First off, you'll never get the argument from me: It can't be done. It can be done and profitably, albeit at a bit more stress and time units per day (although this depends on the nature of the trader). To each his/her own That said, aside from the issue of preference there is the real issue of commissions compounding aginst you. For every spread you pay per unit profit (what ever it is depending on your win ratio and the length of the trade), those pips are not pips that can go toward compounding--they are lost in this sense. Over time the equity curve of a long term trader and a short term trade at one point will start to diverge (assuming both are successful) and this divergence will get stronger as the short term traders is less able to get filled and the 'lost pips' add up even further If you have a 10,000-50,000 USD account and your strategy allows you to lever up and catch the small moves, then yes, you will make more money in the first few years than a better capitalized, long term trader. But over time 5-10-20 years in the future, the long term trader will come out better in the compounding game, as he is able to get filled better at larger sizes (again less spread to pay due to less slippage) and spread/slippage paid is less per unit profit than with a short term strategy. In short, once one's equity/capitial really starts to build it is necessary to look toward taking a longer term view. On the other hand, some traders are fine with a base 50,000 USD in their account taking smaller moves from the market.
A reasonably leveraged 50k is a bit low as a limit for intraday scalping, there's enough liquidity for mid 6-figure accounts at least, without too much slippage. I'm just a poor piker so that's plenty enough for me, my trading style, and my account balance! I take your point though, for someone who compounds indefinitely he's eventually going to come up against liquidity issues and need to scale in and out of trades on a longer term basis, that's why large funds are struggling to produce annual double-digit returns while an intraday trader can quite often produce triple-digits relatively easily. Getting back to Oanda though, they're still workable but they've definitely got worse since the price adjustments rule, maybe it's just coincidence. I've had to change my strategy slightly to allow for it, we've been down this road before with Oanda when they've overcompensated, but eventually they'll arrive at an algorithm acceptable to both themselves and their customers....hopefully!
Seriously? http://www.nfa.futures.org/news/newsNotice.asp?ArticleID=2273 That, and part (b) FIFO, are just about the hottest topic to affect retail forex traders in the past decade! Welcome to planet earth, we hope you enjoy your stay!
Yeah i knew about the new hedging rule , but only now i read part b , anyway i use SpreadBettuing firms in the UK because of this i didnt care much about these new rules in the US , i have an account with Oanda but untill now i didnt use it ...
hehe, trolling as usual But for once you actually raise some relevant points, and while I doubt you will understand the reply or participate in anything which remotely resembles a sensible and logical debate it might be helpful to someone... '....few hundred bucks..."? I purposely rarely mention dollar amounts because it's irrelevant, performance is all about risk and returns, come on haven't you learned that much at least! On average my returns are around 6% per month which is perfectly acceptable, I'm happy with it anyway and most people would be I expect. "....why haven't you moved on, from scalping 10 pips, from bucketshops...."? Moved on to what exactly? An ECN-style broker? Longer term trading? Why? I'm getting instant fills, at more or less the price I want, and I'm producing a very respectable return, why change anything when there's nothing better available? Listen, it's not my fault you got burned trading with a bucketshop, get over it and accept the fact that your losses were most likely down to you and your naiivity and inexperience, nothing to do with the broker. He left you to your own devices as you were happily losing without any help or hindrance from him! lol, have you ever managed to have a reasonable conversation with anyone or is trolling your limit
Part (b) is the FIFO rule, part (a) is price adjustments. Whatever, as long as you're having fun......
I have chatted with cabletrader before (alos under an older alias). From this I can tell you that he has a very good understanding what trading is all about... there are plenty of folks you should be exposing on ET (mostly gurus). Trust me, once you have developed your own strategy it is very hard to break it and go from long term to short term or vice versa (especially one that has been profitable in the past).
Yeah, 6 figures would probably work with the amount of liquidity in the market. However, things could For longer term moves, the SPX is a better vehicle anyway. Once that beast moves, it does so with very little retracements on the daily chart (i.e. all the retail money piles in ) About Oanda, I thought they were simply a stop hunting outfit. Could you confirm that this is indeed just crap?