Well, ok, but please excuse my mentioning that this is a truly [I]horrible[/I] spread for EUR/USD.
Even using a small account and a counterparty market-maker, nobody should be paying more than one pip spread on the Euro. I know it sounds like a small difference, but at three pips, one would be paying three times the necessary dealing costs every time one traded! I haven’t looked at these brokers for a long time, but I’m really surprised that there [U]are[/U] three-pip spreads on the Euro. That’s unmanageable.
I recommend that you have a look at Oanda. In my opinion, they’re about as good, decent, honest, ethical and reliable as you can get for a counterparty market-maker (in other words, probably not 100%, but close enough for most people, most of the time), and their spread on the Euro is often under a pip, and never more than about 1.2 pips during regular trading hours. (I still have access to my old account there, though I almost never use it, so that’s one I do know.)
I hear you, but I think the logic there isn’t necessarily quite right. You need to look at minimizing risk collectively, really, rather on an “individual trade basis”.
It’s a big and important issue, because long-term successful trading is all about risk-management.
I’m not trying to suggest that you’re wrong (and you may not be, at all), but equally, don’t assume that doing 6-8 pip trades is going to minimize risk. It may not. Trading with a 20-pip target and a 30-pip stop-loss - strange though it sounds! - can even work out less risky than 6-8 pip trades, [I][U]overall[/U][/I], if your win-rate’s high enough. You need to calculate this with things like “profit factor” and so on.
This beginners’ book will be [B][U]really[/U][/B] helpful to you: “[I]Profitability and Systematic Trading[/I]” by Michael Harris (Wiley 2007).
I think so, if I understand you correctly. In that nobody should trade forex with the rent-money, or money they can’t afford to lose. A lot of that has to do with working out position-sizing according to your worst-expected losing runs and losing patches, and so on (explained by Harris).
One thing is for sure, though: if you’re aiming at “small-sized trades” (e.g. 8 pips or whatever) a 3-pip spread will make it effectively [U]impossible[/U] for you to make long-term profits. You’ll need spreads of a [B]maximum[/B] of about 1 pip, for that to be viable, and that’s “in experienced hands”.
Small-scale, frequent forex trades (e.g. targets of 10 pips or less) [I]can[/I] be [U]very[/U] steadily profitable, it’s true, but that kind of trading also needs long hours, lots of patience and discipline, low dealing-costs, and some experience (on a demo account!). If you’re interested in learning how to do it, I [B][U]strongly[/U][/B] recommend Bob Volman’s books on the subject - and there’s a great big chunk of one of them available free of charge as a PDF on one of his websites, if you want to try a “free taste”.