Forex vs. Other Markets

R

redbull13

Hey Fellas,

Alright, I started trading when I was 16. I'm now 20, and since then I've traded stocks, futures, options on futures and forex. I've never day-traded and I never plan to. I feel much more comfortable swing trading. Recently I've been starting to realize some new things - most of them psychological. The most important thing I've realized is that becoming constistently profitable is TRULY one of the, if not the, most difficult task I will ever accomplish in my life. I think this is true all around. I opened my new forex account with FXCM about a month and a half ago. Since then I've had my ups and downs. Right now my account is down about 50% - it was a pretty small account to start with. What I've noticed is that my calls are generally pretty good, however, I can't make money on them. Forex seems to have lots of seemingly random swings that generally aren't in my favor. I would defintely say it's the most challenging market I've traded. How do others feel about this? How did you become profitable? Thanks.
 
If you're trading with FXCM that mean you're probably trading mini lots ($10 000) which, if your account is any less than $5000, is waaay too much. Trade smaller.
 
I think the best way to trade forex is to pick a session and only trade that session.

For instance: EUR/USD

There are several sessions but the most liquid sessions are the European/NY overlap. 7AM to 11AM EST. Then be flat @ 11AM or let a move ride out until 2PM EST or before if you get a signal to exit.

Of course you will need to keep abreast of news release days and times as this will increase volatility.

Or you could trade the 12PM - 5PM session which is generally calm and trending. Lends itself well to swing trades. But you'll have to be flat @ 5pm.

Outright position trading currencies is very difficult. Most currencies are range bound instruments and stay in that range for many months.

Also, look into trading CME's currency futures.
 
Quote from faure:

If you're trading with FXCM that mean you're probably trading mini lots ($10 000) which, if your account is any less than $5000, is waaay too much. Trade smaller.
More...

I trade a 100k account, and you got my initial acct. value correct.
 
Quote from ddunbar:

I think the best way to trade forex is to pick a session and only trade that session.

For instance: EUR/USD

There are several sessions but the most liquid sessions are the European/NY overlap. 7AM to 11AM EST. Then be flat @ 11AM or let a move ride out until 2PM EST or before if you get a signal to exit.

Of course you will need to keep abreast of news release days and times as this will increase volatility.

Or you could trade the 12PM - 5PM session which is generally calm and trending. Lends itself well to swing trades. But you'll have to be flat @ 5pm.

Outright position trading currencies is very difficult. Most currencies are range bound instruments and stay in that range for many months.

Also, look into trading CME's currency futures.
More...

I did trade CME currency futures awhile back. I was trading them much more short term, breaking even.
 
Quote from redbull13:

I trade a 100k account, and you got my initial acct. value correct.
More...

So, your leverage on every single trade is (way?) north of 20:1... which means you must use relatively tight stops, to prevent a large % loss on a single trade.

Yet you're swing trading, not scalping or even day trading... which means you must use relatively wide stops, to accomodate the normal volatility ("seemingly random swings", to use your words) of your primary timeframe.

Do you see the basic problem, the unavoidable conflict there?

And you've chosen to cut your teeth with FXCM... one of the worst choices you could've made.

And -- based on your 50% loss in a month and a half, among other things -- you seem to be in early stages of your learning curve as a trader, despite your self-described 4 years of trading experience in asset classes other than spot fx.

Given all those factors, I'd say that the odds are overwhelmingly, impossibly stacked against you. Unless you are willing and able to STOP; step back; and consider altering your entire approach and mindset.
 
Quote from ddunbar:

Then be flat @ 11AM or let a move ride out until 2PM EST or before if you get a signal to exit.
More...

ddunbar:

Would you care to elaborate on the significance of 11am and 2pm EST (4pm and 7pm in London respectively)?

Thanks.
 
Forex has a lot of sharks and fakeouts. So if you are a breakout trader I recommend you dont trade forex. Actually, if you are a breakout trader I recommend you do some more research and change your strategy entirely. If your going to trade forex, make sure to stay with the trend.
 
Quote from faure:

If you're trading with FXCM that mean you're probably trading mini lots ($10 000) which, if your account is any less than $5000, is waaay too much. Trade smaller.
More...

I don't follow. 2:1 leverage is waaay too much with a $5,000 account trading a mini-lot?
 
I trade forex.

With forex there is a an interest element when you hold a position over days.

You can earn and pay interest.

I take a position when I earn interest.

So when I suffer a drawdown the interest earnt sometimes offsets the pip loss I am suffering. Even better when I am in profit. Pip gain and interest earnt, great !

Its not as easy as it sounds. But it can work !
 
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