Profitable traders

I have heard for years that only 5% of traders are profitable. The CFTC mandates that FX brokers release there % profitable traders in an effort to encourage tighter spreads and increased competition. Oanda released these numbers for Q3.....

http://www.oanda.com/


Do 48% of oanda traders make a living trading the Eur/usd? Probably not, but you need to treat your trading as a business. And one thing that onanda has that others don't is .09-1.2 Eur/Usd spread. I did trade with FXCM a 2.8pip spread and switched to MBtrading as soon as I learned the spreads were 1.6-1.8 pips. The .70 pip spread saves me around $350 a day. Most traders simply stick with the same fx broker because its to hard to switch funds or they don't want to learn a new platform. You also need to take good notes...I no longer log every single trade, but I do tally every hour I trade. I trade better on Sunday evenings thru Monday I make 50-75% of my week at that time. Thurs-friday is the worst time to trade FX for me so I trade Gold or bonds mostly then. Any business that dosn't know when or where they are most profitable is only a matter of time.

Great points Joe and ones most people only learn the hard way.

Happy Christmas to you!

Here are the rules from the CFTC:

Disclosure by FCMs and RFEDs of the number of non-discretionary retail forex accounts maintained by the FCM or RFED and the percentage of such accounts that were profitable for each of the four most recent quarters.

and

The final rules retain the requirement for RFEDs and FCMs that engage in retail forex transactions to disclose on a quarterly basis the percentage of non-discretionary accounts that realized a profit and to keep and make available records of that calculation. The final rule, however, clarifies that a retail forex account will be considered either “profitable” or “not profitable,” with “not profitable” including accounts that break-even. Further, only non-discretionary accounts that are not proprietary are to be considered. Finally, the recordkeeping requirement is prospective and will not require reconstruction of transactions pre-dating the effectiveness of the final rules except insofar as necessary to comply with the requirement that disclosure documents include a statement of profitable and not-profitable accounts for the preceding four quarters.

when you get a chance check out FinFX - im from the usa and you are allowed to hedge there

Merry Christmas to you too Lorn, and to MP.

Doesn't Oanda charge interest per second on open positions on the money used in leverage? My understanding is that you can't trade 1:1 and have to go atleast 10:1 leverage with them. So you pay interest on atleast 90% of money used to trade. I could be wrong....Can anyone clarify this???

No oanda does not charge interest every second. What your referring to is the carry trade For ex you buy Aud/Usd you would receive around %.0098 a day for any amount of time you are in the trade. Other brokers you only receive interest in a pair at a specified time usually 16:00 EST. You only receive interest when you borrow from the country with the lowest %rates like the USD or JPY and buy countries with higher rates, like AUD, NZD, CAD, DKK, HKD the larger the spread the larger you make or lose. if you are long the USD against say the AUD you are losing interest not to oanda but to the trader on the other side. I hope this makes sense.

If you trade $20,000 and leveraged it with 50:1 that would be 1,000,000 units if you held the trade for 6 hours you would recive $2.4506 in intrest. This is somewhat insignificant because its $100.00 a tick with 1million units. if you were to hold that trade all year...you would make 3.5% on the 1million units plus what is gained on the carry trade. To the best of my knowledge carry trades almost never lose over a 12 month period. Some have a 20yr avg of out performing bonds, and the broader stock market.

Based on tight spreads I have selected these pairs. Please let us know where we get or pay interest if long or short the pair with OANDA. Against every pair please put (+) for interest gained and (-) for interest paid.
Sell Buy
AUD/JPY
AUD/USD
EUR/GBP
EUR/JPY
EUR/USD
USD/CAD
USD/CHF
USD/JPY
AUD/CAD

Also how does the commission structure work. I know it it charged based on spread. Say I go long and at that point spread is 3.0. When I exit the trade the spread is 4.0. So now do I get charged 7pips (3+4). or 3.5pips (3+4/2=3.5) or the highest orlowest spread.

say you long 100,000 units of eurusd at (sell) 1.3097<5> (buy) 1.3098<6> the spread is 1.1 pips Your balance would show a loss of $11 that amount floats until the trade close's so if you hold it to a low volume time, like late friday or when all banks are closed you would pay more. But the spread generally stays tight. If you were to long the 6E at the same time you would have to pay a spread between the bid and ask $12.50 and a brokers commission usually $5. If the spread opens to 2pips in the spot market its probably 3 ticks in the futures or $37.50. Either way its cheaper to trade the spot market.

I am still completely lost CharterJoe.... Forex appears to be pretty complicated though it has more opportunity if you use naked charts with no indicators.....