After their little chat and seeing their advert I decided to have a little play with their dummy trading platform (which is supposed to be like the real thing but with a demo account. Interesting. The spread is quite large - 5 pips (I think the spread on the underlying is about 1 or 2 pips?) makes scalping anything nigh on impossible unless you can cross the market, which they don't seem to want to let you do. They also won't let you place orders inside their spread which is a little annoying. But on the other hand I'm not saying money can't be made from trading forex through them either, just have to think a little differently about it and use much bigger timescales to find sufficient movement to accomodate and offset the cost. On the whole, not entirely impressed but I'm going to see out the 30 days and get a proper impression of things rather than run with the first impressions. Oh and the thing about no commission etc is rubbish - it's in the wide spread... best Natalie
Hello, Natalie. Well, things work a bit different here. When you trade via FXCM, they are the one you buy and sell from. They have no 1-2 pip to pay - all 5 pips are theirs. Do you really think 10k contracts they offer (mini) - is realy traded on interbank market? Of course not. 95% of traders loose their money and the money goes right to their pocket. On the other hand, if you make 1mio and more contract - they most probably go to interbank, and there they also dont loose. All they have to take care of is their quotes to differ from interbank quote they have with couple pips in their favor. And thats not problem - syncronizing platforms with couple pip difference. If you look at couple trading platforms offered by diferent brokers/market makers, for ex fxcm and gain or cgi - they most of the time have different quoted at any given time. Also, if you look at daily highs/lows of two different brokers you see theres a difference of upto 5 and maybe more pips...how come? mistery? maybe. But all this shouldnt bother a trader - we are all after money, and they are also. And about scalping...I dont think this would work. I would suggest you trying to target bigger profits than couple pips. Me, for one, I'm never targeting less than 100 pips...but everyone has his/her own aproach, so lets not get into it. Anyway, I wish you best luck in forex market. Its really better for me than any other. I started trading forex, and never even thought looking to other markets. For now. Who knows what's gonna happen later...? Cheers. P.S. We discussed this topic called "how markets really work", and I found it for you. I participated in this discussion and therefore know its good. If interested, here's a link : http://www.moneytec.com/forums/_showthread/_threadid-3494/_s-. There's lots of posts in this thread, but I suggest you read it to the end, as it becomes more interesting. Enjoy. Rezo.
i use and like FXCM. it took awhile to get use to the spread and overall slowness of forex compared to index futures. i trade from hourly and daily charts going with the trend--- you can't scalp imho, but its is a great vehicle for trend riding. not getting shaken out is key, as long as the time frame trends are in synch, STAY IN. enjoy ! surfer
If you are worried about FX spreads then trade the FX futures - almost always between 1 and 3 pips wide - and you can place orders in between the spread.
After FXCM chat, I was also intrigued with trading FX spot market. I opened a demo trading account with RefcoFX instead of FXCM because they have have a monthly contest for the Demo account holders and the winner get $2,500 (real money) if they can come in at first place. Refco's Order Execution software have the same structure as FXCM. The spread is huge and you can't place orders inside their spread. I can forget about scalping on the 5 minute chart. The strategy is different from what I'm used to, so far I'm only up $1k in the Demo Acct. It doesn't look like I'm in the running for the 1st place winner unless everyone else blows out their account. I am going to try MG Financial Group's demo account next month. The winner of that contest gets $1,000 seed money to trade with them.
Hi Rezo Thanks. It is deffinitely different and I will read that thread. And thanks to other responders . It's going to take me a mo to get my head around this one. best Natalie
Hi Surf, I've just taken a look at this the way you are talking about. There are some wonderful big trends aren't there when you open up the timeframes. It's so slowisn't it. Place atrde and come back six hours later instead of the few minutes I'm used to. Culture shock or what? LOL I think managing risk is going to be critical to being successful here, even moreso than in futures where it is very important too, but to a swing trader I can see that thois would be a dream come true. I've only ever used currency as a hedge before, trading equities/futures in different currencies from my home currency and hedging the exchange rate so a new departure indeed. Thank you for the tips . best Natalie
Hi WinSum, Yeah that might be good fun and a great way of improving skills before putting money behind it. :eek: Best Natalie
GIRLPOWER, rezo and marketsurfer are right , FX is not a market for scalping or even daytrading even though theFx firms would like you to believe you can make money daytrading the 5min and 15 min. chart. They know they will take money from daytraders .
Not enough with the spread, they can also play dirty tricks on you, like you are long 50 contracts, want to exit, the trader will keep his bid 2 or 3 pips below fair value. This alone would cost you additional $1000.