betfair vs forex?

[magdelen]

Cheers for the replies, I don't know much at all (if anything) about FX, something I want to look at, but from what it sounds like these guys are just bookmakers effectively (?) you are playing against them. They offer up prices (odds) and you bet against them, they like a bookmaker may hedge your bet but if you win it comes out of their profits eventually and like bookmakers they will only want to loose so much to you before they no longer want you as a customer?

I always thought (wrongly?) that it was more of an exchange model hence the exchange part for FX, like Betfair where you buy and sell against other people etc and a broker takes a commission on each order, goes into the market place and buys and sells as per your instruction. As they get their commissions they don't care if you win say £25 or £2.5 million.

Or is it that there is both of the above options? If so why would you go for one over the other?

Please exuse my reply Leon, but i dont know what the feck u just said.
The fx market, is nothing like a bookmaker, the platforms make their money on the spreads they offer. ie. one platform can offer you a spread of say 3 points, while another can offer you 2. This means that if you sell eur/usd for example, you would need to clear that price by 3 poins before you would be in profit, i suppose on reflection what you are say is correct it it just that you know excatly how much you are giving up, with no hidden xtras.

[Leonthefixer]

I thought I had explained it quite well, guess not lol.

Okay, so as long as they get their spread then they won't care how much you make.

What was puzzling me was that you said something like £250 a day would keep you under the radar, which I thought implied there was a kind of limit to how much you could make until they didn't want your business anymore.

So I can't figure out why you need to keep under the radar as wouldn't they not care if you were trading at say £2000 a pip as as long as they get their 2 point spread.

Didn't a load of the Coolmore guys make all their tens/hundreds of millions on the FX markets? Would they have been playing with these same brokers?

[Caan Berry]

Im a little puzzled why they would be bothered too.... isnt their commission paid anyhow??? or is it just the spread they make their cash from?? or both?? From what i've seen in peak hourse say GBP/USD pair in the New york/London overlap the spread is as little as 1pip.... must be bit hard for the brokers to make much like that no?

[magdelen]

I would want to be the £500+ a day person or I see no point in ditching betting exchanges for myself. Ideally I want to be the £1,000,000+ a year person but achieving that on Betfair is not achievable (for me).

My my Leon, how things have changed, i remember when you first started out on this journey, back then you would have been content with breaking even for the day. Obviously you have upped your game plan and you want more. I am afraid to say that what you went through on your journey to betfair will be even more harrowing on your journey to the real world.

[Leonthefixer]

Doesn't harm having targets

I don't make £1m on BF a year lets just be clear, but what I am trying to understand is is there a limit to how much you can make trading FX. Which I am currently confused about as you hear of people making millions on FX but then on here people are talking about ensuring you sail under the radar at a level of just £250 a day.

I am struggling to get my head around this and I can't say the replies so far have made it much clearer, but thanks no the less for them.

[shadowninja]

Magdelen has posted a lot of useful and detailed information plus thrown us some enticing figures. I will post my comments based on about 5 years' day trading experience:
-Stick to the big boys who will make money either from the commission or spread ie they won't shut you down/run your stops/delay fills/suspend markets/widen spreads.
-Start small (1p/pip) or even demo trade for several months until you have learnt to trade across several different market conditions (risk on, risk off, ranging markets, trending markets, shock news, data releases) - you might think you've cracked it after a week, go big, start to make serious money then a month later get raped 10 times over.
-Don't over-leverage - learn what this means.
-Don't get clever with enough indicators to confuse a 747 pilot that you're a landing strip: keep it simple, look at support, resistance, trend lines; learn to identify trending markets and ranging markets - have a plan for what to do in each situation (it may simply be "don't trade")
-If in doubt, stay out - don't take stupid trades because you're bored; it'll work a few times, then one day you'll get raped.
-Watch the charts 24/6 until you get a feel for how the market moves; price action is where it's at.
-Know yourself and your weaknesses: have a plan to deal with them (eg if you feel the need to get your losses back, then walk away).
-Learn to recognise when your emotions are making you take the wrong decisions.
-Only focus on one of the major charts - FTSE, Dow, EUR/USD, GBP/USD, etc; learn its characteristics intimately (watch it on all time frames, 24/6).
-Learn to cut your losses, learn to let your profits run but know when to take profit; I don't subscribe to the bullshit that you need to take at least 2:1 reward:risk; sometimes the market just hasn't got it in the move. If you see 1.8x risk are you going to ignore that profit and take a loss?
-Don't trust anyone, not even me. You need to figure it all out for yourself.

Much of what you read on various forums is people regurgitating crap from books they've read. I seen and heard a lot of shit. It's only from experience that I can now work out who is risking real money and who is an eternal demo trader. When you put money on the line, you will realise that a lot of this regurgitated stuff is nonsense that just sounds good. The only way to really learn isn't by paying some guru but by putting your money on the market. Not because the guru might be lying (there are a lot of shysters out there) but because even if he told you his strategy, you wouldn't follow it to the letter. However, you need to develop a strategy that suits you (not your lifestyle!) and works for you.

[shadowninja]

Doesn't harm having targets

I don't make £1m on BF a year lets just be clear, but what I am trying to understand is is there a limit to how much you can make trading FX. Which I am currently confused about as you hear of people making millions on FX but then on here people are talking about ensuring you sail under the radar at a level of just £250 a day.

I am struggling to get my head around this and I can't say the replies so far have made it much clearer, but thanks no the less for them.

IG will probably let you do £1m a year. They'll probably thank you for your business. If they start playing games, you can always go DMA and the world is your oyster.

[shadowninja]

By DMA, I mean Interactive Brokers: http://www.interactivebrokers.com/ibg/main.php

[magdelen]

I thought I had explained it quite well, guess not lol.

Okay, so as long as they get their spread then they won't care how much you make.

What was puzzling me was that you said something like £250 a day would keep you under the radar, which I thought implied there was a kind of limit to how much you could make until they didn't want your business anymore.

So I can't figure out why you need to keep under the radar as wouldn't they not care if you were trading at say £2000 a pip as as long as they get their 2 point spread.

Didn't a load of the Coolmore guys make all their tens/hundreds of millions on the FX markets? Would they have been playing with these same brokers?

a price can move in a nano second, would you be willing to trade 2 thousand a pip and watch yer account move into the red by £10-20,000 per pip, i dont think so. Dont think big, Leon, think smart.

[Leonthefixer]

IG will probably let you do £1m a year. They'll probably thank you for your business. If they start playing games, you can always go DMA and the world is your oyster.

:Brilliant

Now I understand it. From what I understood from what was said earlier there seemed to be a limit like with betting before the broker (bookmaker) didn't really want you any more, I couldn't get why people were saying you should be under the radar making £250 a day yet there are people making millions.

But now I see after a quick Wiki search on DMA's that as you say the world is your oyster, this must be what the big boys play with.

Direct Market Access:

http://en.wikipedia.org/wiki/Direct_Market_Access#Foreign_Exchange_Direct_Market_Access

Direct Access Trading:

http://en.wikipedia.org/wiki/Direct_access_trading

So why do you guys choose Broker over DMA? Whats the pros and cons?

[Caan Berry]

So IG is suggested over the others mentioned??

[Leonthefixer]

a price can move in a nano second, would you be willing to trade 2 thousand a pip and watch yer account move into the red by £10-20,000 per pip, i dont think so. Dont think big, Leon, think smart.

It is all relative to the individual, so no point in discussing what one person is comfortable with v what someone else is I guess. All I was trying to ascertain was what is the limit you can earn. Bf the limit is now £250,000 effectively, bookmakers far far less, brokers for FX I think someone said £1m a year would be okay, DMA is unlimited. That is all I am interested in, I now know that it can be something to consider down the line as you can make as much or as little as you want and you won't be turned away.

[shadowninja]

It is all relative to the individual, so no point in discussing what one person is comfortable with v what someone else is I guess. All I was trying to ascertain was what is the limit you can earn. Bf the limit is now £250,000 effectively, bookmakers far far less, brokers for FX I think someone said £1m a year would be okay, DMA is unlimited. That is all I am interested in, I now know that it can be something to consider down the line as you can make as much or as little as you want and you won't be turned away.

Not quite:
Betfair: lifetime limit £250k
Trusted financial spreadbetting companies: £1m per year
DMA: unlimited

[shadowninja]

So IG is suggested over the others mentioned??

I recommend them for financial spread betting, CFDs and trading in general. I would also look at Alpari and Oanda (FX brokers). When you're raping it, try Interactive Brokers.

[Leonthefixer]

So why would you go the Trusted broker route over DMA? Is it to do with costs I would guess?