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  • #1
  • First Post: Feb 10, 2006 9:22am Feb 10, 2006 9:22am
Hello i started a Demo account trading 2 hours ago.

I am working on GBP/USD at the moment and made some money.

Why is it that when i buy there is a margin of 4 PIPS ?

In order for me to make money the USD must drop 5 PIPS.

Where do these PIPS go ?


Thanks
  • #2
  • Feb 10, 2006 9:30am Feb 10, 2006 9:30am
Quoting marc williams
Hello i started a Demo account trading 2 hours ago.

I am working on GBP/USD at the moment and made some money.

Why is it that when i buy there is a margin of 4 PIPS ?

In order for me to make money the USD must drop 5 PIPS.

Where do these PIPS go ?


Thanks
Hi Marc, and welcome to Forex Factory.

The 4 pips you refer to are called the spread, not the margin. Although I can see your confusion since margin sounds like margarine which is a spread!

Seriously, the 4 pips is the difference between the bid price and the ask price. The spread causes you to already be in the hole with a 4 pip loss the instant you enter a new trade. Your trade must then move 4 pips just to get back to breakeven. 5 pips or more and you're in profit.

Where does it go? It goes into your broker's pocket. That's how they get paid for the service they provide you.

Again, welcome, and ask as many questions as you like.

Dial
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  • #3
  • Feb 10, 2006 11:35am Feb 10, 2006 11:35am
Ok i will read the forum and books and continue to trade Demo until i feel i know enough too trade my risk my own money.

I have studied the GBP/USD i lost some pips and made some back i made overall about 20 PIPS. I also traded some oil and made 20 PIPS overal.


If you invest $1000 at 100:1 that would be a gain off $10 per PIP and you loss $10 to each PIP you loss is that correct ?

So i you make 10 PIPS overall a day that would be $100 profit.
  • #4
  • Feb 10, 2006 1:49pm Feb 10, 2006 1:49pm
Quoting marc williams
Ok i will read the forum and books and continue to trade Demo until i feel i know enough too trade my risk my own money.

I have studied the GBP/USD i lost some pips and made some back i made overall about 20 PIPS. I also traded some oil and made 20 PIPS overal.


If you invest $1000 at 100:1 that would be a gain off $10 per PIP and you loss $10 to each PIP you loss is that correct ?

So i you make 10 PIPS overall a day that would be $100 profit.
Yes on a "full" account some brokers also have "mini" accounts for these, 1 Pip=$1 and some of them go even smaller down to 1pip= 1cent I believe.
Shootist - Have Pip Shooters Will Travel
  • #5
  • Feb 10, 2006 2:16pm Feb 10, 2006 2:16pm
I started today with $50K in demo account i did not know what i was doing for 2 hours and lost $12K getting used to trading. I then trade oil for 3 hours and now have $53K in my account.

I now am tired off trading oil for one today.
  • #6
  • Feb 10, 2006 2:43pm Feb 10, 2006 2:43pm
Marc, that was the 1st question I ask about. I couldn't figure out for the life of me why I was 3-pips negative. Afterwards, I gained the understanding of how the brokers get paid and how there is no commission. Keep reading and demo trading.. GOD BLESS you in your trading.

PS. you traded OIL? options or Futures?
  • #7
  • Feb 10, 2006 3:46pm Feb 10, 2006 3:46pm
I was trading Crude Oil (Light S.) on www.gcitrading.com
  • #8
  • Feb 10, 2006 3:59pm Feb 10, 2006 3:59pm
Quoting marc williams

If you invest $1000 at 100:1 that would be a gain off $10 per PIP and you loss $10 to each PIP you loss is that correct ?

So i you make 10 PIPS overall a day that would be $100 profit.
Yes, that is correct, and if your goal is to lose all your money real fast, then using 100:1 leverage is the way to do it.

Read this post of mine: http://www.forexfactory.com/forexfor...0&postcount=20

But, as critically important as leverage is, risk control and position sizing are also important. The Van Tharp book will help you with those.

Dial
sxaxlxvxaxtxixoxnxbxyxgxrxaxcxexdxoxtxoxrxgx
  • #9
  • Feb 10, 2006 4:54pm Feb 10, 2006 4:54pm
Ok i see i am trading 1:1 on the demo and made some money.

So the key is consistency.

I finished today 6% in profit on the demo i will trade on the demo untill i have proven consistency then move on to a real account
  • #10
  • Feb 10, 2006 6:50pm Feb 10, 2006 6:50pm
Marc, Do you reside in the United States? Because, I wanted to trade with the same company you trade with but they stated because of the Laws differ from where there company is located. Please inform me is there a way I can set-up an account with that trading company.

Thanks
  • #11
  • Feb 10, 2006 8:08pm Feb 10, 2006 8:08pm
Quoting marc williams
Ok i see i am trading 1:1 on the demo and made some money.

So the key is consistency.

I finished today 6% in profit on the demo i will trade on the demo untill i have proven consistency then move on to a real account
Welcome Marc to the Forum...Good to know that you are starting your journey with the forex market from here (I mean FF )...

Anyway, you are totally correct, the key is to consistently accumulate as much pips as you can over the long haul, it doesn't matter if you lose 9 times and win 1 time as long as you are consistently accumulating pips....

I am just having a feeling that you are going to be a very successful trader..Don't actually know why, but I feel so...

Hope you will enjoy it and profit from it as well...


Thanks,

Nader
  • #12
  • Last Post: Feb 11, 2006 12:20pm Feb 11, 2006 12:20pm
I am in the UK.

I hope i do become good at Forex to, i like trading.

I will do some more trading on monday and learn some more from my demo account.
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