Hello all,
Is it possible to simply invest in a currency or commodity without leverage or a stop loss.
This way it would not matter how low the price of the currency or commodity drops because you can hold it until it rises again.
I am aware that some currencies or commodities may not rise again for several years, but this isn’t always the case.
I just want to know if it is possible to trade in this manner.
Thanks in advance.
Many brokers give you the option to to choose 1:1 leverage. However you will sill pay/earn swaps. So you need to be cognizant of that. Its not like buying a physical ounce of gold and selling it years later.
Go to your local airport and swap your home currency out.
i.e. If you live in America and want to invest in PESO, head down to the airport with X amount of $ and simply exchange it out. It sounds like you just want to invest long term and not have to fuss with the intricacies of trading.
Maybe there are some ETFs out there or mutual funds which track currencies as well.
Just a thought.
FlyPippin, let me start by complimenting you on your way of thinking. There are those of us who insist on being “traders,” meaning we have to be glued to the charts and jumping in and out of positions. Taking an investor approach is probably a lot more sane and has a better chance of succeeding than trying to scalp the m5. However…
I started my trading career with futures and watched many of my friends/associates lose their accounts with the premise, “Hogs just can’t go any lower, I’m gonna stick it out.” In fact, it was not uncommon to see them adding positions as prices reached what they thought were extreme levels, only to see the commodity reach yet another “extreme.” Stochastics can provide us a good education, i.e., “It is oversold, so I’m gonna buy.” “Now, it’s way oversold, so I’m gonna buy some more.” “Now, it’s way, way oversold and I have a margin call.” The point is, we can certainly take an investor’s approach to the currency market. But, we can also be smart about it, entering and exiting on only the broadest indications and saving ourselves from dramatic moves against us.
Look at the weekly for gbp/usd. Clearly, there are five points of support in the neighborhood of 1.5100-1.5400, resistance sets in about 1.6300, and there is another series of resistance points around 1.6700 to 1.7000. If you are going to invest, why not try to pick good places to start and stop? Of course, s/r levels may not hold, that’s why we call it “gamblin’” as any other investment, and that’s why we would get out if they didn’t hold.
George Soros went long $800 million gold and dumped it in 2011. He was the first major player to get out. From late 2011 to now, gold has dropped from 1700 to 1200. Hmmm…maybe we just need to watch what Soros does. On the other hand, I do remember a situation in the 80’s where one of those guys who plays in his league got stubborn, “It can’t go any lower,” and lost billions. Just mho, I will always trade with a stop-loss.
Most brokers will offer you the option to trade without leverage, but that does not mean that you can hold on to losing trades until they turn around. It simply means a bad trader may trade longer before blowing the account.
It is possible but you need much capital to trade without leverage. Some kind of stop loss would be appropriate I think
you can definately trade in the absence of leverage and stoploss but you have to risk your capital…
Trading without stop loss is possible but leverage we have to decide how much is used in trading it may be low or high . Stop loss is not the necessary part of trading it is just a managing tool that saves you from big loss if you are not good in risk management and market analysis.
Stop Loss is of utmost benefit. Also, leverage help you trade without risking much of your capital and it also gives you the ability to purchase more with little capital. Both options are very beneficial, I don’t see why you don’t want to use them.
If you haven’t studied and wish to go on potluck, then holding on to losers might be for you. If you study hard and learn with experience, then you wont tolerate tying up your capital with failed investment decisions. The old axiom, “Time is money”, does ring true. Thing is, the better you get the less your stop losses are triggered and unless you’re wealthy, leverage is the great equalizer. Proper money management, where you risk only 2 to 3% of your total account, will keep you far from margin calls. This affords you the time needed to prove out your system. I prefer “Price Action” myself, but then I’m still practicing in a demo account. I suggest studying “trade management” with “stop loss” as a central tenant. Good luck and go with God!
Possible? Yes. Unless you are moving mountains of money though I don’t really see the point. Almost any other market can be much more profitable than trading currency pairs at 1:1. They just don’t move that much in absolute terms. When large traders/institutions put their mountains of money into currencies it is because they are using the market as a parking lot waiting for other, more profitable markets to start moving again (the whole risk on/risk off dynamic).
For small retail traders the attraction to forex is high leverage. You are essentially being offered the opportunity to trade other people’s money (your dealer’s) where those small, insignificant price moves that occur in currencies are amplified, hopefully to your benefit with no cap on the amount of money you can take from the market but a limited amount you can lose (whatever is in your account).
And to address several other posters – when trading at 1:1 a stop loss is optional. The only way to really lose all of your money trading the majors is if a currency’s relative value goes to very near zero which is just not likely.
Yes you can but as others have suggested, swap points come into play, so holding onto a losing position with no firm basis or strategy or an idea on whether it may raise later on, makes no sense. In short, irrespective of whether you use stop loss or leverage, you would be risking all of your capital.
For example the sorros example listed in one of your posts is a perfect example, what gets left out is whether sorros took a hit while going long on the gold and by how much…that’s something you may want to consider…