FOREX Currency trade...would you recommend it

I am interested to play with my money but would you recommend it and on which FX Trade Platform.
http://www.onda.com/
http://www.gftforex.com/
http://www.advfn.com/
http://www.forex.com/

or something else…

Thanks

FXCM is also worth a look. Also, you can sbet forex with most financial sbet companies, such as IG Index.

Commodities and foreign exchange futures do tend to trend better than stock indices.

You might find them more to your taste therefore.

I often think stocks in the UK are a bit like this:




... bad news is like bringing the tea around. Those in the know bringing the tea (the bad news) whisper at first, so as not to shock. But everybody keeps snoozing. Eventually one of the retirement home nurses has to physically shake one of the residents whilst shouting "for f@cks sake wake up!" However this does not work immediately. Instead a few mins later, for no particular reason something makes one resident wake up : the shock of waking up makes them jump up and run around screeming. Before you know it they'll all running around screeming. It takes ages to get them seated again. Then just when you think you'll never calm them down they all fall off asleep again!

Fortunes are made and lost in currencies so beware. As for spreadbets, what's with everyone using IG? Try CMC(deal4free) instead for a more professional service and spreads that'll make IG look a bit silly.

Warning this is a long post regarding how to get into forex trading...

Go ahead and trade forex but note a few points FIRST:

You will presumably be using high leverage therefore a total wipeout IS possible if you don't take sensible precautions.

Precautions? Keep most of your money somewhere other than your forex account such that a big loss is a physical impossibility. I would suggest that you don't use total leverage greater than 20:1 unless you really do know what you are doing. When I say "total leverage" it's OK to have something at even 100:1 but if you do that then leave most of the funds as cash in case it goes wrong. Minimise the maximum extent of losses because they WILL happen from time to time.

If that hasn't put you off (hopefully it hasn't) then I would suggest that you take a big picture view and don't try to trade daily, weekly or even monthly fluctuations unless you really do know what your are doing.

So what to do then? Using long term charts (10+ years, sometimes I look as far back as the 1970's) find a currency pair that has reached an extreme and just started to come back the other way. Look for a double bottom / top or some other recognisable chart pattern. (If that statement doesn't make sense then read up on technical analysis.)

There are quite a few potential trades around at the moment so don't delay if you do want to do this. The markets really do seem to be at a turning point in many respects. Put the trade on and let it run. Do keep an eye on it but forget about short term movements unless you really are going to day trade (and if you knew how to do that then you wouldn't have asked questions here so I am assuming that you don't )

You will find that one half of a cycle lasts, depending on the currency pair, perhaps 3 or 4 years. Obviously that varies but the point is that we are talking years and not weeks. Of course there are shorter term moves within those periods but you had better be pretty good if you are going to make a profit trading those. Forex trades 24 hours / 5 days a week. Assuming that you have a day job, stick to the big moves.

Don't assume that you have to trade "local" currencies such as Pounds or Euro. I would, however, suggest that you keep away from anything subject to "official" manipulation such as Japanese Yen. And certainly keep away from anything pegged to some other currency since what little movement does occur will be erratic.

Look at Pounds, Swiss Franks, Euros, Canadian, US and Australian Dollars. New Zealand is worth a look too since although not a "major" currency it normally moves broadly in line with the Australian Dollar.

If you want to be able to access commentary and opinion from a range of sources then remember that most of what is available is with respect to US Dollars. So, trading Pounds, Euros, Aussie, NZ etc versus US Dollar would be a sensible beginning strategy.

As for some actual trades, obviously I'm not giving too many secrets away but I suggest that you take a VERY good look at the charts of Australian and New Zealand Dollars - both them versus the US Dollar. Look back at least a decade, preferably longer and you ought to notice a few things. Look, look and look some more at those long term charts and THINK about it. Think about the housing bubble and recent tales of economic weakness in the UK (it's exactly the same in Oz). Remember everything you know about how to spot a bottom / top and think about what has occurred recently. Remember that the majority is usually wrong (95% of forex traders break even at best - you want to be one of the other 5%).

No promises but look at those Aussie and NZ charts! Pounds / US Dollars worth a look too but be careful. Think about how you would actually trade the market and the benefit of something which doesn't jumep all over the place will become apparent.

Warren Buffet etc. don't change positions every day and they don't follow the crowd. Such people don't normally tell the public what they're doing either since by the time the general public knows what is going on it is usually very near the end (think NASDAQ year 2000, recent housing bubble). AND THESE PEOPLE DO NOT TELL THE WORLD WHAT THEY ARE INVESTED IN - unless, of course, they want to move the market to their advantage, which normally means to enable them to get in / out at a better price. They do, however, make a lot of money at the expense of others. Big hint there as to my opinion of the forex markets at the moment.

Suggest you read everything to do with currency at "investorsdiary.blogs.com" and check out "www.prairielinks.com/chartindex.html" I suggest that it is a good idea to keep an eye on a range of markets to help form an opinion of the "big picture" in your own mind. I am not associated with these sites in any way.

No comments regarding actual platforms but what you want are USEFUL features not gimmicks. Are the stop loss orders GUARANTEED in terms of price? Does the web site function properly? Where is your money actually kept (account with a major bank?)? Spread is less critical unless you are going to trade frequently. What other fees are there? Make sure that you can download charts of the currencies you are interested in. MAKE SURE THE CHART DATA GOES BACK A LONG WAY - AT LEAST A DECADE unless your interest is short term trading. Try practice trading with a "dummy" account (which most brokers offer at no charge with a free "dummy" $100,000 or so to practice with) which doesn't involve real money - remember though that your emotions will be different with real money on the line. (And of course you don't get to keep any profits made with this "dummy" money so it's only for practice).

Finally, I would strongly advise that you do NOT store large amounts of surplus cahs in your forex account. Keep what you need in the account and put the rest somewhere else. Consider an online savings account (ING or similar) for surplus cash. Don't be pedantic about it down to the last cent, but consider ALL funds in your forex account to be at some degree of risk regardless of stop loss orders etc. Use commonsense.

I don't know what the UK tax laws are (I'm in Oz) but presumably you will need to pay tax on profits so don't go and spend the lot! Put the money somewhere safe at the end of the financial year so that you can't lose money that belongs to the tax office otherwise that could lead to BIG problems.

Finally, don't put the stops TOO tight or you will get stopped out only to see it turn around which should have given you a profit. You do need to take some risks.

Suggest that you also look at gold / silver and commodities especially oil shares - just be careful with the timing of entry and use stop loss given the overall market situation. And, dare I mention it, take a look at what uranium has been doing lately...

And with any investment, forget what everyone thinks and LOOK AT THE PRICE. That's the PRICE, not the stochastics, RSI, fundamentals, MACD or whatever. The PRICE. What is the PRICE doing? I would have saved myself an absolute fortune if it hadn't taken me 5 years of investing to work that out the hard way... Can't emphasize this point strongly enough!!!

Excellent post. Also spent my formative trading years trying to work out why things were happening. Waste of time. Jump on and be ready to jump off quick. Never call the turn, you'll miss it. Wait for confirmation and pile in, it always goes further than you think.

As for stops, I don't use them. Knocking out stops is a market makers favorite game. I've developed enough discipline to just dump a position if I no longer like it. I will occasionally use auto stops if I have large exposure and am going to be away from the desk.

Also good idea to not keep too much in the trading account if using margin. The broker will close out your position quicker than you can in the event of disaster and you will still have some money left. Currency trading can do your mortgage in an afternoon.

By the way, as regards tax laws in the UK, we have spread betting which allows us to trade the markets completely tax free with no fees at all. The tax man takes the view that most traders lose and instead taxes the betting companies at source. The few traders who ould pay tax would be far outweighed by those that would claim losses against other tax.

For instance, I just bought BARCLAYS at a spread of 568/569.5 and sold RBS with a spread of 1770/1771.5 with a company called CMC. There are no fees to pay at all and a small move will see me in profit. In fact, I already am by a couple quid. Any profits I make are classed as 'winnings' and are completely tax free!

In fact the only tax I pay is on the interest that CMC pay me on my account balance.

This one surely must find a place on the list
Marketiva

It is a new fx provider from Switzerland Offering charts, fx news, signals, alerts and many indicators on one screen, it is exceptionally good for beginners in the trade.

You can open an account in a minute. You receive $5 on your live account and $10000 on your virtual account and you can play with until you teach the "secrets" of Forex