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First foray into forex
Posted on 6/7/13 at 4:16 pm
Posted on 6/7/13 at 4:16 pm
So I conducted my first trade in foreign currency two weeks ago. Bought out of the money puts on FXA, Australian dollar ETF. I closed the trade today up 44.9%.
Is it really this simple or did I just get lucky? All I did was read some Australian central bank minutes, CNBC articles, a few firm's short term and long term price targets, and decided it was a good idea.
Is it really this simple or did I just get lucky? All I did was read some Australian central bank minutes, CNBC articles, a few firm's short term and long term price targets, and decided it was a good idea.
This post was edited on 6/7/13 at 4:18 pm
2
Posted on 6/7/13 at 4:23 pm to Beerinthepocket
quote:
Is it really this simple or did I just get lucky?
I feel that by typing this you are either a savant or you are about to get your financial arse kicked.
Posted on 6/7/13 at 5:43 pm to Beerinthepocket
quote:
Is it really this simple or did I just get lucky?
You got lucky.
Forex is the biggest market in the world. It is where BIG banks and national governments play and routinely manipulate prices.
With that much money in play you can be sure you have not stumbled onto a reliable money-making strategy in your off hours. The big players who invest a billion dollars or more maybe, but not you.
You rolled the dice and got a seven. Congrats.
Posted on 6/7/13 at 5:45 pm to foshizzle
I will add that even forex is a better gambling game than most casino games. The "vigorish" isn't very high.
But you are still basically betting money on flipping coins and paying to do so. You have no "inside track" here.
But you are still basically betting money on flipping coins and paying to do so. You have no "inside track" here.
Posted on 6/8/13 at 1:25 pm to foshizzle
quote:
You got lucky.
Hah well that's what I figured. My roommate does a fair amount of derivative trading and is very knowledgeable on the subject and seems to do very well with it. He did a trade on the Yen recently and made 240%, so that's what got me interested.
Posted on 6/8/13 at 1:36 pm to Beerinthepocket
just be careful with the leverage. A friend of mine got big on the 50:1 gold trading 5-6 years ago on oanda. He made a ton, then lost his arse. 50:1 leverage is a scary thing
Posted on 6/8/13 at 4:28 pm to ThaBigFella
Some brokerages allow 200:1 on forex, which is just insane. 15:1 or so is as high as I go and that's after I've got profit built in to the position already.
On forex in general short term trading is tough to be succesful in, the longer term the better. In the short term the competition is big banks and central banks.
On forex in general short term trading is tough to be succesful in, the longer term the better. In the short term the competition is big banks and central banks.
Posted on 6/8/13 at 4:58 pm to ThaBigFella
quote:
He made a ton, then lost his arse.
That's a fairly typical day-trading result. Someone does well for a while, gets cocky, starts betting bigger, and then when things start running bad (as they inevitably do) you get truly hammered.
BTW, since it is mostly just luck there are plenty of people who start out losing from day one as well. You just never hear about them, they don't generally advertise their bad experiences.
ETA: Full disclosure - I do have some foreign bonds (which is basically the same thing as forex) but that is for diversification purposes, not for trading.
This post was edited on 6/8/13 at 5:00 pm
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