Anyone with FX experience?


I’ve started applying the same algos I have to trade stocks with to FX, and like the results. I’m interested in doing this because work basically has my balls in a vice grip when it comes to trading. I very seldom am able to get things pre-cleared. To make it worse, I like trading options, and there’s no guarantee that even if I can get cleared to load an options trade, that I’ll be cleared to sell it before it expires. I also have to hold those options for a minimum of thirty days - yeah, which is a deathtrap. However, there are absolutely no restrictions on me trading currencies… shwing!

I have a few questions, maybe we could even connect in private?

  1. What broker is the best? 2. Specifically, I’m looking to trade options on currencies, which brokers will do this? 3. Minimum account size to do point 2? 4. In a given 6 month time span, let’s assume I take 20 options positions, and that in each position I’m risking no more than 5% of my total account. I understand how this plays out in equities, but how will this play out on currency tradnig? I guess the question I’m asking here is how do you measure volatility on currencies? Just like you would with stocks?

Only in the most important fx, gold.

I say this out of pure ignorance… but gold sounds like it’s not volatile enough

You would probably trade gold using futures, so I doubt you’d have a problem with not being able to expose yourself to enough volatility. FX are generally less volatile than equities. You can measure this through historical or option implied volatility. However, if you are looking to trade options, you would be able to afford more options for a less volatile underlier. So this doesn’t mean you would have to take less risk.

I’ve only traded FX through tools that are not available to retail customers, so can’t recommend any specific retail broker. As in most of these brokerages though, the Top 5 or so are probably about the same.

Also, I know you didn’t ask, but this is probably a bad idea, since it is pretty clear that you don’t know what you’re doing. It’s your money though.

dont do it.

currency is a shit investment. its all speculation.

less regulation. more leverage.

gold, which is not a currency (indirectly used to back currency though), is the only thing that’ll beat inflation in long run! :slight_smile:

I forget what broker (maybe Interactive Brokers?) has a trial period to try trading fx. You get to run a paper portfolio for a month.

In my very limited experience, fx seems to be one of the more difficult asset classes to predict. I’d echo ohai and caution against getting into it unless you want to really dive in.

Well I sort of agree with you. I just know that the same algo I have to trade equities with works well with currencies. So I’m effectively losing money sitting here and not trading. I opened up a FX account and started trading a few pairs. I’m only using $1k to start. and risking no more than 5% a trade. So with a 70% win rate theoretically I should be able to at least make some dough over time.

Yes, it is. I’ve asked this question to people on this forum for 10 years now and no one has ever even replied, even when I got into this debate with Blake. If gold isn’t a currency, why is it counted towards a country’s central bank’s foreign reserves? Only fx is counted in foreign reserves.

The attractiveness is in the fact that I can do whatever I want though. I don’t have to pre-clear anything.

currency is a medium of exchange. so if you use gold coins to say buy your everyday transaction then i guess you can call it that. but nowadays with fiat currency, why would anyone mint gold coins or any coins for that matter (althought we still got a lot). if anything they’d melt that shit down and print paper!

anything can be a reserve. Foreign-exchange reserves (also called forex reserves or FX reserves ) is money or other assets held by a central bank or other monetary authority so that it can pay if need be its liabilities, such as the currency issued by the central bank, as well as the various bank reserves deposited with the central bank by the government and other financial institutions.[1]

To most people, currencies have an actual definition, where they have to meet certain criteria. You could argue that gold is a generally accepted medium of exchange - but it is a much weaker medium then normal money. You can’t walk into ShopRite and ask the clerk how many ounces of gold a pack of beer costs. At best, gold can only be called a currency under limited circumstances. The same can be said for a lot of things: cigarettes, Rolex watches, or others.

OP, oh I didn’t realize you had an “algorithm” that definitely works and that you’re just “losing money” by not trading. In that case, yes please continue.

It’s okay we all make mistakes.

^Thanks for the copy pasta but take a look at any central bank’s fx reserves and find an asset that’s not currency/gold. They don’t hold art at the Fed.

I’ll concede gold is not a practical currency…until the zombies arrive.

I second that…I traded for a bit on Oanda…lost 20k in a month and never thought of trying it ever again. (btw i manage a pretty decent hedge book for work)

Guess covered interest rate parity held then?

OMG though that’s brutal. Care to share how?

The nice thing about Oanda is you can pick your leverage and also use really small exposures if you want. You can literally trade in a unit as small as $1 lol! Give your algo a run using small units… see how it does without exposing yourself to intolerable risk.

Also, most FX is commission free BUT you have to consider the spread (where the exchange makes its money) Some pairs (specifically USD pairs) have smaller spreads. This is definitely something to consider when picking which pairs you want to work with. That said, not sure how frequently your algo trades… if less than once a day, these concerns are negligible, of course.

Why options on currencies?

Let me know if you have any questions… I was a shit trader but I know tons about different platforms, tools, and product liquidity.

I’m skeptical of what you are saying here. With a 70% win rate your wins must be TINY… or your are misinterpreting what your risk is. Typically a high win rate is associated with greater risk taking. When you say you are risking 5% do you mean your position size is 5% of your capital or do you mean you will let the exposure move against you by the amount of 5% of your account before you stop it out. I would argue the later value is more meaningful because it accounts for leverage.

He’s done studies, you know. 70% of the time, his algo works every time.

Image result for panther odeon

Algo, by Odeon.

I actually did laugh at all your jokes despite y’all being my heroes and all…not anymore though. . In my defense, it’s 2018, who DOESN’T have an algo? You guys trying to act like you’re stock pickers? I’m not doing anything that is over the top fancy with this, it’s a basic “buy high, sell higher” algorithm. And slow & steady wins the race… 68% of the time. That’s not an OUT THERE kind of statement either… Now excuse me, I need some more avocado toast.

Wins can be anywhere from 1-300%, and I always like to walk away at negative 50% - this is in regarding options. I like to keep it so that my max loss is never more than 5% of my total portfolio. That way, even if I have a string of losses, I’ll still be alive to fight another day. But that intuitively makes sense to me, whereas I have to arbitarily decide what that 5% loss would look like in this landscape. Although, I think what would suit me best is spread betting??