of your forex profit for my tracks It's obviously not about the money for me.. but that someone is buying my stuff and getting painful chest symptoms while listening to it.. that's thrilling

Ok, so back on track.. just wondering. How come online stock brokers like Scottrade, TD Waterhouse, etc don't provide forex services? Wouldn't they attract a lot more customers?

 

[~Shard~]

Shard.. you play the sax and clarinet? Damn, i'm jealous! (wind instr+electronica reminds me of house music in paris) I've always wanted to play a wind instrument.. and nhallmark.. I've wanted to play the guitar. I tried, but I gave up.. I got too bored of only one 'sound' coming out of a guitar.. so i immersed myself into keyboards. Shard, btw.. I make a lot of electronica .. i'll pm you (and i'm bloody more jealous that you guys had a tr 808!!)

Cool, that’s awesome that you’re into electronica as well. The stuff we did was several years ago now (well, we started back in ’93) so it’s a little rough by today’s standards (a lot of it sounds like cheesy video game music I’m sure! ) but we enjoyed creating it nonetheless. As I said, my buddy has since moved onto more professional projects and he’s doing well from what I’ve heard (literally and figuratively )

But yes, definitely PM me at some point and we can chat more. If you have an FTP, iDisk or some other way which we could txfer some files let me know and we could swap tunes!

If I get my tunes up on itunes one day, please donate 99 cents of your forex profit for my tracks It's obviously not about the money for me.. but that someone is buying my stuff and getting painful chest symptoms while listening to it.. that's thrilling

Absolutely! Just let me know when they’re up there.

Ok, so back on track.. just wondering. How come online stock brokers like Scottrade, TD Waterhouse, etc don't provide forex services? Wouldn't they attract a lot more customers?

Yeah, I’ve wondered this too. They honestly just seem to be “behind the times” so to speak. When I compare the power that a platform like CMC has when it comes to stocks especially, the online discount brokerages are lacking far behind. It almost seems like they are light versions of trading platforms. I guess not everyone needs an industrial strength platform but those online ones definitely seem watered down. The quotes aren’t real-time, the bid/ask spreads are greater, the commissions are higher… I guess it’s just the target market their aiming for – for many people that’s good enough I guess. Better than their broker...

So it’s no surprise to me that they’re not into forex and such. Rightly or wrongly they probably believe it’s too foreign (haha “foreign”, forex... ) for the average investor to comprehend and due to the whole margin thing, they view it as too risky. After all, for CMC at least you have to be an accredited investor, not just any Joe Blow. Plus, the brokerage houses would need to support an entirely different trading system, have support for it, yadda yadda. Up here, Scotiabank has been progressive by allowing more freedom in trading options and so forth, as even that is quite limited with other institutions.

But yeah, I think they could – it must just not have a positive business case for them. Or perhaps “they” don’t want everyone to know about forex and want people to assume it’s some high stress rocket science which only Wall Street gurus can comprehend. Plus, to be honest, I don’t know how many people would actually do it. None of my friends know anything about forex trading and even my broker (which I hardly use anymore…) knows nothing about it. The only other person I’ve been able to speak to about it intelligently is a friend of mine who is a bond trader for a capital management firm. (Oh, and he’ll be a good recruit for our hedge fund/trading company whenever we set it up. )

 

[nhallmark]

.. and nhallmark.. I've wanted to play the guitar. I tried, but I gave up.. I got too bored of only one 'sound' coming out of a guitar..

I was that way when I first started playing, but now I like the challenge of coming up with new sounds on a guitar, through a combination of pedals and rack units.

If I get my tunes up on itunes one day, please donate 99 cents of your forex profit for my tracks It's obviously not about the money for me.. but that someone is buying my stuff and getting painful chest symptoms while listening to it.. that's thrilling

If you need a distributor, go with tunecore. They just charge you upload fees and they DONT take a cut of your sales.

Anyway, how did you guys do on US retail sales this morning. I missed the spike but I made 11 pips on the small correction,(which I wouldnt do with real money, so I probably shouldnt have done it).

 

[~Shard~]

Anyway, how did you guys do on US retail sales this morning. I missed the spike but I made 11 pips on the small correction,(which I wouldnt do with real money, so I probably shouldnt have done it).

I just watched this one. Honestly, I wasn't expecting the positive surprise, so by the time I confirmed the #s the downward spike had already occurred and it was too late to trade.

And I don't want to come across the wrong way, but you are right, you shouldn't have done that trade. After all, are you trading the news using facts and logic or are you trading on speculation? (i.e. "I think this curve should correct now...") Because if it's the latter, then you might as well just go play some roulette at a casino - you're essentially betting that since a certain number has gone down lots, it will start to go up - not much scientific or logical about that.

You said it best - you wouldn't have done that with real money, so that basically defeats the purpose of practicing.

As we've said many times in this thread, you have to treat your practice account as real money - don't do anything you wouldn't do with your own money on the line. You have to be honest first and foremost.

Please accept this as constructive criticism and nothing more - I just don't want to see you lose money when you start for real. And as I said, if you want to just gamble on gut feel and whatnot, go ahead, but realize that you're removing all logical thought and reason from the process and you might as well get a monkey to randomly buy and sell for you instead.

 

[nhallmark]

Thanks, Shard. I wake up at 7am and the trades are usually at 7:30(central) so Im usually half asleep, but Im setting my alarm clock earlier every day so I can wake up before I trade...either way, that was the first time I've done that and it will definitely be the last.

Are you trading NZD retail sales this afternoon?

 

[Music_Producer]

Traded the US retail sales for 6 pips today.. could have made more than 45 but CMC 'slipped' A positive number was actually expected because this was for November.. and we had Black Friday (thanksgiving shopping) plus it's the start of the holiday season shopping.. so yeah. Shucks, I should have sold GBP/USD before the report.. but then I'm always thinking of the risks and prefer to wait.

Shard, thanks for the explanation regarding online stock brokers and why they don't offer forex. Yeah, I remember when I used to trade stocks 4-5 years ago.. the platform was not at all efficient. I would get massive slippage all the time.. lol, so I shouldn't be complaining about forex platforms. They are much, much better compared to stock trading platforms.

I'm dying (literally) to get access to an institutional trading platform. I'm just so curious to see what kind of platforms they have, and how they execute. Would be fun to butt in and suggest 'May I trade for you and make $500,000?' See if they hire me on the spot

 

[Music_Producer]

And I don't want to come across the wrong way, but you are right, you shouldn't have done that trade. After all, are you trading the news using facts and logic or are you trading on speculation? (i.e. "I think this curve should correct now...") Because if it's the latter, then you might as well just go play some roulette at a casino - you're essentially betting that since a certain number has gone down lots, it will start to go up - not much scientific or logical about that.

Yeah, nhallmark remember that there are numerous opportunities for trading forex. When CMC doesn't execute my order.. sure I get pissed.. but I don't trade the following spikes. Simply because I would rather wait for 24 hours to trade again than make a loss.

Traders always do this.. they'll spend a week trading and making .. say.. a 100 pips total. And then they will trade the NFP report on friday. "Oh wow! NFP was excellent! Buy the $!!" If they enter the trade late, they still buy the $. And then a european bank steps in and sells massive amount of dollars.. and the traders lose those 100 pips they collected over the week.

If you miss the initial spike, just let it go (unless you get some additional news data) Yes, it's really hard to do that .. but that's what your practice account is there for.

 

[Music_Producer]

Ok, I am leaving CMC for good. They obviously have a 'dealing desk' and it seems that their goal is to provide slippage almost all the time (maybe because i am always profitable? hmm..)

I bagged 20 pips today on the GBP/USD (UK retail sales report) but.. I missed out a 40 pip profit. CMC took 46 seconds to respond to my 'sell' trigger. As shown in the attachment.. i bought gbp/usd at 1.9662 and immediately hit sell at 1.9692 (or 94) Nothing happened. I didn't hit 'sell' again because i knew this order was still pending. It finally let me sell after that unbearably long time (in the picture you can see buy at 9.30.02 am and sell at 9.30.48am)



46 seconds is a bloody long time.. the spike could have easily reversed and I could have made a loss of 20 pips .. who knows?

 

[Music_Producer]

Shard, if we did open a hedge fund.. what broker would we use?! I am confident enough to trade 10 million lots .. but this obviously requires a broker that executes rightaway.

The one thing I don't understand about these idiots is.. that they make their profit on the spread anyway.. so why fleece the customer more? Bah.. I wonder if suing their asses will make them change their strategies.

 

[nhallmark]

I made 8 pips on the US import price index and unemployment claims. Oanda dropped the connection right when I sold(EUR/USD), so I logged in on the mac and closed immediately, making $84.

Oanda has been dropping the connection right in the middle of news time for a few days now. I hope they just do that to the game accounts and not the real ones.

Sorry to hear about your problems with CMC, Music_Producer. I dont have any experience with it myself, but my problems with oanda generate the same feelings of wanting to hit something(or sue something )

 

[~Shard~]

Ok, I am leaving CMC for good. They obviously have a 'dealing desk' and it seems that their goal is to provide slippage almost all the time (maybe because i am always profitable? hmm..)

That's too bad Music_Producer. At least you didn't end up losing a lot of money in the process, but regardless that kind of slippage isn't acceptable at all. Apologies, as I feel partly responsible for recommending CMC to you in the first place! It still meets my needs, but as my skill becomes more "refined" and perhaps if I trade quicker thanks to tools like the tradethenews service, perhaps I will experience deficiencies like that as well.

Shard, if we did open a hedge fund.. what broker would we use?! I am confident enough to trade 10 million lots .. but this obviously requires a broker that executes rightaway.

Exactly. Yeah, I don't know how we would go about that. I guess we'd need to research what the other hedge funds use - I honestly don't know what type of "industrial strength" tools those guys have, or how they have direct to-market access, or whatever they term it. Maybe I'll ask my bond trader friend what all they use.

And you know, I'm not sure about you, but I'm half-serious about doing something like that. We can PM further about it.

The one thing I don't understand about these idiots is.. that they make their profit on the spread anyway.. so why fleece the customer more? Bah.. I wonder if suing their asses will make them change their strategies.

Heh heh - I don't know how well that would go in court, but it would be fun to do! How would you really prove though that you executed your SELL order 40 seconds before it was filled?

But yes, I don't know either why they would do this. Or, perhaps you get what you pay for and a platform such as CMC which is free (after a minimum account deposit) simply isn't as hardened as other platforms and its simply not a foolproof system - perhaps it can't handle split-second high volume trades during busy trading periods. Maybe it's like tradethenes versus Bloomberg news - if you want the best, you pay for it! I don't think it's unreasonable to expect no slippage (because it is possible, we know that), but again, if this is a platform for us "small fish" perhaps the powers that be feel it is "good enough".

 

[Music_Producer]

Oh no Shard.. don't be silly! No need to apologize.. I have just had one loss (due to slippage) but all other trades have been profitable. I can't trade with Oanda because of the spreads.. they are just too much to handle.

In fact, I checked with a customer support rep at CMC, and they were surprised that the re-quote took so long to show up.. they said it shows up almost instantaneously. They also mentioned that if the same problem happened again, I should contact them and they will look into it. Very helpful support team indeed.

If you let other forex platforms' teams know that you're trading the news with them, they'll either close your account or give you a warning.. not CMC. I am going to trade with cmc today and see if the same thing happens. It might be a glitch in the software.. who knows?

Shard, if you don't mind me asking.. if you get a re-quote.. can you check and let me know how much time it takes for that re-quote window to show up? Thanks!

 

[~Shard~]

Oh no Shard.. don't be silly! No need to apologize.. I have just had one loss (due to slippage) but all other trades have been profitable. I can't trade with Oanda because of the spreads.. they are just too much to handle.

Alright, no worries then. It's just that when I recommend something to someone, I want it to turn out well for them, that's all...

In fact, I checked with a customer support rep at CMC, and they were surprised that the re-quote took so long to show up.. they said it shows up almost instantaneously. They also mentioned that if the same problem happened again, I should contact them and they will look into it. Very helpful support team indeed.

That's good to hear. Yes, I've phoned their support desk a few times as well (even chatted with people at their FX dealing desk!) and they have always been nothing but helpful as well. The one guy explained Mark-to-market for me and how the interest is factored into the price differential when a carry position is rolled over - exactly what I needed to know!

If you let other forex platforms' teams know that you're trading the news with them, they'll either close your account or give you a warning.. not CMC. I am going to trade with cmc today and see if the same thing happens. It might be a glitch in the software.. who knows?

Let's hope that's all it was. And yes, CMC has been nothing but good for me s far, so knock on wood!

Shard, if you don't mind me asking.. if you get a re-quote.. can you check and let me know how much time it takes for that re-quote window to show up? Thanks!

Absolutely, of course I don't mind at all. I will definitely let you know if that happens to me- but let's hope not!

So, any predictions on the US CPI tomorrow AM? The EUR and GBP have backed off a fair bit the past couple of days, do you think that will play a factor as well?

 

[nhallmark]

If you let other forex platforms' teams know that you're trading the news with them, they'll either close your account or give you a warning..

Um..is there something wrong with trading the news or is it just an ego thing with them?

Do you guys trade NZD at all? I've watched it on almost every report for the past two weeks now and maybe once it moved enough to trade. Today, NZD retail sales made NZD/USD move a whole pip! So, I guess its just not a good market?(for trading the news)

 

[~Shard~]

Um..is there something wrong with trading the news or is it just an ego thing with them?

Do you guys trade NZD at all? I've watched it on almost every report for the past two weeks now and maybe once it moved enough to trade. Today, NZD retail sales made NZD/USD move a whole pip! So, I guess its just not a good market?(for trading the news)

For whatever reason NZD isn't as popular a currency as others, so it probably isn't traded as much as a result I'm guessing. Plus, the spreads on it would be larger, making it less attractive to trade. That being said, it is technically an excellent carry trade candidate, especially against the yen.

 

[nhallmark]

Just traded US CPI and I made 4 pips. EUR/USD had been moving up quite a bit before the news, so when I saw the data I waited for the spike and then traded which, if I would have just traded the data like Im supposed to, I would have made 24 pips.

Thanks for the info on NZD, Shard. That makes sense. I've heard(or seen) you and Music_Producer talk about carry trading throughout this thread and Im sure I will learn more about it in the future, but right now Im barely learning to trade the news.(in other words, I dont quite understand it...yet!)

 

[Music_Producer]

Hey nhallmark.. I made 4 pips too! Slippage again, and re-quote from cmc took 40 seconds to show up. My initial 'buy' was at 1.9586.. had it executed at that price point.. I would have made 60 pips. Oh well, 4 pips is good (after accepting the re-quote at 1.9650!)

TIC report is next!

 

[nhallmark]

TIC sucked for me. I made 1/3 of a pip. I guess it didnt move that much because of the CPI data?

Also, by the numbers you gave, it looks like you traded GBP/USD? Is there a reason why you trade that vs. EUR/USD? It seems like the pound moves more but, it also seems that during news time, the euro is more stable. Just wondering what your take is...

 

[~Shard~]

I deifnitely need to get on tradethenews - that Oanda news service is too slow. I was waiting for the CPI news this morning, but the spike happeneed before the news was out, and I didn't want to trade based on assumption. I technically could have got in but how was I to know if it would have been at the top of the spike or not? So, I didn't trade this morning, even though is was a good opportunity. Ah well, there will always be more opportunities - that's what's great about forex trading!

nhallmark, read the rest of our comments in this thread on carry trading and if you have any questions let us know. The basics of it are that you find a currnecy pair which has a significant interest rate differential in your favor, such as AUD (6.25%) and JPY (0.25%). By going long on the currency (buying AUD, selling JPY) and using larger lots, you can make roughly that 6% differential on a daily basis in interest. So, you do the math - if you put $1M in the bank @ 6%/year, how much would you make in interest alone?

And yes, your are correct, the GBP/USD has a higher beta than EUR/USD. It's the pair I prefer to trade as well as a result - the only downside is the extra pip (at least with CMC) in the spread.

Slow week next week due to Christmas?

As I predicted, even though the DJIA30, NDAQ100 and S&P500 are all heavily overbought, etc. I doubt they will correct and enter the blow down phase until the new year due to profit-taking and the resultant tax implications. Then I'll be shorting like there's no tomorrow and taking full advantage of that beautiful thing called leverage.

 

[tringo]

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.

Let me guess. You bought Enron stock then.

 

[Music_Producer]

Shard, there were a couple of 'glitches' this morning regarding the reports. The empire manufacturing survey was actually released half an hour before.. due to a 'technical error'. It came out much better than exepected.. so the GBP dropped against the USD by 30-40 pips. Then, the cpi number.. I think some folks got the pre-release news from 'friends'.. and so you saw the USD dropping pretty quickly before the actual report came out.


I was quite tempted to get in, but didn't. Never know what can happen with these moves. And the TIC report wasn't that significant simply because the CPI came out unexpectedly low. The CPI is the most important number.

nhallmark.. haha.. 1/3 of a pip Oh, and don't forget that when you do a carry trade.. you have to take into account the profit/loss you can make when the currency pair moves. You could buy a million aud/jpy at 92.00.. but when it crashes to 82.00.. you've lost a 1000 pips or $100,000 ('lost' if you sell that trade) You can keep holding on to it, till it comes back up eventually.. but what if it doesn't?

Right now it seems like AUd/JPY can still go higher because japan doesn't seem too keen on raising their rates, so the carry trade is on full swing. All it takes is a little panic to bring the whole thing down!

 

[~Shard~]

Thanks for the clarification Music_Producer. I'm also currently in the carry trade, so we'll see how it goes.

Oh, and sorry nhallmark, I shouldn't throw terms out there without explaining them. I re-read my post to you and wanted to explain about beta.

Beta is simply a measure of a stock's (or in this case a currency pair's) volatility and subsequently its systematic risk. In the stock market it is compared to the volatility of the market as a whole. So, for currency pairs perhaps it's not the best term to use, although definitely applicable in the above example, as the GBP/USD is generally more volatile than the EUR/USD.

More specifically, a stock's beta is calculated by running a regression analysis resulting in a beta coefficient. If the beta coefficient is 1, then the stock tends to be as volatile as the stock market, or more specifically, the index/market/sector in which the stock resides. A beta greater than 1 means the stock is more volatile, while a beta less than 1 means it's less volatile.

Oh, and it is possible for a stock to have a negative beta. In this case, the stock tends to move in opposite directions than the market. One example is Anheuser Busch, which is though to benefit when the market is doing poorly because more people turn to drinking. (And no, I'm not joking...)

So, some examples to summarize:

- a beta of 1 represents a stock price movement that has the same volatility as the underlying index, sector, etc.
- a beta of 0.50 represents a stock price movement that is half as volatile as the underlying index, sector, etc.
- a beta of 2.50 represents a stock price movement that is 150% more volatile than the underlying index, sector, etc.

Make sense?

 

[nhallmark]

That makes sense. Thanks Shard. I was about to post and ask you about that.

I was quite tempted to get in, but didn't. Never know what can happen with these moves.

Are you talking about the CPI data or TIC report. I thought you traded CPI?

nhallmark.. haha.. 1/3 of a pip

Err...I dont have have a comeback Oh yeah, "I'm learning"-That's my excuse!

Seriously, I shouldnt have traded the TIC but I didn't know that until afterwards,

Now I know not to trade in a situation like this morning.

One example is Anheuser Busch, which is though to benefit when the market is doing poorly because more people turn to drinking. (And no, I'm not joking...)

That's hilarious...but it makes perfect sense.

I deifnitely need to get on tradethenews - that Oanda news service is too slow.

Yeah, I used the oanda service for about three days and I was done. They seem to report the news almost as an afterthought. Tradethenews has a siren that goes off and the headline shows up red. It really gets your attention. The audio news is pretty cool which I used when I had the trial but now that Im paying Im doing just text because text is $39 and audio is something like $179.

But, if I had been trading real money today, I would have made $40 on the CPI data this morning, so tradethenews pays for itself - its worth it in my opinion.

 

[~Shard~]

That makes sense. Thanks Shard. I was about to post and ask you about that.

No worries - I just didn't want to come across as some smart-ass who throws terms out there expecting novices to understand them..

The audio news is pretty cool which I used when I had the trial but now that Im paying Im doing just text because text is $39 and audio is something like $179.

Really? I hadn't looked into tradethenews yet myself (on my to-do list this week actually) but I wouldn't have thought the price differential between text and audio would be so great. Music_Producer, you mentioned there is a definite gap and that the audio is faster - is it worth it in your opinion, or would the text be a good enough start for me for now? Anything better than is Oanda's service is fine by me, I've had enough of it, time to move on..