Demo Accounts and trading

Guys, I am Vicky. I am totally new to forex trading… basically I have never traded anything till now. Forex is the first kind of trading I am trying out.
I have been going through the school sessions on this site.

My question here is: I started trading with UCW (United World capital) and FXCM together. I traded with FXCM on a good upward trendline but somehow it seemed the spread was too much and I never made any profits.
On the other hand UCW seems to have a better trade system and each trade in there fetched me a good profit.
My questions are:

  1. Has anyone heard abt UCW ? Is it a respectable broker??
  2. Which broker has the best spread?

Hi Vicky

I’m no pro or senior, but I have looked into brokers a bit and to be honest, I had never heard of UWC before. Apparently they’re registered in Cyprus.

There are many things that are important when choosing a broker, and the spread is just one of them.
Financial stability is a major concern! search for forexsaviors thread on this site - everyone should read it before choosing a broker. What, if any, authority regulates them? Personally I’d hesitate to go with a broker that isn’t regulated by UK or US authorites.

Brokers that advertise zero spread, how do they make money??? Maybe through systematic slippage or something else? If it sounds to good…

It’s a difficult search, but an important one. Some well respected brokers with solid finacials (as far as I know anyway) are: GFT, Interbank FX, Alpari, FXCM, Forex.com, Oanda.

There are many others and you alone have to choose. Best of luck!

I think that perhaps you are using a time frame that may be too fast… if you are using 5 minute… go to 15 minute, that may cure your difficulty re profits…

I also suggest that u use a demo account until you have completely mastered one setup and your self… and that includes a strict trading plan and strong money management rules.

Brokers are many… I use Oanda, I like their spreads… but there are several other good ones…

Most important is that you learn to trade according to your plan… use strict money management… the broker problem will become easier as you get the basics of your trading in order…

dave

Thanks guys, for the info. The zero spread thing also bothered me a bit. I asked so to know if there was some respectable broker with the same name out there.
o990l6mh can you please point me to the thread you referring to? I cant kind it.

As, far as money management rules apply, I am trying to, I made my first trades yesterday, so was not expecting anything fly high but FXCM’s spread looked a bit steep high to me.

Looking to demo trade for atleast till 2-3 months before taking a plunge.

Like many, I’ve been happy with Oanda. You can start up on a demo and set it to the amount of money you’ll ultimately plan on trading with. Then you can really see the possibilities with your own line of equity.

Remember, it takes time. If you’re anything like me, you’ll have a few profitable trades and think you’re on your way to your first million. This will happen over and over and over. And each time you lose a decent portion of your account balance, you’ll also learn a valuable lesson if you take it as such.

Take a look here.

http://forums.babypips.com/rate-my-broker/3900-your-funds-safe-nfa-shut-down-small-forex-fcms.html

Guys, looks like my time frame was the problem not the spread :o I used four time frames viz 5 , 30, 60 and daily. Used the signals from the longer time frame to apply to 5 and [B]Voila[/B]!!! [B]Profit[/B]

Anyhow, my aim for each day is a measly 10 pips not more. So, you ppl think it is achievable???

Ten pips is easily acheiveable.

Keep in mind that the tighter the profit you go for the more the spread comes into play and works against you.

Lets say the spread is 4 and you want to make 10. From your entry the price has to move +14 pips before you hit your mark. Again not hard, but going for small profits stacks the odds agains you. The longer time frame and larger take profit you go for, the more insiginificant the spread becomes.

Though, to start, I personally recommend playing with scalping and tight profits at first, just so you see how rediculous it is compared even trading hourly candles and going with a trend. Scalping ends up being lots of work and headaches for lots less profit. Plus you pay the spread over and over and over with scalping.

P.S. the best thing you can do as a beginners is learn to spot trends that are already established and get in on a retrace and just follow it as long as you can. Don’t make the mistake of trying to find tops and bottoms, just find the trend after it’s established.

The amount of money which I can afford to lose is not more than $500. Not a very princely sum but enough to pull myself out of water if I trade just 10 pips with a full leverage position(100:1) and have the ability to stick to this plan.
I believe this plan is a long way away from the “Get rich” systems which many beginners try.
But before that I have atleast 2 months of trading before me. Wish me luck.:smiley:

If you trade with your full leverage you will be overleveraging your account. You will probably lose your account as it is a huge mistake. If you leverage your whole account, even if you have a 10 pip sL and 10 pip TP, you will lose a large chunk of your account if you use all your available leverage.

If you lose 10 pips, then fully leverage your postion again each time you will exponentally lose your account. It will happen very quickly.

I would try to work out a better system. Something to the effect of not riskying more that 1-10% per trade, over that 10 pip sl or TP. Compound your account slowly larger. If you consistently make 10 pips as your account grows, that 10 pip gain can equal more and more and still only risk x%.

For a more precise example. Lets say you only wanted to risk 1% on your account and had a -10 SL.

500 *1% = $5.00 risk

$5.00 risk / 10 SL = $00.50 cent pip value. (Trade a lot size that equals .50 cents a pip and when you lose 10 pips you’ve lost 1% of your account)

Now lets say you win your ten pips. Your account has now gone up by 1%. Now you compound and figure eveything off of $505. Keep compounding up, and when you lose compound down at your desrection.

Please don’t leverage your whole account. Sure you could get lucky and hit a few big trades, but eventually you are going to blow out. And since your account didn’t last very long you won’t have gained very much valuable experience that you need from your first account.

I prefer the conservative leverage and higher time frames…

I have a few years experience… the small time frames have burned me more than a few times…

There are many simpler systems available for daily charts and they are lucrative.

There is a thread in here ‘Technical Templates 2’, I so urge people to watch that thread, there are some excellent ideas in there.

http://forums.babypips.com/free-forex-trading-systems/19076-technical-templates-2-a.html

Ahh, forgot to add that part. I am not planning to risk more than 2% per trade.
ie no more than $10 at stake.($500 0.02)
So, 10 pips = $10
1 pip = $1
Loss of 10 pips makes me $490 and Profit $510 going on a single trade.
Taking that, I am aiming for around 10% of the money(500
0.1 = 50) in my account per day.
For that I need 50 pips a day(I know I recant my previous statement of 10 pips a day. But then , I am completely new to this and need to recalculate and recalibrate things to make them achievable and not blow up everything onto my face. )
Basically , my plan is to go from $500 to $1000 in a total of 2-3 trading weeks(Considering I have a ratio of 75:25, good days to bad days, improbable but achievable.)

Panning the whole thing out, I intend to not withdraw even a single penny for atleast 3 months(approx 13 trading weeks). The colloary of this is quite clear if you follow the calculation part.

Also, I will call it quits if I lose more than half of my trades, meaning if 3 trades go against me in a single day, dont trade.(Need to calibrate.). Following the plan, lose less-win more.

So, in a short, my plan is:

  1. Risk no more than 2% of my account.
  2. Quit for the day if already made 10% of my account.
  3. Quit for the day if you lose more than half of your trades.

Is this achievable? I dont know, maybe some experienced guys can help me out here. Give some feedback.

I know that DEMO accounts can be tricky, because they are usually 100,000 or 50,000 accounts and when we, rookies, open a Micro live account, we fund it with 100 bucks. So the question is, are there any Brokers that offer Micro Demo accounts? Of between 100 and 1000 bucks of virtual money?

Cheers.

Yes, that’s exactly what I did at IBFX. You have to specify micro account or it will default to a regular account. You can specify the balance too.

I tried IBFX but there also I have a huge demo account. Someone, please help me out to chose a good $500 demo account.

Just look at my luck…I opened an Alpari account and tried to lose money. I couldnt do that also.

You have to start another demo and start it as micro. Use their live chat to guide you through, that is what I did. They are very helpful.

I bet on a currency pair to fall below 1.2920 so I put a “Sell Stop” at 1.2920.
Next I put SL as 1.2930 (10 pips apart) and TP as 1.2910 (10 pips apart).
The “Sell Stop” is triggered but I dont make any profit/loss ie no TP or SL is triggered. Why? I am doing something wrong? Btw, it is on IBFX, do they hunt stops which might explain this??
PS:Checked my A/C history, it says deleted.:mad: I didnt even put a fixed time frame which might explain this.

Others might disagree with me, but I do not believe IBFX stop hunts. Other traders DO hunt stop, intentionally or otherwise. It’s just that stops tend to gather around the same areas of support and resistance and retraces, as that is where everyone logically puts them. If anyone stop hunts it is the banks you are trading against. They have enough power to put pressure on price and make it move a bit to a support and resistance area they know stops are clustered around. They’ll hit it, then since all the orders have been triggered, and they have their commisions, their is no reason for price to keep going that way. So, price continued where you orginally though it might. This is where traders get mad and think their broker is purposely moving price because they know where their stop is. It’s not the broker (unless you are using one that is a scam), it’s the 300 pound gorillas, the banks. It makes it look like price took a special little trip just to find your stop loss.

If you are getting stopped out a lot, it’s likely you are jumping in a move as it happens and trying to chase price. By then it’s too late, especially on the shorter time frames, the move is already on and will probably retrace by some amount.

What you want to do is go long or short when price is moving short or long. In other words if you want to go long, you wait until price is retracing short, ALREADY under your entry and stop loss. That way if it is a retrace it will go up your long will trigger and you will catch a good portion of the move. If it isn’t a retrace and the price continues short your trade won’t even trigger unless you’ve set it too short or their is a large spike for some reason.

Sure you can get some wins trying to chase price and get in move as you see it, but more often than not it will end up hurting you.

I can tell you from experience though, if you dont’ use a SL thinking someone is stop hunting and it will eventually go in your direction, you will lose a lot more when you are wrong.

I’ve asked IBFX on several occastions if anyone their trades on IBFX’s behalf. I was told they are a Straight through processor and get their liquidity from a pool of banks. I asked them the other day, “so if you don’t trade against your traders, then why do your spreads widen around news?” I was told. “Because the price and spreads are basically fed to them from the banks they deal with.”

two things to respond to here — first, i believe ALL MT4 brokers, when you register for their demo, will provide one that allows you to set the actual equity amount you wish — its located on the lower right side of the download page and you can backspace over it and enter the amount you wish.

ive often said to simply enter a lousy trade to reduce your equity, but also wondered what would happen if the trade turned GOOD — so i have to laugh a bunch at what is said below. Just try again, i guess !

NOW, im going to comment yet AGAIN about interbankfx ---- to my way of seeing, and based on real accounts, they are to be shot at dawn, or at least strung up in the same manner as Mussolinni !

use anything resembling support and resistance and set your tp — EVERYONE ELSE hits that point, EXCEPT interbank — they miss it by whatever is the spread, and now try SHORTING with them and watch as they pick a tp point ANYWHERE WITHIN THE SPREAD that they choose, once again missing the support point that everyone else hits !

maybe they dont do it with demos, but try a decently funded REAL account and see what happens, especially if your win rate is above average.

[B]with all my heart and soul, I STATE THAT INTERBANK IS THE CROOKEDIST GAME IN TOWN and have absolutely NO respect for a country that lends money to friend and foe alike, and at the same rates ![/B]

my experiences only but i have a LOT of experience !

mp

How long and what size account did you trade with IBFX? And who do you recommend as a broker?