I have just started trading a real account after spending quite some time using several different demos.
While it is true that the cost of the spreads is significantly more than paying a commission with a one pip spread on futures, I have found (so far) that this is not really a factor in my particular trading style.
While I am definitely a "newbie" to Forex, and probably not qualified to say ANYTHING with certainty, it seems that the moves are, while not predictable, quite dramatic.
The platform (I am using GFT after trying demos of virtually all of them)permits me to place parent/contingent orders. So if I want to buy a breakout or sell a "breakdown" (to open), I can enter an order and let it sit for as long as it takes to get hit (if ever). I find it is entirely about being patient.
With parent/contingent orders, you are guaranteed fills at both your stop and limit prices. This works for me. For example, yesterday I had an order to buy (be long to open) the dollar/yen pair at 108. I had placed the order when the pair was almost 100 pips lower. I had a limit order to sell half my positon at 108.40. And a stop (OCO) on my entire position at 107.90. When the news came out about a terrorist scare in Japan, the pair jumped past my limit order price (as well as my stop of course). But because they guarantee stops, I was filled at 108, and out of half my position at 108.40. I was able to place a trailing stop on the remainder of my position. I rode it up to over 109.
For me, the ability to "automate" these trades, with guarantees on stops and limits seems to make the added cost worthwhile.
As I said, I am very new to this, and really can't say for sure how it will work in the long run. But there does seem (so far) to be value in the mechanics of this kind of Forex trading. If you can be disciplined to NOT trade until your stops open positions for you.
There is often NOTHING to do. There is also, in my case, where I am trying to lock in a profit on half a position, the matter of paying close enough attention to place trailing stops on the rest of the position and canceling my original remaining stop. It does require constant monitoring.
Anyway, for what it's worth, that is my take on Forex. I find it interesting, and far different from the equities and options trading I have done for the past almost 20 years. So far, so good. The hours are a bit strange. Seems like most of the action occurs very early eastern US time (while the Asian and London markets are still open). So I find myself trading (or placing trade orders) at unreasonably early hours of the morning. But on the other hand, it is nice to be finished for the day at 9 or 10 am. Especially in Florida this time of year.
The only other point I would make regarding BobCathy's original post is that I cannot imagine making 100 trades a month. It is all about being very selective. If a trade is triggered, fine. The majority of the orders I place don't get filled. They are GTC, but if the chart pattern no longer makes the trade look like it will get filled, there is no sense in not canceling. One trade a day can be quite enough. My win percentage is very high. So far, it seems it would have been even higher if my stops were not as tight. But I am still just trying to feel my way through, and not prepared for large losses.
Peace,
RS
While it is true that the cost of the spreads is significantly more than paying a commission with a one pip spread on futures, I have found (so far) that this is not really a factor in my particular trading style.
While I am definitely a "newbie" to Forex, and probably not qualified to say ANYTHING with certainty, it seems that the moves are, while not predictable, quite dramatic.
The platform (I am using GFT after trying demos of virtually all of them)permits me to place parent/contingent orders. So if I want to buy a breakout or sell a "breakdown" (to open), I can enter an order and let it sit for as long as it takes to get hit (if ever). I find it is entirely about being patient.
With parent/contingent orders, you are guaranteed fills at both your stop and limit prices. This works for me. For example, yesterday I had an order to buy (be long to open) the dollar/yen pair at 108. I had placed the order when the pair was almost 100 pips lower. I had a limit order to sell half my positon at 108.40. And a stop (OCO) on my entire position at 107.90. When the news came out about a terrorist scare in Japan, the pair jumped past my limit order price (as well as my stop of course). But because they guarantee stops, I was filled at 108, and out of half my position at 108.40. I was able to place a trailing stop on the remainder of my position. I rode it up to over 109.
For me, the ability to "automate" these trades, with guarantees on stops and limits seems to make the added cost worthwhile.
As I said, I am very new to this, and really can't say for sure how it will work in the long run. But there does seem (so far) to be value in the mechanics of this kind of Forex trading. If you can be disciplined to NOT trade until your stops open positions for you.
There is often NOTHING to do. There is also, in my case, where I am trying to lock in a profit on half a position, the matter of paying close enough attention to place trailing stops on the rest of the position and canceling my original remaining stop. It does require constant monitoring.
Anyway, for what it's worth, that is my take on Forex. I find it interesting, and far different from the equities and options trading I have done for the past almost 20 years. So far, so good. The hours are a bit strange. Seems like most of the action occurs very early eastern US time (while the Asian and London markets are still open). So I find myself trading (or placing trade orders) at unreasonably early hours of the morning. But on the other hand, it is nice to be finished for the day at 9 or 10 am. Especially in Florida this time of year.
The only other point I would make regarding BobCathy's original post is that I cannot imagine making 100 trades a month. It is all about being very selective. If a trade is triggered, fine. The majority of the orders I place don't get filled. They are GTC, but if the chart pattern no longer makes the trade look like it will get filled, there is no sense in not canceling. One trade a day can be quite enough. My win percentage is very high. So far, it seems it would have been even higher if my stops were not as tight. But I am still just trying to feel my way through, and not prepared for large losses.
Peace,
RS