Hi DM,
Can you give me a little more information on micro fx? Does Justin at Amp provide accounts for microfx? Or, is FXCM, better for microfx?
Is the way we learn to trade here at apex the same when trading microfx? Meaning the same rules and information can be applied? can we look at the underlying through ninjatrader?
Do you look at trading microfx a good way to build your even smaller than small account? or is it just better to demo and save your money for fx/nadex/futures?
Thanks!
You can use the Apex Elite Strategies on FX (micro/mini/standard/futures/cfds,spreads) and can do micro mini and standard lots at FXCM through ninjatrader. Or through another broker that offers it and use nt7 for charting your choice i think all in one place is easier but thats up to you.
Apex Entries, Apex Add Ons, Apex MVP Reversals, Apex BMX Reversals, Momentum Scalps, and Profit poppers on Micro FX like you can on any other market. These are the strategies we teach at Apex for trading underlying markets like forex, futures, stocks.
Many of the other strategies are really more focused on options (call/put/spread/whatever options/binaries etc…)
Yes i think for a smaller than small account 
that micro fx is grate its the same thing as mini or lot sizes - and its real. it may not be much but its real. And real changes the psychology. In many ways its a great step quickly after demo as you wont get cremated but you wont take it to lightly like you may tend to do in demo. While doing it trade it go for 5% a day same rules and everything and of course save up more and more between trading and saving you should be in regular lots faster than you might expect.
Warning you may want to go to Education - And Check the intro to markets video before reading this or it may fry your brain.
Its 100x easier than it seems but it seems so stinking complex the first dozen times you read it… i will try to make it as easy as possible
Check out the intro to markets video - forex under education it may help as well -0 also check out education - nadex contgract specs and watch teh forex conversion videos there. If you watch those first and then read this - it shoudl not hurt your head so bad (i don’t mean youy specifically just saying i remember learning this stuff and the first couple times it felt like i put a ice cream cone in my mouth got a freeze headache and my head was going to explode)
If you will make it past it then its easy as bottom line its basically most fx with USD in the quote is .10 a pip micro lot - 1.00 a pip a mini lot and $10 a pip a standard lot… and it does not need to be harder than that right there - but for the sake of those who really want to get it all down here we go…
Currency Conversion USD Quote Currencies When you buy or sell forex you are trading in the “base” forex currency pair
Left side is base currency and right side is quote currency
EUR (Base)/USD (Quote) (this is how it would work at FXCM)
So if you buy micro lot of 1,000 units of EUR/USD - your buying 1,000 euros at the then currenlty quoted USD quote rate ie if EUR/USD = 1.3000 it saying for every 1 (base currency) euro - you would get 1.30 (quote currency) USD
So for 1,000 EUR (bought eur/usd), you know have bought 1,000 euros in exchange for giving 1,300 USD
You put up 50:1 leverage (aka 2%) in most cases (at least in the United States) so $1300 / 50 = $26 in margin/leverage
If the currency fluctuates you have an an open p/l and that is added/subtracted to your account live as well
Pip Value and Margin
(Fun fact - pip stands for price action point for the smallest increment price change (note there are 1/10th and 1/4 pips that do exist)
If you did a micro lot of 10,000 units on EUR/USD at 1.3000 then you would put up $26 and your pips would be worth $.10 a pip 1/1.3000 would give me .7 euros value per pip
Or you could say .7 euros (1.3 x .76923… euros = $.10)
Worked backwards
1.3000 x 1000 = 1300 USD
1.3000 is 13,000 pips x .10 (cents) = $1,300 USD = 1,000 EURO’s
If you did mini lot of 10,000 units on EUR/USD at 1.3000 then you would put up $260 and your pips would be worth $1 a pip
If you did a standard lot 100,000 units of base currency on EUR/SUD at 1.3000 then you would put up $2600 and your pips would be worth $10 a pip
USD Base Currencies
It changes a little when you get into say a USD Base currency - ie USD/JPY currently quoting at 101.80
Left side is base currency and right side is quote currency
USD (Base)/JPY (Quote) (this is how it would work at FXCM)
So if you buy mirco lot of 1,000 units of EUR/USD - your buying 1,000 USD at the then currently quoted JPY quote rate ie if USD/JPY = 101.80 it saying for every 1 (base currency) USD - you would get 101.80 (quote currency) JPY
Micro Lot: 1/101.80 = .009823… or simply round .10 cents per pip on a micro lot
Margin is super simple with a USD Base Quote currency as its just the amount ie $1,000/50 (note 50 is for 50:1 leverage maning 2% so you coudl also multiple the number x 2% ie $1,000 x .02 and get the same number) of $20 in margin
Mini lot would be 10x that so it would would be $.98 a pip.
Margin = 10,000 * .02 for $200
Standard lot is 10x a mini lot so it would be 100,000 units of base (USD) and would be worth $9.80 a
Margin = 100,000 * .02 for $2,000
Non-USD Curriencies It gets a little more fun if you do a GBP/JPY as you have to convert it into GBP and then convert the number of pounds into dollars.
GBP (base)/JPY(Quote) at 172.90
So for 1 GBP you get 172.9 JPY
To convert GBP/JPY to USD you would need to know the USD/JPY rate
So the numbers we will use is
GBP/JPY 1,000 units at a price of 172.90 with the USD/JPY price at 101.82
GBP/JPY / USD/JPY gives us GBP/USD as the JPY cross out
so 172.90 / 101.82 = GBP/USD 1.6980
at a value of 1/1.6980 .59 GBP - .59 * 1.6980 = or .10 on a 1,000 micro lot
1,000 Pounds at a USD quote of 1.6980 = $1,698 USD .021 = $33.96 in margin on a micro lot
$339 margin on a mini lot - 1.00 on a mini lot
$3390 margin on a standard lot 10.00 on a standard lot
If the currency fluctuates you have an an open p/l and that is added/subtracted to your account live as well
Couple side notes not super important especially on micros but just so you know…
Usually 1x a day sometimes more often they sweep any fx currency (like if you have jpy or EUR) into your account holding at the rate of USD, sometimes its live, sometimes it after its a certain amount (you have to check with each broker on this)
if you hold it past the rollover (usually 5 pm there is what is known as carry trade or swap interest) ie let says you pay .25 % a year on USD and receive 1% a year for owning euros’ you get say .75% interest divided out over a year etc… - or in reverse you pay it - this is calculated each day. Some brokers add or subtract the interest from your balance. Other brokers will adjust your entry price up or downto account for the change. This only applies if holding the position past the rollover. There is more to this than what I am putting here like double and triple swap days etc… but interest rates overall so carry or swap intersest is so small right now its not as big of a factor (on most currencies). This is not a day 1 lesson its something to come back to.
If using TOS… (this is assuming normal quotes of 1.3000 (notice the 4 ticks not 5 ticks - on some brokers like think or swim that will quote in 1/10s of pips and may (TOS DOES) require you to put 10,000 extra zero for the micro lot and it seems to incorrectly dispaly in the fore trade tab the value is .10 a tick but the value is 1.00 a tick the issue is its a partial tick of .00001 so you would yes be correct at .00001 a 10th of a tick value is .10 but a tick is worth 1.0 just so you don’t think your getting micros when your not TOS is just quoting mini lots in 10th’s of ticks but if you hit confirm a order before sending you will see the margin ie be in the 260 dollar range on EUR/USD which would be for a mini lot - NOT a micro lot.
On Nadex its even easier every tick/pip is always worth $1.00 per spread bought sold no matter wha tthe base or quote currency is the smallest size is 1 so the smallest pips value is $1.00
This also shows margin on exotic pairs etc…: Whats Forex Margin? Forex Margin Requirements, Smart Margin @ FXCM http://www.fxcm.com/products/forex/margin-requirements/ FXCM sets the margin to make it pretty simple usually does not update it more than 1x a month unless there is a large forex move. This is a very handy chart to reference.
I warned you to watch the videos first…
Hope you’re picking this up as its not as hard as it looks, but man it looks hard.
After you get it you open up one of the greatest markets in the world to trade (foreign exchange)… the biggest market in the world.
Hope this helps
Thanks DM. Great stuff! I will probably reread all of that many, many times and will also check out the intro to forex videos. I did the research on microfx/fx/FXCM in general and its making more and more sense in terms of next steps to get started. It looks like I am going to be back in the videos/webinars/support forums, to now understand ninjatrader so that I can trade with it live. I already attended the intro and new user webinars to become more familiar with chart trader, dom, etc. Very powerful tool indeed. I see where now, when I get good, i can also use your nadex ultimate hedge strategy to hedge the fx positions.
I also did get up around 2:30EST…yes it ****ED! (can I say that?..sorry :o It was no fun.) I will focus on one strategy and one instrument. Also, I’ll use the color time region indicators to take a look at the movement of the euro pairs to select a good system (apex elite mvp/popper/momentum [diagnostic], vs. spike/bomerang[time]). Will be trading from about 2:30am-6am EST. Any insight as to any pairs and system I should take a close look at during that time frame would be appreciated. I think I heard you mention GBP/JPY and GBP/USD as good ones.
Just had what I consider to be my best trade ever using the system this morning…sold at $40, bought at $8… If I did it once, I can do it again.
Thanks DM!