I’m really confused. I know this is a super-duper-noob question, but it would really be nice if you help me.
ETF = you invest in a fund manager who is carrying a basket of different shares/instruments.
Currency ETF = a basket of different currencies.
If the fund manager close down/runaway then say bye bye to your $$.
ETFs are meant for hedging purposes and you gotta know the risk of each individual etf. Some comes with normal 1x risk while others 3x risk or higher.
Pip = your profit/loss is determine by per pip value x the lot size you set.
$1 = 1 dollar
$0.01 = 1 cent/tick
$0.0001 = 1 pip
do not forget to calculate the pip value if a pair’s quote currency is different from your account’s deposit currency.
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ETF - you basically invest in someone who is carrying a “basket” or collection of different currencies, Currency ETFs - a group of different currencies, PIP determines your loss and profit. Am I correct?
There are many types of ETF & currency is just 1 of them. which is why it’s called Currency ETF.
Stocks ETF, Indices ETF, etc
then under Currency ETF, you invest in the type of basket.
Forex move by pip & to determine how much you wanna profit/lose per pip depends on your lot size but 1st you need to determine per pip value in term of your account deposit currency.
if im buying EUR/USD using USD account then the per pip value is $10 per standard lot. Always.
if im buying USD/JPY using USD account then the per pip value is $9.31 per standard lot. Currently.
as long the USD/(JPY) quote currency is not the same as your account currency, you need to calculate the pip value.
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No. What elden wrote is not fully correct.
A ETF is a exchange traded fund. They are not actively managed (not in the traditional way of fund managememt). They just buy a certain assets in a wholly without any mamager involved.
ETFs are strictly regulated, it never has happened (not to my knowledge) that any money has been stolen from an ETF by a manager (ETFs have no managers in a traditional way).
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the manager im referring to is a company & the company could be a 1 man show.
If the company close down or decided to take down the ETF, your $$ flies.
ETF is like platform for managers to put up their basket for people to invest.
go on and google ‘how many basket have been taken off the ETF.’
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Ok, whatever you say dood.
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Same as anything: due diligence i.e. don’t trade obscure and overly creative and imaginative ETFs.
But they are regulated.
Dunno why the OP is asking about Currency ETFs though. Better bet (no pun intended) would be Currency Futures (if you’re that hell bent on trading FOREX pairs anyway) as they too are regulated.
As for the other questions about Pips: you DOODS have more patience than I have I’ll tell you.
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Haha, very funny @dpaterso.
In truth though @icebunny08, I know it’s not what you want to hear…
But if you really are asking these types of questions then maybe you really should take a few steps back and be sure you understand quite a lot about these terminologies before ever thinking of committing your money into trading or investing.
Most of the over 70% of traders you hear failing in the Forex trading world actually know quite a lot about these things and still end up failing.
Hopefully you got my point. :
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That’s the proper description on ETF! Thanks De.
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Nope, that is not the best description or explanation. It was just too vague.
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So… ETFs are owned by financial companies or institutions, they sell and buy shares to people, and… 
Am I wrong?
indices are managed by the government.
ETF is a platform for investment companies to put up their portfolio for people to invest. Nobody in the world will gather a basket of anyhow for people to invest without a manager.
Who the “They” are they referring to? Maybe God knows.
Anyway icebunny, ETF is not meant for sole investment purpose. so best not touch it even currency futures.
So… It doesn’t matter if I don’t get currency ETFs to the “fullest”? Also, what’s wrong with currency futures?
ETF is nothing. Spot Forex is the way to go for newcomers.
Futures contracts are expensive. high margin, low leverage, has expiry, not utterly flexible on position sizing and easily manipulated by big boys. it’s not worth trading it unless you have few hundred K to play with.
This is quite possibly the worst statement I have ever read on these forums since 2007. And that takes some doing.
As for Futures: nothing stopping somebody from trading CFDs on Futures (CFDs that track the underlying Futures Contract). But you do indeed require DECENT capital due to the costs involved and little to no leverage. But why that’s an issue (low leverage) is beyond me.
And as far as manipulation goes: are your trying to tell me that the S&P is manipulated??? Because if so then it means the SPY SPDR ETF is also manipulated.
Dude. Forgive my being blunt here: but you’re out of your depth.
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Here you can read all.
Etfs are arbitrary product (entities) which means that any money put in the ebtity will be backed/secured with direct purchase of an asset.
You put 1000 in it and they buy stocks for 1000.
Thats why @Elden_Caramba explanation is so wrong. A etf doesnt go broke unless the assets (usually stocks and bonds) become completely worthless. A “manager” can not steal any money as hed first need to sell assets to have liquid funds. Etfs do not have cash at hand because they immediately transform cash to assets. A sale of assets without any owner/customer backed withdrawal of funds would blink all red lights in the etfs financial authority entity and whoever was dumb enough to try to thief money out will land in jail before he manages to sit his ass into his new ferrari.
An etf sells and buys its assets under prestated terms. Thats why they all are called in a special way. The name itself explains its area of operations.
Example:
Axa all india tracking etf.
Buys all shares awailable on the indian stock exchange.
Pimco biotech tracker etf
Buys any biotech company shares
Merryl lynch US automotove tracker etf
Buys any car and car supplyer stocks available in USA.
Etc etc. You get the picture. These ETFs are not managed. As soon as someone invest money into it, the etf automatically buys the stocks from the open market at actual prices. If the stocks the etf own go up, the etf worth (share price) goes up exactly the same %age amount.
So ETFs are owned by the people who invested in them. Not by companues who launched them and gave there name for it.
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It’s an honest undeniable fact that people who are new to trading should not be touching financial instruments with complicated structure. Just name the name the hardest instruments follow by rank.
I’m giving him the figures, not stopping him what so ever.
as for manipulation on future contact, it’s a YES. You have yet to see the market depth when big boys are messing around with order flow.
Somehow, ‘FAZ’ were gathered out of no where for people to short for financial crisis.
I have yet to see do I??? LOL!!! You’re not talking to some two-bit spot FOREX trader here sonny…
Fact of the matter is: I trade FUTURES, ETFS, and CFDS. Only things I do not trade AT THE MOMENT are the cash Indices due to a temporary capital constraint on my part.
And while you may be quite correct that some manipulation goes on with order flow: you’re talking about quick ins and outs which is akin to scalping. It has absolutely no effect whatsoever on a daily chart of the contract.
As for your last post: so??? People made money not??? That being said (and I commented on this before): I’d not personally trade some fancy and obscure convoluted ETF. But there’s absolutely nothing to concern yourself when it comes to Index and Commodity Trackers.
And to say to somebody that spot FOREX is the way to learn to trade??? Do you work for a broker or something??? LOL!!! Only thing spot FOREX is going to teach someone is how to lose their money.
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