Pips in wheelbarrow - Trading FX profitably

[annuvimt]

If the trader is on ECN/DMA, the trade happens directly between Interbank and retail trader through retail ECN. So the spread part is taken out of the scene,so even 0 spread we will get. But a descent commission ($5 - $7)is charged by the brokers for using their ECN. Because of this commission, traders open a/c through rebate firms like Cashbackforex. This is my understanding. Just my few cents.

On what basis this commission ($5 - $7) are been charged...whether it is per lot or per trade or some trade size ?
some where I heard that there is no commission in Forex trade. broker just earn in bid/ask difference...not sure

fantastic thread ..thanks for sharing useful information.

 

[amsin21]

On what basis this commission ($5 - $7) are been charged...whether it is per lot or per trade or some trade size ?

fantastic thread ..thanks for sharing useful information.

Commission is charged per 100k traded for both legs (round turn lot). So if the broker says $2.50 per 100k, total commission will be $2.50 (buy) + $2.50 (sell) = $5

some where I heard that there is no commission in Forex trade. broker just earn in bid/ask difference...not sure

That is the case of Market Maker brokerages.

 

[Galts Gulch]

If the trader is on ECN/DMA, the trade happens directly between Interbank and retail trader through retail ECN. So the spread part is taken out of the scene,so even 0 spread we will get. But a descent commission ($5 - $7)is charged by the brokers for using their ECN. Because of this commission, traders open a/c through rebate firms like Cashbackforex. This is my understanding. Just my few cents.

You are either misled or mistaken.

ECN / STP brokers, no doubt, provide direct link / access to trade with banks. But do have spreads. Otherwise why will banks / brokers give access for retail traders to trade on their platform? ...

Every IB (Introducing Broker) of a broker gets a part / % of the spread generated from all the Trades that their referred clients (Traders) trade. What Cashbackforex kind of Sub Brokers (Big time IB's) do is to share the % of that commission with the end traders.

It works like this ... ABC (Cashbackforex kind of IB) introduces me / my kind of traders to DEF (End Broker). DEF charges me, a pre - negotiated spread for all my trades. ABC gets a part / % of this spread as their commission for introducing me to DEF. This % will be in the range of 30% - 40% of the spread. Supposing my spread is 2 pips. On a standard lot, it will be 20$ / lot. On a standard lot trade, ABC gets about 6$ - 8$ from DEF. Now, what ABC does, is pay me 3$ - 5$ and retain the remaining. It is like paying me % from the spread that I have already paid ...

 

[Galts Gulch]

On what basis this commission ($5 - $7) are been charged...whether it is per lot or per trade or some trade size ?
some where I heard that there is no commission in Forex trade. broker just earn in bid/ask difference...not sure

fantastic thread ..thanks for sharing useful information.

You are Right ...

With all ECN (Electronic Communication Network) / STP (Straight Through Processing) brokers ... Charge same ... The difference between the Bid and Ask ..
There are few brokers who charge / quote very less Bid and Ask but charge commission over and above Bid and ask ...

Go through my earlier posts ... I have covered this ...

One should always have a ECN / STP as their FX broker ...

 

[amsin21]

You are either misled or mistaken.

ECN / STP brokers, no doubt, provide direct link / access to trade with banks. But do have spreads. Otherwise why will banks / brokers give access for retail traders to trade on their platform? ...

I didn't say that spread is completely taken out, it's of no importance. That's why I said even 0 spread you will get.

Please compare the spreads for EUR/USD (click EUR/USD) and see the 0 spreads offers from different ECNs. http://www.myfxbook.com/forex-broker-spreads

Every IB (Introducing Broker) of a broker gets a part / % of the spread generated from all the Trades that their referred clients (Traders) trade. What Cashbackforex kind of Sub Brokers (Big time IB's) do is to share the % of that commission with the end traders.

It works like this ... ABC (Cashbackforex kind of IB) introduces me / my kind of traders to DEF (End Broker). DEF charges me, a pre - negotiated spread for all my trades. ABC gets a part / % of this spread as their commission for introducing me to DEF. This % will be in the range of 30% - 40% of the spread. Supposing my spread is 2 pips. On a standard lot, it will be 20$ / lot. On a standard lot trade, ABC gets about 6$ - 8$ from DEF. Now, what ABC does, is pay me 3$ - 5$ and retain the remaining. It is like paying me % from the spread that I have already paid ...

At least we get some % back. :thumb:... enough for a weekend :beer:

 

[amsin21]

One should always have a ECN / STP as their FX broker ...

It is advisable to go only for true ECN broker. One should actually avoid STP also as they are hybrid between MM and ECN brokers.

 

[Galts Gulch]

Training Chart ...

1 lot trade is running in profit ... 9 pips till now ...

Observe the 2 and 4 Lots ... trades in pending order ....

 

[Galts Gulch]

One more mistake that I have seen most of the newbies doing ... When the profits do come ... In order to increase the account size (GREED in other words) ... They do not withdraw the profits ... What is the use of making (ANY) profit .. if you do not withdraw and enjoy it ???

I ask for a withdrawal as soon as profit reaches 10% of the equity .... Withdraw 8% and let the 2% add to the account size ....

Sachin Tendulkar gets motivated by the amount of runs he scored ... Viswanathan Anand gets motivated by more grand masters ...

"Trading, being a Financial Industry, Motivation comes ONLY from regular Profit and Consistent withdrawals" ........

 

[Galts Gulch]

Water Tight MM and Nirvana Kind of EM are imperative and prerogative to be a Pro trader ...

If you have this in control ... You do not need any indicator ... You can spin a coin every morning ... Heads .. Buy all ... Tail ... Sell every thing ... Still one can make profit ....

If one does not have MM and ED covered ... Best of Indicators ... Best of trends ... All FA and TA ... still you will be under HAMMER .... not Hummer ...

Trading is More ... Most about The psyche of the Trader ... everything else is accessory ... PA is the King ... Psyche of a trader can know it ... Judge it ... Understand it ... And be with it .... If you wake up with a wrong mood ... whatever may be the reason/s ... Do not open your terminal ... Terminal will say SELL ... Indicators will shout SELL ... FA orders SELL ... But still you will BUY ... WHY ... There is no Sync between the Market and the Psyche of the Trader ..... At the end of a day ... Market is made of all .... Independent ... Psyche of ... Individual Traders ....

"Biggest Minority in any Society is an Individual, not his Religion, not his caste ... It is his Right to be an Individual"

 

[amsin21]

Water Tight MM and Nirvana Kind of EM are imperative and prerogative to be a Pro trader ...

If you have this in control ... You do not need any indicator ... You can spin a coin every morning ... Heads .. Buy all ... Tail ... Sell every thing ... Still one can make profit ....

If one does not have MM and ED covered ... Best of Indicators ... Best of trends ... All FA and TA ... still you will be under HAMMER .... not Hummer ...

Trading is More ... Most about The psyche of the Trader ... everything else is accessory ... PA is the King ... Psyche of a trader can know it ... Judge it ... Understand it ... And be with it .... If you wake up with a wrong mood ... whatever may be the reason/s ... Do not open your terminal ... Terminal will say SELL ... Indicators will shout SELL ... FA orders SELL ... But still you will BUY ... WHY ... There is no Sync between the Market and the Psyche of the Trader ..... At the end of a day ... Market is made of all .... Independent ... Psyche of ... Individual Traders ....

"Biggest Minority in any Society is an Individual, not his Religion, not his caste ... It is his Right to be an Individual"

To overcome all these,for any trader, it is advisable to follow and focus on OODA loop. Market is always in this loop. Can say, not only market, the entire universe.