Home > Markets > Forex Trading > FOREX ---A sure thing, YES the holy grail?

FOREX ---A sure thing, YES the holy grail?

  1. i met a guy last weekend who trades what seems to be a sure thing 4X system. I don't trade forex and have limited understanding of it, normally i would dismiss his comments immediately, but drives a ferrari and lives in a large large home all from forex or so he claims. give this a listen:

    the guy trades the payroll numbers, October 7th is the next number release. He has two accounts with 2 seperate Forex dealers. According to him, immediately, as the numbers are released, one of the dealers will jump before the other one pushing the pair 40-100 plus points within 1-5 seconds, now all he does is buy or sell the pair in the lagging dealers account( as it must follow the leader) and collect the profits. He claims this is no lose, easy money and his lifestyle reflects that he walks the talk. What am I Missing??

    Thank you.

    Austin
     
  2. EASY MONEY !!!!

    :D :) :p
     

  3. Talk to me. What doesn't make sense?
     
  4. do a search on ET ...

    trying to game FX dealers on news days

    maybe once existed ... I do not think it still does

    maybe your friend can get lucky and

    does have multiple accounts set up at various

    fx dealers and somehow gets an occasional multi
    pip win ...

    I would think that word would get around and they would widen their pips ( spread ) just for him

    and in anycase ... I do not think size is possible on big news releases unless one pays alot in slippage or spread
     
  5. It's "arbitrage."

    Not allowed.

    The Interbank doesn't even allow it.

    fx
     
  6. I admit I am a bit naieve when it comes to the forex scam, but I find this very hard to believe. Where is it written that a person cannot arb spot forex?

    Show me some proof. I think this is incorrect.
     
  7. Read the fine print at fx brokerages.

    they discourage it and dissuade you from doing it by closing your account.
     
  8. you are quite mistaken

    first of all "interbank" is a general term, it is not a consolidated entity, it reffers to all of the collective entities who have tradintionaly been banks, hence the term....there is no "interbank", and organisation who deals currency is "interbank" and the assertion that arbitrage is somehow banned in currency markets is also quite untrue, many funds are exclusively currency arb funds, maybe some bucketshop you have dealt with says you cannot arb btwn their prices and another dealers, but that is hardly enforceable....
     
  9. *YAWN* .. good luck with that. :cool:

    fx
     

  10. Even I know that its legal and done all the time in the FX market. What you are refering to to is arbing within a single dealer, which is discouraged. This system is not even arbing-- since you are only making a single trade with a single dealer but watching for direction from several before the trade is made. Like I said, I am new to this, but I do know the definitions.

    Do all the dealers move at once now?? Is this why this method no longer works?

    AUstin
     
  11. Just go on, make few demo accounts at several dealers, open their platforms in few windows, sort them on the screen and wait for news to be released. Then watch quotes from each dealer moving. That may answer you if that will or will not work.

    Personal experience is what counts.
     
  12. i personally do not arb the news but several people i know have told me that in the past year "the edge" you speak of has been greatly diminished if not totally eliminated. like the previous poster stated test it yourself instead of relying upon others advice.
     
  13. Thanks ! I was wondering why this guy who supposedly made several million with this method was so anxious to share it with me. I guess you answered my question.... it worked once but no longer does.

    Austin
     
  14. But he still has the house and the car....

    Good trading to you Austin Spare :)


     

  15. I think its entirely possible since I've been able to do it on occasion. I trade with FXCM and they sometimes lag some of the other dealers quotes.

    If you use e-signal (like I do) for you Forex data. You are getting data from over 100 banks. FXCM only uses something around 14 or so.

    If you watch the data from e-signal real carefully. You can observe that when a fundamental announcement, (such as Payrolls) is read, there will usually be some banks jumping on the news first and FXCM will lag behind these.

    The hard part about this technique is, (at least in my account) is that I usually get an error message window stating that the market price has moved against me, even though I am just placing a market order. My execution should be placed immediately, but there is always some hesistation due to the fact that FXCM doesn't want me to get the best possible price. I normally have to go back and try to enter again and by the time I try and enter a position again is that the price has moved another 40 pips or so against me.

    The bottom line is that you have to have quick reflexes and for your brokerage account to allow you to jump into a position qucickly after the payroll numbers are read.
     
  16. Most Forex dealers are not happy providing a service to traders and making the spread.

    The various things they do, like explained here, is just one example.

    My dealer simply widens the spreads, before the news event making it unattractive.

    Remember, that your Retail Spot Forex dealer, provides you HIS quotes, HIS executions and decides YOUR world without regulation in the secondary market he is representing or creating.

    These issues usually chase away most traders who have learned to live with standardized quotes and trade through execution reliability.

    When you start cutting into your Forex Dealers unfair world he is presenting to you, by beating him at his own game...your out!

    There is soooo much money to be made in Forex, while keeping your dealer happy, why bother with methods that are not beneficial to your future. I find that Retail Spot Forex is a longer term play and is a balancing act that any trader can learn...There simply is just an incredible amount of money to be taken, its just how efficient you choose to be, for further refinement.

    As you grow in dollars traded, the issues being discussed may face the trader sooner than later...where in equities usually size and liquidity become the issues first.



    The bottom line is that you have to have quick reflexes and for your brokerage account to allow you to jump into a position qucickly after the payroll numbers are read.
     
  17. ES basically said it in a nutshell, I don't see how anyone could get away with this for long with an fx broker, they will implement all they can to cover their asses on days like those. I'd be damned afraid of submitting market orders with any platform on employment fridays, much less with a bucketshop trying to take my money. "Arbitrage not allowed." -- wtf is that? :)
     
  18. With FX brokers like FXCM there is no way to be quick enough. Let me explain my trade results from 4/1/05 (Friday) in the EUR/USD.

    Prices moved so quickly that the charts reached prices that were never even displayed on their trading platform. I would love to see time&sales from their platform, but it does not matter when the prices reached are quotes and not actual prices where buyers and sellers matched I guess.

    The chart I included is on 5min bars. My original plan to attack this market was to go long without a tight stop and use a loose stop with a profit target. I later revised my stop loss to a tight stop loss. Well the down wick of that red bar before the huge up green bar caught my stop loss, I then tried to enter the market after the high was broken of the red bar. From the time I saw the high broken by say 3 pips to the time I entered the order through the platform the price had risen drastically. I didn't get the price that was showing on the platform at the time. Guess what price I got ? Just off the high of the green bar & the stop entered with that order was hit almost immediately.

    Good news is that the losses of that day caused me to rethink and change my trade plan to avoid these situations, however I just wanted to show you guys an example of what you may encounter.
     
  19. File
     
  20. Well, I think this on is called The Pay Roll trading system and it's available on Ebay. The basic idea is to use Oanda as the fast chart and give the hunch where the price will go, then use 2 RefcoFX accounts to execute the trade, one account to use if the price go up at the Oanda chart mean buy, and the other account to use if the price go down at the Oanda chart mean sell. Open all three trading platform together, so the trade could be execute as fast as possible. I never try this strategy, so can't tell if Oanda chart is faster than RefcoFX price quote. Anybody like to try ? :D
     
  21. Refco would be a total joke to try to execute this type of set up with!

    all you'd get with them is a requote! :D same with fxcm.
     
  22. It's done all the time. Not by guys trading at Oanda though.