Foreign currency (FX) Trading

[TFG]

TFG -
How do you change the time in the charts to your local time? It seems to be in Eastern US time.

You can't for some strange reason!
I have read this about MT4 and it is indeed very frustrating, that is part of the reason, I only use it to plot charts with.

Here is the link for the MT4 tweaks.
http://www.forexfactory.com/showthread.php?p=2245371

[TFG]

Started fooling around with the demo over my morning coffee, bought small amounts of EUR-GBP and USD-CHF for no reason other than a whim from the graph that perhaps they were going to go up today. No golden ratio rules or what have you. So I made an incredible killing of 40% profit on top of my starting deposit of 5000 demo euros.

How the hell is this possible??

It is called FX trading.

You know, with that software and a 1,000,000 Yen deposit buying 10 lots of $100,000 at 1/200 leverage, it is quite possible to knock out 1,000,000 Yen in a matter of hours or even minutes, if you plot the chart correctly.

All you need at those rates is a 1 Yen swing down and you score it.
There again, a 1 yen swing up and you lose it.

[TFG]

Cyka

Have you experienced any problems with FXonline such as, dropping the connection and it remaining down for 40 mins or so.
I have, several times over the last couple of weeks and one right now, smack in the middle of a trade after I pushed the buy button.
It is not my system's fault for sure.

[IkemenTommy]

Another weird shit that's been happening is that your order suddenly disappears when you're offline and it seems that the order closes itself without your permission, often when it's in the negative profit. I only set the T/P limit but not the S/L so I am thinking that the software is messed up. I just lost over 800 dollars by this but good thing it was just a demo account with playing money.

[Cyka UchuuJin]

Another weird shit that's been happening is that your order suddenly disappears when you're offline and it seems that the order closes itself without your permission, often when it's in the negative profit. I only set the T/P limit but not the S/L so I am thinking that the software is messed up. I just lost over 800 dollars by this but good thing it was just a demo account with playing money.

one possibility is that if you don't put in a stoploss order, the system might liquidate your positions if it goes below a certain level. they do this as a failsafe so that your account doesn't go negative.

[IkemenTommy]

one possibility is that if you don't put in a stoploss order, the system might liquidate your positions if it goes below a certain level. they do this as a failsafe so that your account doesn't go negative.

This might come as a stupid question to you, but can you have negative equity?

[Cyka UchuuJin]

This might come as a stupid question to you, but can you have negative equity?

no, you can't. most accounts require that you maintain a minimum balance. the forex.com mini-account is a 50$ minimum to open a position. if your account balance goes near that, then they automatically liquidate your positions to keep you from going broke.

[TFG]

Well, you have to have a margin to trade with or you will get your account closed.

Just got this, it doesn't get much easier to trade FX than this.
It pops up messages advising you to buy or sell and puts blue dots telling you to buy here and red ones telling you get out of the trade.

Love it...Mind you, I still think Fibonacci levels are important and I put them into the template just go get the best of all worlds. In market today, we need this. Anyone get caught in the $ crash? I was in a deal and decided to take a small profit when it came down.

[TFG]

You know, the thing to watch on that software if anyone uses it as a trading platform and not as charter as I use it. The Trailing stop, which is a stop point you set but it trails up behind your profit, anyway, it only works while the software is up and connected to the broker's server. If you turn off you PC, the trailing stop will NOT work.

Also, the problem about your account diminishing is the same as Cyka said, unless you liquidate it, it stays open and if it crosses over the time frame you will have to pay a fee for rolling it over to the next day.

[TFG]

Just managed to get the auto trading working in this template and am taking it for a spin.

Wooooooo...It just knocked out 64,000 Yen out of a trade I would not have dared to enter. it puts in the trailing stops, and indeed the lots to be traded after you have customized the Expert Advisor, then it just makes trades all day and night.

I will be interested to see how much the equity is in the morning on this 200,000 Yen demo I am testing it on.

[TFG]

Hmm, not bad once I tweaked the EA to trade smaller lots with a lower trailing stop and lower target profit price.
Made, 141,000 Yen in 3 trades this afternoon with 2 losing trades of 6,000 & 500 Yen.
I like how this program trades both Long & short positions, this way you win whatever the trend.
Can't beat that now can you.


These automated trading systems are certainly starting to look reasonably good even though I prefer stalking the market myself.
Still, one could always use a system like this to manually trade with just to point you to a possible entry or exit so you don't have to sit in front of the PC all day staring into the market.

[TFG]

Just an update.
I am no longer trading the system previously shown in the thread above.

The reason being that it has too many false buy signals, gets into a trade a little too late and the exit signal is too slow. Also it is a completely automated system which I don't trust.

I am trading this manual system which has over the last week earned over 1,000,000 Yen on USD/JPY EUR/JPY CHF/JPY GBP/JPY.
The equity doesn't show a million Yen, as I reset it this morning with an account of 300,000 Yen, just so I can be sure it is consistent. It is, VERY consistent and I think this is going to have to be traded live.
It is a manual system but the EXPERT ADVISER has been made to alert the user when a trade is shaping up and indeed once all the conditions to take the trade either LONG/SHORT are met. It is a bit complicated to learn but very easy once you learn the rules and apply them to EVERY trade you make.
The rules have to be observed STRICTLY. If they are it is a winner every time.

[TFG]

Anyone thinking of starting FX trading should beware of Brokers that change their rates, find a broker with Fixed rates before you even demo their platform.

FX online has just upped their $/Y rate from 2 pips to 5.

[TFG]

Best advice for anyone wanting to learn FX trading.
---------------------------------------------------

This a great site to learn FX trading.
Don't get put off by the Nursery School type pics and stuff, it is exactly where we need to start and this site is a GEM for anyone wanting to learn FX.
I suggest anyone pays special attention to the Fibbonacci retracements!!!!


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

Once you learn the ropes, then I would suggest this site to learn trading systems and indeed for daily information on News, trends etc.
http://www.forexfactory.com/

Then, get a good demo from a broker that provides the trading platform Meta Trader 4.
Demo, the free account with pretend money using the system or methods of your choice for at least 3 months and make sure you are profitable with your methods before you open a real account.

You can make a lot of money at this, you can also lose a lot of money but you can NEVER lose more than your original investment (unless, you leave it on your account while a trade goes against you) and of course with the Demos you can never lose anything.


The 1 min TF scalping system.
Another great system that can get you 300 pips a day, easily.

[TFG]

I have just switched to yet another trading system as the market is not trending right now. This system is a 4H system and while I was comparing ODL Japan's mt4 trading platform with FX online because of a rumor I heard about MT4 brokers, something VERY strange has come to my attention.

Below is the USD/JPY 4 Hour chart on ODL Japan.
Note how the spike with the horizontal red line is at exactly 97 Yen.



Now, take a look at FX online USD/JPY 4H and note how the spike is at 97.48


This got me concerned so, I also looked at Fx online"s CHF/JPY 4H and found this. See the second spike on the left that is higher than the spike on the right?


This 2nd spike is not on ODL Japan's mt4 chart which is impossible.


There are a lot of rumors going around right now of unscrupulous brokers targeting traders SL points by spiking targeted individuals platforms individually with spikes that do not exist.

Beware of this!!!!

[pheyton]

For us laymen, how is it possible for a broker to produce a spike?

[TFG]

For us laymen, how is it possible for a broker to produce a spike?

There is a server system plugin that comes with Mt4 that can be utilized by a broker to do the following. It appears that Java platforms are also not immune from this. And I have heard that it is also possible to target an individual users platform.

Not how the Foreconline spike is exactly at the break point of the trend, people would probably have placed orders there, with 20-30 pip stops, then they hit you with a PHANTOM 48 pip spike and you get stopped out and lose thousands of dollars in a blink of an eye.




Not all brokers may display this.

[IkemenTommy]

The US dollar hit mid-93 JPY today and it's currently slowly climbing at around 94. I bet it will bounce back up to 95-96 by tomorrow. We'll see.

[TFG]

The US dollar hit mid-93 JPY today and it's currently slowly climbing at around 94. I bet it will bounce back up to 95-96 by tomorrow. We'll see.

Tell me about it. I was riding it all the way down for 60 pips then another 70 after the retracement.

[Jack]

The U.S. dollar will crack the 90 JPY mark soon and when that happens it will be around 85 very quickly. What's keeping the USD from collapsing right now is the weak commodities market.

[TFG]

The US dollar hit mid-93 JPY today and it's currently slowly climbing at around 94. I bet it will bounce back up to 95-96 by tomorrow. We'll see.

Perhaps not.

[Big Booger]

If foreign currency trading is so lucrative, then why doesn't everyone get involved with it? I am often overly skeptical about "get rich quick" and "a winner every time" schemes.

How can you lose money? If everyone makes money then how can that system sustain itself?

[FG Lurker]

If foreign currency trading is so lucrative, then why doesn't everyone get involved with it? I am often overly skeptical about "get rich quick" and "a winner every time" schemes.

How can you lose money? If everyone makes money then how can that system sustain itself?

Far far FAR from everyone makes money in FX. 95 to 98% of traders LOSE money. Some say 99%.

To have any chance of making money in FX a trader needs to:

1) Study. Study. Study some more. And never stop.

2) Develop (or follow) a trading system and ALWAYS FOLLOW THE RULES. There is much more to this rule and a lot of study like in #1. Market conditions change so sometimes you need to change trading systems. Rapidly jumping systems generally isn't good though, it takes a lot of time and effort to understand how most systems work with the market.

3) Follow good money management rules. The basic rule is to NEVER risk more than 1% to 2% of your trading capital in any one trade. If you have $10,000 in trading capital you shouldn't be putting more than $100 to $200 into a single trade.

4) Trade without emotion. This is perhaps the most difficult thing to do as no one likes to lose money.

I think TFG posted this earlier but spending some serious time studying the school at http://www.babypips.com/ is probably the best free way to get a small understanding of how FX works.

If you would like to see how easy it is to lose money in FX, don't study at all and just open a trial account that has a $10,000 balance of play money. Make some trades and see how long that $10k lasts.

[TFG]

If foreign currency trading is so lucrative, then why doesn't everyone get involved with it? I am often overly skeptical about "get rich quick" and "a winner every time" schemes.

How can you lose money? If everyone makes money then how can that system sustain itself?

I think that is a good policy to be Over skeptical of get rich quick systems, me too.

As FGL said, FX isn't a get rich quick scheme, it is a Lose All Your Money Quick scheme. Unless, you know what you are doing.

The first thing to learn is that the markets feed off 4 factors, Hope, Greed, Despair & Fear.
If you can lose all those qualities you can make money, if you can't, DON'T EVER start FX or those that can will steal your account, your house & your wife. LoL

[Big Booger]

I think that is a good policy to be Over skeptical of get rich quick systems, me too.

As FGL said, FX isn't a get rich quick scheme, it is a Lose All Your Money Quick scheme. Unless, you know what you are doing.

The first thing to learn is that the markets feed off 4 factors, Hope, Greed, Despair & Fear.
If you can lose all those qualities you can make money, if you can't, DON'T EVER start FX or those that can will steal your account, your house & your wife. LoL

I am glad you posted that because the way I was reading this whole thread was this "Why in the fuck are you all not doing FX trading like me, and making shitloads of money?"

FGL explained the perils well enough. I am not interested in FX trading enough to invest all the time in it as you have TFG. However reading this thread is nonetheless interesting for me because it gives me insight into a topic for which I had little knowledge of before.

[TFG]

FG..
You probably already know this but, if you haven't already worked it out, I suggest you look at the USD/JPY & CHF/JPY pairs. You can pretty much judge how the USD/JPY pair is going to move from teh CHF/JPY pair as the CHF always, at least to me, seems to move before the USD.

This is a trade I made from few mins ago.

Not exactly playing by the rules here but I am busy.

Sell Stop orders placed below break line on USD/JPY CHF/JPY

CHF/JPY breaks 50 fibo, order gets filled. Still waiting on USD/JPY


USD/JPY gets filled, placed SL.


Both Trades look like they are going to stall.
Closed orders and took 8,000 Yen profit.


Conclusion: It was a good decision to close orders and take profit.



You can do this all day with much larger profits on these pairs.
Seems like the market ranging session is slowing down and trending is starting to appear again.
Think I will start using the Trendfollower 5 min system this afternoon as the above system works best in a ranging market.
This way, we can have the best of both worlds.

PS: I dropped the 4H TF system, just not my style.

[TFG]

I am hearing 85 Yen=$1.00 in the not too distant future.

[FG Lurker]

I am hearing 85 Yen=$1.00 in the not too distant future.

I wouldn't say this is impossible, the yen did hit 79.75yen in April 1995 so it's not like 85yen is unseen territory.

However I tend to be wary of predictions like this without seeing some of the reasoning for the figure. It's a lot like oil: When it was booming "experts" were saying that we'd see $200/barrel. Now that oil is down "experts" (probably even some of the same ones) are saying that we'll see $30/barrel or maybe even less. A lot of the time people just seem to extrapolate from the current situation without considering the effects the current situation is having.

There has been some bad financial news coming from Japan over the past couple of months (75% to 90% profit drops etc) but nothing like the scale of what has been going on the the US. Things are about to get a whole lot worse here though and this could definitely stop the yen's rise, perhaps even start to reverse it.

[TFG]

This is a major concern.

US employers axed 533,000 jobs in November, the biggest monthly cut since 1974, the US Labor Department said.

In a dramatic indication of the worsening economic situation, the US jobless rate rose to a 15-year high of 6.7% from 6.5% in October.

Since these latest numbers were compiled, further jobs losses have been announced, including big cuts at AT&T.

Recent figures have fueled fears that the world's biggest economy is set for a deep, long downturn.

http://news.bbc.co.uk/2/hi/business/7767326.stm

[FG Lurker]

This is a major concern.

US employers axed 533,000 jobs in November, the biggest monthly cut since 1974, the US Labor Department said.

In a dramatic indication of the worsening economic situation, the US jobless rate rose to a 15-year high of 6.7% from 6.5% in October.

A big part of the equation though is how much the market has already anticipated the severity of the data. The DOW ended up 3% and NASDAQ up 4.4%. The dollar gained on the Yen, was about equal on the Pound, and lost a bit against the Euro. So while the data was very bad not a whole lot happened... Non-farm payroll news announcements are often one of the most volatile trading days of the month so the lack of strong reaction seems to indicate that the market expected it to be about what it was...

Recent figures have fueled fears that the world's biggest economy is set for a deep, long downturn.

It's already in a deep, long downturn... Started around the end of 2007 and will probably run until the middle of next year or so. How long it takes after that for the average man-on-the-street to feel a recovery is very much an open question. It doesn't look like the recovery will be quick though.