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Hi Rtrs, Regarding forex trading, from my initial research , I find the
following(correct me if I am wrong)
Advantages: 1. very liquid 2. no or very little slippage 3. no commission
because you go to market maker directly. 4. execution of trade in seconds
5. bid-ask spread of 5 pip 6. Ability to trade from anywhere in the
world with a laptop,cellular and reliable internet connection - ideal for
countries where you can't trade futures 7. 24-hrs market -ability to react
to events anywhere in the world. 8.Margin 2% for daytrading - 4% for
overnight - just an example -it varies. 9. Interest at Libor rate on excess
equity. 10. Free real-time quotes. 11. Can trade in different sizes 12.
Hedging: You can go long and short in the same currency to hedge completely
or partially for example you can go long $200,000 worth DM and go short the
same or less and have both sides open unlike futures.
Disadvantages. 1. Individual trader
cannot keep awake 24 hrs. 2.Since margin is less, trader with poor risk
management can get wiped out quickly. 3. Ray Barros said that you have to
pay interest rate differential - I don't understand this clearly but paying
it may take away most of the advantages. 4. Other costs charged by trading
houses 5. Safety of the money in the account. 6. Adaptation of technical
analysis required. How do you chart the open,close,high,low for bar chart
or candlestick when there is no open or close. I use mostly candlestick
charting and require the open and close.
A forex trader would require 1) good reliable internet
connection 2) live real-time quotes preferably free from the market-maker
3)a cheap or free source of real-time news that could move the currency
markets - also most important good judgement. Any
input would be welcome. For forex traders - anybody using news and/or
technical analysis for trading and your views on it. About trading on
fundamental or news, any recommendation on sources ,books for learning
about how to use news to trade profitably would be welcome.
Does anybody out there make a living trading mostly
on forex give us views on size of account, frequency of trading, working
hours required.
Happy trading, Ashif
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