Forex from scratch --a helping hand from pipshower...

[dhondiyal80]

can you as well inform us if we need to trade in India where are we going to get assistance from.
I have read about etoro how much can we rely on that site

 

[pipshower]

@ankit

From my experience and the knowledge that i have gathered over the last 4-5 years (I have to mention in this topic/context there are not too many materials published about market makers-it is more about learning from experience and experience of fellow traders)-

yes,market makers and market maker brokers mean 2 different things-probably the things that they have in common is-
1.They provide liquidity 2.They assume the risk to profit from the spread.

but as far as forex is concerned there are 2 catagories of brokers.
1.Market Maker Brokers (or otherwise commonly refered to as MM)
2.ECN Brokers

MM's role is to provide liquidity and make the bid/ask quote available to their participants-1.could be other banks,ECN's or corporations in case of institutional market makers
or to 2. retail customers if they are retail market makers. (These are ones whom i am wary of).

MM's are obligated to take a counterparty role at their displayed quote, or in other words have to take the opposite side(sell) if a buyer buys and (buy) when a seller sells.Depending on the MM and the profile of the client,MM's might opt to hedge their counterparty position or they may simply hold ur order and trade against you (Again most common in retail MM's).
Here arises the conflict of interest in order execution-if you win,they lose and vice versa.Hence the dirty games start-slippage,requotes,screen locks,stop hunts because of mysterious price spikes in ur brokers platform or the most common technique delayed executions (by 5-10 secs)...
The breed of MM to be extremely careful about are the "bucketshops"-who just have an internal book and NEVER hedges their counterparty trades...as a result as long as their clients loses,they win and everything is fine.But,in the off-chance that clients win big lets say $2 Million,they just shut shop and you can as well say bye to ur money.
Of course,we do our due dilligence and stay away from such unscrupulous bucket shops-the quality we look out for in a MM broker
1.The reputation
2.Their capitalisation
3.Whether they are regulated and have seggregated accounts
4.Do they/their regulator offer protection to ur capital in the even of their bankruptcy (please note that for indians it does not matter,the protection kicks in only if u r a resident of the country where the broker and regulator's jurisdiction).

As you had posted
"There is a lot of difference between the two. While the "Market Makers" depend on the spreads for profiting(and thus they never loose), the "Brokers" are the people who take positions opposite to you. "

As far as retail MM's are concerned-they do both.AND the common retail investor because of his capital limitation has access only to retail MM/bucketshops-and hence my statement "if a retail trader wins,he beats the MM"

finally as long as we win-we don't care who the counterparty is....
but when u r losing,and losing because of ur MM broker's delayed execution,screen locks etc-the conflict of interest becomes pretty important-does it not??

Looking forward to your views and pipshowers opinion....

p.s-Most of the above points is much more important to a scalper than a positional trader (wherein a few pips or a few secs delay is not make or break)

Regards,
Scalper


I think 2 terms got mixed here.

1. Market Makers
2. Market Maker Brokers


There is a lot of difference between the two. While the "Market Makers" depend on the spreads for profiting(and thus they never loose), the "Brokers" are the people who take positions opposite to you.

When we talk about profiting from markets, as pipshower said here, we dont care about the brokers. All we care about is extracting profit and depending on our system and strategy, we pick our brokers.
There is a lot of hue and cry in Fx world of Brokers taking the other side of your trades and all, but I consider that as a part of the business cost( to an extent). I mean, think about this, whenever you trade an exchange listed entity, dont you pay brokerage, exchange commission, tax etc? Going by those standards, Fx trading is still the cheapest.

So, I think the discussion swayed a little..What we are essentially discussing here is "To Beat the Markets" and not "To Beat the Brokers"


__________________

Very well said..
Exactly the word out of my mind and mouth exactly...:clapping:

This is of most matter to scalping as you said rightly ..thats why scalpers need ECN who dont indulge in all the anti-retailer/scalper attitude rather the more you trade more the ECN brokers will love you as they earn that much more commision ...
Other thing is regular withdrawal of profits from the MMbrokers --This is to be kept in mind always ..As you withdraw profits regularly your risk gets reduced as the time moves on...

As both scalperfx and ankit mentioned , we need these MMbrokers who also form a part of MMmakers who provide continuous liquidty to the market ..Consider the banks too who act as liquidity providers as Market makers ...
Its like they know all the orders out there which always keeps the price moving from orderflows one to another...

Its same when you say during news time the price moves rapidly ---Its not brokers who do that but its the difference of ordeflows during news times that widens the spread and there is no way a broker can do anything ..Even if you trade on ECN you would find that in there orderbook and level 2 Data..

Well keep on adding value to this thread that will help lots of newbies entering forex world in future too:thumb:

 

[pipshower]

can you as well inform us if we need to trade in India where are we going to get assistance from.
I have read about etoro how much can we rely on that site

Hello Friend,
I wont recommend starting with ETORO..They are not ones you should trade with as a starter..
Try reading this thread from start and you would learn many more facts.
If u are just looking for broker in India , the ones are ALPARY AND IB ,both from UK who have offices in Mumbai..
Hope this helps
Regards
Pipshower

 

[scalperfx]

Hi dhondial,

I agree with pipshower.Starring of with Alpari would be ur best bet.(I don't have great regards for them either,but at least they have a presence in India and help u out with the remiting process).Interactive Brokers might need a higher capital to start with ($10k).
Please don't expect trading calls/assistance from ur broker...Try to learn by mock trading in demo accounts with the same capital as u r going to start of with in ur real account with ur target broker-get used to their mt4 platform...try to develop a strategy that suits ur trading persona.
and as pipshower keeps emphasizing-learn money management in ur demo account and after u r confident,try and replicate the same in ur live account

btw pipshower-IB is an American broker formed in the late 70's.They have a UK branch though.

and as u had mentioned
"Its same when you say during news time the price moves rapidly ---Its not brokers who do that but its the difference of ordeflows during news times that widens the spread and there is no way a broker can do anything ..Even if you trade on ECN you would find that in there orderbook and level 2 Data.."

I could nt have said it better!

 

[pipshower]

Hi dhondial,

I agree with pipshower.Starring of with Alpari would be ur best bet.(I don't have great regards for them either,but at least they have a presence in India and help u out with the remiting process).Interactive Brokers might need a higher capital to start with ($10k).
Please don't expect trading calls/assistance from ur broker...Try to learn by mock trading in demo accounts with the same capital as u r going to start of with in ur real account with ur target broker-get used to their mt4 platform...try to develop a strategy that suits ur trading persona.
and as pipshower keeps emphasizing-learn money management in ur demo account and after u r confident,try and replicate the same in ur live account

btw pipshower-IB is an American broker formed in the late 70's.They have a UK branch though.

and as u had mentioned
"Its same when you say during news time the price moves rapidly ---Its not brokers who do that but its the difference of ordeflows during news times that widens the spread and there is no way a broker can do anything ..Even if you trade on ECN you would find that in there orderbook and level 2 Data.."

I could nt have said it better!

Thanks for correcting me on IB ..Yup..u r right there headquarters are in US . :thumb:

 

[ag_fx]

First of all, Sorry for the delayed response.

No, I dont work with ICICI anymore. I was an interbank trader there and traded on institutional level with other national and international banks. We didnt have any software or trading platform, we directly traded with the counterparty bank. Infact, we selected which bank to ask quote for etc.

Indian forex market is too minuscule for the Indian banks to get together and foster a move.And, international banks wont tell us if they are fostering a move

However, RBI used to intervene often in USDINR trading. When we went to 39 odd levels, RBI used to buy like crazy to stop INR strengthening and similar situation was prevelant when we moved to 52, this time RBI sold. And that is the case with almost all currency pairs in the world. For ex, CHF is one of the highest manipulative currency in terms of govt's intervention.

Ankit,

Do you still hold your job with ICICI?
In case you do,i will respect the fact that you should not divulge details and strategies.
But in case u don't work there anymore,could you share your experience about the work atmosphere,trading platform(it is something like currenex right?),interesting anecdotes,any moral dilemmas as in did u have to shaft ur in-house customers to profit for the house?do big investment banks get together and orchestrate big moves?? etc etc..
and if u are ethically bound not to divulge any details of your work,please feel free to say so.

Regards,
Scalper

 

[mkazhar]

Helooo everyone out there,
i being a silent member of this forum, keenly tracking forex because i myself want to open a trading account in that & start trading but the same question i dont understand the exact process to start & can i trust them if yes what should i trasfer my funds through another thing guys hows iforex.com as they have call center based in mumbai right so how are they ... Plz guide me, thankyou in advance
regard's

 

[dhondiyal80]

hi how about alpari they have a branch in mumbai but no assistance i suppose

I have opened up a demoaccount with Alpari and they have a web assisst office in Bandra Kurla Complex. how much canwe trust them. should I go ahead with their account.
What if i start trading with 200$ and would just like to earn only approximately 25$ a day with it can i do that.
They have a volume of 0.01 till 8.00 what is this in actual amount.
if can help pls assist.
thanks

 

[yasirdxb]

Re: hi how about alpari they have a branch in mumbai but no assistance i suppose

I have opened up a demoaccount with Alpari and they have a web assisst office in Bandra Kurla Complex. how much canwe trust them. should I go ahead with their account.
What if i start trading with 200$ and would just like to earn only approximately 25$ a day with it can i do that.
They have a volume of 0.01 till 8.00 what is this in actual amount.
if can help pls assist.
thanks

Start with 200$ and earn 25$ a day!!

how much r u willing to lose a day?

 

[aditya14]

Now i have 1 question on Forex markets.I just tried on a demo account on MT4 with 3000 deposit and made 300 in 15 mins.

My question is that is it always this volatile? Because a lot of times in stocks what happens is that we go through this lean phase when nothing happens.I found that the Forex was like a realty stock chart on adrenaline/caffeine.

And is it worth getting into? I traded EUR/USD btw