Nice Friday to everyone! I am looking at different markets and I want to learn something about Forex. Do you have any recomendation about some educational website for Forex trading? I am not looking for website with tons useless teory, I am looking for website with practical recomendations. (What to trade, what don't, what works and what doesn't...) If you have any personal recomendation, please, dont hesistate to post them too. Forex seems to me very different than stocks or futures markets and I am not sure, if this is the right place for individual trading, but I like to know, what is possible. Thank you for your asnwers and have a wonderful weekend!
In case you didn't see there is now a "Currency Trading" forum section in ET. You might want to browse through the discussions already held.
My suggestions: Go visit the site of Gain Capital. They are hands down THE BEST currency trading firm for individuals. No other firm even comes close to their systems amd benefits. I can tell you that currency, in my opinion, is a lot better place to trade right now than the equities market. More volatility, all the time=more chances to make big money!!! You'er on the right track for sure if you are intersted in the currency market right now.
If you came across a stock or future firm that charges $35 per side per minimum lot which is 100 shares or 1 future lot such as 1 emini would you trade that instrument? Such is the case with spot forex where due to the leverage and execution platform you would be behind by at least 30-$40 when you lift offer and hit bid. Huge Handicap on a 1 lot for daytrading. Swing trades maybe diff story. You might say,well if dealing rate is 80 85 can I bid 80 and hope to get hit, Yes, but the only time you get hit on your 80 bid, it is already 75/80 offer so you are still behind the 8 ball. That is the reason why they offer commission free ! coz it is embedded in the spread with little chance of splitting the spread. Be aware.
I noticed that the Euro futures dropped during the 11:00 AM EST hour this past Friday and then slowly recovered. I was wondering if this falling price action has anything to do with the settlement of the EONIA contract at 11:12 AM EST (16:12 GMT) on the LIFFE? If anyone has sufficient experience to say whether this is a coincidence or a correlation I'd certainly appreciated their advice.
GATrader, I don't think I agree with you here. The problems you describe refer to daytrading in general. I still see trading forex as paying "spread" vs "spread+commission". You're correct that you can't cut the spread in forex, but I rarely try to do that anyway with the ES. Like you said, it all depends on you're timeframe. I primarily trade off the 30min and 5min charts, usually around 2-4 trades per day(rt), per pair. I don't see giving up 2 pips as such a huge handicap when you can often grab 20 or more pips per trade(depending on what the market gives you, of course). I suppose the spread would be more of a problem if I were trying to scalp, but even there, Oanda gives 2-3 pip spreads on EUR/USD, so you're only down $20-$30 per "lot" to start(Oanda doesn't really use lots). Not sure what you meant when you said "given the leverage",since futures and forex both use leverage. Just some thoughts. Note: I'm not saying I make 20 or more pips on every trade. Snake
Just a few thoughts on my experience, there's become increasing more competition for the retail spot fx trader. A few years ago you couldn't find a market maker offering less than 4 pips on the majors. Today many MM like CMS offer 3 pips firm day or night and Coesfx is advertising 1-2 pips with a 1 pip commission. 1-2 pips is interbank spreads. So the days on raping the retail trader with 5+ pip spreads on the majors is gone. I prefer the cash market for the leverage, volatility, and depth(the futures market represents only about 1/10th of total currency volume where as spot is more like 70-80%).
Snake thanks for your insight. Admiteddly, it has been a whle since I traded spot forex.At that time, I picked up a phone and asked for a dealing quote and the guy gave me a 5 pip spread which is around $30-$40 in the hole and another 30/40 in the hole when getting out. There is a a huge diff between elec futures vs. spot forex as far as execution though. This is specially evident on slower moving instruments like 5 yr bonds. When I enter a bid on forex and I get hit it is almost a certainty that it has become the offer. With futures, when I enter a bid and I get hit, it could be that I was the first since the matching engine gave me priority over other bids. I can then scalp on the offer and have a higher chance of scalping it out due to time/price priority.In addition paying the spread by buying the offer and hitting the bid w/o price movement would result in only a 25$ slippage on the ES 10-20 on the $5 dow, $30 on the bonds. I think it is higher in the forex. I am not knocking it, if you can do it more power to you. In fact, I will give it a more than cursory look this week. Best of luck to you.
To experiment try www.fxcm.com. They'll give you a free simulation account. Also, with real money you can trade $10,000 lots ($50 margin) so you can open an account with only a few grand (I think the minimum is $300). Personally I am thinking about trading the smallest size lot on a 40-60 day SMA.