currency trading

[bulb763]

If I had a few £k spare that I wanted to make some money with, would currency trading, on a purely ameteur level, be a good idea? Anyone here experienced with this? I assume there are more efficient ways of doing this than buying dollars at the local Post Office - can anyone recommend where is best, or point out any problems that I might encounter (apart from the obvious one of currency values heading in the wrong directions)?

[okgo]

Spread betting would be one way of doing this?

[bulb763]

I've heard of that but never knew what it was... any clues?

[limpsfield]

Read this

http://www.pistonheads.co.uk/gassing/topic.asp?h=0...

there is a lot of guff in there but the occasional bit of useful advice.

IG Index (my employer) are holding a seminar online on currencies later this month and there is loads of other free education stuff here:

http://www.igindex.co.uk/spread-betting/education....

but bear in mind the usual disclaimers: Remember that spread betting is a leveraged product and can result in losses that exceed your initial deposit. Spread betting may not be suitable for everyone, so please ensure that you fully understand the risks involved.

Edited by limpsfield on Wednesday 3rd September 12:32

[johnfm]

bulb763 said:

I've heard of that but never knew what it was... any clues?

If you don't know what spread betting is - you will not really make any returns from FX trading. I looked at part time 'dabbling' and ran a 'game account' for a number of months. Unless you have a large fund and decent leverage, you can't give up your day job and trade from you Caribbean island.

But, don't let that put you off. Research, open a game account in oanda or on a spread betting site and learn the ropes.

Good luck

[okgo]

I got into it, with some advice from Mr Ninja, and it was great, just have found that I have drifted away from it..

[bulb763]

Spread betting looks interesting and I'll probably have a play, but what about pure currency trading, i.e. buying dollars @ x and selling for y, hopefully making a profit along the way... Are there any places out there (www / phone / real world / etc) that are more efficient for doing this than the local bureau de change?

Or are you telling me that SBing is a better / less risky / more profitable way of investing my money?

[johnnyboy101]

bulb763 said:

If I had a few £k spare that I wanted to make some money with, would currency trading, on a purely ameteur level, be a good idea? Anyone here experienced with this? I assume there are more efficient ways of doing this than buying dollars at the local Post Office - can anyone recommend where is best, or point out any problems that I might encounter (apart from the obvious one of currency values heading in the wrong directions)?

In all honesty most people lose money when trading, but if you are interested I would highly recommend this site http://www.babypips.com/ for foreign exchange it's by far the best free site for it.

[2something]

Places like IG Index provide a decent service and decent software, but the prices are wide and you are paying a LOT for rolling daily positions (if you don't know how much daily rolling should cost, you now see how they can do this).

If you're looking at quarterly futures and keeping positions for a long time, they aren't such a bad option.

Somewhere like IG makes the post office exchange rates look like a joke, so in that comparison IG prices are very very tight.

http://fxtrade.oanda.com/ - should give you an idea of reasonable spreads (I am not suggesting you use them).

First work out what your aim is - how long are you looking to hold positions, what sizes are you looking to trade in, which currencies are you interested in, then you should hopefully have a better idea of who to trade with.

Just as a very very *rough* guide . . . If you open two trades a day and close those two trades in the same day in say EURUSD (the currency with the tightest spread), this will cost you around 7% (IG) or 3.5% (Oanda) in a year. You can stick your money in the bank and get ~4% after tax ...

Trading costs are very very important, unless you don't trade often.

Edited by 2something on Thursday 4th September 11:26

[bulb763]

Thanks chaps