# Info for beginners to Forex



## BentRod

I've noticed there seems to be a lot of new posts lately asking some pretty basic questions regarding the Forex market.

This thread is designed to steer pure beginners in the right direction and to provide them with the resources they need to get started in understanding and trading the Forex market.




WHERE CAN I LEARN HOW THE FOREX MARKET WORKS? 

The very first stop should be to go to school @  Babypips
The lessons are well thought out and clearly written, shouldn't take long to get through them all.

There has also been a book recommended by Tayser called An Australian Guide To Forex Trading, you can buy that from the ASF bookshop .







HOW MUCH IS NEEDED TO GET STARTED IN FOREX?

Despite the misconceptions, a larger account is not imperitive when trading spot Forex (Futures will require a larger account though).
Most brokers offer three types of accounts/Contracts:

Standard Contract($100,000 contract size) which is $10/pip
Mini Contract ($10,000 contract size) which is $1/pip
Micro Contract ($1,000 contract size) which is 10 cents a pip


To add to this, Oanda is the only broker I know of that doesn't use the micro/mini/full accounts structure. Their position sizing is completely dynamic and can be changed so as to risk any exact amount per trade. This in my view is a huge advantage if practicing fixed fractional position sizing.

Keep an eye on http://infiniteyieldforex.blogspot.com to see what can be done with a small capital base and correct money management. 
The Author Joel Rensink (AKA The Real Thing  is no slouch, a pro trader for 20 years)






WHICH BROKER? 

There are many, make sure you do your research beforehand. 

A couple of Larger established ones are:

Oanda
Interative Brokers 

There are also two different types of Brokers, ECN and Market maker.
Further reading regarding the differences between the two can be found in the Broker section at FF. 







HOW CAN I START DEMO TRADING?

The beauty of the Forex market is that most brokers offer a free demo account. 
This is a huge advantage as you don't need to loose money to find out what works and what doesn't.  
Any strategy can be forward tested in real time with real data with demo dollars.
I bet a few older traders wish these were around when they started!

One of the best free trading platforms is Metatrader.  Alpari offers a demo Metatrader that doesn't expire, most other brokers have a trial period and after a while you can't connect anymore.

Get the Alpari Metatrader HERE 
That link goes to Alapri in Russia(not the UK one) because their demo has USDX, DJI, OIL, Gold etc, most others have forex only.

Oanda  has a demo called FXGAME (this is a java based platform not Metatrader)   






WHAT IMPACT DOES NEWS HAVE ON THE FOREX MARKET?

Major news can have a huge impact on the market and new traders should be aware that most brokers widen the spread as news is released so if your stop is close to the market, chances are you will be stopped out if the market moves sharply as it often does.

It is best to be aware of when Major news is going to be released to prevent  eg. taking a trade 5 minutes before a release.
The best resource for this is the Forex Factory Calendar  , an invaluable tool.
Click on the clock up the top to set your correct time. 

Just to add, new traders to Forex often try to trade the expected impact of the news, this is mostly a loosing strategy. 
How can you ever know what the market has already priced in?

Don't trade the news, react to the reaction of the news.





WHEN IS THE FOREX MARKET OPEN?

There are three basic sessions in a 24hour Forex day, the market literally follows the Sun around the World. 
Asia is first, followed by Europe and finally the USA. Flurries of activity should be expected as each session opens and closes.





USEFUL LINKS TO MARKET CLOCKS AND SESSION TIMES:

World Market Clock

 Forex4n00bs clock 

 Qlock (The free clock is down the bottom, once installed it basically just shows the current time in London,Tokyo,New York)

Forex Session times in GMT

GMT Convertor 





OTHER USEFUL FOREX LINKS:

Forex Factory (A great forum, probably the most active Forex Forum on the internet)


 Forex Goodies  (A great site with plenty of useful statistical info)


 Mataf Forex Tools     (more stats) 


Oanda FxLabs   (some great stuff here)


Hopefully this might help someone. Any further info, corrections or links are welcomed from all.

Bent.


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## Pager

Thats some great info there BentRod 

Seems with the sharemarket going down and restrictions and uncertainty surrounding short selling the interest in Forex has increased noticeably.

Good luck to anyone giving them a go.

Cheers

Pager


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## IFocus

Excellent Bent great summary


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## Wysiwyg

BentRod said:


> Any further info, corrections or links are welcomed from all.
> 
> Bent.




Top contribution ---- another very useful site here too which I found while looking for session times.

Forex economic calander


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## ThingyMajiggy

Thanks BentRod. Very useful post, lots of good info.


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## CanOz

Great thread Bent! i'm a noobie on FX too and to be honest i'm just into the demo now and testing a few ideas. I think i'll keep it that way for a while.

Here are some cool links i like:

http://www.fxstreet.com/forex-tools/risk-calculator/

http://forex.timezoneconverter.com/index.cgi?timezone=Asia/Shanghai&refresh=5

I love Oanda's FXGame! I also like the dynamic size lots....makes for easy fixed fractional positioning.

Good trading everyone!

CanOz


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## arco

BentRod - excellent

Re your quote "One of the best free trading platforms is Metatrader. Alpari offers a demo Metatrader that doesn't expire, *most other brokers have a trial period and after a while you can't connect anymore*".

If you delete your MT account in the Navigator panel (right click/delete). Exit the platform, re-open again and you will get a further trial period with a new cash balance, plus the platform will still have all your old indicators, chart templates, etc.

rgds - arco


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## Page

The information about Forex is very good for a newbie and I have many times seen this question asked from a person who is interested in forex market. So you have done a nice job by elaborately describing all the things.


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## Boggo

This is a copy of a post by "Rusty" on Forexfactory, interesting reading 



> Hey
> 
> Guys hows it going - Sorry about another broker related posting. I know i'm actually getting sick of them too.
> 
> But I wanted to post something productive, and might deter some myths about brokers - especially the marketmakers.
> 
> I use to work at a Large Australian Investment Bank here is Sydney - I'll give you a hint, the bank recently tried to take over the London Stock exchange. I worked on the FX cash dealing desk in 2003 and 2004 - which most of the guys who know dealing desks well....it is the lowest ranked dealer you can be. But I was only 18 years old at the time, and I was on a cadetship program with the bank, through university.
> 
> I was working along side some of the best salesmen and traders in the country. These guys are literally on millions or in some instances tens of millions of dollars a year in bonuses and salaries. Anyways, my dream was always to be on the otherside of the phones as a private trader, hence me being one now - cause working at banks is quite stressfull and i enjoy a laid back lifestyle, but i also have a massive passion for finance.
> 
> Anyways, enough lifestories - Basically we were the interbank market. The bank I worked for is among the top 15 investment banks in the world. So we were the end of the line so to speak, we only dealt with other major banks. (Rule of thumb was to deal with Citigroup as little as possible...lol)
> 
> However, believe it or not - We also were a marketmaker with our clients. Infact most major Investment Banks are. Contrary, to people's beliefs that banks are straight through processing, which they are - but also dealt clients prices and matched them with other clients.
> 
> We would take positions against our clients, quite frequently - as our division was not only a broker to our clients, but a trading house too. You don't understand the amount of losing volume that came from clients everyday.....millions! Through our dealing desk we had a volume on average of over US60 billion dollars. (sometimes it racked over 100-150 billion) - This was in 2003, 2004 by the way, I would imagine today the volume would be much, much larger. So, the trader's who liase with the executing dealers on the desks everyday would try to scalp off your position - so that they can take a commission, plus a greater spread.
> 
> For example - If you were long 100,000 euro's at 1.20. Our bank would take a position for 30,000 short euro's at 1.20 against you. Would wait till the market hit 1.1990 and then scalp 10 pips, with a prescribed stop loss. They would not do this all the time, but they would do this when the traders felt the time was right. Sure enough, the amount of losing trades from clients outweigh the winners, and the bank would be in profit.
> 
> We would also play clients positions against each other. Not in a bad way....but it was to offer the clients a better level of service - I'll explain why.
> 
> Part of the reason why the bank was so heavily focused on being a marketmaker - was not only to make profits. But to ensure better service for their clients. The real truth is, that we wanted our clients to do well - but the reality was that most didn't, no matter how much advise or consultancy we gave them. Some of biggest losing clients were actually large corporate accounts.
> 
> How we would ensure better service for our clients, was by trying to fill most orders (we couldnt do all of them, cause the volume through from some clients was to the tune of tens of billions - including leverage that is.) - and we could only fill orders sometimes, by playing clients up against each other.
> However we didnt guarentee fills.
> 
> The dealing desk also provided 24 hour support to clients, including advisory from a trader you dealt with especially. (Most of our trades were executed over the phone by the way, we did have a web based platform - but we wanted to encourage traders to ring us up - so we can give them a better level of service through supporting them with their trading - including giving advice, and market information - so a trader could ring us up anytime and ask us for marketdepth or major buyers of certain pairs. etc)
> 
> We would often favour clients who held their positions - we liked day trading accounts for their volume.
> 
> Although we were a large investment bank, we hated scalpers and often tried to deter them from using us. Most retail marketmakers, I would imagine also -would have a hate towards scalpers, cause they would not be able to feed prices through to the client fast enough (since they are level 2 brokers - and receive the prices from interbanks then must pass them on to the client - making them a middle, middle man so to speak). This is probably why brokers like FXCM. etc place scalpers on manual execution - cause scalpers would take arbitrage opportunites from the real marketplace and play them against the price the broker is giving them.
> 
> The best place for scalpers is with ECN's perhaps. People who guarentee straight through processing. The only problem is most ECN's dont have dealing desks.
> 
> The myths of brokers, feeding through clients the incorrect market prices in order to trigger stops - is quite proposterous. To be able to do that, would not only put the whole firm in disarae, because regulatory authorities not only from Australia (whom are extremely tough), but from all around the world in exchanges we dealt in, would be on your case for fraud, misleading disception, and also theft agains the client. ASIC in Australia, who is the main regualtory body, considers it a criminal act of theft, to decieve clients in terms of pricing. And rightly so.
> 
> This would damage the banks name - and i imagine it would be all over the media in a flash. One of the strictest rules in the firm, was to have integrity, especially towards clients.
> 
> The foreign exchange market is not regualted to an extent - but if pricing can not be confirmed as being executed at market prices for that time (market prices means that there must be a record of prices from anywhere in the world being at that quote at that time), it cannot be done, legally.
> 
> I dont know if brokers elsewhere can toy with that idea - set up phony exchange houses and deal incorrect prices with them for example. But I know we didnt do it. I doubt most large sensible, even the larger retail brokers would do it either.
> 
> To the idea of chasing stops - Yes, this did occur, quite often. During news times mostly. We would see where stops were with our clients, we also had a good idea where market depth was, and we would send through volumes of trades to take them out, in order to make money for the bank.
> 
> See the bank always came first...profitability for the bank the most important thing overall. Clients would leave eventually, successfull or not....but the bank was always there, so it was our main priority.
> 
> The idea at the end of the day is that its every man for themselves in the market. Brokers, traders, hedgefunds. etc are all in it for themselves to make a buck and they will do it whatever way they can.
> 
> If you are a good trader - and know the ins and outs of the market (not placing in house stop losses. etc), you will not need to worry, cause you can play the game - then your sweet!
> 
> My advice is - pick a respectable and PROFITABLE (profitability in a broker is so important, cause the more clients a broker has, the better level of service they can offer you - and the less chance the broker has of falling to the ground), who has impeccable client service. Aim for the bigger retail brokers (if your retail)....who have great relationships with interbanks.
> 
> When questioning a broker, ask them how many interbanks they deal with. If they have a figure less than 5....than stay well away, cause the flexibility of price they will offer you as a client will be completely crap!
> 
> Also, just dont go for brokers just cause they have tighter spreads. etc. Of course you want the best deal at the end of the day...but you also want your orders filled and a dealer you can talk to - this is why I'm not really a fan of broker houses without a dealing desk.
> 
> For everyone who deals with American brokers go to www.cftc.gov - and then go to 'financial reports for FCM's'. Here you can check out the Capital of all the brokerage houses, try to stick to the retail brokerage houses with the highest amount of capital - cause this ultimately means more clients, a better relationship with more banks in the interbank market, cause they can guarentee volumes, and also a better level of service.
> 
> Most importantly....make sure your broker is licensed and registered with regulatory authorities in major financial countries around the world. For example - dont be signing up with no brokers who offer you tight spreads and guarenteed fills from Nigeria.
> 
> Brokers arent bad, they arent there to be against you. But they may not, in terms of co operation in the market itself, work with you. Most brokers who are large and service respectible numbers of clients will tend to try to help their clients become profitbale as much as they can.
> 
> But once your order is placed, its every man for themselves...
> 
> I hope I've helped some people who are just starting out create an idea of how the major brokers and institutions work.
> 
> Cheers
> 
> Rusty


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## BBand

Help
I have been trading stocks for a considerable period of time.

I'm considering moving on to trade Forex, However, I may have a problem -

*Can I use my super fund to trade Forex?*


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## BentRod

I have no idea butt.......

I doubt it BB.


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## potato

nice thread. can some 1 tell me where i can get free eod data for aud/usd to import into into amibroker.


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## aohx075

Wow thanks BentRod and everyone who's contributed to this thread!!! This is exactly what I was looking for!:


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## awg

BBand said:


> Help
> I have been trading stocks for a considerable period of time.
> 
> I'm considering moving on to trade Forex, However, I may have a problem -
> 
> *Can I use my super fund to trade Forex?*





If the trust deeds of your superfund allow you to, I cannot see why not

mine do allow me to invest in any instrument ( so long as it is thru IG markets)

I have a corporate trustee ( a special purpose company) 

I am a client of esuperfund

So far as I am aware there is nothing in SIS or APRA regs that proscribe any investment format.

I have not traded FOREX, but have been thinking about it, as it does allow opportunity to profit in any market condition, but as yet have not had time to learn requisite skills (big job, probably better of not, but u got to start somewhere)


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## BentRod

potato said:


> nice thread. can some 1 tell me where i can get free eod data for aud/usd to import into into amibroker.




Amibroker can be connected to Metatrader via a plug-in  for any data that is displayed in Metatrader so the best way is to install a metatrader demo and go from there.

Keep in mind the data from Metatrader may not be correct, after all it's bucketshop data.

For serious testing and accurate data you are better off subscribing to a service like Norgate premium data.


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## CanOz

BentRod said:


> Amibroker can be connected to Metatrader via a plug-in  for any data that is displayed in Metatrader so the best way is to install a metatrader demo and go from there.
> 
> Keep in mind the data from Metatrader may not be correct, after all it's bucketshop data.
> 
> For serious testing and accurate data you are better off subscribing to a service like Norgate premium data.




Norgate is still EOD though right? Esignal is the best RT data. About 100AUD per month i think....or was that 100 USD?

Cheers,


CanOz


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## BentRod

Yep Norgate is only EOD, sounds like Potato only wants EOD anyway.


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## potato

thanx guys, yea im jsut looking for a new market to trade. So y not give forex a go


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## Wysiwyg

Another useful FOREX link chock full of stuff and has a forum.

http://www.global-view.com/


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## MS+Tradesim

Live forex and EOD data is free from Interactive Brokers if you have an account with them. I feed it into Metastock, but I believe it can also be easily streamed to Amibroker or Ninjatrader (which I have both but I am most comfortable with MS).


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## Wysiwyg

A simple explanation of how central bank interest rates move the forex.

Part 1



Part 2


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## Lammii

great info!

i have a question on price per pip movement.
after reading baby pips they have examples like:



> USD/JPY at an exchange rate of 119.80
> (.01 / 119.80) x $100,000 = $8.34 per pip
> 
> USD/CHF at an exchange rate of 1.4555
> (.0001 / 1.4555) x $100,000 = $6.87 per pip
> 
> In cases where the US Dollar is not quoted first, the formula is slightly different.
> 
> EUR/USD at an exchange rate of 1.1930
> (.0001 / 1.1930) X EUR 100,000 = EUR 8.38 x 1.1930 = $9.99734 rounded up will be $10 per pip
> 
> GBP/USD at an exchange rate or 1.8040
> (.0001 / 1.8040) x GBP 100,000 = 5.54 x 1.8040 = 9.99416 rounded up will be $10 per pip.




and they want to know how much a pip is in USD.
so for us having a broker like go markets that holds your money in AUD.

if we trade
AUD/USD using a rate of 0.6850 using a lot size of 100,000
we have
(0.0001 / 0.6850) x AUD 100,000 = $14.60AUD

EUR/AUD using a rate of 2.0598 using a lot size of 100,000
we have
(0.0001 / 2.0598) x EUR 100,000 = EUR 4.85 x 2.0598 = 9.99AUD

GBP/JPY using a rate of 132.80 using a lot size of 100,000
where GBP/AUD = 2.1367
we have
(0.01 / 132.80) x GBP 100,000 = GBP 7.53 x 2.1367 = 16.09AUD

are my calculations correct?
would i be right in saying that when AUD is the quote currency each pip is worth $10AUD?


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## Page

Friends here are some currency rates seen according to some charts and calculators.
Following are the exchange rates for most important currencies against the euro:

CURRENT HIGH LOW:
 US Dollar 1.4152 1.4173 1.4062
 Japanese Yen 128.09 128.39 127.54
 British Pound 0.9657 0.9658 0.9592
 Swiss Franc 1.5 1.5041 1.4947
 Danish Crown 7.4492 7.4509 7.4492
 Norwegian Crown 9.91 9.9855 9.911
 Swedish Crown 11.0986 11.1096 11.109 
 Australian Dollar 2.0584 2.0619 2.0485
 Canadian Dollar 1.7142 1.7213 1.7113
 Hong Kong Dollar 10.943 10.943 10.944
 Russian Rouble 40.9315 40.976 40.732
 Singapore Dollar 2.0267


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## tayser

Lammii: The pip value is always in the currency on the right.  So if the currency on the right is not the currency you want to know the value in, you need to convert that using the appropriate cross (see the GBP/JPY example).  You're on the right track however.



> AUD/USD using a rate of 0.6850 using a lot size of 100,000
> we have
> (0.0001 / 0.6850) x AUD 100,000 = $14.60AUD




100,000 AUD/USD, pip value is $10USD, and you just convert it back like you did at the market rate.



> EUR/AUD using a rate of 2.0598 using a lot size of 100,000
> we have
> (0.0001 / 2.0598) x EUR 100,000 = EUR 4.85 x 2.0598 = 9.99AUD




AUD is on the right here, 100,000 EUR/AUD always has a pip value of $10AUD



> GBP/JPY using a rate of 132.80 using a lot size of 100,000
> where GBP/AUD = 2.1367
> we have
> (0.01 / 132.80) x GBP 100,000 = GBP 7.53 x 2.1367 = 16.09AUD




Pip value here is in Yen - 100,000 GBP/JPY, pip = 1000 Yen.

So to convert this, you actually need AUD/JPY ( current market rate now: 62.15) - remember you want to know what the AUD value is: 1/62.15 = 0.0161 * 1000 = $16.10 AUD.

we both arrive at the same conclusion  but just remember about the currency on the right hand side of the pair.

cheers.


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## Lammii

awesome! thx tayser!


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## dit1

Hello I've just joined today. I am very new to forex but have read babypips a few times, I opened a practice account with Forex.com and my trial is nearly over, I've made over 30,000 in 3 weeks. I have become quite used to the platform and am just wondering if I am better off sticking with FOREXTrader when i join or if it is safer to choose an Australian based broker. From what I have read on here I gather most are with Aussie brokers. Has anyone had experience with Forex.com?


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## Cartman

dit1 said:


> Hello I've just joined today. I am very new to forex but have read babypips a few times, I opened a practice account with Forex.com and my trial is nearly over, I've made over 30,000 in 3 weeks. I have become quite used to the platform and am just wondering if I am better off sticking with FOREXTrader when i join or if it is safer to choose an Australian based broker. From what I have read on here I gather most are with Aussie brokers. Has anyone had experience with Forex.com?





hi Dit  (nice lips by the way )

ive trialled two systems on the EUR/USD over the past week that returned over 90% strike rate --- but would i back them with 'REAL' money is the question ??  (maybe i already have  lol     )

$30,000 bucks means nothing on a demo account unless u can simulate the same risk/reward with real dough ------

what was yr starting capital --- what was yr maximum risk and on a given trade --- what was yr max draw down??

dont get fooled by the 'big numbers' ----- treat the demo like its YOUR money  ---- funny things happen when its YOUR money ---- blase logic can kinda go out the window when stress gets factored into the equation if u get my drift --


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## Stormin_Norman

so true cartman. especially the point about the 'real' money.

the key is to develop a trading plan. then trade that plan. dont deviate from it.

so use that demo account, record what youre doing, develop your rules. write out your plan - when you enter, when you exit (and anything in between).

when you have that in stone, its time to trade with real money.

plan your trade. trade your plan.


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## fapturbo

Hi all,

Thought I'd post this. Most already know this, but I'll put it up anyway.

Lot sizes are shown as a percentage of a full lot. 1 full lot in forex is equal to $100,000.00 of the underlying currency so 1.0 lot of USDCAD equals $100,000.00 USD. If the USD appreciates versus the CAD you will have more than $100,000.00 (profit) if you went long (bought the USDCAD contract) and less than $100,000.00 (loss) if you went short (sold the USDCAD contract).
If the USD depreciates versus the CAD you will have less than $100,000.00 (loss) if you went long (bought the USDCAD contract) and more 
than $100,000.00 (profit) if you went short (sold the USDCAD contract).

The amount of the profit or loss from a contract purchase are related to the lot size and the number of pips the underlying moved. Here is
how it works:

1.0 lot = $10.00 per pip, you are trading a full lot, or $100,000.00 of the underlying currency
0.9 lot = $9.00 per pip, you are trading a .9 lot, or $90,000.00 of the underlying currency
0.8 lot = $8.00 per pip, you are trading a .8 lot, or $80,000.00 of the underlying currency
etc....
0.1 lot = $1.00 per pip, you are trading a .1 lot, or $10,000.00 of the underlying currency
0.09 lot = 0.90 cents per pip, you are trading a .09 lot, or $9,000.00 of the underlying currency
0.08 lot = 0.80 cents per pip, you are trading a .09 lot, or $8,000.00 of the underlying currency
etc....
0.01 lot = 0.10 cents per pip, you are trading a .01 lot, or $1,000.00 of the underlying currency

**note: some currencies are not exactly $10.00 per pip or a fraction thereof but for our needs assuming so is fine.

Remember, recommended risk levels are no more than 1-2% of your account balance per trade.

So if you trade 0.1 lots, you are risking $1.00 per pip. If the underlying moves against you, and your stop loss is at 60 pips, you are risking $60.00. If your account is $500.00 you are risking 60/500 = 12% of your account on this one trade.

So with a $500.00 account what lot size should I be trading to only risk 1-2% of my account?
$500.00 X .01 = $5.00 risk per trade at 1%, $10.00 risk per trade at 2%

Now lets say our stop loss is 50 pips, so with $5.00 at risk (we have determined our comfort level is risking 1% of our account per trade), we need to be trading a lot size that only risks 0.10 cents per pip ($5.00/50=0.10) so to manage our risk we should set our lot size to 0.01 lots per trade. If your comfort level is 2% risk per trade, then 500.00 x .02 = $10.00 per trade. So $10.00/50=0.20 cents per pip risk which means we should set our lot size to 0.02.


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## Stormin_Norman

to help with the above position sizing:

http://www.forexcalc.com/

is a position size calculator.


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## Cartman

anyone uneducated in MM please listen to what Norm and Fap just pointed out above --- might save some heart ache down the track !! ---- im no expert but i know too much leverage can crucify yr sense of logical reasoning ----

*play within yr comfort zone!!*  ---- or you will eventually LOSE !!


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## Stormin_Norman

i like having large leverage. however i keep my risk <5%

here's why (how):

position 1: risk = 5%

position 1 increases. stop loss set to 0. risk = 0%

position 2 opened. risk position 1+2 = 5%

position 2 increases. stop loss set to 0. risk 1 + 2 = 0%

position 3 opened. risk position 1+2+3= 5%

...ect i think you get the logic on it.

hence having high leverage to open many positions is good.

*having high risk is bad!!!!!*


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## Cartman

Stormin_Norman said:


> i like having large leverage. however i keep my risk <5%
> 
> here's why (how):
> 
> position 1: risk = 5%
> 
> position 1 increases. stop loss set to 0. risk = 0%
> 
> position 2 opened. risk position 1+2 = 5%
> 
> position 2 increases. stop loss set to 0. risk 1 + 2 = 0%
> 
> position 3 opened. risk position 1+2+3= 5%
> 
> ...ect i think you get the logic on it.
> 
> hence having high leverage to open many positions is good.
> 
> *having high risk is bad!!!!!*




i like the way u think Norm   --- our adaptations of entry positions may be different but the position of the end result looks very similar --- hope u r doing well


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## Stormin_Norman

yeah reasonably well. 50-100% most months.

trying to code it into an EA. wont be selling it for $175 on the internet when we do though .


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## Cartman

Stormin_Norman said:


> yeah reasonably well. 50-100% most months.
> 
> trying to code it into an EA. wont be selling it for $175 on the internet when we do though .





haha ---- wonder why not !!  ----- sounds like u r well advanced -- well done ---- i have come up with some great looking systems but capital base keeps me grounded atm ---- i still treat it like a game cause money is just a capatalistic perception of success isnt it ??  -- lol  -----  3 meals a day and a roof over yr head --- what more could ya want !!   ---- good luck to ya Norm


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## Stormin_Norman

Cartman said:


> haha ---- wonder why not !!  ----- sounds like u r well advanced -- well done ---- i have come up with some great looking systems but capital base keeps me grounded atm ---- i still *treat it like a game* cause money is just a capatalistic perception of success isnt it ??  -- lol  -----  3 meals a day and a roof over yr head --- what more could ya want !!   ---- good luck to ya Norm




i think that's the key part to the psychology of it.


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## Cartman

Stormin_Norman said:


> i think that's the key part to the psychology of it.




haha ---- are we brothers ??  

if punters approached the market as a form of 'train to be excellent with minimal risk' in the early stages, there would be a lot less punters go under from 
1) over -leverage and 
2) excessive risk taking ----  

but who am i to talk ---- i nearly went under !! ----- i now call that experience lol  !!!


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## Stormin_Norman

Cartman said:


> haha ---- are we brothers ??
> 
> if punters approached the market as a form of 'train to be excellent with minimal risk' in the early stages, there would be a lot less punters go under from
> 1) over -leverage and
> 2) excessive risk taking ----
> 
> but who am i to talk ---- i nearly went under !! ----- i now call that experience lol  !!!




i blew my first two accounts. no matter how many times youre told. its not until you blow a couple of accounts do you learn the lesson.


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## Cartman

Stormin_Norman said:


> i blew my first two accounts. no matter how many times youre told. its not until you blow a couple of accounts do you learn the lesson.




we are brothers  

amen --- !!


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## dit1

Cartman said:


> hi Dit  (nice lips by the way )
> 
> ive trialled two systems on the EUR/USD over the past week that returned over 90% strike rate --- but would i back them with 'REAL' money is the question ??  (maybe i already have  lol     )
> 
> $30,000 bucks means nothing on a demo account unless u can simulate the same risk/reward with real dough ------
> 
> what was yr starting capital --- what was yr maximum risk and on a given trade --- what was yr max draw down??
> 
> dont get fooled by the 'big numbers' ----- treat the demo like its YOUR money  ---- funny things happen when its YOUR money ---- blase logic can kinda go out the window when stress gets factored into the equation if u get my drift --




Thanks! My starting capital was 50,000, playing in a standard account, $10 per pip. I havn't been recording what I'm doing yet, so I'm not sure on percentage success rate.
I'm not sure even if what I have been doing is a system, I am VERY new to any trading. I mainly read the candle graphs. I havnt been setting a stop loss at all and have only been aiming for 20-30 pip limits. I'm watching the screen the whole time I'm doing this so I can sell if I do see it dropping by alot, but it generally goes back up.
I don't know if I've just been lucky or what, but I've only had one trade I lost on. That was about $700.
I have mainly been playing EUR/USD, GBP/USD, AUS/USD.
Where do you guys get this information on systems to trial?

So should I just keep playing demo's for alot longer?


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## Cartman

dit1 said:


> Thanks! My starting capital was 50,000, playing in a standard account, $10 per pip. I havn't been recording what I'm doing yet, so I'm not sure on percentage success rate.
> I'm not sure even if what I have been doing is a system, I am VERY new to any trading. I mainly read the candle graphs. I havnt been setting a stop loss at all and have only been aiming for 20-30 pip limits. I'm watching the screen the whole time I'm doing this so I can sell if I do see it dropping by alot, but it generally goes back up.
> I don't know if I've just been lucky or what, but I've only had one trade I lost on. That was about $700.
> I have mainly been playing EUR/USD, GBP/USD, AUS/USD.
> Where do you guys get this information on systems to trial?
> 
> So should I just keep playing demo's for alot longer?




hi Dit ---- no stop is fne if u r monitoring yr position and have a mental stop (and stick to it) ---

if the $700 loss was your 'real money'   how would u have handled that -- honestly ?? ---- 

definitely keep doing the demos --- but try and make it real by simulating yr real life position ie how much capital u r starting with --- how much pain u will be in when X amount of that capital is being wiped out by a bad trade etc etc.

MM and a sound trading plan will work great on FX but put yrself under REAL pressure ---- dont pretend with a demo cause that will come back to haunt u when its YOUR cash being wiped out --- good luck with it


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## Stormin_Norman

dit1 said:


> Thanks! My starting capital was 50,000, playing in a standard account, $10 per pip. I havn't been recording what I'm doing yet, so I'm not sure on percentage success rate.
> I'm not sure even if what I have been doing is a system, I am VERY new to any trading. I mainly read the candle graphs. I havnt been setting a stop loss at all and have only been aiming for 20-30 pip limits. I'm watching the screen the whole time I'm doing this so I can sell if I do see it dropping by alot, but it generally goes back up.
> I don't know if I've just been lucky or what, but I've only had one trade I lost on. That was about $700.
> I have mainly been playing EUR/USD, GBP/USD, AUS/USD.
> Where do you guys get this information on systems to trial?
> 
> So should I just keep playing demo's for alot longer?




i dont know how much capital u are looking to play with. but once you have the idea with demos; put $1000 into an account and lose that.

youll learn 10 times more losing that $1000 then anything youll learn on a demo account. once real money comes into things the game changes dramatically.

because of this you need a plan. so youre not trading a $500/$5000 loss. youre trading your plan. similarly you dont just close out a $250 profit cause its 'there' you close the trade out on your plan.

even if you dont have a stop loss; you MUST have one. and you MUST stick with it; or else youll lose too much of your equity eventually and kill your account.

there are many systems to look at on sites such as www.forexfactory.com . my suggestion is to look at some indicators to add to your candle reading.

i find the market kills me when im too clever. the more simple i keep it, the more discipline i have trading my plan and the more patience i have waiting for a 'set up' for my plan the better my results.

personally i would play the demo until you think you can 'do it'. then open a $1000 account (maybe OandA?) and lose your money on it. you might chow through 2 $1000 accounts; but youll learn a hell of a lot. if you blow your 3rd $1000 account; perhaps its not for you.


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## BentRod

> I havn't been recording what I'm doing yet, so I'm not sure on percentage success rate.




Dit,
     If you are using Metatrader, right click your account balance and select "Save as detailed report", that will give you some stats on your trades.

I agree with Norm regarding a real account, you will learn faster when you have real money on the line even it is only a small amount but learn to use stops on demo first.



> no stop is fne if u r monitoring yr position and have a mental stop (and stick to it) --




CM...what happens when internet goes down,power out, hard drives craps itself etc??


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## prawn_86

BentRod said:


> CM...what happens when internet goes down,power out, hard drives craps itself etc??




When i scalp forex i use a mental stop, but always have a trailling stop say 20 pips away fot he reasons above. That way if there is a power outage etc then i am still protected.


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## Stormin_Norman

ive invested in a prepaid mobile broadband, so if the power goes out i can still trade on my laptop.

worth looking into for the $30 a month or whatever the cost is.


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## dit1

Hi thanks guys for all the help,

I'll start setting stop losses and see how it goes. I'm planning on starting with at least 10000, if I start with 1000 I'll definitely lose it won't I? I know I'll have losing trades.

 I do have mobile broadband and a laptop, so I guess I'm safe in that manner.
Thanku for the info on systems too.
I guess everyone has different opinions, I am glad to hear and learn as much as I possibly can.
I don't have metatrader, I'm on FOREXTrader, but I did find the account summary.


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## AbundantIncome

*First loss*

I made my first loss of 23 bucks on first try. well a demo money that is ...

Not sure what I am doing yet. Am beating around the bush 

Back to babypips I think !

Thanks for the info on this thread .... would come back to read more !


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## Stormin_Norman

first two things i can suggest.

position sizing and a trading plan.

the plan doesnt even need to be profitable at this stage. but the discipline to follow one (even an incorrect one) is vital.


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## AbundantIncome

*Setting account with IB*

I want to get some free feeds before subscribe for feeds plus IB seems to cover stocks as well.

I am trying to apply setup account. Now, I am wondering what is the base currency should be and how they work actually ? It mentioned that 

"Your base currency determines the currency of translation for your statements, the currency used for determination of margin requirement, and for a Cash Account (only one currency is allowed), the currency of products you are allowed to trade."

I am not understanding the last part. Does it mean I can only trade pairs with AU (if I choose) either way ???? What are the pro and cons ????

Thanks

Al


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## Page

There are many currency pairs in this market which we can trader. It is not so easy to understand the terms of this market it requires reading articles and searching for forex sites to learn about the terms used for trading this market. Knowledge about forex market is ok but you must have proper knowledge about trading this market.


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## pilbara

*Re: Setting account with IB*



AbundantIncome said:


> I am not understanding the last part. Does it mean I can only trade pairs with AU (if I choose) either way ???? What are the pro and cons ????



the last part relates to a "Cash Account" with IB, which cannot trade forex, so it's not relavant.


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## BentRod

Great video here describing how the Carry Trade works, the dangers of such a strategy and what it did to Iceland.


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## jancha

Hi
  Wondering what XT stands for after the volume of a trade?


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## BentRod

jancha said:


> Hi
> Wondering what XT stands for after the volume of a trade?




Jancha,
           XT relate to Stocks not Forex.

It is a cross trade.

Have a read of:

https://www.aussiestockforums.com/forums/showthread.php?t=5964


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## finvik

Yeah you are right XT is related to stock not forex it's basically what its name suggests: after hours trading allows investors to buy and sell stock after the closing bell. But because the New York Stock Exchange is closed at that time and all the floor brokers have returned home, the trades are filled electronically.Currently, there are two after hours trading systems but more and more online brokers are offering the service each day. The main systems are Instinet, Island, and MarketXT (the XT stands for Extended Trading).


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## Page

Really a compact and gr8 informational package for beginners.
first of all a beginner must know as much as he/she can about the forex market and it's trends.
only then he must go to learn about the analysis and to learn about the movements of the market. 
Opening a and trading with a demo account is must before you deal with the real market, it will provide you enough information and idea about the trading and how to use forex indecators and technical and fundamental analysis.

don't make it in hurry otherwise you'll feel like


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## nunthewiser

Dear stormin norman or trembling hand


after reading another thread and seeing a trade sytem that regards a 20 point stoploss with a 15 point profit target as acceptable by some im just wondering if this is a normal practise with you guys or EA users 

i cant get my head around this method as mathmatically it dont add up 

am i missing something here and the win loss ratios make up for the obviuos mismatch ? or is this kind of system the general go for trading stuff like forex / futures ? ie having larger stoplosses


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## nunthewiser

ps ... 

that was a sincere question


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## Stormin_Norman

forex is a lot more volatile then other markets. it can go up and down very dramatically.

having a small profit and a large stop may in fact be acceptable; depending on results.

having a small stop might have the position taken out quite regularly, where as a larger stop loss might allow the market to fluctuate and go up to its take profit.

its kind of hard to explain if you havent watched charts a lot.

but an example for numbers sake.

take profit of 25. stop loss of 100. you would need 4 winners per loser. however you may find that your indicators produce 6 winners per loser - a positive expectancy. as long as your money management is calculated on 100 pip stop loss there is nothing wrong with that system.

in a volatile market, u might enter and it drops 25 points, even 50. however it might only very rarely drop 75 or more points. if your stop loss was 25 (1:1 risk ratio) then your trade might get taken out more then half the time, then rise back up to your original profit level.

a larger take profit might see your position gain 25 points, then retreat 50 after that.

im not sure of the markets you usually trade, and what their dynamics are, but risk ratio and % successful trade together gives an indication of a worthwhile trading system; not the risk ratio in isolation.

im not sure if i expressed myself very well, let me know what you make of my waffle.


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## BentRod

> am i missing something here and the win loss ratios make up for the obviuos mismatch ? or is this kind of system the general go for trading stuff like forex / futures ? ie having larger stoplosses




No your not missing anything,it is the same as stocks.

You better have a good win rate if your going to run stops wider that profit targets.

All the system sellers use wide stops because your average punter thinks it's about being right. That's how they suck em in.


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## nunthewiser

Stormin_Norman said:


> forex is a lot more volatile then other markets. it can go up and down very dramatically.
> 
> having a small profit and a large stop may in fact be acceptable; depending on results.
> 
> having a small stop might have the position taken out quite regularly, where as a larger stop loss might allow the market to fluctuate and go up to its take profit.
> 
> its kind of hard to explain if you havent watched charts a lot.
> 
> but an example for numbers sake.
> 
> take profit of 25. stop loss of 100. you would need 4 winners per loser. however you may find that your indicators produce 6 winners per loser - a positive expectancy. as long as your money management is calculated on 100 pip stop loss there is nothing wrong with that system.
> 
> in a volatile market, u might enter and it drops 25 points, even 50. however it might only very rarely drop 75 or more points. if your stop loss was 25 (1:1 risk ratio) then your trade might get taken out more then half the time, then rise back up to your original profit level.
> 
> a larger take profit might see your position gain 25 points, then retreat 50 after that.
> 
> im not sure of the markets you usually trade, and what their dynamics are, but risk ratio and % successful trade together gives an indication of a worthwhile trading system; not the risk ratio in isolation.
> 
> im not sure if i expressed myself very well, let me know what you make of my waffle.




i trade the ASX and Gold and often varios indicies

i use charts , hence my question actually . why would one use such a wide stop.

i hear where you coming from re getting stopped out maybe too early but if one was a lil more proficient in charting in the first place maybe they would have a lower % stop because of the perceived support /resistance/pivot points

ok , cheers for the reply and realise forex etc different but still cant find myself drawn to the attraction of needing 4 wins to break even on 1 loss

each to there own , cheers


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## nunthewiser

BentRod said:


> No your not missing anything,it is the same as stocks.
> 
> You better have a good win rate if your going to run stops wider that profit targets.
> 
> All the system sellers use wide stops because your average punter thinks it's about being right. That's how they suck em in.




cheers m8 , thats what some of the sytems looked like to me actually .let ya stop run as long as possible and hope it showed a profit sooner or later

a charts a chart in my book but im naive to the workings of forex /futures


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## Stormin_Norman

im not promoting that kind of method; just explaining how it could be a valid one.


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## nunthewiser

Stormin_Norman said:


> im not promoting that kind of method; just explaining how it could be a valid one.




yes  and thanks . thats why i asked you guys


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## Trembling Hand

No way. Stop greater than target = Broke. Would like to see 100 - 200 trades of any such system. Just the breakeven point you would be  needing to nail a high win rate. Then to get paid for your time and effort!! If its common....... then it also inversely related to profitable traders. 

Stormin FX is not more volatile than other markets. Not by a long shot. Have a look at HSI or GC. Or even oil. Not by a long shot. HSI can do 100 ticks in a min no news, nothing unusual, that's volatility. Even the SPI can run nuts on opens and close.


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## nunthewiser

cheers for replys .norm , bent rod and TH


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## Kauri

on one of mi more infreeekwe...  ahhh.. less frequent.. visits.. due to  other dues falling due...   butt.. I find an elliot-fib ?? chart like this one posted recently is about as tradable as the the tree empty sem-sav-blank botts staring accusingly at me as I speak-mumble...   personally on this type of chart I would be standing aside with de broadaxe shouldered and letting someone else put their neck on the line...  5 is shorter than the one afore it... ABC is about out of proportion as I am...  hey take a look around the farm... there are plenty of fat turkeys strutting about innocently... why try to xxx(make)xxx...sorry FORCE...a trade position out of sumut that ...aahhhh.. why worry... tis probly sumut to do wid money... and dat is one subject .(at least).. where I flounder... speaking of which... the days I went out at 3am with a broomstick wid a nail init... wiggled my toes whilst kneedeep in the the briny... and brought home a flatfish dinner..(or is it now tea??)..  hey... tis good to be back... in spirits abuntant anyways..

Slanty
...........Kauri


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## Trembling Hand

Kauri LOL

And yes it seems to be called tea now.


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## BentRod

Kauri said:


> on one of mi more infreeekwe...  ahhh.. less frequent.. visits.. due to  other dues falling due...   butt.. I find an elliot-fib ?? chart like this one posted recently is about as tradable as the the tree empty sem-sav-blank botts staring accusingly at me as I speak-mumble...   personally on this type of chart I would be standing aside with de broadaxe shouldered and letting someone else put their neck on the line...  5 is shorter than the one afore it... ABC is about out of proportion as I am...  hey take a look around the farm... there are plenty of fat turkeys strutting about innocently... why try to xxx(make)xxx...sorry FORCE...a trade position out of sumut that ...aahhhh.. why worry... tis probly sumut to do wid money... and dat is one subject .(at least).. where I flounder... speaking of which... the days I went out at 3am with a broomstick wid a nail init... wiggled my toes whilst kneedeep in the the briny... and brought home a flatfish dinner..(or is it now tea??)..  hey... tis good to be back... in spirits abuntant anyways..
> 
> Slanty
> ...........Kauri




BAHAHAHAHA  

Ah mate I miss your posts!!

You crack me up BM.


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## Naked shorts

I see what you are talking about stormin, but after learning the hard way, and after reading about other highly successful traders...picking up pennies in front of a bulldozer is not the way to go. You will eventually blow up


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## jancha

Hi,
   I use e-trade pro and i was wondering if anyone knows what the colours represent in the candle stick chart eg. there is green,brown and a bright red occasionally. What do they represent in the volume of trades?


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## Page

Any extensive term venture strategy should ideally consist of multiple less important strategies contained within a bigger overall strategy. Surplus volatility can lead to quick gains and extensive losses to your portfolio of currency couple positions. Long term Forex investors look for supports/resistances, fib levels, superior moving averages, and previous swing highs/lows to enhance their odds of a unbeaten trading position. 
There is a cause why only 10% or 5% of all Forex traders do well. They are the ones trade on the dips and selling into the rallies, when everyone else is not on time to the game. They are the ones that supervise risks, limit losses, and make the most of gains by tactically placed entries and holding their positions longer, taking partial earnings, and letting the rest of the place run on house money, until the tendency is worn out.


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