Say some big forex brokerage sites are bidding on the broad term forex for like $1 per click, and then little ole me is bidding on long tail keywords like "do forex autopilots work". Am I directly competing against these big sites that use this broad forex term for any of my keywords that also use it?
yes, you will be competing against their CPC. Your only advantage over them is putting more effort into writing an advert that matches the longtail search more specifically. Hopefully you can generate a better CTR and outrank the big guys this way.
Yes indirectly you are competing for forex word and if you implement what T_media said then your CTR will go up and on QS issue your cost also come down.
going for the long tail is a good idea as you can get traffic on search terms that they may not be using. It can also be cheaper since there's less competition generally. Matching your ads to each term as mentioned above is another good way to be more competitive through your Quality Score.
Yes you will be competing with them, but you can grab thier spot with patience, a big budget and some skill.
So the broad keyword "forex" will still show for a long tail phrase kyword like "learn how to win with forex california"? The only advantage is being more relevant if you have california in ad text?
Even if both of you have the same CTR, I believe you will enjoy higher conversions with long tail since it is more targeted.
Well my overall campaign is at 5.5% CTR today with one adgroup at 17%, another at 9%, 6% 5% and one at 3%... If I can mantain these kind of CTRs over the course of a week or so my ads will gain rank and lower cpc?
It doesn't matter whether they have used the longtail for themselves or not, as long as they have one of the words in your longtail, matched broadly, they will still be competing with you.