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jake g

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  • First Name
    jake
  • Last Name
    greenwood
  • Country
    United States

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  1. Forex and Futures

    New guy question; hope it's not too naive. I came across an interesting article, but I don't know what I'm talking about. Perhaps it's way off. In a nut shell they say forex is better than futures because its more liquid, can be traded all day, small commissions, less slippage, greater leverage, and reduced risk via automatic margin calls. Is there exaggeration here, and if so, how do you think such issues should be properly conceive of? Please and thank you. Would you say these points are represented accurately? More specifically, I'm asking that because of these aspects of forex, would if function better for a beginning trader, rather than stocks or futures? It sounds like certain pit falls have been removed from the overall challenge. Or reduced. Here's the article "The forex market also boasts of a bunch of advantages over the futures market, similar to its advantages over stocks. But wait, there’s more… So much more! Liquidity In the forex market, $4 trillion is traded daily, making it the largest and most liquid market in the world. This market can absorb trading volume and transaction sizes that dwarf the capacity of any other market. The futures market trades a puny $30 billion per day. Thirty billion? Peanuts!The futures markets can’t compete with its relatively limited liquidity. The forex market is always liquid, meaning positions can be liquidated and stop orders executed with little or no slippage except in extremely volatile market conditions. 24-Hour Market At 5:00 pm EST Sunday, trading begins as markets open in Sydney. At 7:00 pm EST the Tokyo market opens, followed by London at 3:00 am EST. And finally, New York opens at 8:00 am EST and closes at 4:00 p.m. EST. Before New York trading closes, the Sydney market is back open – it’s a 24-hour seamless market!As a trader, this allows you to react to favorable or unfavorable news by trading immediately. If important data comes in from the United Kingdom or Japan while the U.S. futures market is closed, the next day’s opening could be a wild ride. (Overnight markets in futures currency contracts exist, but they are thinly traded, not very liquid, and are difficult for the average investor to access.) Minimal or no commissions With Electronic Communications Brokers becoming more popular and prevalent over the past couple of years, there is the chance that a broker may require you to pay commissions. But really, the commission fees are peanuts compared to what you pay in the futures market. The competition among brokers is so fierce that you will most likely get the best quotes and very low transaction costs. Price Certainty When trading forex, you get rapid execution and price certainty under normal market conditions. In contrast, the futures and equities markets do not offer price certainty or instant trade execution. Even with the advent of electronic trading and limited guarantees of execution speed, the prices for fills for futures and equities on market orders are far from certain. The prices quoted by brokers often represent the LAST trade, not necessarily the price for which the contract will be filled. Guaranteed Limited Risk Traders must have position limits for the purpose of risk management. This number is set relative to the money in a trader’s account. Risk is minimized in the spot forex market because the online capabilities of the trading platform will automatically generate a margin call if the required margin amount exceeds the available trading capital in your account. During normal market conditions, all open positions will be closed immediately (during fast market conditions, your position could be closed beyond your stop loss level).In the futures market, your position may be liquidated at a loss bigger than what you had in your account, and you will be liable for any resulting deficit in the account. That sucks."
  2. Hey everyone. I love your forum here. Tons of great info and insights. I'm new to this so I'm going to say things that don't make sense. That's what new guys are for; It's our job and we're damn good at it. And pardon the long windedness. Currently I'm reading a bunch of books, talking on forums and I want to develop great skill at swing trading and day trading. An aspiring trader needs time and money. Time to study, to learn, and money to cover expenses. Like equipment, rookie loosing streaks, research costs, normal living costs, etc. So, how do you maximize both at the same time? I'm sure other traders have figured out this problem better than I have, but here are the solutions I see so far. 1) I doubt this one will work. Hypothetically, it would be great to work for some company that is involved in trading, or maybe in the ball park. Meet knowledgeable people, learn a lot, broaden horizons etc. However, I have no back ground in finance or investing. My resume doesn’t looks appealing; my only strength is learning fast and being extremely motivated to understand the job well; learn everything possible about this topic. If i am wrong about this, if there are in deed such options, such jobs, please tell me. Until someone suggests otherwise, I'm considering this option a no go. 2) I expect this next option won't work, either. Work 3rd shift at a job you can study. Like a security guard. Eventually, start trading during day time. But, how long before you save up a trading account of 20k? Probably a long damn time. Some say accounts of 5k and below are pointless. Perhaps that is not fully true, perhaps there is some "angle" to trading which can squeak you by, generate a modest profit out of a 5k account, continue to work a full time job. Continue educating yourself about trading, save up, eventually accumulate a large enough savings to trade full time. Again, I doubt this 5k account "angle" exists, and if it does I don't know what it is. Do you? 3) This may sound odd but it's doable. Semi trucks. 35k to 50k your first year. There is a lot of down time where you are not driving. While driving, truckers wait for traffic to clear up, then listen to audio recordings. Truckers get degrees for online colleges this way or learn foreign languages. Save save save, learn learn learn. Make trades during down time. Eventually, stop being a driver; trade full time. 4) Maybe some combination. Such as first #2, then #3. Figure out what the whole strategy should be while working nights, (although I'm sure the plan will change) after that, if I'm 10K or 15K short of start up capital, go drive a truck until I save the rest. Again, I'm new, and am sure other traders have confronted this issue, have thought up better ways to handle the first two years than I have. Any suggestions? Anything important I don't know about, that would change everything I've said here? Thanks a million.
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