I’ve always had a slight interest in trading but never really bother to learn much. For something just to read I picked up The Way of the Turtle. Long story short: I think I’m hooked. Loved the book and the way this guy thinks.
Forex seemed like the natural choice for someone with less than 10K to get started in, plus i work full time too.
A couple questions–
In Forex it would seem to me that the pairs to a certain extent are probably related. Does this ever cause diversification/risk of ruin issues? Like i think I’m making 5 seperate trades but in reality I am making the same basic trade 5 times.
It seems the average spread is ussally 4 pips or so, i would guess in the long run these add up. For the average trader what % does this end up costing you in your years results?
Most accounts are leveraged. Does this leveraging cost you? most people don’t lend money for free.
Do mini forex accounts have higher fees per $ traded than regular accounts? is there any diffenence other than the size of the contract/lots?
That makes since, someone making several quick trades just trying to barely beat the spread would pay alot more than someone making a few big longer term trades
It is a great book - particularly the description of different biases.
For costs, if you’re holding positions overnight, don’t forget there’s also the swap rates (worked out from the differential of the interest rates on the pair you’re trading). Sometimes works in your favour, sometimes against you, depending on whether you’re long or short.
Newbies read too much and think too much
and then what happens? Yup, they get
totally confused and have sorts of misguided
and conflicting “systems” at play all at once.
Correlations are not important, diversification
it itself is overrated, and swap rates also
completely unimportant. The fact that
some traders concentrate on that tells
me that they are not making winning trades.
If they did, negative swaps won’t bother them.
Also they won’t sit around looking for correlated
pairs to trade thinking diversification on top of it.
Simple advice given by many many others.
Pick one pair, learn it, trade it with a stringent
money management rules that you will never
stray from. Why newbies look at trading
more than one pair or even upto 10 pairs
is beyond me. Just trade EUR/USD. And
learn to do it effectively and profitably.
Just wanted to take this opportunity to immediately recognize and admire the constructive and helpful nature of your posts today! I must say I am impressed. It is like a whole new you, and I must say that I could come to admire this guy.
I hope you weren’t offended by my replies to a couple of your posts the other day, but now you know that I will compliment as quickly as I will criticize.
The best friends I have ever had in my entire life have all been people that I have hated the most when I first met them. So lets say, lesson learned on that one. Therefore, I never hold grudges or stay angry at anyone for more than about 5 minutes.
Please do not take this message as some kind of sarcasm, I am serious.