Not all spot forex brokers are weasels?
Anybody trading currencies?
- Thread starter reno4nook
- Start date
Not all spot forex brokers are weasels?
Their is a point to made on the cost of currency trading. Currency futures you must pay exchange fees, and most traders require a charting platform, prices can vary from 50 to 200.
Trading in the spot market most firms give you a charting platform to trade from, I personally use Oanda.
don't get my wrong I trade futures when I see an opportunity, I am currently long in NQ at 1565.
"Their is a point to made on the cost of currency trading. Currency futures you must pay exchange fees, and most traders require a charting platform, prices can vary from 50 to 200. "
Quote and exchange fees at $200/month can add up. $2400 per year that you would'nt have with FX.
Quote and exchange fees at $200/month can add up. $2400 per year that you would'nt have with FX.
FredBloggs
Guest
trading futures will always be cheaper than trading a retail fx account.
i have spoken.
i have spoken.
Please, explain why, this makes NO sense at all.
HONEST retail forex market makers only have to hedge their aggregate positions. This means, as they grow larger and larger, they gain more volume and can match more and more volume in the internal local market. Thus, making a lot of spread by just matching clients. As they get more revenue from just matching the clients, competition between brokers will drive spreads down.
This can be seen in practice, I haven't been around for a long time, but when I started, FXCM had a spread of 4 pip on EUR/USD. Now I am at Oanda with 1,5 spread on EUR/USD.
Will cost for futures come down? I don't think so. If I understand it correctly, future costs are spread + commissions + exchange fees. There could be real gain if the spread would disappear/be lowered, maybe somebody can answer this: Why is there a spread in the futures market?
FredBloggs
Guest
futures: lets assume you pay $5rt inc exchange fees. euro/usd tick is $12.5 so our cost based on 1 tick spread either side will be $30rt ((12.5x2)+5). slippage will rarely be an issue. this will be the same as paying 1.5 a pip at o&a on both sides but with a pip value of only $10
now assume you are doing size and negotiate lower commissions with your clearer. say $3 - nothing special. Also assume your strategy is to be a price maker, not a price taker as retail fx force u 2 b. all of a sudden you dont have to pay the spread either! guess what......
with futures, you can negotiate your commission structure depending on how much business you put through. try asking o&a for that! (or ib for that matter)
so the answer is flexibility. the retailfx weasel owns you and owns your strategy. he decides what $ you get in on and out at. in other words, hes the daddy, and youre his bitch. with futures you can be a street fighter and slap some ass around.
now you dont wanna be the bitch anymore do you!
You mean futures have 1 pip spread on both side, so 2 pip spread per round turn? Or did I not interpret that correctly? The 1,5 pip spread at Oanda is per round turn, so if you open and close an position in EUR/USD, you are $15 down per 100k size.
I didn't really understand the second part. Also, when is the last time total future costs came down, spot costs are still moving down rapidly (and not stopping yet).
But I am really interested in why there is a spread in futures? What is the need? Is this an extra bonus for the exchange, who benefits from this spread?
1st of all an honest FX broker will at the minimum will tell you where they make their $$ b/c lets face it they're not in the biz for fun ....... so lets take the example the next step which I know to be true b/c I sat there for 13 years...... if the cash FX market (which is indication only as opposed to dealable prices in the futures) in STG is 12-15 (lets not get into a pissing contest over what broker is going to falsely promise what) if you go to hit the 12 ur gonna get 11's w/ the caveat that "Oh the price changed" on a 1 STG that is gonna be $100 in and $100 out total $200 Doing 16 Futures (16*62,500=1,000,000 STG) is gonna be $80+fees which is what another .50 So lets summarize
1 STG in the Cash = $200 in and out
16 STG Futures = $81
As I have said many times on these boards the only ways that Cash brokers make money is in 1 of two ways. They either take a pip in/out on the slippage or they "make" you a price and take the either side of whatever the custy does... Full stop. If they tell u otherwise and your fool enough to believe them then you deserve what you get. All this BS about spreads and working the spread is just that BS.... No broker who is in biz is gonna take the chance on a 1000 deals a day that he is gonna take the time on anyones 1 lot to work the spread ...... there just isnt enough mins in the day for that kindof shit and the upside is too limited on the small stuff ...pip in pip out. If Im wrong I apologize or if your the one person who has found an honest dealer more power to you.
Thsie is no since in arguing with him his mind is made up.