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Forex trading questions?

Discussion in 'Beginners Bootcamp' started by jeckvishva, Aug 21, 2011.

  1. jeckvishva

    jeckvishva Recruit

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    The USD/JPY is trading now at about 80.4900 so how much would it cost me to buy 3000 shares of that currency? Also how much money am i required to have to day trade Forex? Because i know you need like 20 grand to day trade stocks. I have been trading stocks now for a couple months and i have a good trading strategy down using MA stochastic and a couple other indicators but will they still be effective in forex trading? Thank You
     
  2. Pharaoh

    Pharaoh Colonel

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  3. dkami

    dkami Sergeant

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    Hi Jeckvishva and Welcome to FPA I have been trading stocks for many years successful and there is just no comparison to trading ccy and stocks in my view you have to look at trading currency in a completely different light

    Pharaoh gave a great link to read

    As for an account size to trade Forex I would suggest no more than 2k to start with using small lots after using a DEMO account for at least 3mths

    And as for your strategy still being effective i could only say maybe because when i trade Stock 99% is on fundamentals and 1% is my own support and resistance system but when i trade ccy Im more of a technical trader using my own support and resistance system and a program i purchased with about 10% on fundamentals

    P.S. Beware of SCAMS there are a hell of a lot in the Forex world
     
  4. f-man

    f-man 4Xangels Representative

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    Calculations

    You really need to study the Forex Market before setting up a live account. The stock market and Forex do not move in the same rhythm.
    Go through the FPA Military School and I could also suggest babypips.com
    You can find some things about forex trading on 4xangels.com also.

    To your question (to buy 3000 "shares" of USD/JPY):
    I will try to make it as simple as possible.

    First of all, in Forex you can buy Lots and not Shares.

    You have to consider the following factors, in order to estimate a "value":

    1. Initial Capital
    2. Leverage
    3. Money Management (A Stop Loss is very recommended)

    Lets take your $20.000 as initial capital and a "standard" leverage of 1:100,
    As safe money management is suggested to use max 2% loss per trade.

    Depending how you trade, the Stop Loss determines your Lot Size.
    With a leverage of 1:100, a standard lot size has a pip value of $10 (On the EUR/USD pair and we use that to make things easier)
    For the sake of calculating a value, we consider 100 pips SL.

    We calculate $20.000 * 2% = $400 maximum loss per trade

    To calculate the Lot Size:

    400/10(Pip Value)/100(SL)=0.40

    As you can easily realize, you can make thousands of combinations of calculations if you change the parameters!

    If you did not understand anything, it means you really need to go through the basics:D

    After you do some basic reading read this calculation again.

    Place more questions on the Forum. Me and all other members of this forum will try to help you understand the Forex market.

    Never Forget: Keep away from Scammers! There are many ways to avoid them. The most simple one is: ask in the FPA about a Forex broker or a Forex product!
     
  5. Ruth Berlin

    Ruth Berlin Recruit

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    Hi … I see that you are a real stock trader because you are using terms from the world of stocks. I started me way in trading stocks… like you did. First thing you have to know is that in forex we are using “lots” instead of shares( 1 standard lot is 100,000). You meant 3000 “shares” which is 0.03 lot, which is a very small amount ( not like in stocks where 3000 shares is a pretty large amount).Regarding you last question, you have nothing to worry about- trading currencies is the same in trading currencies or commodities, except of minor adjustments that you have to make. But the technical analysis system is pretty much the same in forex and stock.You don’t have to start with 20K on the start, the regulation in forex is different and some brokers allow you trade with just 100$. I think it is a joke and the minimum is few grand.
     
  6. Karl Jensen

    Karl Jensen Recruit

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    Quick stock markets and forex are very similar in technical analysis.
     
  7. RahmanSL

    RahmanSL Major

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    More than one month since this thread was posted and not a bleep from the originator "jeckvishva".

    ..hmmm, with so many high powered replies, jeckvishva must either be overwhelmed by so much information or is still in Sive's boot camp...or the more simple reason being that he forgot where he has posted this thread : )
     

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