| Forex Trading The Gbp/Usd |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Trading The Gbp/Usd |
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I thought it would be neat if someone trading forex would post a trade or two to give others an outlook on how easy or hard forex trading can be.
Today, Friday May 05,06 I place a trade on Gbp/Usd just before the close of market (market closes 5pm EST/NYT).
Buy 2 lots @ 1.8594
Sell 2 lots @ 1.8590
Gbp/Usd closed at 1.8590.
Explanation of my trade: I have place a hedge, meaning I am trading both sides of this particular currency (not many brokers allows this but there are a few who do). Because I must actively follow my trades due to my limits and stops are not fixed I will update this post 30 pips before I actually get out of my positions (i will time and date the transation for you, so that you can follow in real-time, if you wish).
Objective: 250 pips on this one trade
Wish me luck...
p.s. What is a pip? In the world of forex a point movement in either direction is called a pip. If you have what's called a mini acct, one pip is worth one dollar (so if the market moves 250 pips, that's 250 dollars per lot). If you have a standard acct each pip (point movement) is worth 10 dollars (so if the market moves 250 pips, that's 2,500 dollars per lot). What's a lot? lol A lot is a contract by which you have purchased to trade at a cost based on what's called the spread. I will explain more in my next post.
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Sat May 06, 2006 1:11 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Trading |
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Hi Coaster
No the trades as mention in my above post are not standing orders to be excuted at some later date. Those trades are open orders.
Now, in forex with some brokers such as fxsol or tradex group and a few others you can hedge your positon. While the position is hedged your only cost/loss is the spread. In this case the spread for me is 4 pips (4 points) and the 4 pip spread will stay until i close out one or both positions.
I hope this is making sense, if not I will explain it again.
Hey have a nice weekend.
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Sat May 06, 2006 1:31 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Trading |
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Hey Coaster
Yes, you are correct. These two trades off-set each other leaving you with a cost of 4 pips due to the spread.
Based on how my trading method is employed I will wait for an exit signal. When my trading system gives me such, I will then close out one side and leave the other, then take the difference between the two as profit or loss.
For most this is a very unusal means of trading for profit but it works (oh did I speak too soon...lol we shall see.)
Trust me, you will find this trading method very interesting and I will keep you posted.
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Sat May 06, 2006 2:00 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Sunday, May 7th, 2006
Time: 7:07 pm EST/NYT
Here's an update on the current open trade as posted above.
Type: Lots: Symbol: Entry: Price: Profit/Loss:
Buy 2 Gbp/Usd 1.8590 1.8609 + 300.00
Sell 2 Gbp/Usd 1.8594 1.8613 - 460.00
Total P/L: - 160.00
Remember when trading a standard account each pip is valued at 10.00 (ten dollars). The spread is 4 pips x 4 lots traded = 16 pips
16 pips x 10.00 (ten dollars) = 160.00
As you can see when you take out a hedge the only cost is the spread which is why Total P/L is -160.00 dollars. If this was a mini-acct your cost would be 16.00 (sixteen dollars). If this was a micro-acct your cost would be 1.6 (one dollar and sixty cents).
The fee due to the spread is the reason many believe trading forex is more cost effective then trading stocks or futures.
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Sun May 07, 2006 11:20 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Monday, May 8th, 2006
Time: 1:09am EST/NYT
Value of the trade is now:
+420.00
-580.00
P/L = -160.00
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Mon May 08, 2006 5:10 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Monday, May 8th, 2006
Time: 4:09 am EST/NYT
Current position of Gbp/Usd (cable) is: 1.8615
If cable runs up to 1.8733 then I will close-out the short side of the trade and continue to hold the long-side. However, if cable moves against me after I have closed-out my short I will sell 2 lots again and add 2 lots to my buy side at my original entry point.
I need to step away from the computer for a bit but I will continue to keep you updated on the trade.
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Mon May 08, 2006 8:16 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Monday, May 8th, 2006
Time: 8:11 am EST/NYT
Hi Coaster
Some currencies have nick names and Gbp/Usd nick is, Cable. The term Cable comes from a time when Gbp/Usd prices used to travel by way of the trans-alantic cable wires. Some may not know but modern day currency trading has been occurring as far back as the 1800s.
Here let me share another nick name or two. Eur/Usd's nick is Eddie and Usd/Cad is sometimes refferred to as Loonie.
Now for the update:
Value of the trade is:
+840.00
-1,000.00
P/L is still fixed at -160.00 usd
P/L, profit and loss
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Mon May 08, 2006 12:21 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Re: Forex Update |
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quote:
Originally posted by fxPipTitan
Date: Monday, May 8th, 2006
Time: 8:11 am EST/NYT
Hi Coaster
Some currencies have nick names and Gbp/Usd nick is, Cable. The term Cable comes from a time when Gbp/Usd prices used to travel by way of the trans-alantic cable wires. Some may not know but modern day currency trading has been occurring as far back as the 1800s.
Here let me share another nick name or two. Eur/Usd's nick is Eddie and Usd/Cad is sometimes refferred to as Loonie.
Now for the update:
Value of the trade is:
+840.00
-1,000.00
P/L is still fixed at -160.00 usd
P/L, profit and loss
Note: I should explain that some trades can be completed quite fast (say less than a few days) while others can last as long as weeks before an exit occurs.
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Mon May 08, 2006 12:32 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Monday, May 8th, 2006
Time: 10:21am EST/NYT
Current value of the trade is:
-500.00
+340.00
P/L is still fixed at -160.00
Notice how the market has now reversed on us, but this trade is not in any trouble due to the hedge I placed.
In this instance a "Hedge" is the off-setting of a trade by buying and selling the same currency pair which is in this case, Gbp/Usd.
Now, if your a scalper (someone who makes quick in and out trades) you could be like my brother and Mom (yes, my mom also trades...lol) and this morning they have already made two trades. One for +98 pips and the other +25 pips.
However, I'm not a scalper can't seem to place trades of that nature without getting hammer with a serious loss (small losses over time add up, if you know what I mean). Anyway, just sharing some info.
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Mon May 08, 2006 2:27 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Monday, May 8th, 2006
Time: 9:19pm EST/NYT
Hi to all checking out the open trades. Just wanted you to know that I'm still here. The market doesn't move fast all the time, there are moments you swear everybody went fishing or something ... lol
Well, anyway I will keep you up to date on these trades as the market moves.
Current value of trade is:
-440.00
+280.00
P/L is still fixed at: -160.00
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Tue May 09, 2006 1:20 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Tuesday, May 9th, 2006
Time: 12:25am EST/NYT
Current value of trade is:
-620.00
+460.00
P/L is still fixed at: -160.00
Being that the market has reversed direction since the first nice upward move my projection for getting out has changed. If gbp/usd continues to head south I will exit my buy side at 1.8411 and add to my sell side at said price.
I will be adding only 1 lot to my sell side if gbp/usd continues down and reaches 1.8411.
Talk to you a bit later...
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Tue May 09, 2006 4:30 am |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Hey Coaster
Yes, I think your right. Gbp/Usd is doing nothing but going back and forward in a small range (small range for position/swing traders, not for scalpers).
Current value of trade is:
+1,220.00
-1,340.00
P/L is still fixed at: -160.00
Once again gbp/usd has reversed and is now up.
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Tue May 09, 2006 2:17 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Tuesday, May 9th, 2006
Time: 10:35 am EST/NYT
Cable (gbp/usd) just shoot up and I closed out my long positon at:
+1,540.00 (closing price was 1.8671)
I am still holding my short and it's current value is:
-1,760.00
Now, things will get interesting... If cable goes up to 1.8733 I will take out another long positon, if cable fall back down I will add to my short. Cable's current position is: 1.8671
I should add for those new to forex that if gbp/usd falls back down, any price below 1.8671 which is where I exited my long position is nothing but profit. But I still have a ways to go before this trade is fully completed.
More updates will come.
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Tue May 09, 2006 2:39 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Hey Coaster
Actually Coaster I'm not concerned with the market going up or dn. After years of trading I have found (for me) that being concerned with such is a set-up for major losses, sooner or later.
I now employ a trading method which allows me to simply trade Price-Action.
This trade is long from being completed.
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Tue May 09, 2006 3:08 pm |
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fxPipTitan
Contributing Member
Cash: $ 9.95
Posts: 49
Joined: 15 Apr 2006
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| Forex Update |
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Date: Tuesday, May 9th, 2006
Time: 11:33am EST/NYT
Current value of trade is:
+1,540.00
-860.00
P/L is now: +680.00
But as I stated, this trade is long from being completed.
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Tue May 09, 2006 3:35 pm |
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