forex trading

[Acidmouse]

I wanted to get into Forex trading but don't have the time to devote to it. A good friend of mine spends 4-5hrs a day on it, but only 5-10mins actually trading. He did some course and follows strict rules when to trade/pip amounts and when to trade out.

It is a really rigid way to trade and he never does more than one trade a day, never tilt, don't chase loses and always at the same time 8-9am.

When choosing a platform to use he said its important to look at how much they take per trade, ie the pips. http://www.oanda.com/ is pretty much the best really, the likes of etoro is more cut for them per trade you make,  it is considered more a gimmick site tbh.

 

[theprawnidentity]

Yeh the site does look a bit 'gimmicky' but it is really easy use and certainly an easy way to get started / have a go.  Once I get my address moved over on all my stuff I will defo give it a go.

[theprawnidentity]

Keep thread going. Are you specializing in any area or just graph staring

Basically just following the trends.  Seems to have worked out ok so far.  Im sure you can make a much bigger edge by doing your own research though.

[redarmi]

I hate to be negative here but what is it that makes you all think that you, sat in your bedrooms, will outperform all the major hedge funds and banks with their maths models and lower transaction costs?  I can understand with shares where there is an inbuilt +EV but forex seems to be a neutral EV bet as when once currency goes up another must go down?  Where is the edge I am missing?

[theprawnidentity]

Without having a solid working knowledge of it (and trying to explain it in the most crude and basic terms I have to hand), I'm guessing that the idea is to buy the currency when it's worth less and sell it when it's worth more.

As I understand though, the market is immensely complex and involves trading a load of money that doesn't really exist.

And it isn't neutral because the market can expand and shrink (growth and recession innit).*

^{*Everything I've said here may be completely wrong, I am pretty much guessing and utilising information I think someone might have told me once.  All statements could prove to be completely fatuous.}

[redarmi]

Without having a solid working knowledge of it (and trying to explain it in the most crude and basic terms I have to hand), I'm guessing that the idea is to buy the currency when it's worth less and sell it when it's worth more.

As I understand though, the market is immensely complex and involves trading a load of money that doesn't really exist.

And it isn't neutral because the market can expand and shrink (growth and recession innit).*

^{*Everything I've said here may be completely wrong, I am pretty much guessing and utilising information I think someone might have told me once.  All statements could prove to be completely fatuous.}

I think you are missing my point a bit.  Obviously the idea is to buy currency when it is worth less and sell when it is worth more but what makes you more likely to estimate when that is going to happen than a bunch of quant analysts at Goldman Sachs utilising powerful algorithms and with significantly lower trading costs than you?  I also don't really understand why the fact that the market can expand and shrink means it isn't neutral EV (before trading costs).  Whilst the value of currencies can, like stocks, go up over time they don't do that in relation to each other overall so effectively you are comparing and speculating on the individual economic performance of countries.  Again I am not sure how you are more likely to do that more efficiently than a banker that is briefed by Janet Yellen.

[theprawnidentity]

Like a blind squirrel perhaps, but happy with a hard weekends graft:

[Doobs]

Without having a solid working knowledge of it (and trying to explain it in the most crude and basic terms I have to hand), I'm guessing that the idea is to buy the currency when it's worth less and sell it when it's worth more.

As I understand though, the market is immensely complex and involves trading a load of money that doesn't really exist.

And it isn't neutral because the market can expand and shrink (growth and recession innit).*

^{*Everything I've said here may be completely wrong, I am pretty much guessing and utilising information I think someone might have told me once.  All statements could prove to be completely fatuous.}

I think you are missing my point a bit.  Obviously the idea is to buy currency when it is worth less and sell when it is worth more but what makes you more likely to estimate when that is going to happen than a bunch of quant analysts at Goldman Sachs utilising powerful algorithms and with significantly lower trading costs than you?  I also don't really understand why the fact that the market can expand and shrink means it isn't neutral EV (before trading costs).  Whilst the value of currencies can, like stocks, go up over time they don't do that in relation to each other overall so effectively you are comparing and speculating on the individual economic performance of countries.  Again I am not sure how you are more likely to do that more efficiently than a banker that is briefed by Janet Yellen.

Pretty much this. 

[Acidmouse]

Most solo forex traders don't need to look at long term patterns or whats happening in the news (obviously you check to make sure no major announcements taking place around the time you actually trade), its all about identifying the correct movement in the two currency against one another and act upon it. You are not trying to beat the banking traders or experts at large firms who are looking at trends in currency going up or down which is a totally different thing. You cannot do that long term be a winner unless you are lucky.

The only difference in what most solo traders at home do is the way they identify a trade. Thousands of theories on what to look for but all of them require discipline, routine and very very few actual trades. Typical 1 a day.

[neeko]

Fama, Hansen & Shiler have today just won the Nobel prize in economics for - as the Nobel committe says  "There is no way to predict the price of stocks and bonds over the next few days or weeks'  (and currencies would be the same).

If you are better than them then day trading forex is the way to go.