Are there drawbacks to working with such a liquid market?

Quote from pipboy:

If cabletrader knew what he was talking about he would not be trading at a retail spot fx firm
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lol, and if you had the capacity to understand what has been written in this thread you wouldn't make inane comments or repeat things like "The cash FX brokers only offset the positions that are heavily skewed to one side. For example if all their clients are buying or selling. If they can match the trades in house they will. They do not offset and hedge each trade." , we've already been through all that :p
 
I agree that there are small spikes in forex.

So what can be done about the problem:

1) Use mental stops.
2) Use stops, but know sometimes you will spiked out. I currently use stops.
3) Hedge your risk by buying/selling another currency to offset your risk. Done it a few times.
4) Have multiple fx broker accounts, so that you can have a backup and determine which broker is causing you to have a problem.
5) Use forex options to hedge risk for example double touch.
6) Realize in fast markets like news reports, there are no guarantees and don't trade them unless you know what you are doing. I have traded them before.
 
Quote from RedDuke:

Offense is the best defense, as the old saying goes.

You have not provided a single fact about any of your posts. You state that forex is great and aside from few bucket shops no need to pay attention to all other unscrupulous behavior, which in your mind does not even exist.

You also could not find a single valid argument why forex is better then CME futures, where I listed several where futures clearly have advantage. The old argument about forex having more pairs and mini lots is very weak defense. If you know how to make $ in currencies, 6 major futures are more then enough.

I was very ignorant when I discovered forex originally, and it took me some time to figure things out. Yes you can make $ in forex, but to do it in a long run you would need to trade with VERY wide stops, and that is recipe for disaster for 99.9% of traders. You might be within this 0.1% or less that can get currencies direction correctly all the time, and the very wide stops are there for fat tails events only. But if you are that good, you would have dropped spot fx a long time ago,

This discussion goes to no where, so we can stop it.

Regards,
redduke
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So say I trade 1 futures contract on the Euro and would like to peel off half of it at my 1st PT, what do I do? Nothing since I can't.

With my broker I can not only take off half, I can keep taking off half until there is no more halfs to take off. Please explain to me how that is NOT an advantage?

Are you trying to tell us that you need wide stops in the FX market but you don't in the futures market?

For one thing, if you need wide stops it sounds like your points of entry are very vague unless you're trading on very large time frames.

And the second thing, have you ever watched the 6E contract side by side to the Euro/Usd? They move exactly the same! So please enlighten me as to why you only need wide stops in the FX market but not the futures?
 
Quote from bugscoe:

So say I trade 1 futures contract on the Euro and would like to peel off half of it at my 1st PT, what do I do? Nothing since I can't.

With my broker I can not only take off half, I can keep taking off half until there is no more halfs to take off. Please explain to me how that is NOT an advantage?

Are you trying to tell us that you need wide stops in the FX market but you don't in the futures market?

For one thing, if you need wide stops it sounds like your points of entry are very vague unless you're trading on very large time frames.

And the second thing, have you ever watched the 6E contract side by side to the Euro/Usd? They move exactly the same! So please enlighten me as to why you only need wide stops in the FX market but not the futures?
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You are using one of the 2 old arguments why forex is better or needed, that is ability to trade mini lots. The first was is exotic crosses. When you trade for some time, assuming you know what you are doing, you will be able to increase the size of your trades from 1 to 2 contracts, from 2 to 3 and so on until market liquidity allows, and thus would also be able to scale in and out at different price targets. If you can not do this, mini lots will not help as well. If you can do it, you do not need ability of scale in or out with under 1 lot, which is not that much $ to begin with.

I have seen price spikes on forex feeds, which were not present on 6E. 6E can only be moved by traders by either trading or entering/modifying bids and asks in DOM. Where your forex feed can be moved by one of the banks quoting outside others, and your own broker, more of the later of course. That is why I mentioned wide stops, these spikes will not happen on large scale since it would be too obvious. Your spot forex trades HAVE NO impact on the price, IT IS ALL VIRTUAL, and that is why many call it bucket shop.

If you trade futures, you have additional valuable tools such Time&Sales and Market Depth, which are of huge importance to time entries and exists.

Unless valid questions are asked, it makes no sense to discuss this topic futher.
 
Quote from RedDuke:



Unless valid questions are asked, it makes no sense to discuss this topic futher.
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"Exactly my thoughts, could not have said it better myself"......discussing it with someone who can't grasp how marketmakers operate makes no sense at all.
 
Quote from RedDuke:

You are using one of the 2 old arguments why forex is better or needed, that is ability to trade mini lots. The first was is exotic crosses. When you trade for some time, assuming you know what you are doing, you will be able to increase the size of your trades from 1 to 2 contracts, from 2 to 3 and so on until market liquidity allows, and thus would also be able to scale in and out at different price targets. If you can not do this, mini lots will not help as well. If you can do it, you do not need ability of scale in or out with under 1 lot, which is not that much $ to begin with.

I have seen price spikes on forex feeds, which were not present on 6E. 6E can only be moved by traders by either trading or entering/modifying bids and asks in DOM. Where your forex feed can be moved by one of the banks quoting outside others, and your own broker, more of the later of course. That is why I mentioned wide stops, these spikes will not happen on large scale since it would be too obvious. Your spot forex trades HAVE NO impact on the price, IT IS ALL VIRTUAL, and that is why many call it bucket shop.

If you trade futures, you have additional valuable tools such Time&Sales and Market Depth, which are of huge importance to time entries and exists.

Unless valid questions are asked, it makes no sense to discuss this topic futher.
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I'm not talking about mini lots. I'm talking about the flexibility of scaling out at any size, not being limited to contracts of 125K.

I watch three price feeds all day every day. The 6E, my spot ECN broker and my MM broker. They all move in concert with each other. And if anything, there is a little more spiky/whippy price action at times on the 6E compared to the spot.

This argument about forex trades having no impact on the market since it's virtual is hogwash. So is the money I make on trades not real? Is that what you're telling us? If the price I'm getting is the fair price, why am I getting robbed? You've yet to provide a "valid" answer to this other than saying the same crap. I'm really trying to understand your points but you need give some more convincing facts other than the marketing info you're getting from brokers websites.

How about this, put together some charts of the 6E contract and the E/U. Then show us how we could have only made money if we were trading the 6E and would have lost if we were trading the E/U?
 
Quote from bugscoe:

You've yet to provide a "valid" answer to this other than saying the same crap. I'm really trying to understand your points but you need give some more convincing facts other than the marketing info you're getting from brokers websites.
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I think you'll have a long wait if you're expecting RedPuke to support what he's saying with anything logical or tangable like an example!

I'm a pragmatist when it comes to trading, if it works and makes money then what's the problem.
 
Quote from forextraderpro:

Are there drawbacks to working with such a liquid market?
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Well the Forex market is much larger than the stock market, and it allows investors to easily enter and exit the market, which many people appreciate. The downside of course is that the currency market can move fairly slowly.
 
Quote from TradingWise:


ontopic: high liquidity often means high volatility; maybe that would be a drawback for some.
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Huh? I disagree 100%. During times of low liquidity is when things get bumpy.
 
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