Simple Forex System Trading

I just wrote a post about my search for a second Forex firm besides Oanda not long ago.  One of the critical criteria I was looking at was the firm’s capital.  Thanks to the CFTC website which made the research a lot easier.  Coincidentally, I came across a post on the Oanda forum talking about the same topic - the Forex brokers’ net capital rankings.  It also mentioned that the NFA will raise the capital requirement to 10 million dollars in October, which I was not previously aware.  Many thanks to ForexFigure, a senior member on Oanda, for the excellent post.

Here we go again - another loss of 30 pips.  This month is almost a repeat of last February and it could be worse.

The stop buy of 156.19 was filled at 7:16 AM GMT and in ten minutes or so, we were stopped out.

We somehow can’t stop the stream of losses.  Today is yet another blow to us.  The stop sell of 155.39 was filled at 9:13 GMT.  The price went as low as 155.21 before it turned north.  It’s another 30-pip loss for us.  We need to get out of this twilight zone fast.

This is a curse.  We had another loss of 30 pips.  The stop buy order of 150.7 was filled at 7:00 GMT.  All it took was one minute and we were stopped out.  Dreadful!

It’s a horrible day.  We got stopped out on both sides, a total of loss of 60 pips.  Terrible!

We lost 30 pips today.  The stop sell order at 147.81 was filled at 7:12 GMT, and it was stopped out about 1/2 an hour later.

We broke even today with our euro yen 30/30 breakout system.  I moved the stop loss too quickly and got stopped out right away.  Had I not moved the stop loss, it would have turned out to be a profitable trade.  The sell stop, 149.60, was filled at 7:11 GMT.  Within minutes, the price went south quickly and was in our favor.  It hit as low as 149.32 (offer) and was merely two pips shy away from the take profit target.  The price began to rebound from that point.  I decided to move the stop loss to the entry point of 149.60.  At 7:19 GMT, only 8 minutes after entering the trade, the order got stopped out - zero pip today.

Since I have been using Oanda as the primary trading account for years, I thought it would be a good idea to open an account with a different broker so that I don’t put all of the money in one basket.  First, I reviewed the financial data on CFTC so I could narrow down my selections.  Two brokers jumped out - Deutsche Bank, dbFX, and Gain Capital.  I trade Euro Yen primarily so its spread is important.  dbFX listed it as 4 pips.  That’s going to hurt the performance.  It’s about 2.3 pips on Oanda.  So I moved on to Gain Capital.  The site didn’t quite tell you what the normal spreads would be, but rather, it told you what the minimum spreads would look like, a.k.a. the spreads are “as low as”.

Anyway, I registered for a demo account and downloaded the software.  It was during the Asian trading session.  I found out that the spreads during that time were between 3 pips and 4 pips.  In addition, the spreads were constantly changing.  Since I already downloaded the software, I decided to give it a try even though an average of 3.5-pip spread would hurt the performance.  I set up the trades as usual and went to bed.

This morning, I checked the results.  It was a profitable trade, same as the one I entered on Oanda.  There are, however, two differences.  On Oanda, the trade was filled at 8:59 GMT and closed at 9:01 GMT.  On Gain Capital, the trade was filled at 8:59 GMT but was not closed until 9:10 GMT.  So, it was a result of the spreads and I could live with it.  But when I checked the account balance, I was in awe.  They charged $25 in commission for each trade for a total of $50 round trip.

I must have missed the fine print somewhere.  I didn’t remember seeing the extra fees they would charge.  After searching the site for a bit, I found it in their FAQs.  Although I won’t be trading one million units at a time, but two standard lots will cost $10 each trade.  That’s steep, isn’t it?