Forex Beginner

[randomtrader]

I know very little to nothing about Forex trading. I saw some internet add saying you can trade with as little as $250 using a credit card. This is really all I know. Does anyone have any suggestions on readig materials, websites etc. which could help explain? What are the brokerage costs and returns on Forex? I have trades stocks and options, is forex complex, does it require constant monitering?

[kaveman]

risks are very high and I would suggest not for the beginner
just type forex into a search engine and take it from there

[bvbfan]

You need to watch it closely and set stops. While it may only need $250 to trade, you can easily lose that + a lot more in a day and your still liable for it

Not worth the stress unless you have a large bank roll, in my opinion

[wavepicker]

I know very little to nothing about Forex trading. I saw some internet add saying you can trade with as little as $250 using a credit card. This is really all I know. Does anyone have any suggestions on readig materials, websites etc. which could help explain? What are the brokerage costs and returns on Forex? I have trades stocks and options, is forex complex, does it require constant monitering?


If your account is small it is probably too much affort for too little gain. However it is a great way to learn how markets trend if you are willing to start with a very small account. For this reason (a learning tool) I would recommend it to any trader. Nothing actual experience as a learning tool

[kaveman]

some of the forex brokers have the facility to paper trade an account. so you can test your ideas

[Milk Man]

Check this out.

http://www.investopedia.com/articles/forex/

Great resource this site.

[Page]

I know very little to nothing about Forex trading. I saw some internet add saying you can trade with as little as $250 using a credit card. This is really all I know. Does anyone have any suggestions on readig materials, websites etc. which could help explain? What are the brokerage costs and returns on Forex? I have trades stocks and options, is forex complex, does it require constant monitering?

Yes Forex is a bit complex and nobody can start trading instantly. It tales a lot of time. I took months to get in to this market and I practiced with AvaFx demo account for 4 months....
As you are a beginner you can start with babypips forex school @ babypips.com and investopedia.com is another good source of information,
after that Forexpros.com is excellent as well.

[Stormin_Norman]

youre a tripper page.

[>Apocalypto<]

youre a tripper page.

ha ha ha ha

[pilbara]

youre a tripper page.nah he's an Indian employee of AvaFX using multiple aliases to ramp the broker without breaking forum rules.

18th October -- claims to have used the broker for 2 years.

I trade on AVAFX.com it is not different from other what I found it different is there suggestions on trade. When I am in dilemma they suggest me what to buy and what to sell. It has been almost 2 years since AVAFX is my broker. I am very happy till date..............

23rd October -- asks a question about the broker, claiming never to have used it.

I have heard about AVAFX how is it? Can any one tell me about it?

5th November -- wow AvaFX executive visits his house whenever he has problems!

But i am lucky now that i am not facing these problems with my broker. If there is any problem their executive comes to my house and clears all the problems or i call directly to the customer care. From their they sourt out my problem. AVAFX is a ver nice broker what i have realized and experiencing.

7th February -- "Page" posts a link to his "reealjrd" website

If you are looking for a good forex broker I can recommend few of them like Oanda, Iforex, Easy Forex, Forex Yard, Finexo and AVAFX. These are some nice online brokers and having nice services as well. They are regulated and working well worldwide. AVAFX is an online broker fro Cyprus and working well in this market. It is not having NFA approvel it is in process and will get it soon. They are having nice services. For more information's about this broker you can visy their site AVAFX.com. I have also written some blogs for beginners they can take help of this URL.

reeal-reealjordan.blogspot.com/

[BentRod]

nah he's an Indian employee of AvaFX using multiple aliases to ramp the broker without breaking forum rules.

18th October -- claims to have used the broker for 2 years.

Spot on Pilbara;)

[>Apocalypto<]

nah he's an Indian employee of AvaFX using multiple aliases to ramp the broker without breaking forum rules.

18th October -- claims to have used the broker for 2 years.


23rd October -- asks a question about the broker, claiming never to have used it.


5th November -- wow AvaFX executive visits his house whenever he has problems!


7th February -- "Page" posts a link to his "reealjrd" website

well done Sherlock Holmes! :laser_sho

[professor_frink]

nah he's an Indian employee of AvaFX using multiple aliases to ramp the broker without breaking forum rules.

18th October -- claims to have used the broker for 2 years.


23rd October -- asks a question about the broker, claiming never to have used it.


5th November -- wow AvaFX executive visits his house whenever he has problems!


7th February -- "Page" posts a link to his "reealjrd" website

Nice pick up pilbara:)

We'll look after it from here:D

[canaussieuck]

Bye bye Page:behead:

[Trembling Hand]

Yeah good work pilbara. We all knew he was dodgy but not sure if he was brain damaged or a spammer.

:burn:

:fu:

[BentRod]

We'll look after it from here

Hu-bluddy-ray:D

:axt:

Oi Page..... :321:

[AbundantIncome]

I just found out that even though we win on the day, overall, our account could be down due to the base currency we hold ???

wow wow wow ... how do you guys handle this ??? double sided sword ???

[Trembling Hand]

our account could be down due to the base currency we hold ???

What base are you in?

[Stormin_Norman]

I just found out that even though we win on the day, overall, our account could be down due to the base currency we hold ???

wow wow wow ... how do you guys handle this ??? double sided sword ???

i convert all cash at the end of the day to tins of baked beans.

when the nuclear war comes, im going to make a packet.

[Cartman]

i convert all cash at the end of the day to tins of baked beans.




lol ---- u r a funny man Norm ----- considering how well yr system is perfroming ---- lets ponder ----

for breakfast at yr place its ?? --- mmmm --- baked beans

and lunch its ?? ---- mmmmm --- baked beans

and dinner its ?? ---- mmmm u guessed it --- baked beans

interested Norm ----- How is the odour in your place at present ?? :D

[AbundantIncome]

What base are you in?

AUD ... should I change ? what are your strategies to minimize this if any ???

I mean you are doing all the trades and at the end of the day you still lose ??? how does that work ???

[Trembling Hand]

AUD ... should I change ? what are your strategies to minimize this if any ???

I mean you are doing all the trades and at the end of the day you still lose ??? how does that work ???

:confused: its only your P & L stays in the other currency. its no big thing. I just close it out end of month.

[AbundantIncome]

:confused: its only your P & L stays in the other currency. its no big thing. I just close it out end of month.


What do you mean by profit and loss? are you saying that the profit and loss in those positions have not been actually been reflected into the account ?? I thought it could have been calculated. I am actually looking at IB demo account page. So, it could be my interpretation only though and hence the total AUD is changing.


What I am trying to comprehend is that, if we make a profit due to currency pair unrelated to the base currency, we may still be subject to loss when converting to australian dollar ?

So, I am wondering what would be the best strategy to avoid this impact if possible. It would be nice just to know if you make a loss or a profit from your trading without unknown risk ???

How do you close it out ? is it something automatic done by broker at month end ?

Thanks

[Stormin_Norman]

if youre with go markets everything is converted back to AUD.

which if that's what you buy your baked beans with, is probably the currency you want to use.

[wabbit]

If you're using the MT4 platform, you can monitor open trades in terms of the account currency, the trade base currency or points.

From the help file:

Profit — show profit/loss as points, as term currency, or as deposit currency. Changes in this parameter are displayed in the "Profit" field. If the parameter of "show profit in the term currency" (quote currency) is selected had, there are, for example, open positions for USDJPY, the profit will be shown in Japanese Yens;



Now you know what the profit of the trading pair is in terms of the account currency, you can adjust your trading style to suit... or so it programmatically?


Hope this helps.

wabbit :D

[pilbara]

What I am trying to comprehend is that, if we make a profit due to currency pair unrelated to the base currency, we may still be subject to loss when converting to australian dollar ? yes with IB, if you are trading cross-rates where neither of the pair are your base currency (eg EUR/USD when your base is AUD), then you actually have a margin loan in one of those currencies and it is secured against your equity in your base currency. In addition to this unhedged forex risk, you must make interest calculations on the margin loan.

compare this to a retail forex broker who offer aussie base currency. Here you are actually trading contracts based in aussie dollars, eg mini is a $10000 aussie dollar contract. With IB you are trading cash and you can structure it as you like.

[AbundantIncome]

yes with IB, if you are trading cross-rates where neither of the pair are your base currency (eg EUR/USD when your base is AUD), then you actually have a margin loan in one of those currencies and it is secured against your equity in your base currency. In addition to this unhedged forex risk, you must make interest calculations on the margin loan.

compare this to a retail forex broker who offer aussie base currency. Here you are actually trading contracts based in aussie dollars, eg mini is a $10000 aussie dollar contract. With IB you are trading cash and you can structure it as you like.

cool ... that is the information that explains it .. thanks heaps .. need to pay attention to pairs i trade then ...


If you're using the MT4 platform, you can monitor open trades in terms of the account currency, the trade base currency or points.

From the help file:

Profit — show profit/loss as points, as term currency, or as deposit currency. Changes in this parameter are displayed in the "Profit" field. If the parameter of "show profit in the term currency" (quote currency) is selected had, there are, for example, open positions for USDJPY, the profit will be shown in Japanese Yens;



Now you know what the profit of the trading pair is in terms of the account currency, you can adjust your trading style to suit... or so it programmatically?


Hope this helps.

wabbit :D

thanks wabbit ... this confirms my understanding ..


if youre with go markets everything is converted back to AUD.

which if that's what you buy your baked beans with, is probably the currency you want to use.

yes, it seems to be a better solution ....

i have to play around with the demo a bit more to see what works for me or what not :D

thanks

[Wysiwyg]

I know very little to nothing about Forex trading. I saw some internet add saying you can trade with as little as $250 using a credit card. This is really all I know. Does anyone have any suggestions on readig materials, websites etc. which could help explain? What are the brokerage costs and returns on Forex? I have trades stocks and options, is forex complex, does it require constant monitering?

I really think it is an expensive form of gambling on the price direction -------- up or down. I find it surprising how often the price moves against no matter what indicators, rules, system or star sign used.

To be honest, it is a game of luck.

[Dowdy]

I would stay away from forex.

I tried it and lost alot but then i invested in commodities (a field i've already researched alot into and have confidence investing into)



I can sleep alot easier at night trading something i have confidence in.

[lasty]

The rule of the game in Forex is "Know your market".
Stick with with AUD/USD or AUD/JPY.
The economic data comes out in our time zone.You know what is going on here in Australia as opposed to Europe.
Dont over trade.
Opening up an account with $250.00 is foolish. You might as well go and play the pokies.
Dont rely solely on charts.
A communication network of forex players is vital to share info.

[white_goodman]

The rule of the game in Forex is "Know your market".
Stick with with AUD/USD or AUD/JPY.
The economic data comes out in our time zone.You know what is going on here in Australia as opposed to Europe.
Dont over trade.
Opening up an account with $250.00 is foolish. You might as well go and play the pokies.
Dont rely solely on charts.
A communication network of forex players is vital to share info.

$250 account is far from foolish... some companies offer nano lot sizes... meaning if your account is in USD and your trading EURUSD 0.01 lot size would be 1 cent per pip... so you can get the feel for the market using real money at such a small cost... that initial painful lesson of blowing an account is alot cheaper...

also to do with what currency your account is based in.... if your account is based in AUD and you live in Australia your not really losing anything, cos you pay for things in AUD....

the only situation where you lose is say you live in Australia, your account is based in USD and the AUDUSD keeps going up.... the benefit I see it, is if you dont need to withdraw urgently its a trade you can effectively just sit on until it goes in your favour. So your reading of the AUDUSD becomes important when looking to make payments and withdrawls...

[wabbit]

$250 account is far from foolish... some companies offer nano lot sizes... meaning if your account is in USD and your trading EURUSD 0.01 lot size would be 1 cent per pip... so you can get the feel for the market using real money at such a small cost... that initial painful lesson of blowing an account is alot cheaper...

You also get to test your trading ideas in real time on a real server, so you don't get to meet the false-hopes of trading off demo servers.

$250 can buy a lot experience and learning if properly managed.

Although trading such a small account will not generate enough income to live off the proceeds, making $25 is still a ten percent gain on the initial capital, and although learning to make ten percent on a small account does not directly scale to making ten percent on larger accounts, the trading basics will be there... and that's the important part?


wabbit :D

[Wysiwyg]

You also get to test your trading ideas in real time on a real server, so you don't get to meet the false-hopes of trading off demo servers.

$250 can buy a lot experience and learning if properly managed.

Although trading such a small account will not generate enough income to live off the proceeds, making $25 is still a ten percent gain on the initial capital, and although learning to make ten percent on a small account does not directly scale to making ten percent on larger accounts, the trading basics will be there... and that's the important part?


wabbit :D
Yes all good for throwing $$$$ to the giant forex vacuum. With a small account, reasonably tight stops are necessary. For instance with 5% of capital risked, an initial stop-loss of 10 (+ 2 spread ) pips on a mini (.1) account is necessary.
A 10 pip swing kills this stop more often than not. Small trading accounts give a good education that small accounts should never be traded.


A 10% risk stop-loss of 23 (+ 2 spread) will give the bet more time to breathe and is more appropriate if testing methods with a small account. 5 losses in a row aint good. :o

[wabbit]

If trading micro lots, your stops can be a lot wider than 10pts which make life much more manageable and if well executed (by learning and implementing the right principles) can provide quite a lot of trading (for "practice") in a live environment for a small capital outlay. I have been "playing" with a toy $20 account since the beginning of March and it is still alive and relatively healthy; for quite a while it was in profit, although it is down this week. The principles learnt here are applied to the "proper" trading account. It is certainly cheaper than buying trading books or attending seminars, and you learn a lot more about trading, the trading platform and about yourself.

Don't be too quick to knock playing in the sandpit with a small amount of real money; it can be quite enlightening.


wabbit :D

[Stormin_Norman]

Don't be too quick to knock playing in the sandpit with a small amount of real money; it can be quite enlightening.


i would say once u know how to handle the demo platform and have a system u think is workable, then a $100 account is almost a must.

expect to lose it, that's what happens.

but real money, even 10 cents is worth more to learning then a $100,000 demo account.

it brings in 'real' emotions into the trading, rather then knowing that its pretend money, and treating it as such.

[Wysiwyg]

The principles learnt here are applied to the "proper" trading account. It is certainly cheaper than buying trading books or attending seminars, and you learn a lot more about trading, the trading platform and about yourself.

Don't be too quick to knock playing in the sandpit with a small amount of real money; it can be quite enlightening.

wabbit :D Fair point of view wabbit and I thoroughly agree but I thought you would have worked it out by now. Are you suggesting after many years of trial and error there is nothing that works?


expect to lose it, that's what happens.
but real money, even 10 cents is worth more to learning then a $100,000 demo account.

it brings in 'real' emotions into the trading, rather then knowing that its pretend money, and treating it as such.

Most certainly, nothing peeves me more than giving back gains and stop losses getting hit.

[AbundantIncome]

has anybody experienced this ? Whenever I sell at a point, the forex pair shoots up...

buy one pair of the USD and holding another, and other pair which shoots up more than others !!!

GRRRRRRRRRRRRRRRRRRRRRR

[Wealth Wizard]

As others have said a small account is certainly well worth it. Provided you manage your risk it can be a useful way to enter the market, managing risk of course does not necessarily equate to tight stops, in fact i would suggest trading minimum lots with wide stops, perhaps start on the daily time frame? you can then monitor your performance, discipline etc as well as what works for you. Forget the small profits as others have said focus on percentages, R:R etc. As for focusing on one pair/currency, i guess it depends on your method, for me daily and 4hr time frames across all majors and few minors hs woked well, but this suites my lifestyle having a full time job. good luck to you an my ASX200 long!

[white_goodman]

has anybody experienced this ? Whenever I sell at a point, the forex pair shoots up...

buy one pair of the USD and holding another, and other pair which shoots up more than others !!!

GRRRRRRRRRRRRRRRRRRRRRR

if uve got a decision between eurusd and gbpusd for eg, look at the eurgbp to see which is stronger or weaker...

[kbp]

Hello. I'm newbie too.

Hope anyone here would help me answer these questions.
(I downloaded and tried MT4 from Go Markets but until now I cannot get it clear)

Question 1: What are the fees/opp. cost in FX? Do I have to pay fees for buying/selling, monthly account fee, commission fee or withdrawal fee etc.?

Question 2: I don't understand the leverage. I chose 100:1 leverage and with initial $5000 deposit. Then it allows me to make an order of size 1.0 (which is about $100 000). How come I can make an order which is bigger than my deposit?

Question 3: Is it possible that my account balance goes negative?

Thank you very much.

[Stormin_Norman]

Hello. I'm newbie too.

Hope anyone here would help me answer these questions.
(I downloaded and tried MT4 from Go Markets but until now I cannot get it clear)

Question 1: What are the fees/opp. cost in FX? Do I have to pay fees for buying/selling, monthly account fee, commission fee or withdrawal fee etc.?

Question 2: I don't understand the leverage. I chose 100:1 leverage and with initial $5000 deposit. Then it allows me to make an order of size 1.0 (which is about $100 000). How come I can make an order which is bigger than my deposit?

Question 3: Is it possible that my account balance goes negative?

Thank you very much.

Q1. in the case of gomarkets the cost is the difference between the buy and the sell price - what's called the spread.

so if you bought and sold a currency pair at the same time, the spread would be the cost of making that transaction.

say you can buy a currency pair at a ratio of 101. you can sell the pair at a ratio of 99. the cost of buying and selling that pair is 2. so if u sell for 99 the price has to increase to 101 for you to 'break even' after the cost of the spread.

some brokers also charge commission as well as/on top of spread.

Q2. when u buy a house with 5% deposit you are using leverage of 20:1. same idea. you are buying a $100k house with only $5k.

100:1 leverage would allow you to take out $500k worth of positions with $5k deposit.

of course this can see you make, or most likely lose that deposit quickly as a 1% movement in the market on a fully leveraged account would either double it or wipe it out.

Q3. yes. although not likely, as margin calls see your positions sold out if u lose 80% of its value - leaving you with 20% buffer. however if you were in a bad position over the weekend, and the market moved even further before opening on monday (ie 'gapped) then you could be left with a negative balance.

brokers like OandA guarantee you wont be held liable for negative balances, others such as go make you agree to pay should this (unlikely) situation arise.

[kbp]

Thank you for your detailed reply. I've got it clear now.
So gomarkets doesn't charge any fee/commission and they earn money by using "spread".

I've also found a "school" for newbies like me on babypips.com

I will probably spend next 6 months to learn all of this and do it with my demo account then live account.

FX is seem to be a good place to invest. Started yesterday with $3k demo, end today with $4.8k. More than 1k income a day! If this happened in real, I'd be very happy. :)

(And IMO, FX market is seem to be much better than stock market since I hardly win in stock market :banghead:).

Thank a lot mate.

[Stormin_Norman]

FX is seem to be a good place to invest. Started yesterday with $3k demo, end today with $4.8k. More than 1k income a day! If this happened in real, I'd be very happy. :)


that can easily be reversed.

[Mr J]

that can easily be reversed.

Oh come on, we all know how easy it is - just listen to all the fx ads.