TheBramble
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All of these comments below apply predominantly to Cable. I have traded other pairs, but my Cable trading dwarfs the others in terms of number of trades.
I've dedicated a substantial amount of time to learning to trade currencies. While the challenge of trading without volume provided an interesting intellectual adventure, it was also the possibility of trading the mornings while 'waiting' for the US markets to open that was an additional inducement.
FWIW here's my take on trading currencies and why I wont be any more. Feel free to challenge or address any of the points I make, but be aware, I am aware that this is my very subjective take on things.
The lack of any real end-of-day on FX (and I know that delineation is increasingly blurring on many stocks ) effectively deprives the day-trader of an effective higher timeframe in which to set the context of their trading. Doesn't matter which way you slice it, and who you 'decide' is awake and trading at what part of the 24hr clock - it's a fabrication. There isn't any real end of day. I have a sense that markets 'need' days just like traders do. They need to sleep. Or they get ragged. The FX markets can't operate much differently to the way they do, but you can see for yourself, you get far more periods of range and consolidation percentage of time wise than you do in any moderate to actively traded stock. But it isn't consolidating - it's sleeping!
Using Tick Pressure as a proxy for Volume is a delightful form of delusion that is convincing until you take a genuinely objective look at what it is you're doing with the data. I spent a lot of time (and money) in getting a bespoke tick pressure proxy on my FX screens and although the process was enjoyable, the assumption that it was a close proxy was just that - an assumption. Supply & Demand do operate in the FX markets, but the tick pressure is not necessarily an aid to deducing it. Works sometimes. Far less than it does in interpretation of stock movement.
My Risk:Reward on FX was never as good as it is on stocks. That's before even going into the trade. My risk was always known and set and my initial target equally. And I did as well (better actually) in terms of winning trades to losing trades than in stocks. But the basic structure of the markets and the way I trade seem not to offer the same degree of gearing to the R:R as with stocks.
A substantial part of the universe of information available to day-traders is in LII. There is no equivalent on FX and this diminishes a traders ability to time and judge the market when compared with stocks.
The globalisation of the FX market means it operates differently to stocks. I know that with some ECNs acting as exchanges in their own right and with the increasing restructuring of direct access trading the operation of stock transactions aren't as discrete as single exchange-based instruments, but even so, there is still a very different 'feel' to the FX markets.
Did I get to make money while learning to trade FX? Yes. In fact, purely on FX I marked up an incredible 6% increase on my total trading capital (assigned to FX trading) in just one day. That's more percentage wise than I ever have on stocks in any one day.
But that's besides the point.
It ain't as much fun.
And I get my mornings back to do other things.
I've dedicated a substantial amount of time to learning to trade currencies. While the challenge of trading without volume provided an interesting intellectual adventure, it was also the possibility of trading the mornings while 'waiting' for the US markets to open that was an additional inducement.
FWIW here's my take on trading currencies and why I wont be any more. Feel free to challenge or address any of the points I make, but be aware, I am aware that this is my very subjective take on things.
The lack of any real end-of-day on FX (and I know that delineation is increasingly blurring on many stocks ) effectively deprives the day-trader of an effective higher timeframe in which to set the context of their trading. Doesn't matter which way you slice it, and who you 'decide' is awake and trading at what part of the 24hr clock - it's a fabrication. There isn't any real end of day. I have a sense that markets 'need' days just like traders do. They need to sleep. Or they get ragged. The FX markets can't operate much differently to the way they do, but you can see for yourself, you get far more periods of range and consolidation percentage of time wise than you do in any moderate to actively traded stock. But it isn't consolidating - it's sleeping!
Using Tick Pressure as a proxy for Volume is a delightful form of delusion that is convincing until you take a genuinely objective look at what it is you're doing with the data. I spent a lot of time (and money) in getting a bespoke tick pressure proxy on my FX screens and although the process was enjoyable, the assumption that it was a close proxy was just that - an assumption. Supply & Demand do operate in the FX markets, but the tick pressure is not necessarily an aid to deducing it. Works sometimes. Far less than it does in interpretation of stock movement.
My Risk:Reward on FX was never as good as it is on stocks. That's before even going into the trade. My risk was always known and set and my initial target equally. And I did as well (better actually) in terms of winning trades to losing trades than in stocks. But the basic structure of the markets and the way I trade seem not to offer the same degree of gearing to the R:R as with stocks.
A substantial part of the universe of information available to day-traders is in LII. There is no equivalent on FX and this diminishes a traders ability to time and judge the market when compared with stocks.
The globalisation of the FX market means it operates differently to stocks. I know that with some ECNs acting as exchanges in their own right and with the increasing restructuring of direct access trading the operation of stock transactions aren't as discrete as single exchange-based instruments, but even so, there is still a very different 'feel' to the FX markets.
Did I get to make money while learning to trade FX? Yes. In fact, purely on FX I marked up an incredible 6% increase on my total trading capital (assigned to FX trading) in just one day. That's more percentage wise than I ever have on stocks in any one day.
But that's besides the point.
It ain't as much fun.
And I get my mornings back to do other things.
