Getting started in Forex

[nizar]

Hi everyone,

Im looking at getting started in trading forex, can anybody recommend me some good books?

Though Im more interested in mechanical systems trading, even some basic ones will do for a start.

And also some questions,
*Which pairs have the tightest spreads?
*Which pairs have the biggest trading range?

I have no idea about forex as all of my (limited) background is in stocks. But I see Fx as a much bigger pond with UNBELIEVABLE opportunity.

Any opinions or discussion would be much appreciated.

Nizar.

 

[MS+Tradesim]

Hey Nizar,

I'm trying to figure out the same stuff. Maybe we can work on it together?

I'm probably going to open a Tradestation account and use their linked brokerage GAIN Capital. Doesn't seem to be the best broker but will at least be a starting point. Tradestation allows for fully automated mechanical trading. It has its own system development and testing tools but apparently it can export test trade data into a format Tradesim can use - which is a nice bonus. The forex guys around here seem to be tight-lipped. Can't get too many answers from 'em.

 

[stargazer]

Hi Nizar

I am also looking into the FOREX side of things and have found a few sites.

Google:
Trader Mastermind (Education) Some Books recommended
Forex Killer is more a software that you plug in nos. (Mechanical)
Top Dog Trader (Education)

Cheers
SG

 

[prawn_86]

I know Oanda has a free account in which you get $100k trial $.

Not sure about the mechanical side though

 

[ithatheekret]

Hi everyone,

Im looking at getting started in trading forex, can anybody recommend me some good books?

Though Im more interested in mechanical systems trading, even some basic ones will do for a start.

And also some questions,
*Which pairs have the tightest spreads?
*Which pairs have the biggest trading range?

I have no idea about forex as all of my (limited) background is in stocks. But I see Fx as a much bigger pond with UNBELIEVABLE opportunity.

Any opinions or discussion would be much appreciated.

Nizar.

The best pip spread I have seen is from AMC ( Swiss Mob ) , they can do better though and that entails a $50K minimum account . putting that aside though , they have the best spreads I have seen ........... and they are an accreditted brokerage . Not sure about the algorythmic trading though , but a simple email would soon sort that out .

If anyone knows of one better please let me know !

The big swingers in Forex IMHO is the Euro it has the most heavily traded crosses on earth . ie. EUR/JPY is a boomer .

 

[connelkp]

I just started researching Forex myself...

I have been reading this website, very good (if not very basic) information.

http://www.babypips.com/school/

 

[ithatheekret]

Read everything you can get your hands on if it affects the market your in .

The first and foremost thing you must first decide , is what type of speculator are you .

Understand your own personality and style first !

A schwing trader will usually have a short time frame planned in their trades .

If you are a position trader you may only make 10 or so trades a year if that .

A daytrader , may limit themselves to just a couple of trades a day or may make upto say 10 a day . the timeline leaning more to in and out on the day .

Then you have as was mentioned , the automated trading systems . But even these require input measured to the style of trading that suits the operator .

 

[soso]

*Which pairs have the tightest spreads?
*Which pairs have the biggest trading range?

I have no idea about forex as all of my (limited) background is in stocks. But I see Fx as a much bigger pond with UNBELIEVABLE opportunity.
Nizar.

Hi Nizar,

1st Q: The tightest spread is usually provided for EURUSD as it is the most popular and liquid pair. The crosses have the biggest spreads, usually.

2nd Q: GBPJPY has the biggest trading range (at least out of the pairs I watch). GBPUSD is also known for its wide range.

And one Q from me: Why do you think it has UNBELIEVABLE opportunity? I ask cause I know it is heavily advertised but I think is no better than other markets and is as dangerous as any market.

Cheers,
-soso

 

[macca]

Hi Nizar,

Plenty of forums, just like stocks, I have found this forum to be good

http://www.forexfactory.com/

Their news calendar is good as well.

I might mention that when trading FX be very careful of the news, it does create huge spikes and will stop you out, time after time.

good luck

 

[nizar]

And one Q from me: Why do you think it has UNBELIEVABLE opportunity? I ask cause I know it is heavily advertised but I think is no better than other markets and is as dangerous as any market.

Hi Soso,

Yes I think there is GREAT potential in the forex markets.
24 hour trading brings about amazing opportunity.

You have all the benefits of short term trading such as:
*Increased opportunity
*Decreased market exposure (short average trade lengths = decreased open equity drawdowns).
*Smooth equity curve due to fast trade turnover

And couple this with forex advantages:
*24 hours a day, 5 days a week trading
*50-100x leverage easily available
*No brokerage fees (except the spread)
*High liquidity.

I actually beg to differ and think that its TOTALLY different from any other market because of the extremely high liquidity and that it trades 24 hours a day.

Thank you everyone for your thoughts, and yes, I have found Forex Factory to be a really top forum, hundreds of pages of info on trading systems and everything to do with forex.

 

[wayneL]

Hi Soso,

Yes I think there is GREAT potential in the forex markets.
24 hour trading brings about amazing opportunity.

You have all the benefits of short term trading such as:
*Increased opportunity
*Decreased market exposure (short average trade lengths = decreased open equity drawdowns).
*Smooth equity curve due to fast trade turnover

And couple this with forex advantages:
*24 hours a day, 5 days a week trading
*50-100x leverage easily available
*No brokerage fees (except the spread)
*High liquidity.

I actually beg to differ and think that its TOTALLY different from any other market because of the extremely high liquidity and that it trades 24 hours a day.

Thank you everyone for your thoughts, and yes, I have found Forex Factory to be a really top forum, hundreds of pages of info on trading systems and everything to do with forex.

Don't bother trading it, get a job marketing it.

 

[wayneL]

OK I trade currency futures, but let ne play devils advocate

Hi Soso,

Yes I think there is GREAT potential in the forex markets.
24 hour trading brings about amazing opportunity. Really? Why? You can only trade it when you're trading.

You have all the benefits of short term trading such as:
*Increased opportunity How?
*Decreased market exposure (short average trade lengths = decreased open equity drawdowns). One can achieve this in any market
*Smooth equity curve due to fast trade turnover One can achieve this in any market

And couple this with forex advantages:
*24 hours a day, 5 days a week trading As above
*50-100x leverage easily available Only a mug would use that much leverage
*No brokerage fees (except the spread) Nonsense, the spread is the brokerage. In fact it's more expensive than brokerage in most cases
*High liquidity. How does that help you over and above other instruments unless trading a billion dollar a/c?

I actually beg to differ and think that its TOTALLY different from any other market because of the extremely high liquidity and that it trades 24 hours a day. Nonsense, gold, oil, and several other commodities trade 24 hours as well

Thank you everyone for your thoughts, and yes, I have found Forex Factory to be a really top forum, hundreds of pages of info on trading systems and everything to do with forex.

I don't want to put anyone off XXXX, it's an good market to trade, but lets cut through the marketing crap.

Cheers

 

[nizar]

I love you too, Wayne

 

[wayneL]

I love you too, Wayne

I'm here to serve.

 

[Temjin]

Here are my comments too.

OK I trade currency futures, but let ne play devils advocate

Originally Posted by nizar
Hi Soso,

Yes I think there is GREAT potential in the forex markets.
24 hour trading brings about amazing opportunity. Really? Why? You can only trade it when you're trading. True, one is still limited by physical trading. Nizar knows what I'm talking about through our private email. heheh I wouldn't say any further in this regards.

You have all the benefits of short term trading such as:
*Increased opportunity How? true, physically impossible, unless...(as above) hah
*Decreased market exposure (short average trade lengths = decreased open equity drawdowns). One can achieve this in any market That's true, forex is just another market to trade, simple as that.
*Smooth equity curve due to fast trade turnover One can achieve this in any market True again, high opportunity trading system produce smooth equity curve, regardless of markets

And couple this with forex advantages:
*24 hours a day, 5 days a week trading As above lol as way above too
*50-100x leverage easily available Only a mug would use that much leverage Only a person who does not understand risk management will get burnt using leverage. As I have said it many times, the higher the leverage, the less capital I need to fully utilise my position sizing strategies. There are 0.01 lots for trade out there, one can trade a 1% fixed size using only $1000 as starting capital.
*No brokerage fees (except the spread) Nonsense, the spread is the brokerage. In fact it's more expensive than brokerage in most cases As the account equity get larger, this becomes extremely true. The shorter the timeframe you are trading, the more expensive each trade become. One pip spread make a hell lot of differences when your stop are only set in the single digit or low 10s pips away. As the trade become longer term, that is stop are set at a much higher pip, spread fee become less expensive in relative term
*High liquidity. How does that help you over and above other instruments unless trading a billion dollar a/c?True again, a small account (like less than a few hundred thousands) make no differences.

I actually beg to differ and think that its TOTALLY different from any other market because of the extremely high liquidity and that it trades 24 hours a day. Nonsense, gold, oil, and several other commodities trade 24 hours as wellthat's true too.

Thank you everyone for your thoughts, and yes, I have found Forex Factory to be a really top forum, hundreds of pages of info on trading systems and everything to do with forex. I would strongly advise you not to spend too much time in such a forum. Everyone there only focuses on their ENTRY STRATEGIES, and not position sizing, exit, etc, etc. EVeryone there are looking for a high accuracy, holy grail trading system. It's a waste of time trying to test out their systems. Develop your own instead. There is a page in "Ways of the Turtle" that mention about these online forums, and I so agree with him hahah

I don't want to put anyone off XXXX, it's an good market to trade, but lets cut through the marketing crap.

Cheers

Sorry, I don't have any specific books on the forex market itself. I forgot how I learn my from, a while ago.

However, it does not hurt you to read those sites you just mentioned as long as you are aware of the "general psychology" and how bad it is for you to follow them. You can also try www.fxfisherman.com and www.strategybuilderfx.com too.

Good luck man.

 

[Kauri]

If you want a good general book as an introduction to FX markets and the way they work, what drives them, their basic mechanics etc,(not strategies or holy gales), then FX Trading by Alex Douglas... an Australian guide to trading FX... is a very good place to start.
Cheers
.........Kauri

 

[Kauri]

The spreads of the pairs I concentrate on...
Cheers
.........Kauri

 

[professor_frink]

Yes I think there is GREAT potential in the forex markets.
24 hour trading brings about amazing opportunity. Really? Why? You can only trade it when you're trading. True, one is still limited by physical trading. Nizar knows what I'm talking about through our private email. heheh I wouldn't say any further in this regards.

Hi Temjin,

I can only venture a guess that you are talking about full automation of the strategy,order entry included, as you have previously alluded to in other posts.

If I'm right, may I ask how you've managed to deal with things like broker isssues, lengthy blackouts, internet problems etc? What happens if your broker's platform goes down just before a major announcement comes out and you're asleep with a position on?? Have you had these kinds of problems before, and if you have, how do you deal with them?

 

[nizar]

If you want a good general book as an introduction to FX markets and the way they work, what drives them, their basic mechanics etc,(not strategies or holy gales), then FX Trading by Alex Douglas... an Australian guide to trading FX... is a very good place to start.
Cheers
.........Kauri

Yes I have bought this the other day as an introduction based on somebody's recommendation. Thanks.

Temjin,

Yes I know that entry isnt the most important thing, blah blah.
Strategy builder looks like its exactly what Im looking for.

Well I beg to differ from Curtis Faith. I've learnt a hell of a lot through internet forums. Alot of the posters (in every forum) are newbies or amateurs or bullmarket champions. But the are a few people who really know their stuff and are willing to share their knowledge and for me that makes the time Iv spent through these forums very much worth it.

 

[tayser]

FX Trading by Alex Douglas is about the only book you'll need to buy.

It will give you a primer, and the rest is up to you and your google skills - the beauty of FX is that there are so many more people who are open to sharing different systems - like Temjin says however, you need to apply a good personal bull****-o-meter, but there are some goldmines out there. Take a look at Trend Follower in the Trading Systems sub-forum on Forex Factory.

Don't be fooled by 'no commissions all you pay is the spread' that is just bucketshop market makers luring you in. Woop ee doo if there's no commission, you will pay for their antics however (eh, they're the ones on the other side of the trade, who's to know what the hell they'll do - ECNs only act like a stock broker and route your orders to a bank and for that you pay a commission - you have a spread but eh, who's complaining about 1 pip spreads of EUR/USD or EUR/JPY and non-fixed spreads of every pair? not I).

You'll then need to decide on a trading strategy - I personally chose scalping because it suits my timeframe (short: i personally couldnt think of anything worse than sitting in front of a PC day trading equities or currencies for that matter) and it's one of the purest forms of trading - or at least the method I'm using is (see the LinuxTroll thread if you're interested or go to LT's new home: http://www.cyrox.com/forum/).

Just remember this: all you need is 10 pips a day and you will live a very comfortable life.