| Topic Name: |
Currency Trading |
| Message Name: |
FOREX - HELP!! |
| Date Posted: |
09/29/2002 |
| In Reply To: |
Ok I will try to explaina little about Fx trading.
Basically you have market makers and proprietary traders. A market maker 'makes a market' and he makes loads of trades a day depending on the currencies he/she is involved in, highly liquid currencies like EUR/USD and GBP/USD will be traded veyr often, less liquid currencies such as the crosses ie USD/THB are not traded as much as the amrket is relatively thin.
Proprietary traders are either short term medium or long term. Short term are basically daytraders in currncies they trade the banks capital whereas market makers trade a high proportion of clients capittal and they take their own view on the market basically gambling on future currency values. A medium term trader will aim to hold his position a day to a week, a long term is usually a couple of weeks to six months or greater.
The hours are usually 6:30am-5:30pm for a market maker and 7am-6pm for a proprietary trader however prop traders take overnight positions and therefore regularly receive calls during the night to either stop their positions which is a stop loss or take profit which is self explanatory.
Market makers in spot foreign exchange are trading spot whereby the currency is deliverable in two working days from when the trade is made, this is the simplest form of fx. Forwards lock in a value at a future date and options give you the right but not the obligation to buy or sell a currency at a future specified date.
If your bank has desks in all the time zones of the world then you should not have to stay back late at night, however, if your desk is the only one worldwide there will be night shifts and you may be called in sometimes at any hour to work a shift, a bit annoying really.
Pay in market making has decreased due to decreased spreads which are as low as one pip sometimes in Eurodollar, however market makers that are experienced and are good build up large positions and by quoting specific prices they manage to hold on to their position and drift with the market making some good money. Good prop traders are making vyer good money as they take a view on the market and trade it they are looking for the large swings and straight lines in currency movements and would take different views of profits depending on whether they are short medium or long term the longer the term obviosuly the less trades you do so the more profit in pips you would expect.
All you need maths wise to trade is a good mental arithmetic brain if you are good at mental arithmetic you should find trading pretty easy I think. Derivatives can get extremely mathematical be good at maths if you want to trade or structure derivatives.
Yes it can be fucking boring when the market is not moving espevcially if you are a prop trader you must just sit there and wait for the moves basically. Money is not too important to traders, they do it becaause they love to be in the game and compete with their peers the money is a bonus on top of having an enjoyable job basically.
If you are a prop trader you will indeed have a reuters pager type thing on you 24 hours a day it must be on you at all times, just goes with the job market makers don't have these.
If you need anything else answered just ask. |
| Message: |
I am currently employed as a foreign exchange advisor, where I watch the rates 8 hours a day and advise my clients when to buy and sell. However, I am interested in doing strictly currency trading (I think I've heard it referred to as prop trading). I don't know much about this industry, but I really want to continue with it and see what else is out there. What is the difference between a currency analyst/trader or anything else that is out there? And what sort of education/experience does one need to get there? I have an undergrad degree in Economics and almost three years of work experience in foreign exchange. Any suggestions/advice would be appreciated. Thank you.
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