Why do you trade the markets do you

[Bowball]

and why?

i'm new to this and have some spare cash to play with. i'd like to know what your view is of the respective pro's and con's of different markets.

For example - someone ion another thread mentioned FX markets were 'highly trending' which would suggest easier to trade if you have a trending model.

another example- i recently papertraded FTSE250 CFDs. trades were succesful but the carry costs wiped out my profits.

thanks in advance

 

[Rhody Trader]

Most people seem to fall somewhat accidentally into the markets they trade - at least at first. To make a proper decision, though, you need to consider the timeframe you want to trade in, and if that's short-term, which market(s) fits the hours you are able to dedicate to trading. For example, trading the stock market isn't much good for a prospective day trader who can only play outside regular market hours. Beyond that, there's the question of comfort with leverage and other elements related to the instruments involved in trading certain markets. Oh, and personal interest plays a part too.

 

[N Rothschild]

i like futures, couldnt tell you why tbh! just suits me better..not a fan of fx!

 

[gooseman]

rhody has hit it-if you do it as a career then you generally stumble across it and become well versed in that market. obviously if you are a fund manager or something then you need to be a bit savvy across the board but as a local/individual the choice is yours. I think most people enter FX as it is fairly liquid, fairly accessible and most people know what a dollar, euro and ppound are as opposed to a bond future or credit default swap or something more exotic.

 

[Bowball]

can anyone here give me some pro's and cons of the products they trade versus the produsct they decided against.

most of my working life i've worked in the interest rate derivatives sales, but also worked in FX sales. i'm not about to start trading swaps as its too technical a product and i dont see any brokers offering leveraged trading. FX Spot however, well i can trade those on CFDs, its a simple product, etc etc

 

[nile_croc]

Forex is a great place to start, especially if you're looking to trade on a short-term basis. Just about all Forex brokers have demo accounts that you can play around with and test your strategies for free, without risking anything. I use OANDA, which offers a demo account. OANDA also does not have a minimum trade size, so once you start using real money you can risk as little as $1 if you want.

Another benefit of Forex: no commissions.

 

[jeffsmith]

It is true that Oanda is a nice online broker and having a nice trading platform. However, I have also come across some drawbacks of Oanda. They are having very long registration process, Leverage provided by them is of 1:50 with is too less as compared to other brokers. AVAFX and FINEXO are giving leverage of 1:200, deposit process takes time, they do not have the facility of credit card deposit, the main thing is the customer support, and they are having only chat only no phone facility. After seeing these disadvantages, I am not interested in going for Oanda.

 

[nile_croc]

It is true that Oanda is a nice online broker and having a nice trading platform. However, I have also come across some drawbacks of Oanda. They are having very long registration process, Leverage provided by them is of 1:50 with is too less as compared to other brokers. AVAFX and FINEXO are giving leverage of 1:200, deposit process takes time, they do not have the facility of credit card deposit, the main thing is the customer support, and they are having only chat only no phone facility. After seeing these disadvantages, I am not interested in going for Oanda.

First of all, let me say that I've been with OANDA for 2 years, and have never had a problem.

With registration, it took about 10 days or so to get completely set up, I don't know how long it takes with other brokers, but it didn't bother me too much, I wasn't that anxious to trade.

As far as credit cards are concerned, I wouldn't recommend financing your trading career with credit card debt. I sent in a check to fund my account, it took a few days.

Here's the deal with leverage: 200:1? you don't need that kind of leverage if you want to trade the right way. I risk no more than 1 % of my account on any given trade, sometimes half of that, sometimes even less than half of that, and I make decent returns on my trades and on my account overall (I trade long-term/swing, I don't day trade and maybe the larger positions taken while day-trading may require a little more leverage). BTW, I take multiple positions too, right now I have about 7 trades going, and a few others waiting to trigger. I can easily ramp up to 2% per trade if I wanted to, and still never have an issue with margin, even with multiple positions. Be very, very careful with leverage.

As far as customer service, they do have an 800 number you can call, and get service. I've only had to use them once, due to an internet outage that I had, and they were decent. I don't have enough experience with OANDA's customer service, however, to make an effective commentary about it.

That's my 2 cents on OANDA for what it's worth. I do not, however, have any experience with other brokers so I can't make the comparison.

There are lots of good brokers out there: I hear a lot of good things about Think or Swim and FXCM as well. Lots of choices.

Take care,
Croc

 

[tomorton]

Hi bowball - I have a range of price chart patterns that I assess each day on the FTSE100, where they work pretty well with a high probability of success. Except that they don't all work all the time. The range of patterns is sufficient that some signals occur when the market is trending and others when it is ranging, and its very nice that they don't all occur every day and I don't usually get two signals on any day with opposite directions (though it does occasionally happen, in which case I sometimes have the financial capability to take both but give one a shorter time horizon).

Some of these patterns only work on a market that has an overnight closed period. This forces many players to exit positions by 4:30pm in this case which can give a different behavioural basis to the market players than if they were able to exit any time during the night. The FTSE100 is also free to open at different levels each morning from the prior close, so that 'gaps' can show in patterns, and these tell something about the market but are also trading opportunities in themselves. True gaps do not occur in 24hr markets like Forex.

I have gone so far as to test one of my patterns on the FTSE100 and I know it has a 60-65% reliability, with a target and stop of 2%, when volatility is high. I wouldn't attempt such a mechanical approach with this trade on any market I hadn't done a similar test on.