I have just started to become interested in Forex trading due to the 24 hour a day trading. I am reading everything I can and all that good stuff but I have some questions I think could be answered here on ET. My first question is weather or not mini forex trading (like that offered at FXCM) would be a good way to go. With a 1000 dollar deposit it seems like it would be a good way to learn and not have to burn through too much cash. Is this the really the case? Second, I really want to trade forex due to the 24 hour a day trading but I was wondering if there are better times then others to trade forex throughout the day? For example, is the market better to trade during US market hours or can the market really be traded profitably through the day? Just looking for some input from more experienced forex traders, thanks.
Minis are a great way to start, you get the learning experience of using real cash but with the safety of keeping your wins/losses small. Keeping down to 1 mini lot each pip is only 1$ as opposed to 10$ per standard lot so you can start with $1k capital easy to get a few trades going. I find that European/US market times are better...When Tokyo is coming to close London opens then New York opens mid way through London markets and alot of money is getting thrown about then. I would avoid ~9pm-1am GMT, no market is open and price movements slow down to a crawl I find (not saying they dry up totally, just tend to take alot longer to move any decent amount, although then again that depends if your only holding your trades for a short amount of time). Get some charts open though and watch the market for a bit and get used to the price movements. www.dailyfx.com has free realtime webcharts and some daily TA/FA.
Minis are nice, but to really start SMALL, you can use oanda. They will let you trade $1 if you so desire.
I agree with baggerlord. I feel mini is still too large for the newbies. Why not start with 100 USD or less and trade maybe 1000 units at a time to see if your trading strategies work or not. If you have made any money after 6 months or more, you can always add more funds to your account.
can you explain exactly how this works ?? i have been trying to figure out the logic behind the ability to trade ANY amount. do you owe them money if the trade goes one pip against you ?? is it like a credit line or something?? it really makes no sense to me. does this firm cater to degenerate gambler types down to their last dollar ??? the OANDA site is not clear. thanks ! surfer ps. i am not currently trading forex, but a reputable firm like FXCM or REFCO ( with minis) seems like a wise choice in this wild and wooly marketplace.
Well basically your trading against Oanda, your trade does not go out onto the market place (min big is like 500K-1Mil to get onto the actual inter bank market) so Oanda are basically letting you trade as much of a currency as you like and they are the ones covering it, they make money from the spread and the number of trades going long/short covering each other. "Real" ForEx is still a domain of the wealthy, people who can trade a min lot size of 1Million+, places like Oanda, FXCM etc are opening it up to the masses, its like the start of online trading is the way I see it, how open was trading indexes and equities etc etc until online brokers started to open up, eventually ForEx will just be another stall in the market place.
As izeickl said, no single trade below 1mio can be executed on interbank market where actual trading is taking place, and where we get prices from. So all those trading <1mio are actually playing against the brokerage firm, and no matter how hard they try to convince masses they are not the counterparty, thats not true. About oanda and $1 trade - I dont know as I never trade via oanda, but I am sure they dont give any credit lines . But I assume calculations are made just as for any account. pip worth is calculated (for euro, cable...) as 0.0001*(contract size), therefore with 100k lot its $10, and with oanda, betting $1, and as far as I know they give upto 1:30 leverage, it will be a $30 trade, so 1 pip worth is $0.003... Regards, Rezo.
Oanda is a great place to learn to trade- I love it, but you still have to respect that you are losing or winning- I usually trade 1000 lots at a time- I use www.FX24.com for recommendations-