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Foreign exchange how much time does it take to make a significant return?

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I am a beginner in Forex Trading. Please try to suggest improvement strategies. I recently started practicing on (forex com) website and I understood the basic concepts of , p&;l, bid and ask.
I am only looking at an initial 1000 , which is approx 1200 euros, and I am following the EUR/USD closely.
Initially, I plan on buying 300 euros.

I calculated a general scenario. If I ask at 1.41626 and bid 1.41712 = 86 will fetch 0.258$. i.e. 20 cents every time such trade is made. Even if I put 4 such , its 80 cents.
This seems ridiculous and will take up months or years even to make 100$.

I read many traders start with small investments, does it take so much time to make a return?

One more question I have is how much should I rely on the daily (candlesticks) open, high, low, close. If the data is reliable then one can put an order in advance, the next day, to buy at a price near the closing price of the last day and after buying if the value never gets to the bid limit on the then will the order have an ? Is this a reliable strategy, that way there is a possibility to get at least 1000 pips.

Thank you for reading.
Thank you for so many . Can anyone suggest just one or two (retain sanity, there are so many websites) forex websites which you use, are credible and offer good without duping the customers just as the customer is making a profit? (forex offers 100:1 )
I will certainly gain more knowledge on leverage and forex basic before proceeding.
I am currently practicing on the website forex (avoiding full website ) but I am unsure whether to follow it in the future with a later account as I have heard some dissuading reviews, about the site on forexpeacearmy.com and babypips.com, stating that it d/c you just if your account is going up. I have went through forexpeacearmy listed websites but some of them ask for a min 10K after 15 day trial, wheez.

Thank you.

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  1. masakmerah on Aug 11, 2011

    Im guessing you haven’t read the part about Margin and leverage. What makes Forex trading so popular these days is because of the available leverage you can get by using minimum amount of money.

    Leverage means the amount of equity you are able to buy with a set amount money. Most Forex brokers today offers 100:1 leverage (US based brokers offers up to 50:1). What this means is you are able to buy EUR100 with only using EUR1 capital. If you buy 100 euros, it gives you the power to trade 10,000 euros.

    Back to your calculation, you stated that you initially planning to buy 300 Euros……this effectively gives you the power to trade 30,000 Euros (Im assuming you agreed with your broker to use 100:1 leverage when you first signed up). the direct way to calculate the value per pip is:

    1 pip = Lot Size x Tick Size, Whereby
    tick size is the smallest increment of the currency for example, Eur/Usd = 0.0001, Gbp/Usd = 0.0001, Usd/Jpy = 0.01 ect. ect.

    Hence,
    1 pip = 30,000 x 0.0001 = USD3.00

    this means if you made 86 pips, you just made USD3 x 86pips = USD258.00.

    But please note that the calculation i showed you above only for "direct currency" pair conversion where USD is the base currency. For example, EUR/USD, GBP/USD, AUD/USD, NZD/USD. For cross pair calculation formulas please check: http://www.fxtrademaker.com/fx_calculation.htm

    To make a return doesnt take very long, but to make a consistent income out of trading is a long process of learning. most people takes years of practice before they could make trading as a full time job. I personally took almost 4 years…..and I am still learning alot of new stuff.

    most brokers doesnt have any expiry on bid limits, but some brokers gives you the choice of whether to make your limit orders to be either GTD (Good till Day End) or Till Cancel (your order stays until you manually cancels it).

    There are many ways to makes thousands and thousands of pips, but since you are new i recommend that you concerntrate on making consistent profits 1st before focusing on making millions of dollars. Your main priority is to make positive pips per month. try doing that. Trading is not easy, so you WILL have losses but the main thing is keeping your overall profits bigger than your losses every month.



  2. Zoller35 on Aug 11, 2011

    Well, in my opinion Forex isn’t a good choice if youre looking for a quick "substantial" profit unless you’re counting on a major economic game changer in a particular region.

    For the most part, barring such a substantial event, the world economies arent going to vary drastically enough in a short time period for you to double your money in a day and a half.

    It typically takes a large amount of capital to reap any substantial rewards from the Forex market in a short amount of time.

    Or you have to time your buys and sells around major unexpected events that will cause a downturn or turnaround in a given economy.

    Sometimes you can see this coming in advance and if you have the time and patience you can wait it out while it makes big moves.

    Other times it happens rather quickly.

    I honestly havent done any Forex trading, but have looked into it on several occasions.

    IMO, its just like everything else – its all about timing and speculation.



  3. Andy elle on Aug 11, 2011

    I suggest that you do not even bother to put money into a real forex account at this stage because you obviously have no idea what leverage is. Leverage is one of the first things you should know about in forex trading. With out any knowledge of leverage you will almost certainly fail.



  4. David W on Aug 11, 2011

    I’ve been trading for about four years now and even run a website trying to get newbies started with designing their own trading systems.

    Here are a few random bits of advice -

    1. You won’t make a lot unless you have a lot. Trying to turn $500 into $50,000 in twelve months and the likes leads to you being over-leveraged and blowing your entire account.

    2. Always test every strategy to see if it does provide a statistical trading edge, for example I recently tested the concept of trading the reversion to the mean strategy and couldn’t find any evidence of it providing a statistical edge http://www.myforexdot.org.uk/reversion-to-the-mean-trading.html

    3. Trading stocks is far easier for most people, when the USA starts QE3 it will be a good buying opportunity. http://www.myforexdot.org.uk/forex-vs-stocks.html



  5. Aaron Brown on Aug 11, 2011

    As a 10+ year Forex trader, here is how I trade to make money…

    If you want, you can also follow these steps. I’ve dumbed it down to the easiest, yet safest way to win in the Forex.

    1) Open a live account at http://bit.ly/iPV25O
    2) Select AAAFx broker, and open MICRO account with 200:1 leverage.
    3) Deposit at least $300 in your account to start.
    4) "Add to Portfolio" the top 20 strategies at http://bit.ly/mJiyZV
    5) Don’t add any strategy that makes less than 10 average pips per trade.
    6) …when adding strategies, set maximum number of trades to 5, and…
    7) …select lot size of 0.1 "mini" lots for each $1000 in your account.
    8) It will trade automatically, following all those top 20 strategies.
    9) Then sit back, relax and take a vacation as you make easy Forex money.


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