Choosing A Broker For My Situation

[Nowler]

Hello folks!
I need a little help with learning more about choosing a broker.

I will give as much relevant information about myself as I can, including my situation and my understanding so far and hopefully you fine folks could throw me a few opinions and/or suggestions based on experience (i'd like to know why you suggest whatever). If you need more info then I am happy to provide it (unless you are a Nigerian prince who wants my bank details in order to lodge in 1.8 million euro for whatever reason :cheesy:

Learning how to trade for: 5 months
Current Broker: Oanda (only one i've tried)
Previous business/economic experience: None, but I do have a Psych degree which helps
Current markets being traded: Forex and Oil
Capital available when ready to pull the trigger: €1,000

As far as I can see Oanda is one of these market makers, which means that they are not putting my trades onto the exchange, but instead have me trading on their in-house "exchange"? Obviously as the other side of my trade they have a conflict of interest but since I am aware of this, it's ok...to a point of course.
I would however like to assess my options, keeping in mind that as someone with limited capital I would prefer alternatives which would allow me to open a live account for no more than €100 or so...I insist on continuing to practice on a mini live account so I gain the invaluable experience of having real money on the line.

I have no emotional attachment to spread betting, I merely want to day trade and it just so happens that the first place I found that allowed me to play for cheap was a spread betting broker (likely why they let me in for cheap) and what they offered was predominantly Forex.

I learned a lesson today about triggering take profits (TP).
I have wondered in the past why my TP's were not always being triggered when the price moved past the TP threshold... Today I found out that the price needed to pass the TP by however much the spread required it to (the bid if short and ask if long).

This got me thinking... What alternative forms are available to me for around €100.

- Are there brokers with fixed spreads?
- With as little €100/€200, can I trade on a commission basis instead of paying a spread?
- Would trading via a pay by commission basis eliminate this situation with my TP's? (where price must pass the TP by a distance determined by the current spread)

What would you suggest for me to look into based on all of this?

Thanks in advance!
I am sorry if my terminology is not up to par...as I said, I'm still learning

Also, I require leverage...

 

[seekingTruth16]

You say
"where price must pass the TP by a distance determined by the current spread"
but there is a bid price and an ask price, not a single price.

If you are in a true market, an exchange for example, it's possible to get filled at the ask, you don't need to necessarily wait for the bid price to move up to that ask. But equally it's possible you won't be filled if the bid never gets that high. No guarantee of being filled with limit orders.

Also, although there are FX futures trading on an exchange, the Forex market as a whole doesn't have a single exchange.

 

[Nowler]

You say
"where price must pass the TP by a distance determined by the current spread"
but there is a bid price and an ask price, not a single price.

If you are in a true market, an exchange for example, it's possible to get filled at the ask, you don't need to necessarily wait for the bid price to move up to that ask. But equally it's possible you won't be filled if the bid never gets that high. No guarantee of being filled with limit orders.

Also, although there are FX futures trading on an exchange, the Forex market as a whole doesn't have a single exchange.

Thanks for the reply and for explaining that.

Have you anything to add in regards to choosing a broker?

 

[seekingTruth16]

Thanks for the reply and for explaining that.

Have you anything to add in regards to choosing a broker?

I don't want to advise a broker, and I don't know the minimum amounts you would need to trade with various options.

I think most would say that it is typically better to trade a real market with transparency and fairness, like an exchange (some exchanges have been accused of unfairness too). But if that option isn't available to you, then the next best is to make sure your account is protected/guaranteed with a broker. So no dodgy firms that can go bankrupt and you've suddenly lost all your money. Then make sure you know what you're doing and understand the rules of the game.

Why do you want to day-trade with 1000? It sounds like a fast way to lose 1000

 

[Nowler]

I don't want to advise a broker, and I don't know the minimum amounts you would need to trade with various options.

I think most would say that it is typically better to trade a real market with transparency and fairness, like an exchange (some exchanges have been accused of unfairness too). But if that option isn't available to you, then the next best is to make sure your account is protected/guaranteed with a broker. So no dodgy firms that can go bankrupt and you've suddenly lost all your money. Then make sure you know what you're doing and understand the rules of the game.

Why do you want to day-trade with 1000? It sounds like a fast way to lose 1000

Cheers.
I'll certainly look even deeper when I decide to deposit significant money but from what I can see Oanda seem to be regulated.

To answer your question.
I would rather swing trade with 100k but that's not realistic.

I can certainly deposit €1k when I feel I'm ready to do so, maybe 2, possibly 3 at a push.

Why I want to day trade?
Because I enjoy it and from my experience so far I see room to make good money from it.

I am not one of the "90%"
I have put on a lot of trades over my 5 months of trading and while I did go as low as 42.5% of my initial capital, my capital is now back to 56.05% of that starting amount.

I'm saying this because I feel like you might be seeing me in the same light as those who think they can make millions in no time at all with a starting capital of 1k.

I realise that €1000 is very little to start with and I know how to apply a good level of risk management. I just need to keep encountering real life scenarios that require me to analyse and act on... building solid trading schemata. Hence my presence here looking for more info.

 

[seekingTruth16]

Cheers.

I am not one of the "90%"
I have put on a lot of trades over my 5 months of trading and while I did go as low as 42.5% of my initial capital, my capital is now back to 56.05% of that starting amount.

Does this mean you lost 44% in 5 months?

 

[Nowler]

Does this mean you lost 44% in 5 months?

Not quite sir, I actually lost as much as 58.5%... I then grew my account back so that I am now up to 58% of my starting capital (down 42%).

Keep in mind, this is only a €20 mini account.
I wouldn't dare put much money on this yet as I am still in the experimental stage. I wouldn't treat a big account the same way. Though I do utilise stop losses all of the time, either through actual stop losses or direct hedging.

I've started a trading journal in the journals section of this forum if you would like to have a better understanding of my situation. It's called "Nowler's Trading Journal"

 

[paulkoger]

Nowler,

I know nothing in regards to Oanda, sorry for lacking any valuable input on that part.
However as you asked for tips in regards to your situation:

I'd recommend to use a trading diary and to track everything you do. One free option is Tradebench. Find out how much commission you're paying percentage wise and if its even realistic to make back that amount with your trades.

One example..My younger brother started trading stocks with 1K$. His broker charged 5$ per trade, 10$ per roundtrip. That 10$ is 1% per trade. Now imagine, on average he made 3 trades per week due to PDT. That cost him 3% in trading fees. 52 weeks in a year, thats 156% return per year that he would have to make to remain at initial balance.

It's a bit harder to track this in forex, but please make sure the odds are not stacked against you, when starting out. In my brother's case, had he used 10K to trade with, total annual commissions would only amount to 15,6%..which in itself is also a very large number, but reachable for a day trader.

 

[Nowler]

Nowler,

I know nothing in regards to Oanda, sorry for lacking any valuable input on that part.
However as you asked for tips in regards to your situation:

I'd recommend to use a trading diary and to track everything you do. One free option is Tradebench. Find out how much commission you're paying percentage wise and if its even realistic to make back that amount with your trades.

One example..My younger brother started trading stocks with 1K$. His broker charged 5$ per trade, 10$ per roundtrip. That 10$ is 1% per trade. Now imagine, on average he made 3 trades per week due to PDT. That cost him 3% in trading fees. 52 weeks in a year, thats 156% return per year that he would have to make to remain at initial balance.

It's a bit harder to track this in forex, but please make sure the odds are not stacked against you, when starting out. In my brother's case, had he used 10K to trade with, total annual commissions would only amount to 15,6%..which in itself is also a very large number, but reachable for a day trader.

Thanks for the feedback mate!

I have a trading journal here on this site and I also have a few pads that I write things in. I have 1 for trades, 1 for planning the week ahead, 1 for education and 1 for scribble work. I only started doing this a few weeks ago and the difference is astonishing! So helpful!

My current broker is a spread broker. I only get charged a spread (not commission) which I ensure is only a fraction of what I expect to make in that trade. Any of those commission based brokers that I have seen charge way too much for someone starting with around 1k. Maybe there are ones who are more reasonable but I have not found them yet.

I have marked City Index as one to look further into. Know very little about them but on first glance they look good.

 

[mpups]

What alternative forms are available to me for around €100.

- Are there brokers with fixed spreads?
- With as little €100/€200, can I trade on a commission basis instead of paying a spread?
- Would trading via a pay by commission basis eliminate this situation with my TP's? .

hi nowler, there are fixed spreads here and there but generally the spreads are part of trading and the account you have with zolanda is possibly the best for you if you want to learn using micro trade sizes. just keep an eye on spread sizes as you have been doing. you wont find commission based trading that is cost effective at your size

 

[Nowler]

hi nowler, there are fixed spreads here and there but generally the spreads are part of trading and the account you have with zolanda is possibly the best for you if you want to learn using micro trade sizes. just keep an eye on spread sizes as you have been doing. you wont find commission based trading that is cost effective at your size

Hello.
Thanks for the reply my friend.

Yes, the more time that passes the better my conceptual understanding. I am better suited to spread betting, at least until I could raise 10, 20, 30k and then perhaps reevaluate. I have been wondering what the likelihood of my spread broker refusing to keep me on as a client if I was to become really profitable.
One way to know for sure I guess...

 

[Brumby]

Nowler,

At your present stage of development I think you are probably worrying too much about the wrong things.

There is a certain pathway that you will take and that can take years in the journey. Specific to a broker, you need time to develop an understanding of your own requirements and only with that you can start matching against broker offerings. Broker spread is least of your problem. Being profitable takes care of a lot of associated cost. If you are currently not consistently profitable, the best spread in the world would not save your trading account. Don't underestimate the difficulty in achieving consistent profitability. In a research I have seen, less than 1 % of traders can achieve that performance (between quarters).

You need to work out your own trading style and the required trade strategies. Only with that you can determine your trade frequency, execution requirements, platform support tools and associated peripheral tools so necessary to your success. Are you a scalper, swing trader, trend trader or risk event trader? If you are a scalper, spread, execution and tick chart becomes important. If you trade trends then spread is for all practical purpose a non consideration. If you are an event trader, then squawk and real time news source becomes a primary consideration. You need to work through where you want to be in the scheme of things. This can take years.

Finally when you are ready to put serious money into an account, your primary consideration should include client funds segregation and the legal jurisdiction offering that protection. Personally outside of the US, there are only two country jurisdiction that I would at least have some faith in i.e. UK and Australia.

In the meantime enjoy the ride and all the best to your success.

 

[Nowler]

Nowler,

At your present stage of development I think you are probably worrying too much about the wrong things.

There is a certain pathway that you will take and that can take years in the journey. Specific to a broker, you need time to develop an understanding of your own requirements and only with that you can start matching against broker offerings. Broker spread is least of your problem. Being profitable takes care of a lot of associated cost. If you are currently not consistently profitable, the best spread in the world would not save your trading account. Don't underestimate the difficulty in achieving consistent profitability. In a research I have seen, less than 1 % of traders can achieve that performance (between quarters).

You need to work out your own trading style and the required trade strategies. Only with that you can determine your trade frequency, execution requirements, platform support tools and associated peripheral tools so necessary to your success. Are you a scalper, swing trader, trend trader or risk event trader? If you are a scalper, spread, execution and tick chart becomes important. If you trade trends then spread is for all practical purpose a non consideration. If you are an event trader, then squawk and real time news source becomes a primary consideration. You need to work through where you want to be in the scheme of things. This can take years.

Finally when you are ready to put serious money into an account, your primary consideration should include client funds segregation and the legal jurisdiction offering that protection. Personally outside of the US, there are only two country jurisdiction that I would at least have some faith in i.e. UK and Australia.

In the meantime enjoy the ride and all the best to your success.

Hey mate.
Thanks for the great input!

I do prefer to race ahead a little just to get a quick look so that when I encounter things at a future time, it won't be the first time I've considered it. I am being a bit presumptuous though, I will admit it.

I'll rein myself in a bit
Projecting forward can be troublesome but it's so tempting. It's like the forbidden fruit...
I think I am doing impressively well for such a small amount of time but I do get put back into my place if I start getting a bit too big for my boots.

This whole process is addictive! It's like a battle! Me against the market! I can clearly see that making money is a reality but it's the discipline to keep yourself in check that's the difference maker.

I'll just keep going... Reassess things toward the end of the year I guess.

 

[mpups]

...There is a certain pathway that you will take and that can take years in the journey. Specific to a broker, you need time to develop an understanding of your own requirements and only with that you can start matching against broker offerings. Broker spread is least of your problem. Being profitable takes care of a lot of associated cost. If you are currently not consistently profitable, the best spread in the world would not save your trading account. Don't underestimate the difficulty in achieving consistent profitability. In a research I have seen, less than 1 % of traders can achieve that performance (between quarters).
You need to work out your own trading style and the required trade strategies. Only with that you can determine your trade frequency, execution requirements, platform support tools and associated peripheral tools so necessary to your success. Are you a scalper, swing trader, trend trader or risk event trader? If you are a scalper, spread, execution and tick chart becomes important. If you trade trends then spread is for all practical purpose a non consideration. If you are an event trader, then squawk and real time news source becomes a primary consideration. You need to work through where you want to be in the scheme of things. This can take years.

Finally when you are ready to put serious money into an account, your primary consideration should include client funds segregation and the legal jurisdiction offering that protection. Personally outside of the US, there are only two country jurisdiction that I would at least have some faith in i.e. UK and Australia.

In the meantime enjoy the ride and all the best to your success.

Very nicely put Brumby i must say, and i agree with what you say

The "less than 1% make a profit" statistic seems to have little meaning though without elaborating more, do you have a link to it?

 

[Nowler]

Very nicely put Brumby i must say, and i agree with what you say

The "less than 1% make a profit" statistic seems to have little meaning though without elaborating more, do you have a link to it?

That would be nice actually.
I keep hearing people throwing around these percentages but I'm getting the impression that nobody really knows themselves... It's just a regurgitation of something said by someone that heard someone else say it about someone else

I've heard that 90% of new traders lose 90% of their account in 90 days. This sounds a little fishy in my opinion. Perhaps the study that this was taken from was just rounding numbers so as to have a nice tag line but...

I just go with the thought that 90% can't do it, 9% can but only 1% make a killing at it (millions)

 

[mpups]

Choosing a broker is very dedicated decision, so it should be in cool mind and the broker can affects the result of our trading with certainly.

what broker did you chose with your cool mind Peter?

 

[CalebM]

Hello folks!
I need a little help with learning more about choosing a broker.

I will give as much relevant information about myself as I can, including my situation and my understanding so far and hopefully you fine folks could throw me a few opinions and/or suggestions based on experience (i'd like to know why you suggest whatever). If you need more info then I am happy to provide it (unless you are a Nigerian prince who wants my bank details in order to lodge in 1.8 million euro for whatever reason :cheesy:

Learning how to trade for: 5 months
Current Broker: Oanda (only one i've tried)
Previous business/economic experience: None, but I do have a Psych degree which helps
Current markets being traded: Forex and Oil
Capital available when ready to pull the trigger: €1,000

As far as I can see Oanda is one of these market makers, which means that they are not putting my trades onto the exchange, but instead have me trading on their in-house "exchange"? Obviously as the other side of my trade they have a conflict of interest but since I am aware of this, it's ok...to a point of course.
I would however like to assess my options, keeping in mind that as someone with limited capital I would prefer alternatives which would allow me to open a live account for no more than €100 or so...I insist on continuing to practice on a mini live account so I gain the invaluable experience of having real money on the line.

I have no emotional attachment to spread betting, I merely want to day trade and it just so happens that the first place I found that allowed me to play for cheap was a spread betting broker (likely why they let me in for cheap) and what they offered was predominantly Forex.

I learned a lesson today about triggering take profits (TP).
I have wondered in the past why my TP's were not always being triggered when the price moved past the TP threshold... Today I found out that the price needed to pass the TP by however much the spread required it to (the bid if short and ask if long).

This got me thinking... What alternative forms are available to me for around €100.

- Are there brokers with fixed spreads?
- With as little €100/€200, can I trade on a commission basis instead of paying a spread?
- Would trading via a pay by commission basis eliminate this situation with my TP's? (where price must pass the TP by a distance determined by the current spread)

What would you suggest for me to look into based on all of this?

Thanks in advance!
I am sorry if my terminology is not up to par...as I said, I'm still learning

Also, I require leverage...

I'm also quite fresh in trading sector and thinking about finding a broker. But as far as I have been reading forum I see that before finding a broker It's wise to do a lot of research and read quality books about trading. Regarding brokers I think there are a lot of scam type sites

 

[CalebM]

I'm also quite fresh in trading sector and thinking about finding a broker. But as far as I have been reading forum I see that before finding a broker It's wise to do a lot of research and read quality books about trading. Regarding brokers I think there are a lot of scam type sites

Does anyone have experience with eToro? I read severel reviews about that site and most of them say that it is great for beginners up to medium level traders. Are these reviews even genuine or are they full of comercial information? For example https://foxytrades.com/etoro-review/ brings out that platform fees are not the cheapest. But what competing platform would be cheaper or better to use for a beginner? Any help from you is more than welcome

 

[SmartFXRebates]

Does anyone have experience with eToro? I read severel reviews about that site and most of them say that it is great for beginners up to medium level traders. Are these reviews even genuine or are they full of comercial information? For example https://foxytrades.com/etoro-review/ brings out that platform fees are not the cheapest. But what competing platform would be cheaper or better to use for a beginner? Any help from you is more than welcome

Etoro is by far not the cheapest to trade with. You should consider signing up via IB, to drive the cost of trading down with rebates.