Yea if you don't know what you're doing. You can trade a lot safer on forex though. Micro account brokers have pip values of .01 so it would be hard to lose more than $5.00 on a bad trade, and for that to happen you'd have to be extremely careless. Don't over leverage yourself. _________________________________________________
I am not sure what you are talking about? What broker are you using? From what i see trading forex can be really expensive no matter weather i have a mini or regular account, maybe i am missing something. Anyone making money for real? I am thinking of playing, doing a mini now, but i am suprised how little the phone reps know with the company i am using for my play account.
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There are a couple brokers that over micro accounts which have pip values of either .01 or .10. Either way those should be small enough for many people to trade actual money, lose a lot of pips and still not hurt their living situation.
Look into www.neuimex.comwww.oanda.com and www.fxsol.com. I know little about these brokers, but a quick search on a forex forum for micro brokers came up with those. I know quite a few people use oanda though. Matt
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Thanks Permanentjaun, did not realize there was also smaller trades than just two. I am still just learning, still kind of surprised how much they can take out for their trades even though they try and make it sound like it is free, thanks again.
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Not sure I know what you mean by "smaller trades than just two." Forex is cheaper than stocks. You're paying commission and getting charged in the spreads as well on stocks. In forex it's only the spread. You control how much that is, 3 cents or 3000 dollars. It depends on your trade size.
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I guess its getting late for me, i have been playing with that forex the last few days and trying to figure out formulas and the terms. I thought that their were only two 10,000 and 100,000 lots even though the 10000 will be okay, if i decide to trade. I guess the big differance in stocks is that you can buy any amount for basically the same commission, where with forex it appears you our locked in to lot sizes for the price of the spread between the buy and sell. With the company i am trading with, i noticed today that the spread was up to 5 to 9 pips on the trades, i was not watching carefully. With those pip price ranges from around 1.00(est) per pip and a spread of 5-9 pips per lot seems like you have to be careful to get your break even point. Sometimes it seems like play money(which it is right now) with that 200 to 1 leverage, when really you are just playing with 50 per lot. It is play money now for me and i will see how it goes as i learn. Are you making any money? Thanks for your help, i am still trying to figure this out, might look at the futures also... Good luck to you.
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No there are smaller. 10,000 are minilots and 100,000 are standard lots.
I am not entirely sure, but I believe some brokers offer commission trading instead. They charge a set amount for every 100,000 or so. I think they offer it for religious reasons pertaining to Islam. I know they offer interest free accounts for this reason.
Don't be fooled, you may only pay the commissions to your broker, but you're also paying the MM's. That's the whole point of the spread. What happens if you buy at the ask and sell at the bid if price doesn't move? Your account will decrease. You lose the spread just like you do in forex. Spreads are there to make someone money, and it's not us.
Spread will fluctuate during periods of high volatility, just as stock spreads will widen or tighten. Same concept.
I'm not making any money yet. It's hard getting a grasp on things. There are a lot of variables to understand that allow for an infinite more amount of possible strategies that aren't possible in stocks. Matt
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It is fun to see if i can find a good way to trade them. It seems like it would be easy to make up those pips they get for commission, but so far it seems easy to lose and hard to get in the green. The pips we pay to trade are a pretty good percentage to make up "if" its goes in the direction were playing and lets say goes 30 pips our way and we are paying 3-10 pips to trade a lot, that 10 to 30+ percent is a bit to make up. I guess thats the advantage of playing bigger lots. I have not tried to play any trades longer than a day, would be a little leary if it is my own money. Let me know if you find some good ways to trade. I would like to hear if anyone else is doing any good trading and if they have some good tips.
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Forex has no MM's, scams, or hype either. You don't have to worry that your stock will tank if the wind changes direction or a CEO jumps ship. What a breath of fresh air!
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Beechwood, You will get no argument from me on that fact, but i am just trying to see if i can make any money on the forex market, still to early for me to know, it is nice to trade for nothing to see if i can figure a method to beat the odds.
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Try slowing your charts down. Trade only the majors which have the smallest spreads of 1-6 pips. Try looking at 4 hour charts or longer. When you play anything smaller you're really trying to predict the noise of the market which is very difficult to do. Don't try to predict reversals. Let price do it for you. So step back and look at the larger trend of the market. If your system has trades that have stop losses of only 10-20 pips you're going to have a tough time mastering to trade that way. Slow things down.
One strategy that people are having success with is placing a straddle of buy/sell triggers at the open of the week and not moving the straddle. Eventually price moves several hundred pips from the open of the week and the trade is closed at the end of the week. It's successful because there is no speculating, there are set stop losses, and you're almost guaranteed price will not stay in a tight range over the course of a week.
Really though, the biggest road to success in forex is money management. Don't risk it all on any one trade. Search for the Turtles on google. They were a trading group that produced a system that didn't have great buy/sell signals, but had strict money management rules which eventually made them millionaires. That's all it takes. Matt
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I will have to try that method, i seem to do pretty good at picking the short term chart just hard to make much taking those little ups in pips when i get a couple of losses at 20 pips. Last night i got 8 out of 10 right and did not make much money and i know that will not happen a lot in short term runs. I will try your method seems to be the way to help set off those pips. Where are you setting you stop loses at (approx. range)? Thanks again, it is an interesting market, like you said so many ways to play.
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SL should depend on your strategy. Don't bother trying to play any system that has 10 TP and 50 SL. The risk:reward has to be in favor of the reward. Even if you're 80% correct with 10 TP 50 SL you will either end up losing or producing profits not worth trading for.
SL depends on your strategy though. If you're playing chart patterns then your SL is variable. Set it above/below support/resistance/trendlines. That way you give your play room to breath and if it reaches your SL you know it is trading outside of the pattern and you're in a dangerous trading area.
The system I mentioned has a strict SL of 30 pips. They set the straddle based on sundays close. They use a 50 pip trigger above and below that price for their long/shorts. When price triggers a trade a 30 pip SL is placed. The trade that isn't triggered is then moved to the close price of sunday. All trades are then closed before the close on friday.
What happens is you may get stopped out 1-3 times since 30 pips is a pretty tight SL. As you'll notice on a weekly chart however, price will not stay very close to the open. Since the 30 SL isn't trailing price will eventually move further and further away as you allow for the weekly movement to occur. I institute a system of moving my SL to breakeven so if a move crashes after being 100 pips in profit I don't lose on the trade. You'll notice on several pairs weekly candle generally have a solid trend. That is why the system works.
This is just one system. There are literally thousands of methods out there. It is addictive. As soon as someone posts a method on the forums people flock to it and immediately change the rules to their trading style. For example on the above strategy people place trailing SL', TP levels, static triggers, multiple lot entries with varying exit points, variable trigger staging times. This system doesn't even involve any indicators. Imagine how many ways you can alter a moving average system! You can change the MA's period as well as basing them of the O,H,L, or C, and you can have smoothed MA's, SMA, HMA, EMA's, etc. It really gets mind boggling.
That's why I'm not making any money yet. With so many ways to alter a system I haven't found my method yet. Next week I'll probably buckle down and use the system I partially outlined above. I'll use it on a few uncorrelated pairs to reduce my risk and draw down.
That's another thing. be careful with correlated pairs. Know what you're trading. You could be doubling your risk or hedging if you trade certain pairs.
I could go on an on about forex. There is a lot of new material that you need to get acquainted with. In the end it's worth it. The profits can't be matched on any other financial market.
Anyways, stop loss placement. It's up to you! Matt
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It really is a different game, good tips, i really feel like the fng right now, but i am getting a little better slowly, and it is not costing me anything but time, to learn.
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You can trade both, this has been a funny year in the pennies, i also was in rshn and sold most and then rebought. It just seems in the last year it has gotten much harder to predict the pennies, not as many companies with good rises in pps, it seems like i have to sit much longer in penny stocks this year more than in previous years, not good to sit to long in the pennies without getting profit out. I think there is less traders in the pennies now than there was in previous years, so you are not getting as many companies with upward trends. Just my opinion. I like learning other ways to trade and it is free, if you do not like it nothing loss but a little time, but if you can make money at it and not have to out guess ceo's, why not.
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I agree. I also believe there are fewer traders in pennies now. I think it's because pennies are a fad. The new fad is forex. Wall street has done several articles on forex in the past 2-3 months.
I think those that aren't in pennies are in forex. This isn't because forex is better, which it is, but because forex is an even greater 'get rich quick' trading method. Why trade with only $5000 in pennies when you can leverage your account and use over $100,000 worth of USD? That is the downfall though. Those that fail in pennies will fail in forex for the same reason. They'll over leverage their accounts and their account will disappear quicker than they've experienced before.
With 400:1 leverage you could have $1000 and easily trade with $100,000. Of course you're left with only $500 or in margin before you get a margin call. So price moves 50 pips against you and suddenly you get a margin call. Currencies easily have trading ranges of 100-200 pips a day. 50 pips isn't very much. So one trade and you've wiped out over 50% of your account.
Be patient in forex. Compound your profits. Unfortunately right now it's the fad and those that don't understand this will be slaughtered on the market.
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permanentjaun....Since you're a Forex Expert, Take the free trial to this Forex Day trading room and tell my what you think. Their performance is insane. They're making 40-50 thousand dollars a month. They give real time alerts.
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I'm not an expert by any means; at least in terms of account growth.
I would say don't bother with that site. For one, they don't show performance in terms of pips. What is a pip to these people? What if they play so many lots that making $10,000 a week only requires 10 pips? Any reputable source should really give results in terms of pips.
I also don't like the idea of it. You're paying them for what plays they're making. They have no incentive to give you good plays. All they care about is getting your money month after month in subscription form.
Many brokers offer resources where they will actually trade your account for you. Then they are only paid by on commission. If they don't make you money they don't get paid. I would feel safer doing something like that then paying these guys to tell me what is a good play.
If you want to trade yourself I would say pay for a course on how to trade a certain strategy. One very reputable and successful site I know of is www.james16group.com. I didn't sign up for it because there are plenty of free systems out there. Although many people say this is a very good system that is easy to use and very successful.
I think the reason I don't care for your site is it's more about making calls rather than teaching you how to trade. Not my can of worms. Matt
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There are no percentages in forex you're correct. You should never judge a site/system by how many pips it earns a month. That is a key part, but more importantly is understanding the draw down. A system could make you 2000 pips in 2-3 months, which is spectacular, then hit a dry spell where the market has shifted into a different trading pattern and the drawdown is 2000-3000 pips. People want smooth linear equity lines. It's like saying, "two steps forward, 1 step back." That would be better than a system that's "two steps forward, 3 steps back."
That is why if you go to a forex forum you will see pages and pages of people testing systems. They'll backtest and forward test a system for months before putting money into trading it with live money. I would say if a system can average 100 pips a week it is considered above average.
It all comes down to money management though like I said. The famous turtles trades had a system which had subpar entry signals and the system experienced tremendous drawdown. Their idea was to use very, very strict money management so it would be next to impossible for them to not be able to trade. So when the market went in their direction they'd be able to still be there to capitalize on that. Most people can't follow strict rules like that for emotional reasons especially when a system experiences huge drawdowns.
If a site says 100 pips per month that isn't much to brag about though. It's nothing to shake a stick at either. There are plenty of threads stating all you need is 5 pips a day to compound and you'll be a millionaire in a short time. This is true, but 5 pips can be hard to come by because of losing days; i.e. drawdown.
It's hard to explain what a pip would be in percentage terms though.
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I just got set-up with a practice account... I am long AUD/USD at .7735. Why dont we move this conversation over to the FOREX board?
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