Forex rebates on every trade - win or lose!

[13:10 EUR/USD: IMF Warns ECB not to Rush] Boston, April 19. The IMF"s spring
forecasts are out, and in the report, the Fund warns the ECB not to be in a
hurry to normalize rates. They say demand remains fragile and inflation is
contained. The IMF also says forex moves to rebalance global trade are
inevitable while calling Bush administration deficit cutting goals unambitious.
Dealers note talk of large 1.2280 expiries coming into focus this morning. Stops
are seen mixed in with bids down to 1.2270, EUR/USD trades at 1.2300.
Jamie.Coleman@Thomson.com/rs



[IFR Forex Watch]
[SQUAWK BOX]

Rick

Did you sort out the BOM stop outs/spikes? Was their attitude ok or cmc-ish?

Robb,spoke to them last night,and they admitted they had a problem,so today they are sorting my account out :-))Thanks for your help,how you keeping you old b***er ????

Rick...

Rick,

Glad to see they are being reasonable.

I'm OK thanks mate. Haven't got my Ferrari yet but a fair bit closer than when we sat in Croc's conservatory looking at bots :-)

Only watch, not trade, the forex for the moment but like to follow the thread so noticed your predicament. Anytime you need numbers its no problemo.

Cheers
Rob

Glad your well,yep brings back memories of Croc,i believe it was only few days after we met at his house he suddenly passed away !!!

Rick..

Mega, glad to learn BOM have admitted the problem and are setting things right.

klal,thanks,aint been trading much the last couple of days,have been metal detecting on a farm with a roman villa on it,the farmer wanted to sow a crop before the weekend.
But we are back in the groove again :-)

Mega...

Harlosh,

I've been looking at the Updata wotsit again today.

For some reason as it refreshes, it frequently scrolls either up or down by around 200 or 300 pips away from the price action on my cable chart, leaving me with a blank piece of graph paper on my screen. Is that a common occurance, because it frustrates the hell out of me.

Hilary, funny you should mention that but it has been happening to me the last couple of days. I'll contact support and ask them what the problem is.

Hilary,

I spoke to support today but they require me to send screen shots of the offending charts. Unfortunately I was out most of the afternoon and the problem failed to occur for the rest of the day (on my pc anyway). I am at the Active Investor show tomorrow so will have to sort it on Monday. Hope you can bear with it till then.

Harlosh,

I would've thought that a screenshot of a blank piece of graph paper is about as much use as a pork sausage at a Bar Mitzvah, but hey ho, if that's what they want ................

Thanks for your effort in trying to sort it out.

H,

One of my biggest reservations about the Updata P&F is the accuracy of their LSE data feed.

My FXCM feed has barely budged from 1.7775 these last few minutes, yet their feed has ranged in that time from 1.7767 to 1.7778. As I see it, this has the potential to introduce more reversals than there actually are into the chart, and thereby take the price action closer to the trend line than it really should be. That's OK on days like yesterday and Wednesday where the trend was pretty well defined, but my concern is that it could unnecessarily whipsaw you in and out of trades on quiet days.

We'll see.

Hilary - 'screenshot of a blank piece of paper', Yes, I know. My thoughts entirely but they say they might see something on the screen I can't so I'll go along with them for now.

As for the price feed I suspect FXCM are filtering some of the price movement in their charts in a similar way that CMC and other free charting facilities seem to do rather than constructing the chart you see direct from LSE data as Updata charts are. I suppose that's what I get for the extra 50 a month I pay.

Personally, I would rather have the exact price movement rather than their interpretation of it. I suppose it can sometimes work in your favour and other times against.

Hil: I see you beat the FX Fairy to it this weekend . . .

I don't know where Updata's FX data comes from, but I know a bit about feeds. It looks to me like FXCM may be conflating their feed more than Updata which will give a smoothing effect. It you look at a ComStock Forex feed it has about 600 'contributors' who all supply their price spreads for various crosses, whereas Reuters have about 2,000 contributors. This is a real headache for people who might want to display continually updating prices, particularly to a mobile device, say, with restricted bandwidth. Also, the figures can move so fast that you can't actually read them.

So, some smoothing or conflation is required to make the data usable and meaningful.

Chart sampling intervals present similar problems.

I believe this is my first post on this thread, but have been lurking for a year or so, but having struggled with this beast for all of that time, perhaps now is the time to pass on my hard earned experiences. As far as shares are concerned I admit I am not a particularly patient investor, I have lost count over the last three years, how many times I have closed positions either at a loss or small profit, only to watch with dismay as the SP has recovered or fulfilled my initial expectations. Hence my attraction to day trading Forex, substantial profits can be made in a much shorter time frame and I dont have to sit and wait for something to happen. However, this volatility has a downside, losses can (and have!) be made in a heart beat and it is easy to understand why newbies can lose their pot in a very short period. Although I have yet to master this market (I do wonder if I ever will) I have established my own rules, which hopefully will lead to some measure of success. These are in no particular order of importance, each has their own place and I appreciate you will all have your own views, either agreement or otherwise.

1. Do not even think about this market unless you understand Technical Analysis. Reading the daily papers and such like will provide general market sentiment, but clearly does not provide entry / exit points required for day trading.

2. Draw charts, establish trend lines, (up and down) and areas of support and resistance. Ensure you use Indicators (my own preferences are MAs/EMAs/MACDs). This approach will provide your entry and exit points.

3. Have faith in your chart and indicators, unless it is going badly. If this happens, you have probably got it wrong, so re-draw.

4. Currencies do trend and when they do it is easy to become complacent, it wont trend forever, be prepared for a breakout. Use longer term indicators to resolve when this may happen. If it breaks out of your trend line and you are on the wrong side, then accept, cut the position and start again. Waiting for it to come back may never happen and turn a small loss into a big loss.

5. News releases from various areas (interest changes / jobless figures / manufacturing outputs and a host more) have a significant daily impact. If you are not happy or dont know what effect news is going to have, then stay out of the market. You may miss a golden opportunity to make a quick and significant profit, but you may well avoid a similar loss. Make sure you know when news is going to be released, it is all in the public domain.

6. Just because the papers say that the dollar is going to weaken, it doesnt mean it is going to happen straight away. Use charts to plan your strategy

7. Establish exactly how much of your life savings you are willing to bet. If 20 per pip sends you into a cold sweat or is likely to wipe you out in one go, then bet a lesser amount. You may not make a fortune in a single day, but you will live to fight another day. Personally, I have found the only way to work this one out is by trial and error, but is also subject to change, dependant on what the market is doing. There will be times when all of your indicators are giving contrary information and uncertainty rules. It is probably best to do nothing when this happens, but if you must take a position then lower the risk with a smaller amount.

8. Set stops and limits, especially stops. Your chart will tell you where these should go, although it is an emotive subject. I have lost count of the amount of times I have been stopped out by just a few pips, but at the same time I dont want to suffer a bigger loss than I have to. However, I am sure that as my experience increases, I will make better judgements in future. Unless you have a very good reason (and its hard to think of one) dont move your stop. Your stop should have been set at a resistance / support level and if it goes through this level then it has probably broken out and you will only increase your loss.

9. Never, never believe that, just because it has risen (or fallen) 100 pips that it wont just keep on going. I have fallen into this trap quite a few times, believing that it JUST CANNOT go any further, and it does. Again use your charts and indicators in an attempt to determine when and where it will stop. Eventually it will and if you are trying to catch the top or bottom, this is the time to enter the market.

10. The old adage, the trend is your friend is as applicable to currencies as it is to anything else. Believing that it is about to reverse, just because you think it has gone too far too fast is courting disaster.

11. Watch the Yen and Euro carefully, both of which tend to lead sterling (although not always ho hum). Also, gold, silver, crude and the Dow Jones, make sure they are visible on your trading platform.

12. Do not become obsessed in a belief that a currency is a roaring short or long. Be prepared to change and be flexible. It is awfully hard to change your mind in accepting that something is no longer true, but whilst you fail to do so you will suffer losses.

13. Take profits when you hit your area of support or resistance. That was your target, so take it. Subsequently, it may breakout, but you can always open a new position if it does.

14. As in any form of trading / investment, the most importance discipline is discipline itself! Establish your rules ands stick to them, of course refine as experience grows, but stick to the basics.

I have to admit that part of the reason for this post is to that I am probably the worst person in the world for sticking to my own rules, but now they are in the public domain, I will have to try harder :-)

I am also sure that there are some things I have forgotten or yet to learn, but thats all part of the experience.

For what it is worth I will likely be long Cable this evening with a target tomorrow of 1.7900. Havent quite made my mind up yet where the stop will go, probably close to 1.7800, although because on this occasion it will be a CFD, perhaps 1.7750.

Good luck

pth

Hi pth, Nice to see you on here. Great post and having just started forex myself recently I can certainly empathise with many of your points.

Having spent most of the morning trying to get my head around posting a chart, here it is. I hope it looks ok.

Its a 5min candle chart of cable. It shows a distinct uptrend since the big gap up on the 17th Apr where it reached a peak of 7935. From there it formed a downtrend for the best part of the day. It finally broke out of my bearish resistance line during the evening of that same day and has since developed a new uptrend. Its currently at 7828 in the middle of my uptrend channel.

These are, of course, just my own thoughts.

Harlosh,

As MM suggests, there are several different FX data suppliers including Reuters, Bloomers, S&P Comstock and FXCM. The idea is for those suppliers to use sufficient contributors (ie the banks which provide a quotation) so as to form a smooth representative sample. Insufficient contributors will lead to the erratic action which you see on the Updata feed.

Updata suggest that their price feed comes through the LSE which also might explain the strange terminology they apply to it. It doesn't particularly bother me that they might be a few pips off a tradeable price, because I'm not looking to trade their price. It does bother me though that their P&F chart might not construct properly as it could show an excessive number of reversals which might not be there if the feed was smoother. It would be interesting to see whether or not the P&F charts looked identical using a different data feed.

bakko,

There was no gap on Monday. The FX markets were open from Sunday evening through Monday and cable rose in that time. For some reason the feed on your chart seems to have been switched off on Monday (maybe because of the UK Bank Holiday).

Here's my 1hr effort which shows a clear uptrend for the last month. It would have to break below my bullish support line of approx 7600 before a downtrend could be called.

Hilary, Thanks for pointing out the gap which would have been due to the lack of data on the bank holiday.

Heyyy and then there were three betfair boys ;)

Just a teeny suggestion Bak - although NetDania tends not to plot pre-market activity on a Sunday night, FX Power Chart does. And it's always wise to have a back-up.

So we're all long then :)

et tu, peter !!!