Newbie needs helpie/is this a scam?

Beginner Questions
1

Hey im new to forex, but i have been studying it for about a year now. I know most of the technical stuff and ive spent quite a few months on a demo account. I think I have a strategy that works. But there are a few things that are bothering me and even though they may seem like outwright stupid questions im going to fire ahead with them anyway.

  1. IS THIS A SCAM?
    I know this might seem idiotic but the forex thing just seems remarably easy to me since my strategy seems to work so well. But also when I have read the legal agreements of some brokers carfully and asked them about certain aspects of contracts they have been less than friendly about it.

  2. IS RETAIL BROKERING A SCAM
    Ive heard that the retail side with its huge leverages might just be a scam and the high end stuff is where the real action is. Do i need 50 grand to get an honest chance?

  3. OANDA?
    Ive looked at miles of reviews and forums of various brokers and even though Oanda is by no means inocent it does seem to be one of the cleaner and more trustworthy broker. However having said that they were the most hostile to my questions about so of the legal stuff they expected me to sign up to. If not could anyone recommend a trustworthy broker for a first timer? Ive heard the term “kithchen” used about alot of retail brokers who are in it to conn, could someone tell me one that is not a “kithchen”?

  4. DO BROKERS BENEFIT FROM YOU LOOSING?
    I can not get a customer representative for any broker to explain to me how this works but ive seen it in countless forums. Can they? Do they? and which ones do?

  5. AVERAGE SLIPPAGE?
    my strategy very much depends on not having too much slippage. I plan to trade the euro and gbp throughout the day, I know that slippage depends on time of day but could someone give me an idea of average slippage on a busy day in the morning, afternoon and late at night? I know it depends but I just want an average

  6. Do people actually make a living from this?
    Id like to know. It seems like bull****

Thanks

PS i know its long, answering even one of the questions is much appreciated

2

according to number 1, your strategy works, so you must be making money right? So how can it be a scam?

I can’t really answer your questions but I do use Oanda and have had no problems so far. I don’t scalp so small things like slippage and spread is not such a large factor. They have very fast execution speed of orders. But I don’t like their graphing, I prefer to use a metatrader demo with another broker for charting and then place trades on Oanda.

anser to number 6, yes some do make a living.

3

I’m a Newbie also and i know at our stage how exciting it is to get responses. First time Ive actually been able to contribute. - The only stupid question is the one un-asked. :slight_smile:

The are loads of seasioned traders here that will say that it is easy. And i agree. The actual trading is easy. The hard part is the Physiology IMHO.

Would know this sorry- maybe someone else can help here.

I had a brief look into them and couldn’t tell u why i didn’t choose them. I am with GFT and i reside in Australia. GFT has been great IMHO. They have provided me with online “chat” support in an instant. Run live workshops on their platform and whenever i have called them they have been more than helpful answering ANY of my questions (and i have asked some lame ones).
Don’t have a bad word to say about them. Is early days though.

Brokers benefit from you trading. This is the spread thing. weather u win or loose.

I wouldn’t know about the times of the day. Didnt know that. I cant say i have seen any major slippage when i trade. I guess it depends on how volatile the market is at that particular time.

That question “the big guys” seem reluctant to answer although there is a whole thread on it- search it. I would say some yes but not all.

Thats what the forum is for. :slight_smile:

Have fun that is the main thing

4

[quote=“mrnice,post:1,topic:30409”]

  1. IS THIS A SCAM?
    I know this might seem idiotic but the forex thing just seems remarably easy to me since my strategy seems to work so well. But also when I have read the legal agreements of some brokers carfully and asked them about certain aspects of contracts they have been less than friendly about it.
    [/QOUTE]

Yes trading is easy, maybe too easy, just hit a button or two and you can buy or sell, the moderately hard part is getting a good stragery, but you say you have that, so thats great, however the hardest part of all is psychology, that is when fear and greed start affecting you when trading a real account. The system doesn’t amount to anything if you cannot stick to it.

Many times traders get out of a trade with a small loss or small profit even when the stragery has not given the exit signal only to find hours or days later that the trade could have been hugely profitable. Another thing that happens is traders keep holding a negative trade even when their stregery is screaming at them to get out, they keep in hoping the price will turn and end up in a huge loss.

As with anything on the net there are some scams and some real, do your research. With research also keep in mind that many who burn their accounts go around blaming their brokers. Try using one of the major retail brokers. If possible deposit with credit card and try taking out porofits in a few days or a week, if they try to scam you just hit them with a chargeback. Also now ECNs do allow accounts with lower deposits, I have heard of 5k minimum and also $400 minimum from MBTrading.

I have no personal experience with them so I can’t say one way or another. Kithchen is a new one for me, I heard bucket shop before :smiley: Personally I would not go with anyone who is hostile to me even before I signup. Try live chat again and see if you get different person. If so as that person and see what he says, the representative could have had a fight at home. It happens.

They benefit from spread and ECNs benefit from commission, They usually work out to be the same. Though some brokers may be profiting when you lose, those would be the shady ones.

It doesn’t really depend on the time of the days, it depends on news releases, market open and such stuff. Actually you should have less slippage on a busy day. Actually slippage should only be a major issue with large lots.

Yes there are people making a living from it, some on this forum even.

5

Hi mrnice

  1. This is a most nobel proffession, but like any venture involving money scam artists will always be around so proceed with caution.
  2. see above
  3. Oanda is not my broker so I cannot comment
  4. Reputable brokers want you to trade win or lose the spread is their profit
  5. Sippage has never been an issue for me, maybe your strategy needs tweeking if this is an issue for you.
  6. yes

Trading as an activity is very easy, even my cat can push a button to make a trade. Having a strategy that works on a demo account is also not hard to achieve. Preparing yourself to put theory into practice is a different matter, on which I am sure, many people will offer their opinions
best regards

6

I am hoping these answers are true. I am hoping that while I know there will always be con artists around, most of the bad stories about brokers are from people who trashed their account - maybe due to greed or fear, and find it better to blame someone else.
I trashed my first account so far, for no other reasons than greed, fear and complete ignorance of the markets.

I am also hoping I can make a decent living from this. Mainly because I have followed world politics for around 15 years, and have been interested in foreign exchange since I was younger. Only then it was an exclusive market to the big boys, and I can’t believe my luck it can now be open to me from home. Due to this I am now investing a huge amount of effort into learning and will continue to do so, I expect for a long time.

M

7

Just to clarify a few things about my post, I say i have a strategy that works but that sounds idiotic, I have a strategy that seems to bring moderate profits most of the time.

Could you recommend a broker aswell?

Thanks for the feedback

8
  1. IS THIS A SCAM?
    I know this might seem idiotic but the forex thing just seems remarably easy to me since my strategy seems to work so well. But also when I have read the legal agreements of some brokers carfully and asked them about certain aspects of contracts they have been less than friendly about it.

I agree… trading is easy and if you have a good strategy, all the better! In my opinion though a good strategy is just part of the puzzle! Also, if your strategy is good… is it good in the long term!!! Let me just say that winning in the short term is simple… everyone has lucky runs! But being profitable in the long term… that’s a whole different story all together!

  1. IS RETAIL BROKERING A SCAM
    Ive heard that the retail side with its huge leverages might just be a scam and the high end stuff is where the real action is. Do i need 50 grand to get an honest chance?

Is it a scam??? No! it’s a business! Now personally I would not use huge leverage! It will bite you if you are not careful! As for the needing 50 grand… nope! Just play in mini accounts and play in your bracket! That’s the key… Money Management! Just look around the forums about Money Management!!! that is the key to keeping your accounts!

  1. OANDA?
    Ive looked at miles of reviews and forums of various brokers and even though Oanda is by no means inocent it does seem to be one of the cleaner and more trustworthy broker. However having said that they were the most hostile to my questions about so of the legal stuff they expected me to sign up to. If not could anyone recommend a trustworthy broker for a first timer? Ive heard the term “kithchen” used about alot of retail brokers who are in it to conn, could someone tell me one that is not a “kithchen”?

Cant answer this one… I trade through STP brokers… JadeFX.

  1. DO BROKERS BENEFIT FROM YOU LOOSING?
    I can not get a customer representative for any broker to explain to me how this works but ive seen it in countless forums. Can they? Do they? and which ones do?

You should read the book “Beat the Forex Dealer” by Agustin Silvani it goes into great detail how brokers trade against you and more importantly how to beat them!

  1. AVERAGE SLIPPAGE?
    my strategy very much depends on not having too much slippage. I plan to trade the euro and gbp throughout the day, I know that slippage depends on time of day but could someone give me an idea of average slippage on a busy day in the morning, afternoon and late at night? I know it depends but I just want an average

Slippage is part of the game! This is (in my opinion) why scalping is so difficult! Read the book mentioned above!!! But this is one of the tactics used by brokers… for the most part I really only trade at STP Brokers… like Jade since they don’t take trades against you!

  1. Do people actually make a living from this?
    Id like to know. It seems like bull****

Yes… and make quite a good living at that! In a lot of cases better than some of the professions and are known to make a lot of $$

Hope it helps!!

9

Choose a big regulated broker from the US or UK and you will have no problems.

Choose a little known broker registered in a place like Russia or the Seychelles and it might be a different story.

No, it’s not a scam. No, you don’t need 50k to get a fair chance.

I trade live with Oanda and IMHO they’re the cream of the crop in everything except their charting. For that I use a MT4 demo.

So called bucket shop brokers benefit when you lose. The way this works is that they just match their clients orders against each other, not passing anything on to the interbank market.
Then they expect the net result of their clients positions to be a loss, which means that the broker simply collects the difference. since most retail clients are constant losers, this works most of the time.
However, if John God-like opens an account with such a broker and trades very successfully, this means that the broker may start losing money from the sum of all their clients orders. since they do not pass these trades on to the interbank market, the winnings for John comes out of the brokers pockets. Naturally these brokers play all sorts of tricks to get rid of the likes of John.

Respectable brokers do the same but with a difference - they offset any imbalance in their order book in the interbank market. This means that if their clients’ net position isn’t even between longs and shorts, they’ll open a position in the interbank market to hedge that imbalance. Such a broker will not lose money when you win and I dare say that all big UK/US brokers do this.

From my experience with IBFX and Oanda, close to zero.

Yes, some do. Not me yet, but I’m working to get there.

10

The are loads of seasioned traders here that will say that it is easy. And i agree. The actual trading is easy. The hard part is the Physiology IMHO.

Excuse me but, what is IMHO?

I think you need more experience and trade real money on your own, choose well your broker also, I’m a brand new in this world and still learning but I’m pretty sure very few people make profit consistently.

11

I believe it is “In My Humble Opinion” and he meant Psychology. All these acronyms like IMHO are so widely used in North America especially in USA that i find it bit confusing when people use it in a global forum. However, slowly getting used to it. :confused:

Muthu.

13

thanks for clearing it out!

14

This is a good websit for FX scams