Newbie Forex Q's

Discussion in 'Forex' started by Kastro_316, Apr 28, 2004.

  1. Im new to Forex, and i have a couple of questions for you guys if you dont mind...I warn you, im new to this :)

    1)--Im having trouble understanding the pairs. Lets say, USD/JPY. Now lets say i buy 100 units when its low...What am i buying? am i buying USD? And, when i see something like USD/JPY on my graphs, and the graphs shows its way down, i buy, what what am i buying? :confused:

    2)--What do the units mean?

    When you guys buy, what has to happen in order for you to buy?

    Thanx guys
     
  2. The first one in the pair is what your buying or selling and it is trading against the second one. If the USD/JPY is going up that means that the US$ is strengthening vs. the Yen (i.e. the Yen is weakening vs. the US$).
     
  3. The second half of your question, why we buy or sell, let's say the president stood up before a camera and said, "Ladies and Gentlemen of America, today it is my pleasure to announce to you that the United States is bankrupt."

    You'd place a buy order for EUR/USD. Some though may place a sell order.

    to
     
  4. 2: fx pairs are traded in 'lots' or 'minilots':
    1 lot = 100,000US$; 1 minilot = 10,000US$.
    Margins per lot/mini depends on the online fx broker.
     
  5. Tariff

    Tariff

    Couple of forex questions:

    is it true that there is no such thing as slippage in forex? is the price on your chart the price you trade at (plus the spread)?

    What about stops - I've heard the phrase "guaranteed stops" do they exist? why would a stop not be filled in forex if not?

    I'd also heard a tale of a trader who was scalping on forex succesfully, but suddenly started getting slow fills... something to do with the fx company transferring him onto a broker fill so he had to wait for a broker to manually fill him by taking the other side of his trades - should this sort of thing be an issue?
     
  6. nkhoi

    nkhoi Moderator

  7. Kermit

    Kermit

    Tariff,

    I wouldn’t be surprised. The FX company is the market marker and takes the other side of your trade. Since many lose money, the house is more than happy to take that other side of the trade. But if you’re good and consistently make money, you’re “flagged” because you’ve become a “risk” to the “house” and house will be reluctant to take that other side, as they don’t want to assume that risk. They can choose to hand your order to another counterpart for that purpose.

    Kermit
     
  8. Tariff

    Tariff

    yeah, he said something like as long as 8 mins for a fill... an eternity in the futures world of insantaneous fills! an eternity in forex too I imagine!
     
  9. WarEagle

    WarEagle Moderator

    Its stuff like this that keeps fx trading from gaining any real legitimacy. How can both the trader and the counter party (in this case, the broker) have an edge at the same time in a zero sum game? They can't, so just like a casino banning card counters, an fx broker has an incentive to remove the traders taking money from them. How are these places any different from the old bucket shops?

    I am not saying that no one makes money in fx or that stocks and futures don't have their own risks, but who needs the added risk of your broker wanting you to fail? It just doesn't make sense to me.
     
  10. AC3

    AC3

    First and Foremeost I have written several times on this site that in forex the broker although he advertises $0 commissions only the sucker actually believes thats true...... the broker is always going 2 nic u a pip in and out if he is kind ... more then likely its going 2 b 2 or 3 b/c the rates u C on the screen are nothing more then indications given by banks or prices where others have dealt ..... simply put the broker is "not held" 2 any price. That is 1 of 2 ways a FX dealer is going 2 make money .... the other is by taking the other side of ur trades, not unlike the specialist on the floor, only in this case the dealer may hold ur position 4 as long as he likes if he thinks ur going 2 lose and he is going 2 win...... Guarunteed Stops ... well if u havent fig'd it out already he (the broker if he thnks ur posi sux and u gonna go right for ur stop he will "get ahead" of u by 10 pips or so (basically electing ur stop (at his own risk) 10 pips ahead and filling u at ur price). He can afford 2 take this risk given the fact that he has taken a pip or 2 or 3 on ur last 4,5,6 trades....... Have a nice day ......
     
    #10     Apr 29, 2004