I have been critical of the fx dealers. For some reason, a lot of you seem to want to use them instead of the futures. I will suggest that you CAN make money in currency trading using a volatility breakout system. There are many such systems around, no need to buy one. Typically they take a lookback period, derive a range from it, then add/subtract a volatility component for a buy/sell stop the next day. One that worked well for me in backtesting several years ago was the channel break system included in TradeStation. Use a simple 30 period high/low break on the 60 minute or daily and you can make a lot of money if you get lucky. These systems typically have about 30-35% winners, 50% or worse drawdowns, but are profitable over long periods if you trade them across a portfolio of markets. They also have a history of working pretty well on interest rate products. They do not work well on the stock indexes, because of the back and fill nature of those markets. They do test well on stock indexes for the great bull market years and the big blowoff, but those periods were abnormal.
FXCM hmmmmmmm.
- Thread starter Girlpower
- Start date
Yeah and those who make a killing on the demo software, I wouldn't get too excited either. The demo is another marketing gimmick... I don't like paper trading but I made a couple of trades on some of these demos, typically I would place a 5 lot order then close the software and come back a few hours later or the next day, of course most of the time I had a nice profit. 
Quote from Kicking:
Yeah and those who make a killing on the demo software, I wouldn't get too excited either. The demo is another marketing gimmick... I don't like paper trading but I made a couple of trades on some of these demos, typically I would place a 5 lot order then close the software and come back a few hours later or the next day, of course most of the time I had a profit.
Well even random trades have a 50/50 chance of making profit. For all their ills do you guys honestly think a ForEx broker can control prices to such an extent? The tin foil hat brigade are out in force over ForEx I swear to god. If you dont trust one get your data source from somewhere else, I do because I dont like my brokers chart package, not because I dont trust them, and the prices are always within the spread range.
When asked by Schwager (in Market Wizards) for when trading currencies whether using the interbank market or the futures market, Bruce Kovner's (who at the time around 1987 may well be the world's largest trader in the interbank currency and futures markets) reply was "I only use the interbank market, unless I am doing an arbitrage trade against the IMM." for the reasons of liquidity and 24-hour market.
Quote from OddTrader:
When asked by Schwager (in Market Wizards) for when trading currencies whether using the interbank market or the futures market, Bruce Kovner's (who at the time around 1987 may well be the world's largest trader in the interbank currency and futures markets) reply was "I only use the interbank market, unless I am doing an arbitrage trade against the IMM." for the reasons of liquidity and 24-hour market.
Just so there is no mistake, trading with an fx dealer is not trading the interbank market. For a size trader the interbank market can offer advantages, although with globex you now can trade currency futures around the clock and I doubt anyone here would be liquidity constrained in the majors.
It seems that my initial impressions that caused me to start this thread have prompted quite an interesting discussion from which I have learned much about the forex business and realise there is considerably more to learn.
Thank you for all the comments and thoughts on the subject.
Best
Natalie
Thank you for all the comments and thoughts on the subject.
Best
Natalie
I found another event that is playable on FX. After the dismal first day results in the Treasury Refunding, I shorted the USD on the 7 major pairs.
I figure that if we don't want US debt, why would other countries want them. Working under the assumption that there would be no increased demand for USD to purchase the US debt, I shorted the US dollar last night. All 7 position were profitable this morning when I close the positions.
Maybe I can do it again on the next quarterly refunding.
I figure that if we don't want US debt, why would other countries want them. Working under the assumption that there would be no increased demand for USD to purchase the US debt, I shorted the US dollar last night. All 7 position were profitable this morning when I close the positions.
Maybe I can do it again on the next quarterly refunding.