Forex, Questrade and huge margin

Over the weekend I opened a trial forex account with Questrade.

I must admit that I was surprised to get a call today from a representative offering his services should I have any questions. My "tele-marketer" radar blinked on for just a moment but was quickly dispelled once I realized who was calling.

One thing that he was sure to point out was the huge margin allowances, up to 200 times...not 200% but 20,000%. This is needed as lots are in the 100,000 not the 100 I am used to with stocks.

So today I logged in to do some playing. Not quite as intuitive as I thought it might be but I think that may just be the strangeness of the currency trading environment. The charts can be easily set up to emulate my stock charts, moving averages, colours...not much else is really needed. I have not checked my account in the last hour but I watched as the profit/loss jumped up to $500 then back to the red in a minute or two. Very fast due to the leverage involved.

The Java based platform works well. There is a PC version that can be downloaded but it will be easier for me to stick with the online version due to my moving from computer to computer.

An interesting twist is the 24 hour trading environment. 1700h Sunday until 1700h Friday. I thought this would make a nice seamless charting experience but it is strange to not have a beginning for each new day...then again, sitting down for an hour in the evening is possible, if not necessarily prudent. I am sure this could be addicting.

I will investigate this further but I am not sure that it is for me at this point, I need to play with it some more. Unlike stocks I would not suggest anyone try this on for size with your own real cash off the start as it could be lost very quickly. Carefully traded, with tight loss allowances, I am sure that it can be lucrative and could be a small portion of a trading portfolio.

Like anything else, due diligence is in order big time here. Getting to know a bit about currencies and choosing currency pairs that you can trade regularly will be important.

All in all it looks like a hoot and I am looking forward to at least some further playing, if not some active forex trading.

Jeff.