Hi, I am a newbie to FX trading. I have a couple of queries and really appreciate some help/suggestions. 1. Do you pay for the spread both getting in and out of a trade? If the spread is 5 pips, we have to pay 10 pips just to cover our ass? 2. My account provider also charges a 'commission' on top of this both way spreads. Is this common? 3. Could you kindly suggest me a good broker with tighter spreads who is not a bucket shop? Thanks again for you help guys.
You buy at the ask and sell at the bid. So if you entered a buy and then immediately sold, you would loose the spread, not twice the spread. Most forex dealers do not charge a commission but some do. From my experience, those charging a commission have tighter spreads so you might find it works better for you. I use IB for forex but it might not be the best for someone new to forex trading. See what recommendations others give you.
When I am buying, I am paying ask. If I put a stoploss at 45, it is taken out once the price hits 40. But if the profit target is 75, it stays on until price crosses 80. It looks like I lose 5 pips no matter what (on top of the 5 pips spread I pay when I get in). I am not complaining but wondering if its the standard norm. Could somebody please suggest a good broker for forex newbie?
MB Trading is great to start out with for as little as $400. Even if you just use them for your trades and use other software to make trading decisions you'll do much better than using a market maker broker: http://www.mbtrading.com/forex.aspx