Need the Fx Basics

[brownsfan019 17]

I was hoping with our FX traders that could provide some links to useful FX sites so I am not spending this long weekend all over the place.

 

I just need some FX basics and good informative sites to have in my bookmarks.

 

Some questions that come to mind:

1) What are the major pairs to look at?

2) What is each pip worth?

3) Exactly how worried should I be about placing money on deposit with a firm?

4) How about leverage? I know there's a ton available, but I'm not interested in being leveraged to the tilt.

 

And anything else you can suggest.

 

Thanks in advance!

[Hlm 10]

Hey Brownsfan. Here is just some QUICK replies since the market is currently open. I am sure others will pop in here and answer a little more detailed.

 

1) Take a look here

2) Depends on the pair and your lot size.

3) I personally remove money on a regular basis. It depends on the broker. But yes, no account protection like futures.

4) Again, just depends on the lot size you use. FX is very flexible.

 

Haha, very helpful, I know.

Main reason to post so fast was the link in number one. I have found that to be a good link to show people. If anyone has a better one please share.

 

Edit: Here is a good link as well. It is the "preschool" section of babypips.com --> HERE

Edited March 20, 2008 by Hlm
Added link

[brownsfan019 17]

thanks hlm!

[Sledge 13]

I was hoping with our FX traders that could provide some links to useful FX sites so I am not spending this long weekend all over the place.

 

I just need some FX basics and good informative sites to have in my bookmarks.

 

Some questions that come to mind:

1) What are the major pairs to look at?

2) What is each pip worth?

3) Exactly how worried should I be about placing money on deposit with a firm?

4) How about leverage? I know there's a ton available, but I'm not interested in being leveraged to the tilt.

 

And anything else you can suggest.

 

Thanks in advance!

 

Brownsfan:

A. EUR/USD is the Flavor of the day currency- every noob and their brother is riding the rocket.

GBP/USD- Our old soul and my personal favorite

USD/CHF- The inverse Euro

USD/CAD- I'm not even going here!

USD/JPY- Get your feet wet with EUR/GBP/CHF first!

 

Each currency pair has its own personality (took me months to figure this out)

1. Euro- is our resident toddler, exploring every day but continually growing for the most part.

2. GBP is the grandfather, he has had his wild days and is a bit more tame- but with enough movement to keep the party going and plenty of opportunity to make pips!

3. CHF- Pretty much the Euro twin (in inverse)

4. CAD and JPY- Both these currencies are the resident "Wild Teenagers" They whip and dip on a whim, they give you 50 pips and then steal it back before you can say "YEA.... Oh no!"

 

B. Each Pip is worth $10 on a 1.00 lot on the GBP, EURO and CHF, somewhere in the $9.90 range for the CAD and JPY.

 

C. Your best bet is to trade on the Globex. Any of the "bucket shops" even the big boys- you are trying to trade against their "dealing desk" They will tell you that you are "out in the market" but in essence- you are buying and selling against their other clients. Do well? You can and will get banned- not outright, but you'll see crap like bad data feeds, lagging, charts that don't update or "outages" Think it isn't possible? I was banned from the same brokers "demo program" TWICE! I was not a customer they wanted!

 

The BIGGEST reason to trade on the Globex is the following- if you get into a "bucketshop" and they go bankrupt- if you have a $100,000 account- you stand in line in bankruptcy court behind their landlord, or any other creditor. You ARE NOT protected with YOUR money if they go belly up! You say "but wait isn't the NFA overseeing them" Yup. But the spot FX market is the wild west of the trading landscape. Full of cowboys and thieves!

 

In The Globex you are trading out in the actual market with the rest of the world (not a brokers client list) and they are regulated by the CME, your funds are safe!

 

This site will give you the scare of your life and verify everything I stated above:

nondealingdesk.com

 

D. Bucket Shops will allow you to leverage to the hilt! You'll see everything from 100:1 to 400:1.

As you are no doubt a seasoned trader- you know darn well the basics of money management and protecting your capital to "live to trade another day" so I won't expound on this one at all.

Sledge

[milliard 10]

 

But the spot FX market is the wild west of the trading landscape. Full of cowboys and thieves!

 

That's a pretty (general) sweeping statement you make there buddy. Stick RETAIL in front of the above highlighted text & your comment maybe holds water.

 

I can assure you there are very distinctive levels of quality between the institutional & retail engines within the spot market. Pricing, delivery, execution & working practices are worlds apart.

[torero 10]

Check out babypips.com, I usually recommend this site for those new to forex.

[Sledge 13]

That's a pretty (general) sweeping statement you make there buddy. Stick RETAIL in front of the above highlighted text & your comment maybe holds water.

 

I can assure you there are very distinctive levels of quality between the institutional & retail engines within the spot market. Pricing, delivery, execution & working practices are worlds apart.

 

Millard-

Fair enough, I am VERY interested in learning more about an honest and reliable broker, as would thousands of other people if they were to see this thread. You are talking to Joe Average here though- I don't have a $500,000 account.

 

If you would point me to a spot broker who:

1. Doesn't claim a NDD and is not lying

2. Won't ban you, like Livermore, if you end up actually succeeding

3. Have the platform "fail" when their is high volitility and not give you a B.S. answer that it is "slippage" (in reality they probably didn't have the liquidity to actually cover so they time the trade out or offer it too you 10 or 20 pips away at a loss)

 

I would Honestly be very happy to demo their platform to give them a test-run to see! I was banned from one broker twice! After the third run at it they changed their currency out to 1.XXXX decimal places and were STILL stealing my swap $ (i.e. on a GBP long I should be getting PAID at EOD if I hold my position not have that amount taken from my account) - I bailed on their program days later!

 

Right now the best answer I could provide Brownsfan is what I have lived and what I know. If you have a third option. I personally would like to know more about it and as said, I'm SURE others would too!

Sledge

[smwinc 20]

Millard-

Fair enough, I am VERY interested in learning more about an honest and reliable broker, as would thousands of other people if they were to see this thread. You are talking to Joe Average here though- I don't have a $500,000 account.

 

Sledge, Millard is talking about the real Spot FX market, not Market-Making brokers like FXCM, interbank FX, etc.

 

The Spot FX market is able to be traded through Reuters D2 or EBS (the two largest facilitators).

 

EBS / Reuters D2 are designed for institutional clients.

 

Brownsfan, I would highly suggest trading the FX futures on the Globex as others suggested.

 

Depending on how you trade, I would also recommend getting the real cash data from EBS.

[milliard 10]

Millard-

Fair enough, I am VERY interested in learning more about an honest and reliable broker, as would thousands of other people if they were to see this thread. You are talking to Joe Average here though-

 

I don't have a $500,000 account.

 

Sure, but all I was concerned with was that the important little tag (retail) was inserted in front of your comment regards cowboys & thieves. Quite crucial to distinguish between the hobby shops & the legitimate working environment.

 

I’m afraid I can’t comment on the rest of your post, & I wouldn’t imagine Mr Krantz or Ms Gistane (Anna-Maria) could either. We don’t ply our trade in gamblin shops.

 

If folks are sufficiently equipped & loaded with sensible (FX) market skills & experience, (note the word sensible!!) then they really shouldn’t be wasting time, effort or indeed, their own money hustling hobby shops & getting distracted with all that nonsense.

 

There are firms & groups of investors out there with pockets full of greenbacks only too willing to bankroll the serious hotshots.

 

Instead of wasting energy on things which can’t be changed, funnel it into area’s that can make a difference.

 

Slinging regular 5 & 10+ million clips (of someone else’s mooool-ahh) thru a decent Prime or heavyweight (spot) dealing engine will return far more bang for your buck than pissing around with 5th rate hustling shops. And that kind of financing will open those kinds of (Prime Broker/top tier supply) doors.

 

That’s providing of course one possess the aptitude & psychological maturity to handle both themselves & (regular) heavy size.

 

Retail shops exist for a reason. I assume most folks are savvy enough not to require the likes of me to lay those reasons out on the line.

Edited March 21, 2008 by milliard

[torero 10]

Sledge, have you tried Interactive Brokers, MBTrading or EFX? I heard IB is not bad, even for forex. I trade through MBT and EFX belong to MBT. I have no complaints from MBT, occasionally their quotes lags during high volume periods but I have FXCM quotes on Ensign and can monitor the real time quotes, I put in my orders and they are accurate with the bid/ask at the moment. They have demo acct you can try out. Try EFX as they have charting tools on their platform.

 

Sledge I was like you when I got started and was frustrated also at the swindling and dealing that goes on behind the scenes and worst was they were getting away with it. But I tried out a few accounts with different brokers with small lots to test their claims.

 

All I'm saying is don't generalize that all are bad. True the worst offenders are the largest companies with the highest budget in marketing to capture the inexperienced. These are the same guys that smear the reputation of the forex industry. But there is some decent ones out there if you look for them and of course read reviews from others.

 

Let's just say I used to lose money from DD (dealing desk) and now it's just the opposite from trading with NDD. With DD, you need to swing trade if you are to make money. For shorter time frame, there is 0 chance of winning. But with NDD you can do both and do all right for yourself.

 

Good luck.

[Anna-Maria 10]

 

I’m afraid I can’t comment on the rest of your post, & I wouldn’t imagine Mr Krantz or Ms Gistane (Anna-Maria) could either. We don’t ply our trade in gamblin shops.

 

Now what would you know about my whereabouts & the kind of company I keep mister. I’ll have you know I’m more than adequately versed on the intricacies of the retail spot environment. Stop being so grouchy & mean spirited with these nice folks.

 

Pay him no mind Mr Sledge, he’s just pissed coz he’s got to spend Good Friday ploughing through accounts & reports. His laziness is paying him an overdue visit :o

 

torero offers a playable alternative if you’re looking to maintain an independent slant, rather than hook up with a fund or private money. I’d also highly recommend sticking your snout in the CME trough. In fact it wouldn’t do folks any harm to spread their funding base around & have an iron in each fire.

 

I understand EFX are a tad on the heavy side with their commissions? maybe take a looksy at Hotspot & London Capital Group, who I believe offer a sample of Interbank access routes accommodating differing palates.

 

I/we don’t have any front-end experience of any of them unfortunately, but I’m sure if you approach them & make yourself heard you’ll get any pertinent questions answered.

 

Failing that, Andre does actually make a valid point regards hawking your CV down appropriate avenues if you can proof a solid track record & fight your corner whilst looking the money-men directly in the eye when they test your mettle.

 

Sorry can't be of more assistance. I certainly hear you though regards the banana skin tactics of the retail shops. They really are distasteful characters of the highest order.

Edited March 21, 2008 by Anna-Maria

[milliard 10]

Why doesn’t that surprise me any. I ought to have figured you’d be sticking your beak into places & things that don’t concern you.

 

I guess we’ll have Mr Krantz informing us he’s a major investor in Oanda next?!

 

Mind you, that’s not such a shabby income stream judging by the bemusing attraction, apparent high strike-out rate & account pumping antics of the gamblers.

 

Think maybe we ought to divert & branch into retail shop distribution Annie Oakley? What do you reckon.

 

Grease the slimy palms of the laughable regulators & we're home & hosed.

[torero 10]

Hi Anna-Marie, I see you're not spending Good Friday at a pub or in some country club sipping some hot tea or better yet an icy margarita! So much for teasing Andre about being stuck at the office!:o

 

Thanks for the recommend on these 2 brokers, I'd certainly research around for them.

 

Just out of curiosity, a commoner wanting to know about the forex biz, what is the length of time is considered solid record before a firm would even consider looking at it?

[Anna-Maria 10]

Good morning torero,

 

:o We've got end of quarter meetings looming, so it's all hands on deck I'm afraid. The bars will have to wait till tomorrow & Sunday

 

We had a fella approach our parents just last year via one of the suppliers we do business with. He had 3 years (live money) records + sound business (trade) plans behind him. He wasn't short on confidence that's for sure, which tipped the balance.

 

It very much depends upon the individual torero. Most firms/investors will only talk to prospects who possess extremely strong & well defined (trading) structures. They know exactly what they want & how you should operate out there.

 

They'll quickly close negotiations if a candidate fails to deliver robust risk & quantifiable presentation parameters. They can smell bullshit from afar.

 

The better prepared you are, the more serious you'll be taken.

[Sledge 13]

Sure, but all I was concerned with was that the important little tag (retail) was inserted in front of your comment regards cowboys & thieves. Quite crucial to distinguish between the hobby shops & the legitimate working environment.

 

Instead of wasting energy on things which can’t be changed, funnel it into area’s that can make a difference.

 

 

Milliard-

I think if nothing else my initial "comment" shed light on a subject that is hard to know unless you have lived it from this side of the trade. I remember when I started I said- "Damn I know how to trade, but where I park my money and feel safe about it is the hardest part of trading."

 

Taking all of my hard work to seed my account and to have it stolen by a shady broker would yield results that I cannot and will not mention. So sadly for me (even still) I just don't have the money backing to play in your arena. I'm not sure what brownsfan's account trading size is- but if he wants to play the spot fx market and isn't a VERY LARGE monetary holder- I am warning him to the pitfalls of the "bucketshop"

 

I know there are honest brokers, I know that the comment was general and sweeping. I am not here to offend, but I'm also not here to pander to anyone I don't know and am honest about what is out there. Would I be a good contributor if I said "Yeah go to FXCM they are the largest broker out there- that makes them good" Hell no- they are one of the biggest thieves. That is HOW they are the largest.

 

Your post sheds light on the other side of spot- a side I cannot speak from as I am not in that ballpark. So no offense intended.

Sledge

[milliard 10]

I hear ya sledge, & you certainly didn’t offend.

 

I totally agree with your comments re; majority of the retail fx brokers out there. Spot has attracted a bad rap now for a good while, & the double barrel kick from clueless punters & scum bag (retail) brokers really pisses the genuine players off big style.

 

On the whole, those dirt bags (brokers) attract exactly the type of punter they deserve, & vice versa.

 

Most of the crowd who have jumped on the wagon over the past few years are under capped, over leveraged, & gunning totally inadequate strategies for their intended aims.

 

They do very little (initial or ongoing) research, planning, testing of sorts or even understand the generic marketplace & what makes it tick. Little wonder they go underwater so quickly. Most of them are a brokers wet dream.

 

The minority who go in amply prepared & with eyes wide open quickly find out (as you appear to have done) the reality is very different from the rosy, sexed up picture being painted by all the bullshit marketing.

 

But there are alternatives out there for you & any other player who has their head screwed on, & has been ever since these slime balls began sprouting up over the last 5 or 6 yrs. All’s it takes is a little snouting & ferreting around & a confident persona. Ring the larger supply houses up & talk through with them what you’re looking for.

 

They’re not ogre’s. They want to do business with professional players. If they can’t accommodate you, then push them to recommend an alternative over & above the lower tier retail shops.

 

Ask them if they have contacts into private money or short to mid-term investment vehicles seeking an avenue outlet etc etc. How can you get on the lower rung of the Interbank engines blah blah blah……

 

These fella's (dealers, clerks, reps) speak to a lot of customers every day (including spec desks/hedge outfits/CTA pods/high net worth punters etc) & know what's going on out there.

 

You got to put yourself out there & hustle these characters. They’re not going to come knocking your door. Not many have the balls to contact them. As long as you’re confident, know your onions & you’re polite yet ballsy, they won’t hang up on you.

 

As Anna-Maria said, if one possesses a keen awareness of what’s what out there & has his-her shit wrapped tight then the options are a little more varied.

[Sledge 13]

It very much depends upon the individual torero. Most firms/investors will only talk to prospects who possess extremely strong & well defined (trading) structures. They know exactly what they want & how you should operate out there.

 

They'll quickly close negotiations if a candidate fails to deliver robust risk & quantifiable presentation parameters. They can smell bullshit from afar.

 

The better prepared you are, the more serious you'll be taken.

 

Anna-

I am most apprciative of all of you that are actually in the market and on the side that you are. As you and Milliard seem to be open and honest about contributing to this conversation- Would you elaborate on this?

 

With so many people out there who WANT to get their feet wet, but don't want to go to a "bucketshop" can you give more details on the info in the quoted text above?

 

Are you saying that on the high-end spot brokers you have to lay out a plan (like a business plan) to them before they would take you as a customer? What do they want to know? How much of my actual trading "strategy" would I need to reveal to them?" Also- what is the minimum account size at these larger "non-retail" sopt firms? This is a whole new world for me, so hopefully my questions do not seem like "no-brainers" to you.

 

If I could find a reputable spot firm that would work with me, or allow me to trade with them without a huge account. I'm all ears to know more info!

Thanks in advance.

Sledge

[Sledge 13]

Sledge, have you tried Interactive Brokers, MBTrading or EFX?

 

Torero-

I did demo their platform at one time but unless something changed--when I did- they had no charting to go along with it. Some folks didn't care, but it was too cumbersome for me to have a charting program running and alt+tabbing over to EFX to make my entries and monitor trades. I'm a longer term trader now so I may look into it, but at the time I was scalping and it was nearly impossible to do it with no charts

Sledge

[Anna-Maria 10]

 

This is a whole new world for me, so hopefully my questions do not seem like "no-brainers" to you.

 

If I could find a reputable spot firm that would work with me, or allow me to trade with them without a huge account. I'm all ears to know more info!

 

I think we’re talking at cross purposes here Sledge.

 

The comments you highlighted above are in reference to individuals approaching investors or backers, not the requirements of brokers.

 

Price providers don’t care what your strategy consists of, as long as you stump up the required (minimum) capital to trade & behave yourself.

 

I believe Hotspot still operate a two tier entry grid. Last I heard an individual could leg in for $7.5k min. Take a snoop around their site for more info, I haven’t had occasion to look in there for a long time.

 

http://www.hotspotfx.com/main.jsp

http://www.hotspotfxi.com/

 

 

London Capital can lever you into various portals (incl Hotspot via a straight-thru link) dependant upon your stake, aims & variables. They cater for small to mid-sized specs as well as multi-outlet operators across several streams.

 

Take a look around the site, make a few notes & maybe give them a call & explain your situation. My brother had dealings with a couple backers who dealt with them a while back – according to him, they spoke highly of the reps at the time.

 

http://www.capitalforexpro.com/bankPortal.php

 

 

I’m a little rusty on stuff which doesn't directly affect how & where we operate, so I'm not sure who else you could approach as an “independent” to be honest.

 

Most of the next level price suppliers such as your Prime Brokers & low tiered Bank desks are geared more towards funds & firms. The houses we use only entertain well financed specs & high rollers who have substantial capital input.

 

Anyhow, I hope some of this stuff assists in some small way. Let us know how you go on, & if Art (Krantz) can throw a log on the fire when he rolls in middle of next week, then I'm sure he'll let you know.

[Sledge 13]

Anna-

$7.5K is absolutely alright. I was sure to start with at least $10K when I started anyways. So this absolutely is OK and I would advise anyone who does get into FX to seed their account with at least $10K.

 

ANYONE READING THIS ASIDE: Just because the bucketshops LET you open an account with $500 does NOT mean it is a good idea! They will be glad to get you in as a client, overleverage yourself, take your $500 and wait for the next sucker, all while turning you off of the market.

 

Ok, back to Anna:

Thank you for your post & links. I will be sure to look at the sites you gave and look to making some phone calls! Yes this helps, this helps a lot! Thank You!

Sledge

[Sledge 13]

Not wanting to stir the pot- just provide backup to the slimy tactics of RETAIL spot brokers. This VERY scary flyer was discovered some time ago and is making its rounds on the web. Do you all see why you almost are scared to trade with any of these people?

 

Credit to "Burgerking" on the "Forex Factory" Forum

(Thread here http://www.forexfactory.com/showthread.php?t=70582)

Edited March 21, 2008 by Sledge
Added Link

[Anna-Maria 10]

Thank you for your post & links. I will be sure to look at the sites you gave and look to making some phone calls! Yes this helps, this helps a lot! Thank You!

 

Ok, cool & you're very welcome.

 

Right, we've had more than enough of all this paperwork for one day, time to shut up shop & go slug a few beers

 

Enjoy the extended w/end....

[smwinc 20]

Not wanting to stir the pot- just provide backup to the slimy tactics of RETAIL spot brokers. This VERY scary flyer was discovered some time ago and is making its rounds on the web. Do you all see why you almost are scared to trade with any of these people?

 

Credit to "Burgerking" on the "Forex Factory" Forum

(Thread here http://www.forexfactory.com/showthread.php?t=70582)

[ATTACH]5579[/ATTACH]

 

Sledge, I wouldn't trust retail brokers as far as I could throw them, however that flyer is 100% fake (although pretty amusing).

[Sparrow 10]

The 888 account is very similiar the 88888 account Nick Leason used, maybe just a coincidence or a hoax .

 

Trading non retail would be very interesting however I'm a few bucks short of 5M non leveraged.

[Sledge 13]

Sledge, I wouldn't trust retail brokers as far as I could throw them, however that flyer is 100% fake (although pretty amusing).

 

How do you know that it is fake?

Sledge