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ChuangTzu
starvingphysicist




Registered: 09/04/02
Posts: 3,060
Last seen: 10 years, 3 months
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Foreign Exchange
#9116902 - 10/22/08 04:48 PM (15 years, 3 months ago) |
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I've been waiting for the euro to drop below $1.30 to make a small (few thousand dollar) purchase. Now it's at $1.28 and ripe for the picking, however there are only three ways of making a forex purchase and none of them are really ideal.
-Forex.com requires very large minimum trades: 10,000-100,000 currency units. -Currency changes charge over 5% premiums (Wells Fargo, my bank, is selling at $1.35 and travelex.com is selling at $1.39...) -If I could find someone who just got here from Europe, we could exchange at market price, benefiting both of us. I'd probably get kicked out of the airport pretty fast for trying that though.
Any other ideas?
Edit: I have an account in Europe that I just have to figure out how to get access to again since I lost the access card. I just found this site: http://fxglobaltransfer.oanda.com which seems to allow me to send money to an account denominated in euros at market price plus $25. Much more reasonable....
Edited by ChuangTzu (10/22/08 04:54 PM)
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geokills
∙∙∙∙☼ º¿° ☼∙∙∙∙


Registered: 05/08/01
Posts: 23,417
Loc: city of angels
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Re: Foreign Exchange [Re: ChuangTzu]
#9117300 - 10/22/08 05:59 PM (15 years, 3 months ago) |
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Nice find on the Oanda FXGlobalTransfer site. I've never actively traded in currency myself, so really I'm just posting to thank you for the chuckle you gave me regarding gettin' booted from the airport for underground currency exchange! You crazy terrorist you...
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Alpacalypse
Psilocybelief



Registered: 09/20/08
Posts: 6
Last seen: 15 years, 3 months
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Re: Foreign Exchange [Re: ChuangTzu]
#9134255 - 10/25/08 09:53 PM (15 years, 3 months ago) |
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fxcm.com is one of the only few non-shady forex companies.
They offer $25 deposits too and you can buy any sized lot.
They are listed as having "no dealing desk" but they may have one now. This means that for short-term day trades they may shaft you some pips for their own gain.
mbtrading.com offers $400 minimum deposit and is an ECN... they actually pair your order with another market order. They are one of the only reliable discount forex brokers that isn't a "market maker" like forex.com. Market makers will steal your money. Mbtrading is the way to go.
forex.com and Gain capital are SCAM ARTISTS! Too many reports of them swindling money from people left and right...
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ChuangTzu
starvingphysicist




Registered: 09/04/02
Posts: 3,060
Last seen: 10 years, 3 months
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Do you know anything about oanda?
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Alpacalypse
Psilocybelief



Registered: 09/20/08
Posts: 6
Last seen: 15 years, 3 months
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Re: Foreign Exchange [Re: ChuangTzu]
#9135973 - 10/26/08 09:25 AM (15 years, 3 months ago) |
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There are essentially two types of forex brokers.
ECN (Electronic Comminations Network) brokers connect to a universal forex network and find an actual buyer\seller that is "out there" to be the counter-party to every trade you make. This is a true market.
Market Makers are big firms that have substantial control over the ebb and flow of the forex market. They typically have no commissions because their price is indistinguishably incorporated into the bid+ask spread so you never know how much they are taking. They act as the couter-party to your trade at all times, instead of finding someone in the market. So you are essentially trading back an forth with just the broker, "playing forex". Unfortunately, Market Makers have built a reputation for manipulating price to enact stops + limits of their clients for their own profit at the loss of the client.
A new breed has been emerging called No Dealing Desk. The Market Makers typically have "dealing desks" to process and arrange the counter-trades with all their clients. In the end these deals ultimately make profit for the firm (profit taken from the accounts of their clients). A No Dealing Desk broker may still act as the counter-party to your trade but CLAIMS to have "No Dealing Desk" where unfavorable trades are negotiated with clients funds.
Oanda is a Market Maker. They have recently adopted the whole "No Dealing Desk" repertoire which means they are at least trying to appear to take a step in the right direction. The problem is that NDD means they are still a Market Maker and the fact Forex is unregulated makes "No Dealing Desk" a very grey area that can mean a number of different things to different brokers.
It all depends on your strategy. If you want to buy some currency and sit on it for a while, maybe make a few trades every couple of weeks, then something like Oanda would be fine. They are big, the most "reliable" of the Market Makers and tend to be the most progressive Market Maker out there.
If you are looking to be an active currency trader you are going to want a broker that is an ECN so your don't get consistently shafted out of your pips.
There are only a few good ECN brokers out there... three of which require a big deposit.
The only real ECN option avalible to the average home user would be mbtrading.com and they let you trade micro-lots of 10,000.
Dukascopy, Interactive Brokers, and Hotspot FX are all ECN's as well but require a larger deposit and only allow you to trade 100,000 lots.
FXCM is thought to be one of the other better non-ECN brokers out there even though they offer a "No Dealing Desk" approach. You can also open up accounts as low as $25. This allows you to make trades of any size! FXCM will act as the counter-party to all your trades though.
Sounds like FXCM might be your best bet if you are looking to trade lots less then 10,000 with a non-shady broker. They allow you to trade lots of 1-2k.
Remember, forex is 95% technical. Always put in a stop, even if your a long term investor. Otherwise your account could be drained in an instant. Also keep in mind, anything held more then a day or two is "long term" in the forex market.
Good luck investing!
Edited by Alpacalypse (10/26/08 09:57 AM)
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Alpacalypse
Psilocybelief



Registered: 09/20/08
Posts: 6
Last seen: 15 years, 3 months
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Re: Foreign Exchange [Re: ChuangTzu]
#9136666 - 10/26/08 01:13 PM (15 years, 3 months ago) |
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Quote:
ChuangTzu said: I've been waiting for the euro to drop below $1.30 to make a small (few thousand dollar) purchase. Now it's at $1.28 and ripe for the picking, however there are only three ways of making a forex purchase and none of them are really ideal.
-Forex.com requires very large minimum trades: 10,000-100,000 currency units.
Also, if you weren't aware, Forex brokers give you automatic margin\leverage of usually always at least 100:1.
You have to use this leverage or else you make next to nothing. You don't have to use ALL the leverage you have but you use the leverage to make more then +- 50 cents at a time.
100:1 leverage means with $1,000 you could buy a single 100,000 lot of currency.
If you have a couple thousand dollars that's enough to buy several 100,000 lots or you can buy many 10,000 lots.
Just stick with the reliable brokers and watch out with using over 100:1 leverage, it can bite you in the ass really fast.
but it all just depends on your trading style...
Edited by Alpacalypse (10/26/08 02:01 PM)
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Ferris
PsychedelicJourneyman



Registered: 03/12/06
Posts: 11,529
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Not knowing anything about Forex, several 10:1 or 5:1 positions seems to be the way to go when given 100:1 leverage. No more than 20:1.
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Liquidkick
H2O
Registered: 05/03/02
Posts: 2,635
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Re: Foreign Exchange [Re: ChuangTzu]
#9151067 - 10/28/08 09:31 PM (15 years, 3 months ago) |
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Alpacalypse pretty gave you all the info needed to open accounts.
I currently have think or swim account for forex. I do not recommended you use thinkorswim for scalping....
I been getting shafted on my scalps on the big EU drop. so pissed...
but yeah i dunno if you really want to put your cash up in forex if you are not going to actively trade.
It's a risk you really don't need... you'll have to do a fundamental analysis of whats going on in the macro world and then use Technical Analysis to get in....
but the markets can turn on you real quick and you could lose cash even with a stop loss...
so lets say you lose 100 bucks from the EU going down and the USD getting stronger... its going to suck because prices in everyday items tend not to go up or down that fast(there are exceptions of course). So now you have 100 less to spend 
since you might not be traveling around the world the impact for trading forex might not be worth it. unless you need goods in another country or are investing in another country.
hopefully i made sense...
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ChuangTzu
starvingphysicist




Registered: 09/04/02
Posts: 3,060
Last seen: 10 years, 3 months
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Re: Foreign Exchange [Re: Liquidkick]
#9154917 - 10/29/08 04:12 PM (15 years, 3 months ago) |
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Yeah, I don't want my money tied up in Forex accounts. I want either euros in hand or in a European bank account. Too bad I missed the .8 window...
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kadakuda
The Great"Green".......East


Registered: 05/21/04
Posts: 7,048
Loc: Asia
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Re: Foreign Exchange [Re: ChuangTzu]
#10732473 - 07/24/09 11:48 AM (14 years, 6 months ago) |
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sorry for the noob Q, but why are you guys saying htere is such a big risk?
say i buy 10,000 euro and it cost $15,000 usd (just for example and easy numbers). lets say the value drops and now if i changed back to usd its only $14000. lost 1000, yes, but other than that is there another risk i am missing? i mean are there some ways these companies can swindle their way into taking more than the actual $ drop? or is that $1000 situation the only risk with forex trading?
like ChuangTzu, i have been looking to do this kind of trading through my 2 bank accounts in different countries. with them there is a flat fee of $30 or something to actually transfer the real cash form this country to that. safer?
-------------------- The seeds you won't sow are the plants you dont grow.
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