Forex trading

[vegasdave 0]

Just wondering if anyone has gotten involved in forex currency trading. I am in the early stages of learning about it and practicing with the free accounts. I realize that there is risk involved but there is also opportunity. Because it is all done electronicly and it is a 24 hour 5 day a week market with lots of liquidity it does seem appealing. The other thing I was wondering is if one is trading while in LOS is there an issue regarding work permits ect. Of couse it would seem that just keeping a low profile woudl be fine. Also I would not be trading baht. I am mostly interested int EUR/USD, USD/JYN, and GBP/USD. I am mostly doing intraday scalping. And settling for small (5-7 pip) profits. If I could generate a realitively small amout each day I would be pretty content. It is obvious that it can take years to really learn all the factors in the market but there does seem to be some opportunity while learning. At any rate be fun to hear what others have to say.

[tom21 19]

Work on the principle that the practice accounts are real so if you are making a profit on a regular basis go for it. It is not as easy as it looks so do not play with what you can not afford to loose. As the account will not be in Thailand I can not see a problem with it.

[Owen` 2]

The world of online daytrading arrived in the late 90's with lots of guys who persuaded themselves that what they were doing was pay for labor.

 

It's not. It's seeking a return on an investment -- every time you trade.

 

If you have a $100K account and you think you're going to earn $50,000 per year "trading", that is a 50% return on your investment -- and if someone came up to you and offered you guaranteed 50% return on some scheme, you would (or should) turn around and walk away.

 

The reason, in general, that it doesn't work is that the world of investing is percentage, not dollars. If you sustain a 50% loss on a trade, you have to come up with 100% on your next trade just to break even. A 50% loss on $10 leaves you with $5. A 50% rise on the next trade with the $5 leaves you with only $7.50. You did not get back to where you were.

 

The mathematics of investing is always skewed in favor of losses.

 

Read about taxes too. There is a way to get LT CG rates on anything made, but you have to jump through hoops, and I don't know if foreign currency allows those hoops. That will skew the math even further.

 

In general -- bad idea. Put it to bed and let it sleep -- forever.

Edited February 6, 2007 by Owen`

[sabang 0]

I agree with Owen. Forex is really a big boys game- institutional.

The commissions alone are likely to exceed what you make, if you are lucky enough to even make a profit.

Consider stock indices, if you really must do futures.

 

But if you can't tell me what a spread, a straddle or an artificial option position are, I recommend you stay out of the game frankly.

[kdc1899 1]

Is Forex like options in that time value is factored in to the value of the purchase?

Are there long term plays in currency trading? Or, do these contracts also have time value that depreciates towards expiration?

Thanx in advance

[casper_uk 12]

If you have 'spare' money ...... it's a great game to play.

 

I dabbled a little and initially had relative success, however, it started taking over my life! I was constantly reading strategy books, buying new software and staring at the screen whilst the markets where open.

 

Pretty soon though, I was at the stage where making 'small money' wasn't enough, I wanted more. Apparently this is a very, very common situation.

 

That's when things start going bad, and you lose a few and begin to play 'catch-up' ...... which you find you never really can. Another common situation.

 

Honestly it's fun at first and to anyone who has a spare few 'k', give it a go, it's one of lifes true lessons

[torrenova 644]

I was a risk analyst with trading license for 12 years on the floors of investment banks around the world and I can tell you that your decision making process is not the same when playing for "fun" money. Hesitation, worry, anxiety, etc. all become key components and chasing a profit is what happens to most, leading to ever increasing losses.

 

Keep Nick Leeson in the back of your mind, if you actually know what he did.

[Dirk_Diggler 0]

Well im someone who is not so down on trading (ForEx or otherwise)...The reason it gets such a bad rep is people go into it not knowing what they are doing and cant control themselves.

 

A) You don't HAVE to use loads of leverage just because its available.

Commission/spread losses are more of an issue when your day trading/scalping...if your looking to swing trade then they become a much smaller part of your trading cost.

C) You MUST have another income stream unless you are consistently profitable/funds to cover down months. Ive read about so many guys taking up trading full time with the pressure of needing to make a monthly income to cover living expenses and they end up taking stupid risks in desperation attempts.

D) Only use money you can walk away from (As above, Ive seen guys using Redundancy money to trade with while having a wife+mortgage to take of).

E) You have to be able to control your fear/greed emotions.

F) Get used to people saying its "Just Gambling" and "Everyone Loses Money Trading"....

 

Other than that just read/learn/study and take it slow...A decent ForEx company like Oanda let you trade micro accounts so you can throw in 500 USD or something and learn with real money while keeping the trades small enough it should last you a long time (i.e. don't use any leverage) Unlike some which have a min trade amount of 10 000USD+ Oanda let you trade as small amount as you wish. Their a good company, been going a number of years. Although their charting platform is a little basic.

 

http://www.oanda.com/

[wacmedia 277]

I was a risk analyst with trading license for 12 years on the floors of investment banks around the world and I can tell you that your decision making process is not the same when playing for "fun" money.

 

Hi,

 

 

Too true. Often people have great knowledge, but when it comes to laying down their money their thought processes go awry.

[mrstein 0]

I traded for close to a year ......

 

First off if You are not working with at least a 75/100 pip stop lost YOU have No business playing in that arena until you have at least a year under your belt.

 

Working with such tight stop lose is insane YOU will never make any money ESP if you are using a mini account which I assume you are.

 

Paper trade for about 3- 5 months then open up a standard account and GO ..........

 

Using a mini is a waste of time and once you get to a standard you will have VERY bad habits as a mini si a dollar a pip and a standard is 10.00 per pip NOT TO MENTION MONEY MANAGMENT IS EVERYTHING.

 

NEVER MORE THEN 3-5 % OF YOUR Account balnce per trade.

 

Once again attempting to make 10/20 pips a trade is an all day scalping practice done by many and yet Most bust out faster that way then setting up for a 100- 150 pip gain ESP on double tops and bottoms

 

Learn the patterns first Start with Trend continuation patterns first Such as Channels Flags Traingles and pennants ..Once you master those then you can move up to Trend reversal patterns such as tops and bottoms and 123 "s ......

 

 

Trading Forex is a Lot of work and Needs time to master 2 years MIN............

 

THERE ARE NO SHORTCUTS IN TRADING FOREX, AND YES You can make a LOT OF MONEY ONCE YOU MASTER IT WORKING ABOUT AN HOUR A DAY.

 

Good luck

 

Mrstein

[vegasdave 0]

Lots of great advice and opinions. Indeed I dont intend to use any moneys that I cant afford to lose. Here in Vegas they call it "scared money". I also accept that fact that it is a long learning curve. And part of my education will be learning to lose gracefully. Basicly I am looking to learn something that will keep me occupied and challenged when I eventualy move into retirement. Again not depending on it but wanting to keep my fingers in something. I forgot to mention that I worked with a friend that had developed a pretty successful nasdq e-mini system. So I have had a bit of a chance to learn how to look at charts ect. And do back testing ect. It seems that some of the basic principles are the same with forex. Again I would never risk needed money or depend on it for my livelyhood. Basicly I see it as "mental golf". But again all suggestions and ideas are very appreciated.

[Canadian_verbal_kint 0]

Interesting topic, some of the opinions stated sound like they are coming

from people that have either never traded anything including forex or

they bought some Ebook or trumped up we'll make you rich forex

course and are now bitter.

 

FYI, I have traded full time for ten years.. 8 with options and the last

two with futures (the ES) and forex.. as I split my time pretty evenly

between Thailand and Canada each year I usually trade more heavily

on the futures when in Canada as the time frame suits me better and

when in Thailand I trade the London Forex session more often.. again

the time frame works better..

 

The reality is that 95%+ of all new day traders lose money and usually

their entire accounts within the first year. But far too often it's NOT

because trading is so hard it's that they don't really understand what

they are doing and never do learn. If you haven't traded full time any

market for at least one entire year you have NO clue how that market

is going to react in every possible environment and as such you are

just guessing at trades or worse you are trying to follow some super

duper secret method that you paid 197 bucks for..

 

Trading is NOT about making trades it's about controlling your emotions

and managing your money.. the rest will take care of itself it is very

nice living in Thailand for six months while still making a full sized

western salary...

 

As to one of the questions the original poster asked nobody here in

the Thai government seems to know what to call what I do. I am NOT

employed by anybody in Thailand nor am I selling or buying anything

in Thailand and to make matters a little more complicated I always

log in remotely to my machine in Canada then do my trading from

there so in actual fact my IP on my trading platforms are showing

as having me technically located in Canada while I trade..I have

asked them (the Thai Gov't) if I was expected to have some sort of

work permit, but my computer is in Canada, my brokerage accounts

are based in the US and have the profits wired to my Canadian

account and withdraw here from my ATM card.. so to this point

they have NO official stance on it.. I'm sure that will change at

some point as they figure out what to call it and how to tax it.

 

J

[LocalYokul 177]

oddly enough, I was considering getting back into trading forex again

 

I used to trade and do well, until Sep 11th took out about 60% of my account

 

after that, my trading was a mental block, and suffered.

 

now that I am a little more secure, and have some money to play with, I am looking at playing with those long dormant accounts

 

anyone sell USD/JPY last night ?

[Canadian_verbal_kint 0]

anyone sell USD/JPY last night ?

 

Much too volatile pair for me.

 

I prefer to stick to the old boring but predictable GBP/USD you only a single

pair that you comfy with and a method of reading it you have faith in and

that's that.

 

Mind you unlike so many of the so-called trading Guru's out there I am

not looking to get rich, just pay my bills and stick some money in a few

other things here and there... which I do believe makes me a better

trading as I don't ever trade with "scared money"

 

CVK

[Soi_6_Slider 0]

Day trading will be very hard to accomplish, but there a several old reliable methods to trade profitably. None will be get rich quick and there will be drawdowns. I suggest looking into Volatility Breakout methods and stick to the ones that seem the more simple. Simple works you just have to learn to trade through the drawdowns that will unevitably occur.

[jacko 8,766]

I have always respected Owen's opinions, but my practical experience has differred. I had a forex trading account recommended to me, and I saw statements for the previous 12 months showing healthy profits. So I decided it was a high risk 'gamble' and I opened an account, using money I could 'afford to lose'. The way my account works does not match the way Owen describes. They make a put or call, and I either lose or profit for each trade. They trade 5-10 times per month....if there are more gains than losses that month, I am ahead....minus charges. For example on a $10,000 account, a trade either loses or gains $500 (on $US/€ movements). Losses and gains are limited, only a part of my account is risked. If it gains 6 times, loses four that month, I am ahead $1000 minus charges, about $500. If they lose 10 times that month, I am down $5500.

 

I have had an account for 8 months, profits each month, healthy some months. I do not do the trading myself, I have someone who has experience and a track record who does that. I am withdrawing money now to consolidate profits.

 

I am presently 'losing' money on fixed term deposits in the UK that give interest rates below inflation!

 

It might be fun to 'do it yourself'... but while I acknowledge I am in a high risk environment, I don't mess about with forex and loaded weapons myself.

Edited September 10, 2008 by jacko

[Alfred 26]

Amazes me that people think trading is an easy business, reality is its one of the hardest ways to earn a living and takes a hell of a lot longer to earn than most people think, most who start out fail, ask yourself do you think you could become a doctor by reading a whole load of books and doing research on the Internet ?

 

What most people don't realise is that trading isn't all about buying and selling its actually about risk management, cut your losses and let your profits run, problem is most people who try and trade break this golden rule, reality also is most of the worlds most successful traders actually lose more trades than they win but again most people cant get there heads around that, as a n example put it this way is you risk $100 to make $1000 and are 40% profitable, on your 60% of losing trades you lose $600 but on your 40% of winning trades you make $4000, $4000 - $600 = a profit of $$3400 but you only got it right 40% of the time.

 

In a nut shell along with money management which again for example. say you will risk 2% of your capitol which is $50000 on any 1 trade, so 2% of $50K is $1000 and using the futures market as an example you divide that by the contract risk, lets say its $300 so you could trade 3 contracts 100/3 = 3.33, if you lose then your account is $49000 so your 2% risk is $980 etc etc, if you win say $500 per contract then your account is $51,500 so your risk is $1030 etc etc.

 

Ive traded for a number of years and believe me its hard and amongst other things emotionally very hard, imagine going to work week in week out and not getting paid or actually having to pay for doing so ?, this is the reality of trading for a living at times, people think full time traders are larger than life characters who make $$$$$$$$$$$$$, reality is some do but think of it like a pro sportsman, for every tiger woods or Roger Federer there are tens of thousands of golf/tennis player just making average wage just waiting for there chance or a slice of luck, this is were iam, i make a living from trading but its very very hard, very lonely at times and a constant battle.

 

Good luck yo anyone who thinks its a matter of a few hours a day then off out on the Yacht or Ferrari without a care int eh world as many so called market educators would have you believe.

[vegasdave 0]

Well stated by many of you. As Alfred said if does seem to be about money management and self control. There is something called the Kelly, or kelly system. It is a formula that allows you to determine your risk of ruin. Basiclly it helps determine an amount of your stake to invest in each trade. Based on several criteria. You can also set you tolerance as well. Many people will use a standard number like 2% or 3% of your account on a trade. But a Kelly number may more accurately reflect what you should or shouldn't be risking. This formula applies to investing, and gambling. I first became exposed to it through a team of professional gamblers. Very successful ones I might add. Here is a link with a bit about it

http://www.investopedia.com/articles/trading/04/091504.asp

[Soi_6_Slider 0]

You can read Kelly and books by Ralph Vince etc...but really if you have a trading plan that has a decent edge then 1% per trade, more or less, should be adequate enough. If your system is a loser in the long term then no MM scheme will work.

 

I've been studying a while now and I have a couple systems I just need to do some optimizing and I'll be ready to go live. I know the characteristics of the systems and I am prepared for the drawdowns, this will be a long term aspiration for me that I take very seriously. I hope to someday be able to spend 6 mos a year in LOS with FOREX helping me accomplish it.

 

Books I recommend: Way of the Turtle by Curtis Faith, Long Term Secrets to Short Term Trading by Larry Williams, Day Trading with Short Term Price Patterns and Opening Range Breakouts by Toby Crabel...

 

These mostly center around Futures but alot is applicable to trading forex as well.

Edited September 11, 2008 by Soi_6_Slider

[vegasdave 0]

Of course no MM will ever overcome a bad trading method. But it will allow you to have a clear way of managing drawdowns and over all control of your risk of ruin. I do agree if you can find a consistant EV (expected value) and you are able to sustain the most extreme fluctuations then you have a reasonable chance of making a bit of money. I think where most people fail is in terms of not having enough funds to make it through the fluctuations. Again this is where a specific MM plan and being able to emotionaly take the ride down come into play.

[Soi_6_Slider 0]

Trading very well may be one of the hardest ways to make money in the world but it's also the best business in the world IMHO...

 

"What one man can do...another can do." I really believe that.

[NorCalKid 1]

I found this to be a very interesting thread. I didn’t think you could day trade from Pattaya with the crappie internet. I am just starting to trade options on a practice account. Mostly covered calls(30 day). I am just starting to get the hang of it. It seems to be a fairly conservative way to trade. And most importantly I am comfortable with the risk. Course I guess that might change when I am putting up real money.

If anybody has any advice for me I would welcome it.

[Alfred 26]

Trading very well may be one of the hardest ways to make money in the world but it's also the best business in the world IMHO...

 

"What one man can do...another can do." I really believe that.

 

I agree 100%, problem is most people could do it but cant, is emotionally a nightmare at times, when things are going well its easy but most of the time they wont be !, trading is about losing and not about winning, winning is easy, its how you handle your losses that counts.

 

First and foremost you need a plan and a plan with an edge or a "Positive expectancy", strict discipline to follow your trading rules and not deviate not matter how hard the temptation, Casinos have a very small edge in the games they offer but still rake the money in over time, sure they get the odd punter who makes a fortune and don't they promote that when it happens because they know all the losses from the average joe will cover the big loss and some.

 

Trading is also remarkably simple and again this presents problems for the wanna be trader who's looking for the secret formula that doesnt exist !

 

If your seriously interested in trading, then read Market Wizards by Jack Schwager, this is interviews with some of the worlds top traders and gives a terrific insight into there world and what elements make for success.

[NorCalKid 1]

If your seriously interested in trading, then read Market Wizards by Jack Schwager, this is interviews with some of the worlds top traders and gives a terrific insight into there world and what elements make for success.

 

Just looked for this book on amazon. Looks like there is a new version coming out this week.

 

The New Market Wizards: Conversations with America's Top Traders by Jack D. Schwager (Hardcover - Sep 15, 2008)

[Alfred 26]

Just looked for this book on amazon. Looks like there is a new version coming out this week.

 

The New Market Wizards: Conversations with America's Top Traders by Jack D. Schwager (Hardcover - Sep 15, 2008)

 

There are 2 books, New Market Wizards is more recent although has been out for a few years, like the original, its excellent and a must read for anyone who wants to trade.