Stock Market and Forex Trading

salami1212

salami1212

salami1212

Soldato
Joined
3 Jul 2005
Posts
3,027
Hi does anyone have any experience in this. Specifically Forex..

As I think ive figured out how forex works. Surely If the GBP/USD was increasing you would just buy loads of Pounds and if the USD/JPY was decreasing you would sell loadsa dollars and then once the graphs reversed or leveled out you would just stop the trading..?

Edit: and no I dont actually think ive figured it out, im just curious as to why this wouldnt work
 
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Well, think of it this way, several years ago it was 2 USD to the pound roughly. It went down to about 1.5 USD to the pound. That's quite a large movement. On a £1,000 investment that's about £300 profit. Now take off commission and factor in how long it took to change that much.

The above is all very rough and in no way exact numerically!

Edit: there are ways to make it work obviously but I wouldn't say it's a great way for the man on the street with minimal capital, and it's still a gamble. Look into Forex hedging as a way it can be done.
 
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Pudney said:
Well, think of it this way, several years ago it was 2 USD to the pound roughly. It went down to about 1.5 USD to the pound. That's quite a large movement. On a £1,000 investment that's about £300 profit. Now take off commission and factor in how long it took to change that much.
Click to expand...

That's why you can have up to 500x leverage ;)
 
friend of mine is startin out on forex, there is a demo trial which will help you understand it a bit more, and not spend any of your money, and when you are ready there is a 2nd level, i think from 50 to 1000 deposits, will find out more and post shortly
 
90% of traders lose money. That is why you see adverts every where as they need new customers on a regular basis.
 
Sorry, yes private day traders. I trade nearly full time and it is one of the hardest things you can do. Not to be taken lightly.

One of the reasons is that as you sit in front of your screen you have only yourself to keep you on track. Harder than you think.

Traders that work for banks have a boss that will help keep them on track. Same in most work careers, you have a boss to answer to. Even when you run your own business you have customers to answer to.

3 things you need to be a trader:

An edge. (strategy)
Good money management. (Risk)
Good discipline. (Psychology)

I would argue that it is hard to find an edge in Forex especially. What makes you different from all the other thousands of traders?
 
salami1212 said:
As I think ive figured out how forex works. Surely If the GBP/USD was increasing you would just buy loads of Pounds and if the USD/JPY was decreasing you would sell loadsa dollars and then once the graphs reversed or leveled out you would just stop the trading..?
Click to expand...

Firstly, I've never traded Forex as it's ridiculous. And it certainly shouldn't be the first thing you should start trading, if ever.

In basic terms you'll have leverage and a bankroll (what's in your account to cover any losses). 100x leverage is pretty standard with Forex I believe.

So say you deposit £1000 into your Forex account. You buy £100 of USD from GBP, x leverage, so you've bought £10,000 worth. You'd only need a fairly small reverse swing for your bankroll to be wiped out instantly and your broker to clean out your account and close the trade.

Scale of ridiculousness: Government Bonds > FTSE 100 stocks > FTSE 250 stocks > AIM stocks > FTSE 250 spread betting > FTSE 100 spread betting > commodities spread betting > indices spread betting > Forex.
 
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