Noob Question(s)

Beginner Questions
21

the reason i get a bit confused is because the thing AIN’T EXPLAINED PROPERLY, ONLY HALFLY .(even in the course)

you guys are saying that you don t trade with anybody, you just bet with your broker …and than i read something like this on baby pips that says “Because the forex market is so enormous, it is also extremely liquid. This is an advantage because it means that under normal market conditions, with a click of a mouse you can instantaneously buy and sell at will as there will usually be someone in the market willing to take the other side of your trade” witch would suggest that in fact you are trading with other people. so is one or the other true or both?

but the confusion stems further because they can’t both be true (at least in this form) because of the fact that forex has no middlemen (i;ve been reading the course yes)
witch means you ain’t buying or selling to other people trough the broker, so how does it work?

22

or… you are MISUNDERSTANDING IT and they can both be true, have you considered that ?

I understand, but what is PROPERLY
by WHO’S DEFINITION is it PROPER

clearly babypips can never explain something that EVERYONE will understand… not a chance.
they can only hope to reach out to the majority

you clearly are not understanding it , i think you are looking at it too specifically, to be honest.

No… WE are not
i think @falstaff said that, i might be wrong, but i think it was him that used the word BET

Me personally , i don’t see it as a BET or a GAMBLE
but again… we now get into this conversation of who defines the words BET and GAMBLE in what way
and how is PROPER defined

bottom line, everything is your own point of view, at times you may share a common point of view with other people.
at times you may PARITALLY share a common point of view

i don’t see forex and trading (if done correctly) like going to a casino and GAMBLING in the traditional sense of the word

Now. let me give 2 points of views here

Point 1 - guy walks into a bar … hehe
no… Guy walks into a Casino… yes, a casino…
walks up to a blackjack table , PUT MONEY DOWN TO PLAY 1 HAND

this can be interpreted as A BET also as a Wager, technically you could call it a trade
so we also need to consider THE ENVIRONMENT in which we are speaking

is a BET necessarily bad… NO IT’S NOT
but me personally , i do not mentally like to associate gambling with trading, so i avoid words that are used in casino with trading. now, thats my thing… ok
you can develop your own thing

i think when falstaff says bet, maybe you are interpreting a bit different

you see, you’ll here BET a lot on binary Sites
Now… forex and binary are not exactly the same thing and the risks are far different
but, if you look at it like “Trading is not gambling” the someone on a Binary Site says… “i’m placing a bet” then Falstaff says , I’m placing a bet

you then put 2 and 2 together and say "oh… well… forex then must be a gamble"
then you associate that with a casino
and that leads to another thing and you eventually get to a frame of mind that says, if you put money down on forex, there is no way you will win

WHICH IS INCORRECT

so… you are going too far with this and you are misinterpreting a lot of it, that’s the problem.

yes…
but i could also say this to an electronics engineering student

Because of the nature of electricity , it is very useful
and then… the guy goes on a job site and touches two wrong wires and dies…
how is that useful you might ask hehe

Mate, you need to take things with a grain of salt
and you need to understand that the advice in the course IS GENERAL ok GENERAL BASIC ADVICE

just like Mathematics… YOU ARE GIVEN A SET OF BASE RULES TO FOLLOW
then… HOW YOU APPLY THOSE RULES IS UP TO YOU

you can use mathematics to calculate your wages
or
you can use mathematics to work out how many pounds of weed you have in your plantation and how much money that will bring you when you sell it on the street

clearly the latter is better :stuck_out_tongue: Just kidding
but, you get the point right…

yes… but again, THIS IS GENERAL ADVICE

it depends how you look at it
DEFINE… I’M TRADING WITH [FILL IN THE BLANK]

now , if you mean, there are other people in the market… then yes, there are
if you mean are you directly trading with them… No you are not, but then you could be hehe
you are directly interfacing with a computer… THAT’S WHO YOU ARE TRADING WITH
and the computer aka / The Broker, finds someone to fill the other side of the trade, or the broker may take it or he may find a third party to take it … it depends.

where did you get that from ?
how are there no middlemen hehe
Your Broker is the Middle man between you and the interbank network… see. MIDDLEMAN

1 Like
23

[quote=“Martin_K, post:22, topic:136016”]
you clearly are not understanding it , i think you are looking at it too specifically, to be honest

Well yes @anon81929759 - @alexslabu23 has my position exactly right.

AS retail we are simply betting with the bookie. If the bookie feels the need to hedge some of his position on the real market because the imbalance in his books is outside his risk profile, that is his prorogative.

However as I have said before - the bookies give us an oportunity to “trade” teh markets, which would be denied to most of us if teh “brokers” were not there.

1 Like
24

Except that it isn’t just a “position”. It’s a factual statement.

Exactly.

When you “trade” with a counterparty retail spot forex “broker”, no currencies are changing hands at all. You’re betting directly a counterparty who may sometimes offset his net liability in an underlying market. But that’s his business, not yours, and it has no relevance to your transaction with the “broker”.

(Unfortunately this reality isn’t mentioned in the Babypips course.)

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25

Since when has that made the slightest difference here ? :laughing:

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26

there are no middle men (it says in the course right “here”…but “later edit” new users can;t post links,even of baby pips com ) that ;s why, witout any disrespect, i said not all things are well explained on the site.

we do have somewhat different views, but i think we can accept our differences and also reach a consensus.

so …you are trading trough your broker witch is taking your order and placing it against a) his own money b) other traders money c) a whole sale trader contract d) other possibilities

so…(from the course)“Retail market makers basically provide liquidity by “repackaging” large contract sizes from wholesalers into bite size pieces. Without them, it will be very hard for the average Joe to trade forex.” …meaning a whole sale trader can have a contract of 1000 000 units and the "other side " can be taken up by forex retail traders correct? …my question is how does an order like this work if every forex trader gives a different close time? (so the close does not happen at the same time for everybody) …so how can you close unilaterally, ? if i have a buy for 100 and the whole saler has a sell of 1000 000 and i close does the whole saler still have a sell but of 999 900?

witch means he (the hole sale trader ) is selling his 1000 000 unit contract progressively and for chuncks of it at different people at different times and prices?

can this happen to your contract to?

if my order for buy 300 is pinned against a sell of 100 from another retail trader(or it can;t be?) can my order be force closed partially by the other person (for 100) and will i still have a order for 200 buy (300 - 100) ?

i know this information isn’t even very important to trade and i don’t wanna become a broker…but for me it is interesting to know how the system works in depth and to know “what’s happening under the hood”, also if somebody else can close your contract partially or totally at any time is kinda important for trading purposes too.

p.s.: i also don t think trading is like betting…but i tried using the terminology that other users gave.

27

Martin_K can you please reply to my last post?

28

@alexslabu23

ok, let me read it

29

yes… to a degree i agree with you.

of course we can

if you are using the terminology to relate to others, that’s fine
if you believe the terminology , THAT’S A PROBLEM

as for the rest of what you said,
i agree it’s good to know what’s under the hood, i’m like that as well

BUT MATE , PLEASE UNDERSTAND THIS AS WELL OK

  • These concepts are really basic for me

  • i don’t really want to go into them

  • but the main reason , right now (and don’t take this personally ok) I have a lot going on in my life and in my business right now that FAR FAR OUTWEIGHS THIS UNIMPORTANT DISCUSSION.

I have a lot of things on my plate right now, and Respectfully, i would ask that you ask some of the other guys like Trading Viper, Trendswithbenefits, Falstaff , Bob to perhaps answer this is they have the time,
is that cool

I just have too much to think about right now and i know if i answer this i have to answer follow up questions and so on…
i don’t really want to do that right now… ok
IS THAT COOL

thanks mate

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30

sure it’s cool man, thanks for the reply and bucket loads of success to you and your business!

1 Like
31

also if anybody could help with this: I’ve been reading up on the school of pipsology and am currently reading about candle sticks (I know, really basic right)

and the text is talking in terms " a candlestick has a high and a low , a open and a close blabla " what is a bit funny is that they are using the words open and close…so can you trade only at the open of a candlestick and close at the close of the candlestick, or can you trade at any time and it’s just tht the wording is a bit confusing?

32

No, you can open a position anywhere during the candle…

Opening/closing of the Candle is Timeframe (TF) dependant… so on say the the 1 Hour Chart, a candle closes on the top of the hour and a new one opens… giving you the open and the close. The TF on a all Charts signifies the time between candles opening and closing…

Say on a 1 min Chart, a candle closes every 60 seconds and at the same time the next candle opens.

Hope this is of help…

1 Like
33

thx for the replies

so I have been watching this talk by Anton Kreil

I am confused because some people here are telling me you are not trading anything just booking bets with your broker and the difference in calculated gain or loss is denominated to your account(withc is one model) and this guy is implying you actually do trade something with other traders (even on dealing desks)

at 34:46 he is talking about the spread in dealing desk brokerage firms in terms of “if the broker has two clients he can buy at 5 and sell at 6”

so he is basically impling that you do in fact trade something with another trader (but who is also part with the same broker)

so withc one is it?

34

Hi Alex… below is a previous thread that was thrashed out a few months back, read the whole thread.

Every man and his dog put forward their view and had a say…

EdIt: Forex.com found the thread (better description) I was looking for… as I said it’s late…

2 Likes
35

thanks for the reply!! I read your post on the topic, you are basically confirming something I have been recently starting to realize. but may I ask, if this is your true opinion , why are you still on this forum and haven’t ditched forex a long time ago?

at first I was pretty enthusiastic about fx but I am begging to think more and more that I won’t be spending a dime on this shit.

36

@alexslabu23… It’s 2.30am in my TZ atm… it’s a long answer… I’m making a profit week in week out these days… sometimes small other weeks very reasonable… but I have put in 100’s (maybe over 1000) of hours (really) of demoing, reading, watching and research so I can protect my positions or lower my losses with various risk management techniques…

If you read back through my activity…you’ll see that I’m as pessimistic about the whole box and dice of FX as you are and you haven’t even started…90% lose money in this game, and it is a game against your Broker, I would say the odds are even greater…

[quote=“alexslabu23, post:35, topic:136016”]
At first I was pretty enthusiastic about fx but I am begging to think more and more that I won’t be spending a dime on this shit….[/quote]

If you want real nightmares… watch the video below…

My suggestion… read up a lot more on Forex Trading, open a FREE demo and give it a try for yourself, it won’t cost you a cent and the only thing you will lose is time…then you will be able to make a more informed decision of whether it is worth pursuing or a waste of your time and possibly resources…

DON’T pay for any courses or trading education…you have the school here on Babypips, and 1000’s of useful demonstrations, lessons and ideas on Youtube…

The hard part starting out is sifting through what is of real value and what is just a sales pitch at you…

I hope this is of some help to you…

Edit: To answer your original question… yes, you are trading against your broker, not in the open market…
You never own the currencies, you are trading CFD’s (Contracts for Difference) which is effectively betting whether your trade (position) will go up or go down… that’s it.

37

TRUE ECN/STP isn’t even possible to do from a technical point of view…there are a few ways It can be implemented but they are theoretical and not at least slightly practical…well firstly…one problem is that you can’t conduct business by unilaterally closing and opening trades, only bilaterally witch is a bit complicated to implement!! for any transaction to be completed both parties have to give their confirmation !! either a open is paired up with a close (of the same currency) but it gets tricky because the system would have to get you a person at just about the exact same time you open or close to exchange the exact same value (but idenominated in opposite currencies) witch is further more made difficult by the fact that price has just fluctuated for both of you, so what are the odds of pairing up at the exact same TIME with somebody that has your exact same VALUE after price fluctuation… ALSO another problem arises, do you know how much it actually cost (not to mention how much time it takes ) to physically exchange money from a credit account to another? you also need either somebody to be sufficiently stupid to send their money first, and then the second …to probably a third party! further more if and only if all these eh just 3 things come togheter at the exact same time (more chances for all the planets aligning) + plus the other a few little inconvinieces of how the transaction from entity to entity is actually done…well as you see it’s too complicated and the odds of it happening are really slim!! it’s either this model of little odds syncronicity OR partially closed traids and dividing a bigger trade from a party into more little trades witch also has it’s problems, I won’t get into because the post is already going for too long…also if there really was the possibility to trade other people well if everybody is buying (based on a pattern) than who’s willing to sell? NOBODY…so where’s the liquidity? basically at one time the number number of buyer / total bought capital has to exceed the number of sellers and total sold capital (or the other way around)…so somebody has to get stuck !!!(id’s say probably a lot of people) all in all these things summed up and the fact that a lot of factors have to happen in sincronicity make true ecn/stp brokers impossible, and impractical…but hey we still have the bucket shops that spy on our trades and [Removed due to Forum policy]

38

yes but I guess demoing and going live are 2 different things (even if your starting in demo capital is equal to the starting capital in live ) because I guess the broker can rape you with different tweaks.

are you actually trading profitably ? because before you edited your post you said you were consistently profitable week in and week out…was that just demo?

39

I am wondering what do the so called ecn/stp brokers PRETEND they are giving you the opportunity of trading ?

40

Didn’t edit that part…?

Live…otherwise I would be wasting my time… for example this week the first 3 days,12 positions across the NZDUSD, USDJPY and USDCHF for over 100 pips…the US Dollar was strengthening (advised a member on this forum prior who didn’t take the advise) and I profited from it… Thursday - 26 pips… Friday + 17… I work on 2 - 4% per day…Compounding is a money management strategy on it’s own…

I was trialing a strategy via PM with another on this forum…

One of the best strategies can be found here… I trade a slight variation of this…it works…