Hope everyone is having a good ass day today. This might be long. Please upvote so others are more likely to see in their feeds. I have really wanted to start sharing my other forms of trading with you guys. I trade forex and did well this week betting on usd strength against the safe haven currency Japanese yen. I’m also invested at $2,200 into a crypto currency called cindicator. I have 392,197 shares. Trying to get to 700,000 for access to their highest tier of trading indicators. I’ve followed this company for a long ass time and their product is great. If the price gets back to its high of $0.37, it’s a 6,959% profit for me. I’m expecting it to hit AT LEAST a dollar during this next bull run due to cnd/btc charts. Crypto currencies are similar to pennystocks in their volatility. I also have very good evidence that bitcoin is about to start moving up very rapidly. The halving event that pushed it up to $20,000 just happened again two weeks ago. I and probably everyone else are expecting $100,000 bitcoin by October 2021 due to bitcoin stock to flow model. That indicator was designed by some billion dollar hedge fund manager and its accuracy is something I’ve never seen before. Please read the bottom half where it explains how that indicator works. Truly impressive. I’m also learning how to trade SPY options, and I just made my first winning trade after a week of losing by buying SPY 298c 5/29 So my question is, are you interested in learning other forms of trading? By order of difficulty, we’d start with crypto currency. Mainly bitcoin and a handful of others. It’s pretty straightforward until you get into cold storage. Then forex which is complicated, and options further down the line after I understand them fully. Or if the consensus is forex or options, we’ll start there. My main goal in Reddit is to make you guys better traders/ investors. One of my next personal goals is to get my series 7 and 65 licenses and do this shit professionally. I’ve done the math, and if my average return in forex at ~10% per month stays consistent, managing $5,000,000 in client money and charging 20% would mean I make $80,000 a month. I’m currently building my trading history on Oanda as the first step in this process. So if you start seeing me in suits and ties on my streams, you’ll know what’s up. Let me know if you’re interested. I’m not sure how I would do it. Maybe just include [BTC] in my headlines about crypto currency stuff when I post so that it’s easy to skim over for those not interested. I don’t want to start an isolated subreddit or anything like that.
So I’m new to forex but have spent a decent amount of time with stocks and more recently options. I was curious if there was a way to kind of mitigate risks other than setting a stop loss? I noticed in OANDA that you can set an “entry order” and was wondering if that worked kind of like options? For example if I got in a pair LONG at .00800 and set a stop loss at around 30 pips but had an entry order that was 1.5-2x the original long purchase at 40-50 pips could I theoretically profit from a big loss/flash crash? And are there any downsides if this is possible? I’d also plan on changing the entry order accordingly as the long kept profiting. I’m assuming there’s gotta be something I’m missing because it wouldn’t make sense that you could just do this since it seems like a full proof way to break even at minimum.
It's noticeable that more and more people in Forex are talking about the so-called Carry Trade or Cary Trade strategy - some know nothing about it, some advice them to use it... I've commented on the matter elsewhere but think it's worth a separate post, thus I do it: The Carry Trade (Strategy) was very profitable prior to the Financial crisis - I could buy a small new car only on swaps every year from a 20K deposit! Since around 2008/9 it's being squeezed out as the interest rates are gradually reduced globally - this is due to the global economy is cooling down. This alone hit the most all the Currency Hedge Funds... My records show that for example Oanda's combined for all the currencies positive swap dropped 2.5 times in the last three month!!! For you as a novice fx trader the main danger of this carry strategy is that countries with high interest rates will inevitably cut their interest rate rather sooner than later. Thus, for example, if you sell USD/TRY to capitalize on an attractive positive swap it may soon mean for you that you are left with a huge minus generated by your sell-positions and a tiny plus swap (in relation to the minus). And you can't close those sell-positions with profit for god know how long - and imagine some economic turmoil during that time with volatility shooting up 10 times, or a flash crash etc... Buy the way Turkey cut its interest rate in September and brokers cut their positive swaps 2 times in response (!)... Nowadays the Carry Trade has lost its shine for most pro traders as there are other strategies generating superior returns, but for a novice it is useful to learn about it. P.S. Those currency pairs with the better positive swap are the most volatile.
Originally posted by Darkstar at Forex Factory. Disclaimer: I did not write this. I found this post on ForexFactory written by a user called DarkStar, which I believe a lot of redditors will benefit from reading. ________________________________________________________________________________________________________ There has been much discussion of late regarding borker spreads and liquidity. Many assumptions are being made about why spreads are widened during news time that are built on an incomplete knowledge of the architecture of the forex market in general. The purpose of this article is to dissect the market and hopefully shed some light on the situation so that a more rational and productive discussion can be undertaken by the Forex Factory members. We will begin with an explanation of the purpose of the Forex market and how it is utilized by its primary participants, expand into the structure and operation of the market, and conclude with the implications of this information for speculators. With that having been said, let us begin. Unlike the various bond and equity markets, the Forex market is not generally utilized as an investment medium. While speculation has a critical role in its proper function, the lion’s share of Forex transactions are done as a function of international business. The guy who buys a shiny new Eclipse more then likely will pay for it with US Dollars. Unfortunately Mitsubishi’s factory workers in Japan need to get their paychecks denominated in Yen, so at some point a conversion needs to be made. When one considers that companies like Exxon, Boeing, Sony, Dell, Honda, and thousands of other international businesses move nearly every dollar, real, yen, rubble, pound, and euro they make in a foreign country through the Forex market, it isn’t hard to understand how insignificant the speculative presence is; even in a $2tril per day market. By and large, businesses don’t much care about the intricacies of exchange rates, they just want to make and sell their products. As a central repository of a company’s money, it was only natural that the banks would be the facilitators of these transactions. In the old days it was easy enough for a bank to call a foreign bank (or a foreign branch of ones own bank) and swap the stockpiles of currency each had accumulated from their many customers. Just as any business would, the banks bought the foreign currency at one rate and marked it up before selling it to the customer. With that the foreign exchange spread was born. This was (and still is) a reasonable cost of doing business. Mitsubishi can pay its customers and the banks make a nice little profit for the hassle and risks associated with moving around the currency. As a byproduct of transacting all this business, bank traders developed the ability to speculate on the future of currency rates. Utilizing a better understanding of the market, a bank could quote a business a spread on the current rate but hold off hedging until a better one came along. This process allowed the banks to expand their net income dramatically. The unfortunate consequence was that liquidity was redistributed in a way that made certain transactions impossible to complete. It was for this reason and this reason alone that the market was eventually opened up to non-bank participants. The banks wanted more orders in the market so that a) they could profit from the less experienced participants, and b) the less experienced participants could provide a better liquidity distribution for execution of international business hedge orders. Initially only megacap hedge funds (such as Soros’s and others) were permitted, but it has since grown to include the retail brokerages and ECNs. Market Structure: Now that we have established why the market exists, let’s take a look at how the transactions are facilitated: The top tier of the Forex market is transacted on what is collectively known as the Interbank. Contrary to popular belief the Interbank is not an exchange; it is a collection of communication agreements between the world’s largest money center banks. To understand the structure of the Interbank market, it may be easier to grasp by way of analogy. Consider that in an office (or maybe even someone’s home) there are multiple computers connected via a network cable. Each computer operates independently of the others until it needs a resource that another computer possesses. At that point it will contact the other computer and request access to the necessary resource. If the computer is working properly and its owner has given the requestor authorization to do so, the resource can be accessed and the initiating computers request can be fulfilled. By substituting computers for banks and resources for currency, you can easily grasp the relationships that exist on the Interbank. Anyone who has ever tried to find resources on a computer network without a server can appreciate how difficult it can be to keep track of who has what resources. The same issue exists on the Interbank market with regard to prices and currency inventory. A bank in Singapore may only rarely transact business with a company that needs to exchange some Brazilian Real and it can be very difficult to establish what a proper exchange rate should be. It is for this purpose that EBS and Reuters (hereafter EBS) established their services. Layered on top (in a manner of speaking) of the Interbank communication links, the EBS service enables banks to see how much and at what prices all the Interbank members are willing to transact. Pains should be taken to express that EBS is not a market or a market maker; it is an application used to see bids and offers from the various banks. The second tier of the market exists essential within each bank. By calling your local Bank of America branch you can exchange any foreign currency you would like. More then likely they will just move some excess currency from one branch to another. Since this is a micro-exchange with a single counterparty, you are basically at their mercy as to what exchange rate they will quote you. Your choice is to accept their offer or shop a different bank. Everyone who trades the forex market should visit their bank at least once to get a few quotes. It would be very enlightening to see how lucrative these transactions really are. Branching off of this second tier is the third tier retail market. When brokers like Oanda, Forex.com, FXCM, etc. desire to establish a retail operation the first thing they need is a liquidity provider. Nine in ten of these brokers will sign an agreement with just one bank. This bank will agree to provide liquidity if and only if they can hedge it on EBS inclusive of their desired spread. Because the volume will be significantly higher a single bank patron will transact, the spreads will be much more competitive. By no means should it be expected these tier 3 providers will be quoted precisely what exists on the Interbank. Remember the bank is in the business of collecting spreads and no agreement is going to suspend that priority. Retail forex is almost akin to running a casino. The majority of its participants have zero understanding how to trade effectively and as a result are consistent losers. The spread system combined with a standard probability distribution of returns gives the broker a built in house advantage of a few percentage points. As a result, they have all built internal order matching systems that play one loser off against a winner and collect the spread. On the occasions when disequilibrium exists within the internal order book, the broker hedges any exposure with their tier 2 liquidity provider. As bad as this may sound, there are some significant advantages for speculators that deal with them. Because it is an internal order book, many features can be provided which are otherwise unavailable through other means. Non-standard contract sizes, high leverage on tiny account balances, and the ability to transact in a commission free environment are just a few of them… An ECN operates similar to a Tier 2 bank, but still exists on the third tier. An ECN will generally establish agreements with several tier 2 banks for liquidity. However instead of matching orders internally, it will just pass through the quotes from the banks, as is, to be traded on. It’s sort of an EBS for little guys. There are many advantages to the model, but it is still not the Interbank. The banks are going to make their spread or their not go to waste their time. Depending on the bank this will take the form of price shading or widened spreads depending on market conditions. The ECN, for its trouble, collects a commission on each transaction. Aside from the commission factor, there are some other disadvantages a speculator should consider before making the leap to an ECN. Most offer much lower leverage and only allow full lot transactions. During certain market conditions, the banks may also pull their liquidity leaving traders without an opportunity to enter or exit positions at their desired price. Trade Mechanics: It is convenient to believe that in a $2tril per day market there is always enough liquidity to do what needs to be done. Unfortunately belief does not negate the reality that for every buyer there MUST be a seller or no transaction can occur. When an order is too large to transact at the current price, the price moves to the point where open interest is abundant enough to cover it. Every time you see price move a single pip, it means that an order was executed that consumed (or otherwise removed) the open interest at the current price. There is no other way that prices can move. As we covered earlier, each bank lists on EBS how much and at what price they are willing to transact a currency. It is important to note that no Interbank participant is under any obligation to make a transaction if they do not feel it is in their best interest. There are no “market makers” on the Interbank; only speculators and hedgers. Looking at an ECN platform or Level II data on the stock market, one can get a feel for what the orders on EBS look like. The following is a sample representation: You’ll notice that there is open interest (Level II Vol figures) of various sizes at different price points. Each one of those units represents existing limit orders and in this example, each unit is $1mil in currency. Using this information, if a market sell order was placed for 38.4mil, the spread would instantly widen from 2.5 pips to 4.5 pips because there would no longer be any orders between 1.56300 and 1.56345. No broker, market maker, bank, or thief in the night widened the spread; it was the natural byproduct of the order that was placed. If no additional orders entered the market, the spread would remain this large forever. Fortunately, someone somewhere will deem a price point between those 2 figures an appropriate opportunity to do something and place an order. That order will either consume more interest or add to it, depending whether it is a market or limit order respectively. What would have happened if someone placed a market sell order for 2mil just 1 millisecond after that 38.4 mil order hit? They would have been filled at 1.5630 Why were they “slipped”? Because there was no one to take the other side of the transaction at 1.56320 any longer. Again, nobody was out screwing the trader; it was the natural byproduct of the order flow. A more interesting question is, what would happen if all the listed orders where suddenly canceled? The spread would widen to a point at which there were existing bids and offers. That may be 5,7,9, or even 100 pips; it is going to widen to whatever the difference between a bid and an offer are. Notice that nobody came in and “set” the spread, they just refused to transact at anything between it. Nothing can be done to force orders into existence that don’t exist. Regardless what market is being examined or what broker is facilitating transactions, it is impossible to avoid spreads and slippage. They are a fact of life in the realm of trading. Implications for speculators: Trading has been characterized as a zero sum game, and rightly so. If trader A sells a security to trader B and the price goes up, trader A lost money that they otherwise could have made. If it goes down, Trader A made money from trader B’s mistake. Even in a huge market like the Forex, each transaction must have a buyer and a seller to make a trade and one of them is going to lose. In the general realm of trading, this is materially irrelevant to each participant. But there are certain situations where it becomes of significant importance. One of those situations is a news event. Much has been made of late about how it is immoral, illegal, or downright evil for a broker, bank, or other liquidity provider to withdraw their order (increasing the spread) and slip orders (as though it was a conscious decision on their part to do so) more then normal during these events. These things occur for very specific reasons which have nothing to do with screwing anyone. Let us examine why: Leading up to an economic report for example, certain traders will enter into positions expecting the news to go a certain way. As the event becomes immanent, the banks on the Interbank will remove their speculative orders for fear of taking unnecessary losses. Technical traders will pull their orders as well since it is common practice for them to avoid the news. Hedge funds and other macro traders are either already positioned or waiting until after the news hits to make decisions dependent on the result. Knowing what we now know, where is the liquidity necessary to maintain a tight spread coming from? Moving down the food chain to Tier 2; a bank will only provide liquidity to an ECN or retail broker if they can instantly hedge (plus their requisite spread) the positions on Interbank. If the Interbank spreads are widening due to lower liquidity, the bank is going to have to widen the spreads on the downstream players as well. At tier 3 the ECN’s are simply passing the banks offers on, so spreads widen up to their customers. The retailers that guarantee spreads of 2 to 5 pips have just opened a gaping hole in their risk profile since they can no longer hedge their net exposure (ever wonder why they always seem to shut down or requote until its over?). The variable spread retailers in turn open up their spreads to match what is happening at the bank or they run into the same problems fixed spreads broker are dealing with. Now think about this situation for a second. What is going to happen when a number misses expectations? How many traders going into the event with positions chose wrong and need to get out ASAP? How many hedge funds are going to instantly drop their macro orders? How many retail traders’ straddle orders just executed? How many of them were waiting to hear a miss and executed market orders? With the technical traders on the sidelines, who is going to be stupid enough to take the other side of all these orders? The answer is no one. Between 1 and 5 seconds after the news hits it is a purely a 1 way market. That big long pin bar that occurs is a grand total of 2 prices; the one before the news hit and the one after. The 10, 20, or 30 pips between them is called a gap. Is it any wonder that slippage is in evidence at this time? Conclusions: Each tier of the Forex market has its own inherent advantages and disadvantages. Depending on your priorities you have to make a choice between what restrictions you can live with and those you cant. Unfortunately, you can’t always get what you want. By focusing on slippage and spreads, which are the natural byproduct of order flow, one is not only pursuing a futile ideal, they are passing up an enormous opportunity to capitalize on true inefficiencies. News events are one of the few times where a large number of players are positioned inappropriately and it is fairly easy to profit from their foolishness. If a trader truly wants to make the leap to the next level of profitability they should be spending their time figuring out how identify these positions and trading with the goal of capturing the price movement they inevitably will cause. Nobody is going to make the argument that a broker is a trader’s best friend, but they still provide a valuable service and should be compensated for their efforts. By accepting a broker for what it is and learning how to work within the limitations of the relationship, traders have access to a world of opportunity that they otherwise could never dream of capturing. Let us all remember that simple truth.
So I pulled up the data from January 2017 on both Euro and USD. I think everyone can agree that was when you wanted to go long EURUSD. Here's what I found on each of the categories that I've been told are important to fundamental analysis:
17-Jan euro usd
interest rate 0 0.75
inflation rate 1.8 2.5
gdp growth rate 0.6 1.2
unemployment rate 9.6 4.8
balance of trade -1583 -48715
government debt to GDP 90.3 105.8
Here's where we stand today:
18-Feb euro usd
interest rate 0 1.5
inflation rate 1.3 2.1
gdp growth rate 0.6 2.6
unemployment rate 8.7 4.1
balance of trade 26273 -53118
government debt to GDP 89.2 105.4
As I've noted before the big thing that stood out in the Jan 17 assessment is that negative trade balance on the US side. I still maintain that $48B/mo in negative cash flows (now $79B!) just from running the economy has to dwarf any contribution from Forex speculators, but maybe I'm wrong. Yes, trillions of dollars move through Forex and derivatives, but these are Euros being bought with no stop loss or take profit, and minimal concern for order entry position. We would have to go all the way back to May of 2014 to see conditions that greatly favored the US. Comparing this year to last, Euro is down 28% on its inflation but up 9.4% on unemployment and 1.2% on government debt. The trade balance has swung $24.7B in favor of the Euro. GDP growth rate and interest rate has not changed. On the other hand, the USD had doubled its interest rate while losing 16% of its inflation. GDP has more than doubled and unemployment has improved 14.6%. The massive trade deficit has worsened 9% to -$53B. Government debt improved last year 0.38% but I expect that number to worsen once Trump's tax plan is on the books. Tomorrow's inflation data is projected to show 1.9% which would be even worse at -24%. So going category by category:
interest rate: favors US for the moment (see below)
inflation: favors Euro
GDP: greatly favors US
BoT: greatly favors Euro
Government debt: favors Euro, soon will even more heavily
I'm not seeing inflation to justify interest rate increases on the USD side. If you want to buy bonds I think now is the time to do so. You can resell them later once the US announces it is backing off from interest rate increases. The Trump tax plan did prop up the stock market momentarily, but it also incurs debt that's going to hurt the US if it wants to continue raising interest rates. The US cannot fix its trade balance. The new tax plan really only helps plutocrats. I don't think giving more money to the average citizen would help either since the average citizen would just spend more on foreign goods. The only thing I can think of is some sort of redistribution of wealth, with a focus on helping small businesses. At any rate, I'm not a politician just a speculative spectator. Other than long EURUSD, JPY, ZAR, and CNH all look strong with high trade balances to counteract the USD. ZAR and CNH have higher interest rates, though Oanda doesn't pay interest on the CNH trade. NZD looks more risky but it might be worth a play as well. There isn't as much pressure for them to drive their currency down like there is for JPY and CNH. I like ZAR mostly as a hedge against the negative carry trade from being long the other currencies, but it should improve in value as well.
Opinions wanted: Choosing Broker after SNB Floor Removal
Hello, I am conflicted about the options for a brokerage account that I am now facing in light of recent events and would enjoy hearing others opinions. Pertinent Information:
I am a trader located in the USA
I trade several technical strategies, all of which revolve around tight breakouts and trend riding.
I have never needed to use more leverage than 1:50
I have had accounts with Forex.com and more recently held all of my funds in a Finfx account
My accounts have a combined value of ≈ $30,000
I recently received an email from Finfx stating that they could no longer accept US clients but had secured a deal with a broker in Grenada called "Tallinex". All of my funds, open positions, and accounts are to be moved automatically to a Tallinex server the first of next month. I have long considered hedging my risk by holding accounts with multiple brokers, and because of recent events I am more inclined than ever to do so. The only issue I am facing is selection of brokers. I have always known that if i were to open a US account it would be with FXCM but I am not sure about how safe that would be now, especially if my goal is to hedge risk; However, as far as US accounts go they are by far the least expensive to trade. So my questions are:
Should I keep my funds with Tallinex? I am conflicted about their reviews and regulatory standards.
Should I open an account with FXCM? They are by far the least expensive broker I know of and are very well regulated and known, but would my funds be safe there if they close down?
Should I open accounts at two different brokers to hedge my risk? Perhaps one in the US as a primary account and one off shore that allows hedging and higher leverage. And if so should those two brokers be FXCM and Tallinex?
I prefer being able to be able to hedge and have access to high leverage, however i would weight the cost of daily trading lower than the risk of having my funds in an account where it would not be safe. My current Opinion is that I should open an account with FXCM as I do not necessarily need to hedge or use high leverage, however I am unsure of the relative safety of doing that. If it is to risky than perhaps another US broker like OANDA would be good because I can feel safe with my money being there as well as their prices (though they are not stellar). Thanks for any and all responses! I have lurked this sub for almost a year for entertainment and relaxation, but I hope to be more active in the future.
Do you think someone will buy my C++ source code of a backtest/trade system?
Hi all, This is not an AD, but I'm asking your opinion whether someone may be interested in my system, or whehter it's worth that I do some work to find a buyer. This is a backtesting and trade system, not strategy. Main functions and features: * Written in C++, using Qt framework. Can run on Windows, Linux, and Mac. * Console program, very fast. * Currently only support Forex, but it's easy to extend to support other markets, such as Stock. * Backtesting. Candle bar based backtesting. It's not difficult to support tick based backtesting. * Optimization. Currently only brute force is supported, but it's quite easy to plug in other methods. * Walkforward testing. * Multiple threading. OpenMp is used for multithreading, each backtesting task is allocated on a CPU core. * One robot can use multiple instruments and multiple time frames. * Live trading system. Currently Oanda REST API is implemented. One robot can place buy/sell order on different account, to avoid no-hedging limitation. I have used it on my live account, and it works well. * Any more trade platforms should be able to be integrated to the system, such as FIX, but I didnt do any investigation yet. * Some indicators are included. MA, RSI, MACD, PSAR, etc, using ta_lib. New indicators can be developed easily. * Dukascopy data download. Incremental download tick data from Dukascopy, very fast. * Oanda data download. Using Oanda REST API, incremental, very fast. * Simple charting. So the report contains a balance chart, very intuitive. * Some other features, such as convert Dukascopy tick data to internal candle binary data, convert candle data to MT4 CSV, etc. * Unit testing. Some key components are unit tested. * High quality code. I'm an experienced developer. You can check my code quality and style from my open source C++ library, cpgf, on github, though it's not finance related. * Very good performance. The bar based backtesting system is highly optimized. * Since the architecture is good, the system can be used as either a program or a library. * About 50K lines of C++ code. * I spent about one year partial time on it. My question is, do you think anyone will be interested to buy my source code? And how much do you think I should charge for? Or beside selling the source code, what do you think I can do to earn some money via the system? My original purpose developing such a system is to use by myself, but I'm not sure when I can find a good strategy to earn some money for me. Thanks
FYI- OANDA clients in certain regions (Europe, Canada, and Asia Pacific for now) can now create MT4 Hedging Compatible accounts in order to view long and short positions for the same instrument on the OANDA MT4 platform. While no actual hedging occurs on these accounts (the fxTrade system will still net out the trades while MT4 displays multiple hedged trades), we are hopeful this functionality will meet the needs of traders either looking to use EAs that require hedging or multiple EAs that may conflict. If anyone would like more details, feel free to view our recent blog post, website, or ask a question here and I'll do my best to answer it. All the best, Alex Case Product Manager of Web & Desktop Trading Platforms at OANDA
Help me to choose a broker -- Oanda, FXCM, forex.com, FXDD
Hi all, I posted this thread on a Forex forum, I re-post it here hoping to get more advice. I live in China, and I'm a newbie to Forex trading. I plan to deposit 5,000 USD to experiment Forex trading after I get used to the demo account. After I'm OK with 5K USD, I may invest not less than 10K. I'm struggling to choose a broker, here are my criteria, 1, Allow hedging. I'm 100% wanting this. Indeed I'm not going to hedge the same amount of money at the same time to earn quick money (which is often used in big news event). What I want to do is, I have a long term position which will be there for several weeks, then I do some short term positions (intraday or several days). That's possible that I have two positions in two directions at the same time. 2, Money safety. During my Googling, I found that some brokers close a trader's account just because he/she earns too much money. 3, 100:1 leverage. 50:1 is not too bad but 100:1 gives me more flexibility. 4, Prefer to NDD (ECN or STP), but DD and MM is acceptable if money safety is guaranteed. 5, Regulates with NFA or FCA. 6, Support depositing using credit card. This is cheapest way for me, at least cheaper than wire transfer. 7, Easy to open an account. I prefer to open an account via internet only so I don't need post a lot of certifications to the broker. The other points except 1 are tolerant, but I really want point 1 and I think it will be important to me. Now comes to the brokers I've done some research on. I've checked a little with Oanda, FXCM, forex.com, and FXDD. Oanda, the most money safety one. 50 leverage. However, it doesn't allow hedging. All other brokers in my list are not as same money safety as Oanda. FXCM, the one that's really annoying me is the margin. Why margin for a lot of EURUSD is $750? That's really weird and is not connected to the real price. Can any one explain to me? Forex.com, as big as FXCM, but in the event that ECB put down the interest to 0.25% at Nov.7 this year, a lot of Chinese traders get network error and lost money. That scared me. FXDD, not as old as Oanda, and not as big as FXCM and Forex.com, and registered in Malta... So, what's your advice of a proper broker for me? The one not on my list is OK too. Thanks EDIT: another disadvantage of Oanda is that they have 6 candles a week, but it's a trivial problem since I can use other broker's MT4 for technical analysis.
Hey all, I know that the "hedging in the US" question has been asked multiple times, but going through the search results on /forex I haven't found a satisfactory answer. Maybe there isn't one? My singular interest at the moment is to find a US-based broker (or, at least, one that explicitly accepts US traders and has a history of integrity) that permits back office hedging. I heard, in the wake of the regulations that made hedging in the US illegal, that back office solutions were available, but so far, asking around multiple brokers, I am told either that it is not supported by them or that there is some roundabout "hack" to get it working. I am currently running multiple MT4 EAs on the same currency pair, each targeting a different element in the price action... or I would be, if TradeKing had back office hedging. I was told by an Oanda rep that I could synthetically hedge by using multiple MT4 accounts all linked to my main account, but what I don't get is where the "don't worry, we'll deal with it in the back!" brokers are. I'd like my EAs to all run on the same account on the same instance of MT4, and completely ignorant that the others exist. Are there any US-based brokers using MT4 that support seamless, completely transparent back office hedging? I'll go with Oanda if such a thing does not exist, but of course, I'd rather do less grunt work rather than more.
ECN. Used most by professional traders. Difficult platform for beginners
Minimum deposit $10000 (or $3,000 if under 25yo) * Well diversified -Oanda
Market maker. Second largest retail FX brokerage in the US. Easy platform for beginners.
No minimum deposit
Not well diversified, but well capitalized -Gain Capital (whitelabel forex.com) *Market Maker *Fair spreads *Minimum deposit $250 *Well diversified -FXCM Inc
ECN. Largest retail FX brokerage in the US
Minimum deposit $2000
Not well diversified. CAUTION: FXCM nearly went bankrupt in Jan-2015 due to a lack of diversification and low capitalisation. As a result FXCM LLC was bailed out with a large loan which may prove difficult to pay back. Be warned that their business may not be sustainable in the long term. -MBTrading
ECN. Mid-sized retail FX brokerage
Minimum deposit $400
International Only- -LMAX (whitelabel DarwinEx) *DMA broker based in the UK. Note that as a DMA broker LMAX eliminates the ability for LPs to last-look transactions. This may result in reduced liquidity during volatile times as liquidity providers would be likely not to risk posting liquidity to LMAX's pool. *Tight spreads *Minimum deposit $10,000 *Fairly well diversified -Dukascopy *ECN based in Switzerland, but available elsewhere depending on local regulations. *Tight spreads *Minimum deposit $100 *Fairly well diversified -IC Markets *ECN based in Australia *Fair spreads on standard account, tight spreads on professional accounts. *Minimum deposit $200 *Fairly well diversified -Pepperstone *ECN broker based in Australia. *Fair spreads on standard account, tight spreads on professional accounts. *Minimum deposit $200 *Not well diversified Software / Apps: Desktop/mobile
Apps are typically broker dependent. Some brokers have their own proprietary software, while others lease common software like Metatrader or NinjaTrader. Some software has a large development community for indicators and EAs.
Terminology/Acronyms: www.forexlive.com/ForexJargon - Common terms and acronyms FAQ: I need to exchange money, how do I do it? This isn’t what this sub is for. Your best bet is using your bank or an online exchange service. Be prepared to pay a hefty fee. I have money in one currency and need to exchange it into another sometime in the future, should I wait? Don’t ask us this. We speculate intraday in FX and shouldn’t be relied on to tell you what’s best for you. Exchange the money when you need it. I have an FX account, should I start trading demo or live? This is highly debatable. You should definitely demo trade until you have mastered how to use the trading platform on desktop and mobile. After that it’s up to you. Many think that the psychology of trading live vs demo trading is massively different. So it may pay to learn to trade live. Just be warned that most FX traders lose almost their entire first account so start with a low affordable balance. What’s money management? Money management is a form of risk management and is arguably the most important aspect of your trading when it comes to long term survival. You should always enter trades with a stop loss - the distance of the stop allows you to calculate how large of a percent of your account balance will be lost if your trade stops out. You can run a monte carlo simulation to figure out the risk of having a number of trades go against you in a row to drain your account. The general rule is that you should only risk losing 1-4% of your account per trade entered. More on this here: www.investopedia.com/articles/forex/06/fxmoneymgmt.asp www.swing-trade-stocks.com/money-management.html What about automated trading? Retail FX traders have been known to program “Expert Advisors” (EAs) to automate trading. It’s generally advisable to stay away from that until you’re very experienced. Never buy an EA from a developer because the vast majority of them are scams. What indicators are best? That’s up to you to test and find out. Many in this forum dislike oscillating indicators since they fail to capture the essence of what moves price. With experience you will discover what works best for you. In my experience indicators that are most popular with professional traders are those that provide trading “levels” such as pivot points, fibonacci, moving averages, trendlines, etc. What timeframe should I trade? Price action can vary in different timeframes. In longer term timeframes the price action and fundamentals are much more clear. Unfortunately it would take a very long time to figure out whether or not what you’re doing is successful on longer timeframes. In shorter timeframes you can often tell very quickly if what you’re doing is profitable. Unfortunately there’s a lot more “noise” on these levels which can prove deceptive for those trying to learn. Therefore the best bet is to use a multi-timeframe analysis, working from top-down to come up with trades. Should I trade using fundamental analysis (FA) of technical analysis (TA)? This is a long standing argument in these forums and elsewhere. I’ll settle it here - you should have an understanding of both. Yes there are traders who blindly ignore one of the other but a truly well rounded trader should understand and implement both into the analysis. The market is driven in the longer term through FA. But TA is necessary to give traders a place to enter and exit trades from a psychological risk/reward standpoint. I’ve heard trading Binary Options is an easy way to make money? The general advice is to stay away from binaries. The structure of binary options is so that when you lose the broker wins. This incentive has created a very scammy industry where there are few legitimate binary options brokers. In addition in order to be profitable in binaries you have to win 55-65% of the time. That’s a much higher premium over spot FX. Am I actually exchanging currencies? Yes and no. Your broker handles spot FX is currency pairs. Although they make an exchange at the settlement date they treat your position in your account as a virtual currency pair. Think of it like a contract where you can only buy or sell it as a pair. In this sense you are always long one currency while short another. You are merely speculating that one currency will appreciate or depreciate vs another. Why didn't my order fill? Even if price appears to cross over a line on your chart it does not guarantee a fill. Different charting platforms chart different prices - some chart the bid price, some the ask price and some the midpoint price. To fill a limit order price needs to cross your limit's price plus the spread at the time that it is crossing. If it does not equal or exceed the spread then it will not fill. Be wary that in general spreads are not fixed. So what may fill at one time may not at another.
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