the reason people like to say "fx is a scam" is because these losers tried gambling at 100-1 leverage and lost.. run the numbers using the spread as .9pip and you will have plenty of flexibility at 20-1 to have substantial swings. i trade with interactive brokers and the effective spread is about .2pip
i absolutely <b>disagree</b> with this. I think its easier to trade equities (there are thousands). Futures are tougher and more efficient and have higher commisions. FX is probably the most efficient market of all; i would never trade it except for options.
just learn as much as you can-you CAN convert that 2k into much more just need to wait for the absolute best setups. Learn about options--when you see a really good setup use options instead of actual stock. At your level i think u'd only get access to basic level in options that is just buying call and puts. Try options for indices SPY DIA QQQQ they trade with tight spread. Once if you are profitable can ramp up size. On a sidenote undercapitalization is a big reason for faiilure for a number of traders for obvious reasons. Why not get a part time job and raise maybe another 3-5k and try with that. Much better chances of converting that into something than with 2k
Yeah I'm trying to get a job right now- but I don't get my drivers license for a few months- and I recently blew too much money on some golf stuff... But I think I'll liquidate whatever I can around the house to hopefully get some more. I've been considering options for a while and am still really confused. The guides all have the same mantra without specific details on what matters: "Calls give you the right, not the obligation to buy 100 shares of the underlying stock per contract!" Yeah; I know that 'The Market Guys' What I don't understand is how you actually make any more money from options in relation to stocks (excluding the fact that you could short a stock without a margin using options). This is probably a dumb question but Is there any money in buying a call/put and selling it and hopefully coming out in the black from your premium?
in simple terms you will start at basic level buying calls/puts if you think stock is going up buy Calls if you think stock is going down u buy puts You can lose money in options on two things mainly Time decay and wrong price action(it goes down when you thought it would go up) Thats why use only the best setups. Thats why both timing and direction are important in options-do your homework well before you start trading
My advice is trade as small as possible while "learning the market" as you put it. This will take you many many years whether you want to believe it or not. If you stick with it a year from now you will look back at yourself right now and realize how foolish you were for thinking what you think currently. (whatever that may be) This will go on for awhile... Unless you have a sound idea with an actual plan it is probably best you do not do any trading. I have never seen anyone open a $500 forex account and not pretty much give it all to the broker so be very careful doing that. Good luck with whatever path you choose but right now my recommendation is focus on an actual career and do trading on the side.
look at FBP I buy buy x put contracts for march at about 45 cents each with a strike price of 2.50 the stock is trading at 2.34 at the moment but I'm pretty sure from looking at the charts that this stock will be very bearish in the near future, in a matter of days or weeks I wait 1-2 weeks when the price dips to 2.00 Buy 100 shares of the company at 2.00 exercise the contract and sell them at 2.50 50 dollar profit - 10$ comission to buy option= 40 bucks -4.50 premium = 35.5 bucks per contract I'm thinking of buying 3 contracts. This is what I do when I decide to buy something; I think it has all the needed info for when I will get in and out, and my expected profit. Feedback anyone?
This is the best advice so far. Get a part time job and put money in your account at regular intervals to smoothe your equity curve and grow the account while you learn. Beyond commisions, the biggest problem people have with a 500 dollar account is unrealistic expectations...A 50% yoy return is an amazing return but no one is going to be happy making 250 bucks when you could just work 2 weeks and do the same thing. So you end up taking dumb amounts of risk and get your head taken off. Trading isn't a sprint its a very long marathon..most people run out of gas when the race has barely even started.