Success In The Forex Market (part 2)

The forex market ticker should he within calling distance of the telephone to the forex market. Some brokers have a way of making you or a clerk walk a mile to give an order. Every step means delay. The elapse of a few seconds may result in a lost forex market or opportunity.

If you are in a small private room away from the order desk, there should be a private telephone connecting you with the order clerk. Slow execution won’t make it in tape reading. Your orders should generally be given "at the forex market." We make this statement as a result of long experience and observation, and believe we can demonstrate the advisability of it.

The process of reporting transactions on the tape, consumes from five seconds to five minutes, depending upon the activity of the forex market. For argument's sake, let us consider that the average interval between the time a sale takes place on the forex market floor and the report appears on the tape is half a minute.

A forex market order in an active forex is usually executed and reported to the customer in about two minutes. Half this time is consumed in putting your broker into the crowd with the order in hand; the other half in transmitting the report. Hence, when Union Pacific comes 164 on the tape and you instantly decide to buy it, the period of time between your decision and the execution of your forex market order is as follows:

The tape is behind the forex market …30 seconds
Time elapsed before broker can execute the order … 30 seconds

It will therefore be seen that your decision is based on a price that prevailed half a minute ago, and that you must purchase if you will, at the price at which the forex stands one minute after. This might happen between your decision and the execution of your order: UP 164, ¼, 1/8, ¼, ½, ½, 3/8, ¼, 1/8, 164, …and yours might be the last hundred.

When the forex market report arrives you may not be able to swear that it was bought at 164 before or after it touched 164½. Or you might get it at 164½, even though it was 164 when you gave the order, and when the report was handed to you.

Just as often, the opposite will take place - the forex will go in your favor. In fact, the thing averages up in the long run, so that forex market traders who do not give forex market orders are hurting their own chances.

An infinite number of forex market traders seeing Union Pacific at 164, will say: "Buy me a hundred at 164." The forex market broker who is not too busy will go into the crowd, and, finding the forex at 164¼ at ¼ will report back to the office that "Union is ¼ bid."

The forex market trader gives his broker no credit for this service; instead he considers it a sign that his forex market broker, the floor traders and the insiders have all conspired to make him pay ¼ per cent higher for his 100 shares, so he replies: “Let it stand at 164. If they don't give it to me at that, I won't buy it at all."

How foolish! Yet it is characteristic of the style of reasoning used by the public. His argument is that the forex, for good and sufficient reasons, is a purchase at 164. At 164¼ or 1/2 these reasons are completely nullified; the forex becomes dear, or he cares more to foil the plans of this "band of robbers" than for a possible profit.

If you believe UP forex is cheap at 164 it's still cheap at 164¼. Here’s the best advice I can give: If you can't trust your forex market broker, get another. If you think the law of supply and demand is altered to catch your $25, floor -- you better reorganize your thinking.

Were you on the floor you could probably buy at 164 the minute it touched that figure, but even then you have no certainty. You would, however, be 60 seconds nearer to the forex market. Your commission charges would also be practically eliminated. Therefore, if you have two hundred seventy or eighty thousand dollars, which you do not especially need, buy a seat at the forex market.