NEW skool trading or OLD skool trading

You can't compare ticks in fx and stocks, since these are 2 different instruments with totally different natures, but I think in fx the equivalent to 1-3 ticks stop would be 10-30 pips.

Why do you say trading fx air is like trading air? Of course the currencies are moving as a result of economic releases, and supply and demand, which is exactly the same reason stocks move.

agree. I was thinking. 1 tick is 1 cent. 1 pip is 1/100 cent.
so, if I scalp stocks and I am allowed only up to 3 ticks loss it mean relatively 30 pips in FX. But anyway, I notice, the moves are quite different. At least I feel it is easier to determine short term move in stocks in comparison to FX as I have my Level II and Orders window and especially volumes.
I mean by trading air that stocks/ commodities represent something real like company or commodity that has real value while currencies are paper money and has no such real value attached to them. They are being printed now with a speed of light.

regarding FX trading I am absolutely paranoid about cutting losses. It was enough for me to lose once 70% of my $100 account and I got it right away. I am risk control nut. But on the other hand I take profits too early as well. Which obviously is not good.

Chikot posted:
    regarding FX trading I am absolutely paranoid about cutting losses. It was enough for me to lose once 70% of my $100 account and I got it right away. I am risk control nut. But on the other hand I take profits too early as well. Which obviously is not good.

I think you've hit the nail on the head - the way I see it is, you can lose money on fx much faster than trading with stocks or any other markets.

I believe the leverage factor acts as a catalyst both for success and failure, although we know that most fail, and even the successfully ones fail at least at first.

The recent CFTC suggestion to limit the leverage to 1:10 might just change it, and although many see it as a bad move, I do agree with it in part - the fx industry is just like a casino with almost no limitations; just deposit money and start gambling.

The best way to go is limit the leverage until you find your edge, and gradually increase it (if needed). At the beginning it will feel just like stocks, as with no leverage or low you will need to have some big moves go against you to even feel it.

Chikot,

Trading fx might not feel real, but the green certainly does in your pocket!

I think fx teaches all the right lessons, you once you can trade it, you can trade anything.

Elkart posted:
I think fx teaches all the right lessons, you once you can trade it, you can trade anything.

I must disagree with you on that one. It's like saying once you're a rocket science engineer, you can engineer a car.

I believe different markets require different tools even though the general approach can be similar.

I think it is easy to lose money quickly in both stocks and Forex, but leverage factor is obviously here.
My leverage per each pair is always 1:1. I use no leverage to make higher returns.
In stocks you can open position with say 10 000 shares and let it run when it is against you ;)
I think results would be similar to trade FX with high leverage.


And yes to Elkart.
If you know how to trade FX, by which I do not mean grid and hedging, you absolutely can learn to trade stocks much faster than someone who just started trading stocks.
Imagine, we trade FX blind, we have no information, while those who trade stocks and commodities do have a lot of useful information. We use S/R and pure price action to trade. It helps a lot.

U get the same useful/useless information for FX. As long as u consider yourself 'blind' trading u should stay away from this market. Stay with soya beans...😀

I am not blind but FX market is considered 'blind' as there is no orders and volume information.

I see what I need to see to make $$$. But volumes and orders obviously would be very helpful.

Try FXOpen ECN, they offer level 2 volume, whatever this is. I don't need it to make $$$😉

Chikot posted:
    I am not blind but FX market is considered 'blind' as there is no orders and volume information.

I see what I need to see to make $$$. But volumes and orders obviously would be very helpful.

Well, you do have a point there.

But let's face it, once you have the information, everyone else have it also, so the whole point of a trading edge is gone through the window. At the end of the day, you still need to create a successful trading system just like in fx.

Haha,

That's why i like systems where you don't care where the price goes... no matter if you buy or sell...
But you need vary strong risk management rules for this. well, you can't close only the green positions.

I prefer forex because here nobody (else Bill Gates) can manipulate the price, like the oil crisis before few years.

mettall posted:
    Haha,

That's why i like systems where you don't care where the price goes... no matter if you buy or sell...
But you need vary strong risk management rules for this. well, you can't close only the green positions.

I prefer forex because here nobody (else Bill Gates) can manipulate the price, like the oil crisis before few years.

be careful.. that's a major error to think price doesn't get manipulated.
Central Banks do it, especially the Bank of Japan. When i started trading, in 2003, they pushed so much money in their currency to hold it above a certain level, sometimes the price jumped up 150 pips in an blink of an eye. And they did it over months, til nobody had anymore the nuts to dump the yen further down. I lost my first account on this LOL, that's why i will never forget how drastically a CCY can be manipulated by the big dogs.

biz0101 posted:
 
3 years is a bit too much i believe in order to prove yourself - i think one year of consistent returns should be enough, nevertheless, the longer the track record, the better.

Hi Biz,

You say 3 years is a bit to much to proof that one is a good trader.
On forex-tsd there was a topic opened by someone with the following question: How long does it take to become successful in forex (or as a trader) ?...

My reply:
Quote: For the overall majority: NEVER. ( lack of money, time and discipline)
For the others: Their whole life (it is a constant battle to addapt to the markets and to stay disciplinized).... Unquote.


I am a professional trader now for 14 years. And I know that every year I need to proof myself again and again to my customers. It is not because last year I made a nice profit that this is a guarantee to be profitable this year.
I even need to proof myself every month and every week and every day.
And I will need to continue to do so as long as I stay a trader.

There will NEVER come a time that I will be cappable of saying: AAHHH now I know how this 'little game' works....now I am sure that I will always make money.....never.

Friendly regards....iGoR

iGoR - I generally agree with you on the NEVER mastering forex BUT some systems are just the way they are. Martingale will always be Marty with no adjustments needed (I've seen some very nice hedging Marty's that wont kill your account) and I feel my no-indicator hedging system is the same way. The code is solid and bug free and needs no adjustment or tweaking from me. At this point theres nothing more for me to do and I'm brainstorming my next system confident that I'll NEVER have to test or tweak my hedging system for current market conditions. I've seen a few no indicator systems and none need adjusting EVER! - So while I agree. Some systems dont need manual intervention and trader discretion. I favor price action systems over indicator based and no tweaking needed is a feature of a lot of the systems.

Fulltime247 posted:
    iGoR - I generally agree with you on the NEVER mastering forex BUT some systems are just the way they are. Martingale will always be Marty with no adjustments needed (I've seen some very nice hedging Marty's that wont kill your account) and I feel my no-indicator hedging system is the same way. The code is solid and bug free and needs no adjustment or tweaking from me. At this point theres nothing more for me to do and I'm brainstorming my next system confident that I'll NEVER have to test or tweak my hedging system for current market conditions. I've seen a few no indicator systems and none need adjusting EVER! - So while I agree. Some systems dont need manual intervention and trader discretion. I favor price action systems over indicator based and no tweaking needed is a feature of a lot of the systems.

Fulltme247,

Read over what I said, successful trading is constant addapting to the market conditions. This means that the moment that you think that everything is all to stay then you will see that some important things change (not only market behaviour)

A simple example: There are very strong rumours that the leverage is going to change to a Max. of 1:10 for the US brokers.
Lets now asume that they can push this trough and that they can put so much presuere on the rest of the forex world that they need to follow the 1:10 leverage rule.

Then you and I know that this is the end to all Martingale systems and grid and basket systems that can work with enormous floating losses.

Other example: lets say that they agree on not allowing to take in micro or nano lots. And mini-lots are only allowed as incrementations on full lots.
Then again it is finished with a system that you considered as ever lasting.

Important is that I would wish any better then these rules would be implemented because it brings to many NEW SKOOL traders (here we go again -- but it is in line with this topic) to the forex that see forex as some sort of call of duty or counter strike forex game where one can make money.
Where I am sure that they distroy the market as I knew it. Meaning the markets 10 years ago, if it was S&P or FX or BUND markets were moving in a reall steady pass. And when one was in a trade you stayed in it till you made your 100 pips.
Now 95% of the traders start to jump out the moment they make 10pips profit. Which makes the market to oscillate a lot.

15 years ago when one wanted to trade on the S&P it was 25K$ marging to take in 1!! single contract. If you pay that money you don't have any room to play 'games'. You sit in a trend and you wait till you make a nice profit.
Now on that S&P index you take even CFD's for 16$ per unit and traders that are actually gamers jump in and out every 5 minutes.
Which ruines the whole party.

My suggestion is to bring back everything to real common sence. Meaning that if you want to trade a stock then BUY that stock. If you want to trade oil, OK you will be delivered with 10 barrels of crude oil when you bougt a future on it.
When you buy a call option on stock, you will need to buy the stock at the expiration date.
If you buy or sell dollars or pounds through FX or futures you need to really buy or sell that money in the leveraged way.
if you want to trade live catle you will be delivered with 5 or 10 cows.

Now everybody (the smallest idiot nitwit) trades markets or instruments and has no involvement with them what so ever...only trying to make money in a casino way.

Oil did not go up 2 years ago to extreme highs because there was a shortage of oil or that China was consuming to much oil. It went up because of the speculaters that speculated that oil could go to 200$ a barrel. But they were responsible for a certain perctage on the finacial crisis. But they never saw an oil well from 1000km distance

So my point of view is leave each market to the people who need to TRADE in it
Buying currencys when you need to cover yourself because you have some important business deals to make with a foreign country and you want to cover yourself.
Buy or sell oil when you are a transport company. Buy or sell stock options because you want to sell your stocks or want to have those stocks. Buy and sell corn, weat, catle because you are a farmer or factory that needs those products.
So that trading comes back to trading and finshed with all the martingale and grid and basket systems. But that traders take in trades and stay in their trades and hope to make a nice profit within 3-4-5-6 months.

But I know that this is some sort of Don Quichote idea. But I can only aplaud the rules of 1:10 Leverage and no more hedging etc. Because I want that the market need to be there for REAL TRADERS who are involved in market movements and not to the casino players who invent casino systems just to make a few dollars.

Friendly regards...iGoR

PS.Even a very simple rule would be that every broker needs to accept that the minimium account size should be 25K$. That would already push out all the 'forex-gamers'. And bring back the world wide markets to some calmness.
Be honest. The very first trading rule that you learn is that you trade with money that you can afford to loose. But if one enters with 1000$ one know that this is not money they can afford to loos.

 

LOL, first i thought this could be a interesting thread....

After the last post of iGoR i came to the conclusion not to waste more time on it.

Backwards orientated, frustrated posts are not my thing. I prefer to live in the real trading world, to deal with the facts and to make money for a living.

I actually dont think leverage wil go to 10:1 - The response has been FURIOUS!! (they usually get 200 written comments, 10:1 has generated 7,000!!! - Even senators have went on the record about it) - Traders are already running for the exits (overseas) and I've already moved. If the USA decides to kill retail forex this will only create a overseas opportunity that some country will be glad to accommodate - so I'm not worried.

GO Markets is getting so many new USA traders that they'll have to expand very soon!! Dukascopy just lowered their entry to 1K!!! - DUKASCOPY!!!! One of the largest ECN's on the planet now accepts 1K accounts and trades microlots!!! - This NEVER would have happened is the US didnt ban hedging and FIFO! (a couple months ago the minimum was 50K) - So they can keep on restricting US retail forex - Other countries are welcoming us with open arms!!

They're shipping retail forex jobs AND traders overseas at record speed!! - 10:1 will kill it and this will prob go down in history as the fastest movement of an industry overseas ever!! It took decades for manufacturing - FX will have only took 1 year. (USA, USA, USA!! - and IGoR wants 25K minimum account size!! - Boy this country sucks if you're not rich. 39%+ healthcare rate increases (my state 74% - Michigan), no FX unless you're rich, Usury Credit Card rates, No loans, No credit, No jobs, Top 1% hold 97% of wealth, No middle class.)

I consider FX a valid exit option for the small guy. (It was for me) - The volatility in FX can be deadly but it also offers the learned a way to earn nice profits. Like anything else theres a learning curve. I sure took my lumps but a 25K barrier would never let me even enter. You sound like an elitist snob iGoR. Perhaps the name is well earned because your conclusions would have monster-like effects on newbie, underfunded traders. Just another door slammed in their faces.

Actually I don't care if the leverage goes to 10:1.........the CFA(or whatever acronym they go by) has already killed off regulated FX in the States. I also believe that regulation is WAY over-rated.......regulation may protect you from outright theft but it will not protect you from losses....in fact many of the worst bucket shops are properly regulated.

I also wish to argue the point that we are screwing the market up. Maybe I am going to display my ignorance and lack of proper economic edukayshin here but I don't believe that us retail traders move the markets anymore than a punter at the racetrack can affect the outcome of the race by placing a bet.

Most of the times we are shifting money amongst ourselves(thanks guys). Nope, the crisis was caused by greedy banks speculating with mom and pops pension.

And frankly, I don't see a problem with the markets moving..........there is no party being ruined here except yours iGoR......mine is just getting started. It is time to accept that this game has evolved and if you cannot stand the heat then you should get out of the kitchen.