Trading on the Foreign Exchange

I recently set up a Mini Demo Account with 4X Made Easy. To put it mildly, I’m completely fascinated (obsessed may be a better word). The platform is called FX Trading Station and was extremely easy to learn to use. The ability to open an account with as little as $300 seems compelling, however, I have some reservations about this company.

I also took a look at the Visual Trading Platform demo from CMS. It is much more complicated and frankly, a bit over my head at this point.

A search of the web left me overwhelmed with information and services from the companies themselves, yet I was able to find little info from independent sources.

Can any of you point me to FREE resources that could help a clueless newbie like myself to learn more about the market and available trading platforms? I would also like anecdotal information about experiences any of you may have had with various trading platforms.

There must be a site out there somewhere with reliable user reviews and recommendations (sort of like a CNET for traders) which could help me to choose a platform etc. to try for real.

Any info you could share would be most helpful.

Thanks.

No traders here?

Hmmmnnn…they must all be too busy crunching numbers.

I’m currently up $1450 (beginners luck no doubt).

Don’t choose a dealer based on their platform, as tempting as that may be. Choose them on their service. FXCM and RefcoFX offer firm dealing prices and guaranteed fills. Firm dealing prices means that you can actually trade on the on-screen price. Other firms may say that but what they really mean is that the on-screen price is an indication. What happens is that when you take an offer from a 15-20 quote on the screen, they’ll come back and say the market is now 17-23 do you still want to deal? They’ll shade the price knowing you’re a buyer. (If a company consistently did that to me I would just hit a bid when I wanted to buy and when they came back with a new price, I’d lift their offer) More importantly, those two firms I mentioned offer guaranteed fill prices which means that you’ll always get filled on your stop regardless of market volatility. This is pretty insane and could seriously be exploited by a savvy trader.
How are you currently making your trading decisions? I can point you towards some resources if I know your current knowledge level and approach. Though it sounds like you’re still quite the beginner if you’re saying trading “on” the foreign exchange. :slight_smile:

FXCM is who I’m looking at.

As far as my knowlege level goes, let’s just say I don’t have a clue. I’ve only been trading for several days now, but I’m fascinated with it and would like to learn all I can.

I’ll trade on this demo acct for another month or two, and then jump into a real account with some cash I can afford to loose.

From what I’ve seen so far, the learning curve is pretty steep. How would you recommend that a “clueless noob” like me should go about learning more?

On what basis have you been making trading decisions for the last several days? Do you know any concepts of a basic analytical methodology? How much money and time are you willing to commit to it? What got you interested?

FX Trading Station has a news plugin. I’ve been studying the info on there and on the Squawk Box to make some trades. I’ve also used the Net Dania Charts to find pairs that are volatile within a given range and have managed to get lucky several times with that approach (not very scientific but thats the best I can muster at this point).

As far as finance or analytical methodology goes, I’m not very educated, but I’ll dedicate whatever time and money is necessary to give myself a leg up.

I found the trade demo through an accidental google search and it piqued my interest.

There’s a university nearby, I’ll look into auditing some of the finance courses there.

Are you aware of any forums that focus on the Forex?

I’d start with a basic book on technical analysis though you will eventually have to look at technical analysis from “an intentional stance.” Akin, to “What are these odd creatures called humans thinking?” I’ve never seen anything in a book (and I read them all) that comes close to capturing how a professional trader thinks but you’ll still need to know what other people look at. Here is a basic book:

http://www.amazon.com/exec/obidos/tg/detail/-/0071381937/ref=pd_sxp_f/002-0948011-5084044?v=glance

The best forex forum is actually quite good with a lot of professionals. You’ll see free forums on the side:

http://www.global-view.com/beta/?/

To get a feel for what commodity/currency trading is all about, there is no better book than Market Wizards, by Jack Schwager. It’s what made me go pro and I actually ended up trading for one of the guys profiled in that book.
It’s a long fascinating road with alot of bumps and lessons to be learned. If you ever have questions feel free to ask. I taught my secretary how to trade and now she makes in the high 7 figures a year.

KidCharlemagne what do you trade? I just trade equities and I do fairly well, enough to not work for a living, but certainly not 7 figures :slight_smile:

(Sorry about the hijack.)

I have been pretty good at picking a point to buy. My problem has been picking a point to sell. I had a couple $20K+ gains on single stocks this year that I didn’t sell, I just let it ride. Now one is up about $10K and the other about $12K. Not bad, but I need to get my sell button working when the time is right.

I see, you guys are talking about currency trading. Sorry, my post-button works quicker than my read-the-links button.

ccwaterback I traded just about everything. Stock, bond, and short rate futures (in every country with enough liquidity), currencies, commodities (energy complex, grain complex, softs, metals). I’d say I made most of my money in currencies though - I love the way they trade. As far as your exit strategy: you had good extincts to let it ride but you do need to know when to bail. Generally I wouldn’t take a trade if it didn’t have at least a 3 to 1 reward/risk. One of the best ways to get out of a profitable trade is in units. Drop a third of your position at 3/1, a third at 5/1 and let the last third rip and only get out when you give back a third of your profits. When you’re doing it all day and night you need to really keep yourself psychologically strong-handed so I like to “pay for my trades.” That entails moving your stop up to breakeven after you’ve made some profit. I fight to preserve my capital like it’s a damn ground war - take some ground and entrench, etc… Always have a predefined stop loss and always stick to it. That is the single most important aspect of trading anything (along with a general risk management plan). When your trade size is small you have the fortune of being able to give the stop to your broker - you should do it.

I have a degree in statistics and I was (am?) a computer programmer for many years. I have tried writing TA programs to do the picking for me, but I haven’t had much luck with that. I think I just have too many “intangible” things I look at for “buys”. I trade mostly small-float, volatile small-caps. Some days their volume figures are less than 10,000 shares, and generally I hold at least 5,000 shares. So, I know how to be patient. I haven’t had too much problem on the downside, I usually don’t start buying until they get into “oversold”. The dogs I buy might dip 10% and stay there a couple months, that’s about as bad as it gets.

Well it sounds like you have been around that’s for sure, glad to see things are working out for you. I’m not a frenetic trader, I only make maybe 10 trades a month at the most. I worked with a guy that had TradeStation, I watched that one day and I couldn’t handle it. I’m more of a buy-and-holder, short term holder anyway.

Good luck (too all of you traders out there).

Just for kicks here’s a hint: Try looking at a ratio of 20 day/90 day volatility. When it hits .6 or so, look to buy a 20 day high.

I’ve been dabbling in FX trading for a year or so now. I have a live account with Forex MG (www.forexmg.com), and have been a happy customer.

Basically a guy at work was fooling around with it, and I decided to play at it myself. I did the demo thing for awhile and made some good fake money, but I’ve yet to cut a profit with the live account. I’ve lost about $1,200 since I’ve been playing around, but I haven’t had the time to dedicate myself hardcore, so I chalk the losses up to inexperience. I went to www.stockcharts.com and found a nice explanation of indicators under the “Chart School” button. I’ve been using the MACD and the DMI the most.

I’ve also found some good forums at www.moneytec.com.

Forex MG now does fractional trading which is essentially micro trading, but you can use tenths of a position all the way up to a whole one and beyond. I like the Yen as it seems to be the most volatile.

I’ve been neglecting my research on the FX trading, but I think I’ll check out that book KidC recommended.