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Cheapest Pair To Trade

  • #1
  • First Post: Sep 5, 2006 1:05am Sep 5, 2006 1:05am
Hi everyone, I've been demoing my account for sometime now and I've decided to go live in few months time. The thing is, I'm only 18 and my capital is very limited. I have only around 5k SGD which is about 3200 USD. Which pair is the best for me to trade with my limited capital? I've been thinking the kiwi, NZD/USD because the initial margin is low. I'll be focusing all my trades on this pair only to practise for my live. Any other pairs that are low in margin?
  • #2
  • Sep 5, 2006 1:11am Sep 5, 2006 1:11am
Quoting JodyOng
Hi everyone, I've been demoing my account for sometime now and I've decided to go live in few months time. The thing is, I'm only 18 and my capital is very limited. I have only around 5k SGD which is about 3200 USD. Which pair is the best for me to trade with my limited capital? I've been thinking the kiwi, NZD/USD because the initial margin is low. I'll be focusing all my trades on this pair only to practise for my live. Any other pairs that are low in margin?
I trade the EUR/USD, USD/JPY, USD/CHF, EUR/JPY, and the AUD/USD. Depending upon the broker, spreads can be 1 to 4 pips. This also depends on what part of the world you reside in.

The EUR/USD and USD/JPY usually are 1-3 pips.

If you are concerned with margin, trade mini-lots or micro-lots.
  • #3
  • Sep 5, 2006 1:31am Sep 5, 2006 1:31am
get a micro account or smaller. oanda and interbankfx let you go down to 1 cent a pip, then you dont need to worry as much.
  • #4
  • Sep 5, 2006 2:41am Sep 5, 2006 2:41am
Well I'm not really afraid of losses and stuff, just that I want the pair with the lowest margin so I can take larger hits. Like for instance the NZD/USD pair, the initial margin is only around 2k USD compared to GBP/USD which has a much higher margin!
  • #5
  • Sep 5, 2006 4:10am Sep 5, 2006 4:10am
Quoting JodyOng
Well I'm not really afraid of losses and stuff, just that I want the pair with the lowest margin so I can take larger hits. Like for instance the NZD/USD pair, the initial margin is only around 2k USD compared to GBP/USD which has a much higher margin!
Listen to the above posts.

Open a micro account, or better. (better than a mini)
It allows better granularity.

With $5k you would be able to trade like you had $500k and a standard lot account. With less stress. Allowing you to keep one aspect of becoming a successful trader at least partly under control.

As you build your account up over time you will be able to increase the lot size you trade with. ...And in fractional amounts to boot! i.e. .01 Lots .02 1.23 Lots etc.

You can then truely risk only %1 of your capitol each trade and not be stuck risking too much just because your account can't use finer amounts.

Simplified, at %1 total risk to your account, you could handle roughly 500 Pips worth of stop losses accross your open trades. (depending on pairs you trade of course and trading .01 Lots).
That would enable the majority of strategies here. Even at larger time frames! (recommended for starters)

There are wiser and more experienced people here who have covered this subject with more detail and accuracy.
Bundy's status today: "Waiting..."
  • #6
  • Sep 5, 2006 4:17am Sep 5, 2006 4:17am
Hmm true, it does make sense to start with a mini i guess.
  • #7
  • Sep 5, 2006 4:29am Sep 5, 2006 4:29am
Quoting JodyOng
Hmm true, it does make sense to start with a mini i guess.
Micro not mini ...Don't forget micro.
Not all brokers offer them.

Even experienced traders can benifit from the extra granularity and control of position size you can get from it.
It has little to do with even being a beginner.

(And I misread your account size as $5000 US ..LOL but it still holds true and is still plenty)
Bundy's status today: "Waiting..."
  • #8
  • Sep 5, 2006 4:40am Sep 5, 2006 4:40am
Wait a minute, what's the difference with a micro and a mini?
  • #9
  • Sep 5, 2006 4:59am Sep 5, 2006 4:59am
Quoting JodyOng
Wait a minute, what's the difference with a micro and a mini?
Size. Suppose you buy/sell EURUSD. A lot means that you buy/sell $100000. A mini is $10000 and a micro is $1000. My advice: try the demo of oanda for a while. That gives you some experience with forex. They don't use lots, mini's or micro's, you can fill in the amount you want to trade.
  • #10
  • Sep 5, 2006 5:01am Sep 5, 2006 5:01am
Quoting JodyOng
Wait a minute, what's the difference with a micro and a mini?
Standard - 100,000 base currency ($10/pip)
Mini - 10,000 base currency ($1/pip)
Micro - 1,000 base currency ($.10/pip)
Mini Micro - 100(?) base currency ($.01/pip)

Dollar values are given as a comparison's sake.
  • #11
  • Sep 5, 2006 5:08am Sep 5, 2006 5:08am
Quoting JodyOng
Wait a minute, what's the difference with a micro and a mini?
take it from a full time trader. Get a micro!!!! YOU CAN GO AS LOW AS 1 CENT PER PIP IF CAPITAL GETS LOW.

plus you get better leverage.

what ever pair you trade just stick to one. Each pair moves and forms waves differantly.

Best prices for accounts start= 5k-20k mini account, 10k plus will usually lower the leverage on most brokers but keep it a mini. Less than 5k micro. You can trade mini positions on 5k and under but drop it to micro size position if you suffer a 25% draw down or more. Untill market atitude turns back in your favor.

Dave
  • #12
  • Sep 5, 2006 6:09am Sep 5, 2006 6:09am
Well I'm not really afraid of losses and stuff, just that I want the pair with the lowest margin so I can take larger hits


this doesnt sound a good way to start a trading career
  • #13
  • Sep 5, 2006 8:58am Sep 5, 2006 8:58am
Quoting dailydow
Well I'm not really afraid of losses and stuff, just that I want the pair with the lowest margin so I can take larger hits


this doesnt sound a good way to start a trading career
Yeah, sounds scary at first. But I think what JodyOng was wanting was to be able to trade a pair that will give him the smallest hit to his/her account. And that's the idea isn't it? . Keeping risk to a minimum.

Armed with the knowledge everyone has given here Jody will be able to take a slightly safer road.

I had to read about micros here to know about them. They aren't advertised that well.
Bundy's status today: "Waiting..."
  • #14
  • Sep 5, 2006 9:55am Sep 5, 2006 9:55am
everyone's comment about micro and mini is right. no need to go up until at least 20K. The ability to scale in and scale is out very good, especially for new traders
  • #15
  • Sep 5, 2006 1:36pm Sep 5, 2006 1:36pm
Quoting bundyraider
Yeah, sounds scary at first. But I think what JodyOng was wanting was to be able to trade a pair that will give him the smallest hit to his/her account. And that's the idea isn't it? . Keeping risk to a minimum.

Armed with the knowledge everyone has given here Jody will be able to take a slightly safer road.

I had to read about micros here to know about them. They aren't advertised that well.
Yea that was what I meant. How can I play out my odds if the hits I take are too big and I get blown out even before I start my "casino"? =)

Thank you all so much for the help! I think I can make my decision already =)
  • #16
  • Sep 5, 2006 2:19pm Sep 5, 2006 2:19pm
Micro = only way to start your adventure. I use FX Solutions micro account and have been happy w/them no-problems.

I calculate my lots-available at the beginning of each trade session and increase lots as available to maintain compounding of account.

: ) Thom
  • #17
  • Sep 5, 2006 3:12pm Sep 5, 2006 3:12pm
Hi . look my friend .. you must know that you trade forex to make profits . And firms reserve margins regarding the amount you can profit or loose .
you get it .
So a pair with low margin , gives low profits _ limited daily steps .

Take a daily chart , and compare cable moves and pips moved a day ,and USD/JPY or Aussie or Kiwi for e.g. .you'll clearly see the difference .

One Cable mini-lot with 180 $ margin can move 70 pips an hour with 70 $ profit or loss, meanwhile one mini-lot of USD/JPY with 100$ margin ,can make 40 $ an hour . it's the same .you'll have to take this in consideration in your TP and in your SL too .

Don't look for margins when u trade . if you see you understand a pairs move , get involved .that's my advice .
Lebtrader 1
  • #18
  • Sep 5, 2006 10:08pm Sep 5, 2006 10:08pm
Wait, so micro is smaller than mini right? Like mini is $10,000 while a micro can be like $1000?
  • #19
  • Sep 6, 2006 12:05am Sep 6, 2006 12:05am
Quoting JodyOng
Wait, so micro is smaller than mini right? Like mini is $10,000 while a micro can be like $1000?
yup
with oanda micro you can bet $100 too i think or 10 or 1
my gf opened an account with $50 and is having fun with it
lol
so instead of putting in your 5k to practice with a mini account, you can actually use 50 bucks and bet 100 lot size
wish i had know that back when i started
  • #20
  • Sep 6, 2006 12:46am Sep 6, 2006 12:46am
Wow that's cool, but do onado do overseas accounts from Singapore?
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