So I’ve been reading as much as i can on the babypips school,
and opened a demo account just to play with (I have no clue what I’m doing)
anyways I’ve been playing around opening trades and one currency pair (I forget
which one) I opened up a trade (long) and was automatically at a loss of 50 pips. I sold
it off and went (short) on the same pair and was again losing a significant amount, why was I losing
so much right off the bat? was that due to the spread of the currency pair?
Are you sure it wasn’t 5 pips, or 50 “pipettes”?
What were the prices at which you opened and closed the trade? (They’ll still show in your demo account.)
What was the spread showing when you entered the trade?
If you don’t know, see what the pair was and what its spread is now - that might give you an indication?
It’s Saturday evening: were you trying to do “weekend trading”, when almost all the interbank market is closed and spreads (where you can trade at all) can be ridiculous? Forex trading is 24/5, not 24/7.
These are the questions that immediately spring to mind, but it’s difficult to start guessing any more without knowing any more.
The only other explanation, besides lexy’s, is that your trade coincided with an important event that moved that currency pair significantly. Twice.
But it’s highly unlikely.
This happens because of spreads. You should monitor the spread at the time of your trade and if you are newbie you should first learn about spreads. Different brokers provide account types with different types of spread. they are of two kinds Fixed Spread and Variable spread. The spread you pay depends on market volatility and the currency pairing that is traded. And also when you calculate your position just don’t take closing price and opening price into consideration. The broker might have widened your position by charging extra spread and making his profit. Second thing to watch for is commission that the broker is charging, for example $8 per standard lot (100,000 Units). Commission can be fixed or relative also (%, percentage basis). There are lots of hidden charges that a broker charges, like inactivity fees, margin costs, monthly minimums. Also, Swap chargers or Overnight chargers should be considered.
Continue playing with the demo account and and eventually the experience and the mistakes will teach you. Just some heads up: when ever you are ready to start developing your strategy you should do it on a live account.
I’m also guessing it’s probably because of the spread if you’re down by an amount from the moment you open a trade, but it’s likely that you’re down by either 5 pips or 50 “pipettes” as lexys said. Or you might also need to check your leverage and lot sizes. How about sharing a screenshot of your trade orders/opened trade so the folks in here can weigh in and help you out?