Foreign Exchange & Commodity Dealing

Discussion in 'The Intelligence Cell' started by Giancarlo_Badass, Sep 11, 2012.

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  1. I've tried a bit of financial spread betting, its ok if you enjoy it in the same way as playing poker online, i.e. you're probably going to lose more than you make in the long run but enjoy it.

    Some people of course can make a living from it, I used to follow the forex markets online in the morning with a group on Skype, most people on there seemed non-profitable but enjoyed it.
  2. I think it is best choice for beginner is to open live cent account for
    10,000(100$) cent or 5,000(50$) cent for example.

    They can feel that is like demo and have lot of space to open position.
  3. GB, I make a very comfortable living out of trading, but I have made every mistake in the book and spent a load of cash getting there. Reality is 80% of people who try it blow their money. To make money, you need knowledge, a workable plan with trading strategies that have a chance and the balls to follow them through or change them when it goes pete. By that, I mean you have to take the losses that you will inevitably accrue and learn from them.

    There is no connection between poker (or any other gambling) and trading. If you approach trading with a gambling mentality, you WILL go bust. You need to understand risk management, you need clear goals and you need proven strategies. You are entering the world's financial markets, albeit as a pimple on their arse. The shenanigans that you refer to are the basic building blocks of international business and commerce. There is no sympathy vote if you get on the wrong side of a trade.

    Get it right and the rewards are massive. Start with a relatively small sum (say 5k), risk 1% per trade and consistently make 5% a month for 5 years whilst keeping all your money in your trading account and you will be a millionaire. It is bloody difficult to get to a point where you consistently make 5%, but I do have a number of friends who I have met through trading who are multi-millionaires from this kind of start.

    I have no idea what the **** Steven Smith is on about. Don't go near a broker with real money until you have researched a plan that has a chance of working.

    PM me if you want more. Trading is 80% psychology. The rest is in the mind.
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  4. My brother in law dabbles in shares in a small way. He does keep his feet on the ground. He has got me a little interested in share dealing and I have also thought about trading in foreign exchange and commodities as well.

    What are the mechanics of getting started? Is there a particularly good real time software you should go for or do you sign up with someone to access their systems etc?
  5. First question, do you want to invest in shares or do you want to trade derivatives? I can only comment on trading, but you need to be crystal clear on the differences, because they don't mix well. If you want to trade, you need to open an account with a broker and fund it before you can start trading. Most brokers offer a free demo account for a month or so, which you can use to learn the mechanics.

    You have a choice with software. You can use a subscription package like ESignal which can give you live access to any market you want and is "broker agnostic", but it costs good money. Alternatively, you can go with a broker that has a good platform. I have always traded using ESignal as a charting package, because I can shop around the brokers and I trade several markets.

    Most brokers provide a charting package for free. Some are good, some dire. Some have live data, some delayed. Personally, I'd shop around for a broker that uses one of industry standard packages, rather than their own. Meta Trader 4 is generally recognised as the best broker platform for beginners.

    FXCM is a good place to start if you only want FOREX. Easy package to learn, good tutorial set up and helpful staff. I don't trade with them because they offer limited markets, but I use their website Forex Trading News, Charts, Signals, Strategy, Analysis @ DailyFX every day. Also, look for a tight spread; brokers like FXCM offer tiny spreads (the cost of trading) but are limited to the really big markets. My main broker is ETX, who offer a great range of markets, but their charting set up is dire to non existent and their spreads are slightly less competitive. Just remember that brokers exist to make money out of traders.

    Whilst typing this, the trade I place on the Euro yesterday has just clocked through 10 grand of profit, but I lost 4k yesterday. Trading is an emotional roller coaster. Either do it seriously or not at all...........
  6. Stop Losses and Market if Touched on the upside. When you're dealing with FX Futures use these or loose your house.
  7. The basic rules I use are:

    Only trade when in control of your emotions
    Plan your trade and trade your plan. Consistency is all in trading.
    Always trade with a stop loss
    Only ever risk 1% of the trading account on a trade
    Trade the charts, not the news
    Keep a log of every trade you do
    No more than 5 trades open at a time
    Only place one trade on a currency at a time
    Only take trades with a realistic 3:1 reward to risk ratio
    Place a limit order on your target (Market if Touched order on some platforms)

    I've been trading long enough to flex some of these rules and accept being bitten when it goes wrong. But the first 5 are cardinals for me. On the others:

    I may have more than 5 trades open, but not in the same market or sector
    News is becoming more significant in my trading. At first, I used the news as a reason not to trade, now I am trying some strategies that capture news event. But you need to be able to trade the technicals before you can trade the news; the entry and exit are always on the charts.
    I sometimes hedge and have contrary positions open, say Long GBP/USD and short GBP/EUR. Depends on the charts and fundamentals, but, for a beginner, don't go there. Keep it simple.
    There are plenty of strategies that will make you profit with lower Reward : Risk ratios, but they are not for me. In late 2012, it was very difficult to get 3:1 ratios; it took me three months of losses to work out why. I reduced my reward:risk target to 2:1, but otherwise changed nothing and I broke even.
    If the trade target is in open waters (eg all time high / low) or you are capturing a potentially long move, trail you stop loss.
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