Currency Trading

[bahroor]

Anyone here trade currencies?

Well, yours truly opened a practice account to exercise some knowledge and skill obtained through some brief reading and needless to say, I lost 1 grand in 1 day after 6 trades.

The shifts are not huge, very subtle actually, even daily (for the most part), so the only way to make big bucks is to trade with a lot of capital... and they make it real easy too with huge margin balances (200 to 1). So if you open a $5,000 account, yes your buying power is a cool one million dollars.

And they know how to suck you in too... you can open an account with just 250 bucks and they don't charge commissions (compensated through bid/ask spread). Another thing that's appealing is the long market hours (covering Europe, Asia, North America, Australia), you can trade 24hrs a day almost.

Anyway, just wondering if anyone here has tried this, even with just a practice account?

[TonyM]

I have not tried it, but I've heard here and there that it's a suckers game manipulated more than stocks. From looking at the forex advertising, it appears that the demographic is uneducated and inexperienced people looking to make a quick buck. I'm not insinuating that you fit that descrption or that you can't be successful at it, just what I've heard and read.

[bahroor]

Well, if there's a practice account available in any type of trading then I'll try it on paper at least.
And I quickly learned that I can't accuratley predict market direction. Sure, global economic news will sway the price around, but from what I see, by the time I get to it, I'm probably too late. And to me, the risk of that hapening in my sleep (delayed reaction time) in a 24hr market is just too high.

Next, futures.

[Lou]

I believe FXCM allows you too. I actually am invested in a currency hedge fund. The mgr trades for me. Returned 18% in 2006. www.forxone.com I know Omar the owner.

[bahroor]

I believe FXCM allows you too. I actually am invested in a currency hedge fund. The mgr trades for me. Returned 18% in 2006. www.forxone.com I know Omar the owner.

how long have you had the account with them Lou (if you dont mind me asking).
have the returns been consistent year after year?

[Lou]

since march. the fund has been open for about three years. last i checked it had about 500k, i think, and about 200k of that was omars, so your best interest is at heart. when i last chatted with them he and his partner were working with merril and ubs to trade money for them. it was avg 9.73 per month when i signed up. so you can see if was somewhat flat over the last 9 months. i was told the goal was to double your money each year. i've never lost more than say .15% percent a month. its just steady small gains each month. if i honestly had 100k i write a check today. i think in 8 or 9 months my account was up something like 18.80%

[Lou]

For those of you who have been sending private messages here's your answer. The fund has returned 69% since Nov 05 to Sept 06 - this is after all the fee's. Since Sept 06 to now the fund has been down a little over 1%.

[Joanne]

Hi Lou,

Since February, how has the fund done? I'm looking at investing this week.

Joanne

[1979Trader]

Hi Lou,

Since February, how has the fund done? I'm looking at investing this week.

Joanne

While there certainly are good forex firms out there I think its important to know that the forex market is much less regulated than the stock and futures marekets and a lot of people have lost money as a result of firms packing up and running off with all the client money.

I don't know anything about the above firm so I am not saying that they are going to do that I am just saying do your research. Best of luck.

- 1979Trader

[1979Trader]

Anyone here trade currencies?

Well, yours truly opened a practice account to exercise some knowledge and skill obtained through some brief reading and needless to say, I lost 1 grand in 1 day after 6 trades.

The shifts are not huge, very subtle actually, even daily (for the most part), so the only way to make big bucks is to trade with a lot of capital... and they make it real easy too with huge margin balances (200 to 1). So if you open a $5,000 account, yes your buying power is a cool one million dollars.

And they know how to suck you in too... you can open an account with just 250 bucks and they don't charge commissions (compensated through bid/ask spread). Another thing that's appealing is the long market hours (covering Europe, Asia, North America, Australia), you can trade 24hrs a day almost.

Anyway, just wondering if anyone here has tried this, even with just a practice account?

I trade forex and TonyM is right in a sense that there are a lot of suckers that do trade it as they get lured in by the high margin levels available and promises of easy gains that are often made in forex advertisements.

The market in and of itself is much more difficult to manipulate than the equities market because it is so big ($3 trillion plus traded on average daily). Because the market is over the counter however, if you choose to trade with a market maker who wants to screw you then they can and there are no rules against it. So basically you have to do more research when choosing a firm to trade with than you do when trading equities or futures.

Outside of the above however I like the market because you can make it whatever you want it. What I mean by this is that when you combine the high level of leverage available with a market that is not very volatile you can customize the volatility of your trades to pretty much whatever you want by turning up or down the leverage on your account. If you trade without leverage then the market trades like a utility stock and conversely if you make use of all the leverage that is available then it is the crack cocaine of financial markets.

I use the crack cocaine analogy because most people see all the leverage they have available to them and quickly blow themselves out of the water, another reason why the market has such a bad name. For those who can control themselves however I think it is worth a look.

-1979Trader

[Maverick_Investor]

I have traded currencies over the years - indeed, I used to be a professional money broker, years ago.

I use IG Index as a spread-betting platform, which I believe is illegal beyond the UK shores. And I'm almost a pure technical trader.

However, I've recently become bored with it. Why do i want to be sitting gazing at screens all day?

I also realised something. I have all the kit on my desk now that, ten years ago, professional brokerage houses would spend tens of thousands of dollars on. That's great, except for one thing - those brokerage houses are STILL a decade ahead of me in technology, and I'm still a decade behind!! Which means I'm still playing against the odds.

So, I'm currently on the look-out for a good managed fund. I'm looking at one or two at the moment - due diligence is everything here, folks! - that aim for 4% - 6% a month. Keep the leverage sensible, limit losses, look for a long track record and no change of senior trading personnel.

If anyone has any ideas on a good managed fund (and I'll look into the one above) do let me know.

Untie me from these screens! I need a life!!

[CommunistJack]

i tired currency for the second time and i think the term crack cocane is an understatement

yesterday i sold eur/usd when it had a slight rally @ ~1.26
today i liquidated yesterday's order and my practice account went from $50,000 to over $76,000

something tells me that with all that leverage losing would really suck

[timmhaan]

i'm about a month into forex trading on a live account. started small with $2500. after 28 trades, my stats break down as follows:

36% losing trades (10) = average @ -25.08
64% winning trades (18 ) = average @ 13.77

obviously, i need to either reduce the average loser or increase the average winner. the leverage you can use is pure craziness! i only feel comfortable trading 1 lot size as I'm still learning the ins and outs, but it should definitely be feasible to make money if you're disciplined.

so far, my venture into forex has been interesting. hopefully, as i establish more of a track record, i can start to turn a steady but small profit.

[walkthewalk]

I have tried the FXCM practice demo and all but I have never been able to understand how currency trading works. I don't know many people that mess with it from what I have heard it is very complicated and speculative. Hopefully one day I will have the patience to learn...

[timmhaan]

I have tried the FXCM practice demo and all but I have never been able to understand how currency trading works. I don't know many people that mess with it from what I have heard it is very complicated and speculative. Hopefully one day I will have the patience to learn...

it's just like the equities markets in many respects...plenty room for different kinds of techniques. you have people who only trade on technicals, those who trade the news, and those who position themselves based on fundamentals.

my one month working observation (so please take with a grain of salt) is that it is a wonderful market to make purely technical trades. following trend lines, acting on support\resistance breakouts, bounces off bollinger bands, etc.