One thing I wanted to ask you is - what is the margin requirement on that $100,000 trade? What's the leverage like there? Does Oanda give 50:1?
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Dirty Dealin?
- Thread starter Golflyer
- Start date
One thing I wanted to ask you is - what is the margin requirement on that $100,000 trade? What's the leverage like there? Does Oanda give 50:1?
Quote from FredBloggs:
so what you are saying is that you position/swing trade fx for a few hundred $ over a period of days, and you scalp futures (probably for a few hundred $) implying a much shorter holding period.
you imply yourself that you are under funded for swing/position trading futures due to emotional reasons (nothing wrong with that - just an observation)
so basically, you have 2 methods to get a few hundred $.
thew difference is, is that 1 method has a longer holding period than the other. a longer holding period means MORE RISK.
so trading fx is again more risky, takes more time, etc. why bother?
could it be the emotional gratification of getting a big move in when you look at the chart rather than the money?
just a thought.
Well I am always modifying my trading, looking for the optimum way.
I began with swing trading then moved to scalping (by which I mean any trade less than an hour long) and now I'm moving back to swing.
With forex swing trading, to me, means using more fundamental indicators whereas scalping is mostly technical.
I think risk is not necessarily less with either- it depends on risk/reward and percentage win rate.
Quote from traderNik:
Hi roberk
I have never traded spot forex; I have traded currency futures.
1)Ummm... I am not 100% sure what you're saying here. What was your stop on the trade? How much of your capital do you risk in each trade before you definitively pull the plug? If you are saying that you added to the position because you were sure the market would turn and that you had it planned that way all along... well, that's great. Congratulations on that trade.
2)Again, I'm unsure about what you are saying here. Is it that you can let positions 'breathe' more trading small spot forex positions? Maybe you're saying it's easier to leg into positions in spot forex if you don't have a huge trading account? If so, that may be great for a certain of style of trading. I personally leg into positions too, but my stops are worked out before I enter the first leg, so my opinions after the first leg goes on don't really matter. It wouldn't matter to me what my 'outlook' was - my outlook would have been reflected in the position I put on in the first place. I very rarely if ever add to losing positions. Instead I get out and wait for the market to provide me with fresh evidence that my initial judgement was correct. I've read about lots of guys who average down, though, including some heavyweights.
I don't scalp anything, ever. I treat futures as you do spot forex. In currency futures I have never traded the NZD, only the CDN and EUR and GBP. And yes, I've been filled away from my stop in a fast moving market. It is a new idea to me that bad fills in fast moving spot forex markets are, for structural reasons, less likely to consume xx% of your equity-at-risk than a commensurate position in a fast moving futures market. I would be very interested in knowing if this is the case, because it could affect my trading decisions.
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Thanks for the questions Nik,
1)Well I can't say I planned for the first entry to move 120 pips against me. But I was ready for such a move. It is always hard- wait too long and the trade may go without you- get in too early and you risk more. I was looking at the fundamentals -especially news I get here in Japan. Also the technicals looked right so I took a punt - that is my way.
2)Breathe more is probably the right term. If I was trading a million dollar account being down $1000 or so is nothing but I know from past experience that once I get to about negative $500 on a trade I feel ill. The size of the futures contracts are just too large to allow much leeway on my size account. I am either right from the very beginning or I have to get out. With forex I don't have to time things to the tick the way I do with futures.
Remember the liquidity on forex is phenomenal - and forex brokers allow small traders access to that. Also there are more than a few size traders using forex brokers.
Hi roberkQuote from roberk:
Thanks for the questions Nik,
1)Well I can't say I planned for the first entry to move 120 pips against me. But I was ready for such a move. It is always hard- wait too long and the trade may go without you- get in too early and you risk more. I was looking at the fundamentals -especially news I get here in Japan. Also the technicals looked right so I took a punt - that is my way.
Thanks for the info. Actually, I phrased my question badly; I wouldn't think you had planned for a position to go against you. What I meant was 'did you plan to add to the position if the first move was against you'. As you said, you were ready for such a move.
Best of luck with your forex trading
Remember the liquidity on forex is phenomenal - and forex brokers allow small traders access to that. Also there are more than a few size traders using forex brokers.
Nik
I want to thank those of you who have responded so honestly with your thoughts on how a dealer can "trade against" their clients.
I have also read the references from those of you who were kind enough to reply.
TraderNik, you actually hit the nail on the head when you indicated the poster (me) is likely to have opened an account with one of the firms I mention in the post. You are correct. The firm is GFT. I have not started trading, but the account is opened.
Ok, now that "I get it" (the problems with some firms), I would like to better understand how firms like Oanda and Interactive Brokers are different. How are trades with these firms different? Who is the "other side" of the trade? IB? The direct interbank market?
Again, thanks for your feedback. It is great to get the opinions from what sounds like very experienced traders.
Golflyer
I have also read the references from those of you who were kind enough to reply.
TraderNik, you actually hit the nail on the head when you indicated the poster (me) is likely to have opened an account with one of the firms I mention in the post. You are correct. The firm is GFT. I have not started trading, but the account is opened.
Ok, now that "I get it" (the problems with some firms), I would like to better understand how firms like Oanda and Interactive Brokers are different. How are trades with these firms different? Who is the "other side" of the trade? IB? The direct interbank market?
Again, thanks for your feedback. It is great to get the opinions from what sounds like very experienced traders.
Golflyer
IB doesn't trade against the client: they provide multiple pools of liquidity via ECNs.
www.interactivebrokers.com/en/trading/forex.php?ib_entity=uk
www.interactivebrokers.com/en/trading/forex.php?ib_entity=uk
The more you lose, trading with a bucketshop, the more the bucketshop makes. This gives bucketshops an incentive to help make you lose.
Interactive Brokers is different. Every time you execute a trade, IB matches your order against an identically priced and sized order from some market-maker, bank, or IB customer. This way, IB makes absolutely no profit based on your losses. IB instead profits because you pay commissions to IB. This gives IB an incentive opposite to that of the bucketshops. It is in IB's best interest to help make sure they do everything they can to help you win. Because if you win, you will keep trading and keep paying commissions.
One of the many advantages of the IB setup is that you can actually trust IB with your stop orders, trailing stops, and other advanced order types, without worrying about whether IB will run your stops the way a bucketshop can.
Interactive Brokers is different. Every time you execute a trade, IB matches your order against an identically priced and sized order from some market-maker, bank, or IB customer. This way, IB makes absolutely no profit based on your losses. IB instead profits because you pay commissions to IB. This gives IB an incentive opposite to that of the bucketshops. It is in IB's best interest to help make sure they do everything they can to help you win. Because if you win, you will keep trading and keep paying commissions.
One of the many advantages of the IB setup is that you can actually trust IB with your stop orders, trailing stops, and other advanced order types, without worrying about whether IB will run your stops the way a bucketshop can.
Quote from Golflyer:
I want to thank those of you who have responded so honestly with your thoughts on how a dealer can "trade against" their clients.
I have also read the references from those of you who were kind enough to reply.
TraderNik, you actually hit the nail on the head when you indicated the poster (me) is likely to have opened an account with one of the firms I mention in the post. You are correct. The firm is GFT. I have not started trading, but the account is opened.
Ok, now that "I get it" (the problems with some firms), I would like to better understand how firms like Oanda and Interactive Brokers are different. How are trades with these firms different? Who is the "other side" of the trade? IB? The direct interbank market?
Again, thanks for your feedback. It is great to get the opinions from what sounds like very experienced traders.
Golflyer
Hi Golflyer
Sorry I can't help you with specifics. Sounds like you have enough information now to know that you have to be careful. As long as your decisions are informed by that, you should be okay. One thing I will say is that I seriously doubt that your small orders are going into the interbank market. I even doubt that brokers pool orders and send those into the interbank market. Someone may correct me on this.