Well I traded stocks for a few years and switched to FX just last week and have been adjusting my system to fit the FX market. Don’t know how much i like the Idea of the 100:1 leverage or spread instead of just a flat trading fee. But I am currently running a simple strategy of range trading on 1, 5, and 15 minute charts trading the ranges of the trend. Had a fairly rough start the few days…made 400 dollars with a $250 account(I realize opening an account with $250 is not smart but i more of wanted to check the “hype” of FX.) The spread gets me because I am used to being able to profit from a couple point increase on a stock if i purchase a large enough quantity but here i need on most at least a 5 pip movement to see anything.
My next problem was I was not smart enough to take my earnings and exit the market for the week on my first friday. I decided I would pull out of my trades at 4:55 or so as i was in a small uptrend in a trade but The pair was undealable at 4:54EST and I got stuck holding it for the weekend and through the gap on sunday night and triggered a margin call on my 2 lots of 20,000 and lost nearly all of my account.
All 15 trades today have been profitable(now that I spent 3 days hitting the books hard on FX and truely played by my game plan). Each trade has been making me 5-15 pips each but i am risking about the same as I am making on each trade with trading the ranges.
Another thing I am having issues with is the only software I can find to work with Forex.com is there FOREXTrader PRO sofware which is great but has one thing that has made me enter bad trades. The software fails to create a new candle at the end of the period and keeps adjusting the previouse candles for about 4 minutes after the end of the period then it splits.
Any critiques, comments, suggestions or anything is highly appreciated.
I would recommend a better broker. One that offers the MT4 platform. Also, sounds like you are way over risking, but you probably know that. I stick to a set stop loss, with max risk 2% of the account.
Since you are still getting comfortable, and trading with a small amount of money to start, you will need micro lots aka 0.01 lots to maintian the proper risk. Forex will burn your account to ashes pretty quickly if you are not managing your risk. So, a broker that offers 0.01 sized lots is best for now.
Also, since you don’t like spread (and who does!?) there are brokers out there that offer extreamly small spreads and take a commision.
You also want to watch big news releases, as your chart may go a bit nuts at the release, and spread can get very wide. Also hard to get orders filled…slippage.
Well that’s all I can think of for now. Good Luck.
PS Wouldnt mind hearing your strategy if you care to share, and maybe we can offer some help adapting it to FX as you said.
I think that once you get used to large spreads and the different dynamics of Forex, you will like it much better than stocks. I used to dabble in stocks, but now I have realized that investing in a sovereign nation is a much better idea than putting your money into the hands of potentially irresponsible corporations. Forex also offers better liquidity and is not a manipulated as stocks. Also, I don’t know how you were trading your stocks, but with such high margin, you want to limit your losses to a smaller portion of your account so you don’t risk another margin call. Also try making longer trades, it reduces stress and the amount of time you need to sit at the computer. You may find that contrary to stocks, Forex develops large trend changes between months, while most stocks take many months to change trend. Also, you should read through the “School of Pipsology”.
I read through the school here on babypips before i started trading and I think I should have listened to the part about start with a DEMO account.
My time doing stocks was primarily over the counter penny stocks doing day trading with them. But got extremely tired of the highly manipulated market( especially in the penny stock world)
But basicaly I like to determine at what levels the market is in a strong trend(Daily, Hourly, 15 min, 5min) and level below the trend where it is ranging alot) And when I have a strong trend I will sit for a few hours trading the Ranges by entering at the bottom of the range in an uptrend, and without a limit set follow a couple of pips behind the range up with my stop loss order after it has reached about +3 pips profit so it will catch at the peak of the range(unless it fakes out and goes down a few pips then continues the range)
and of course opposite for a down trade, and i never trade against the trend on my range trading. And to determine the entry point I rely on Candle Stick Patterns, Support Levels determined by trend, Stochastic Oscilator, Williams %R, MACD, and Bollinger bands
Not sure what brokers offer micro lots. The low spread/commision brokers (ECN) are least likey to do that. You should research brokers and see what works for you at this point… some of the popular ones are alpari, Odl, FXDD, MB. One of those might suit your needs. Google “broker comparasion”, you should find some charts that will run down the features and compare.
FXCM has probably the lowest minnimum deposit, but I can tell you now stay away from them. You should be able to find $50 to $100 range for minimum deposit with a decent broker.
what kind of leverage do they offer…although I do feel nervouse about 100:1 i have sdeen some with 5:1 and i would be an old man before i ever see a dollar profit
one rule I learned is that if your broker gives you “requotes” then you should run far far away and never look back!
I can’t give you advice for all brokers, but I’ve traded live accounts with forex.com, GFT, and Oanda.
…and Oanda literally makes a mockery of the other 2. Spreads are tighter, order execution is flawless in comparison (no requotes with oanda, ever!), and of course their price ticker runs 24/7. Which makes more sense really, because if the FX is an OTC market, it should never really close.
Just my 2 cents, and yeah range trading works just fine here too. technical analysis is pretty universal I’d think. technical traders look for volatility and liquidity and FX has mega-boatloads of both, especially during the euro/US overlap.
so you recommend Oanda?..i’ll research them some tomorow…right now I am involved in a trade…first time trying to ride a trend and I want to walk away from the PC so I dont go against my strategy and make a stupid exit, but my nerves keep making me stare at the charts. But I’ll probably try a demo account with Oanda.
well there’s no movement between friday at 3pm and about sunday at Noon. But the point is that you could exit a trade or get into if you wanted a jump on the Sunday open. The spreads are wide of course because there’s pretty much no liquidity. Then as the market starts moving sunday afternoon, spreads start to tighten and are pretty much at optimal levels by 5pm. All my times are MDT or EDT-02:00 if you’re in the East.
what pair are you trading right now? I’ll give you the spread Oanda is offering at this very moment, and you can compare…
I just looked at there comparison real quick…the only thing i couldnt find is what is there minimum deposit. and is there any quality free trading software available for it
I don’t believe there is a minimum deposit now that I think about it. I started my account with $1000, for what it’s worth.
well you did the comparison that’s good, but for instance the GBP/JPY is trading at a 2.7pip spread right now. I know some brokers charge 7-9pips on the GBP/JPY and I hope someone reads this and realizes that they don’t have to be getting ripped off if they don’t want to!
and it comes with charts with all the most common indicators. If you’re into running EAs it’s probably not for you. If you trade simple price action setups, it’s just fine
well thanks for the enlightenment on that…When i signed up at Forex.com i didnt do much research before hand and the guy who got me into explained it as them being like the central market