Beginners
- Thread starter lymanem
- Start date
new as well..who charges the least to trade forex
they are all about the same. Market Makers charge no commissions and make their money from the spread.
ECN's charge a commission, but the spreads may be more consistent
I use interactivebrokers, they charge about $2.50 per 100k
interest is also a consideration, you pay interest on the currencies you borrow to trade, some pay you if the carry is positive
my broker is not the cheapest, but I prefer them overall
thanks oldtime
I've been trading a longtime, but I just started trading forex about a year ago. I immediately liked it because everything was new, and I didn't have any preconceived ideas about anything. The more opinionated I become the smaller my profits have become.
Like right now, everybody is trying to guess about the future of the Euro.
CHF is committed to pegging at 1.20. Will the peg hold if they trash the Euro?
Never know when JPY will intervene
and what about USD? Everybody wants it to go down, but be strong
It's an exciting market and there is an opportunity everyday no matter how small you are
there are probably more small forex retail traders worldwide than there are small stock traders, but that also gives rise to many, many more unscrupulous forex brokers.
they call them "bucketshops" because in the old days they use to collect a stock and then dump a bucket load on the unsuspecting clients. Nowadays, they just trade against you and widen the spread to their favor and your demise.
trading currency futures contracts should also be considered
the M6E is the micro version of the 6E Euro FX contract which is for â¬125,000
M6E: contract size: â¬12,500 months: H,M,U,Z pip/tick value: â¬0.0001 / $1.25
M6E margin: daytrade: $100 o/n: $270 rt commission: $1.99 - confirm with broker and
check margin statement after first trade - I was first charged $3.06 , amended to $1.99
one oddment is that 10 M6E contracts traded o/n = $2,700 whereas the o/n margin for
one 6E contract is $4,725.00 . 6E daytrading margin $500 rt comm: $5.94
futures contracts are traded in an open cry exchange 'pit', and/or the CME Globex elec-
tronic exchange
NB: futures close for a period before re-opening for the night session, the currencies
close for one hour at 2/5pm PST/EST, and note that if you don't have $270 margin in
your account while daytrading you'll be closed out by AMP at 1:55 and pay $25 + comm
AMP Futures new account minimum $500 - apply online http://www.ampfutures.com/
the advantage of trading spot fx is that an account with Oanda can be opened with $1
one can begin trading with a small amount after first demo trading, testing not only
one's system/method but also ones psychological/emotional reaction to losing, using
an amount of money that hurts a little, but doesn't bankrupt one's life savings
trading futures contracts means trading a fixed contract size
Oanda: 12,500 eurusd @ 1.25648 @ 50:1 - max leverage - margin: $314.12 â
in other words, 3 times the daytrading margin of the M6E contract, and more than the
M6E o/n margin
no interest charges are applied to futures contracts
one consideration partciularly after the MFGlobal fiasco is that Oanda Canada and
other Canadian brokers who participate in the Canadian Investor Protection Fund -
CIPF insure All client account types - stocks, futures, fx etc up to C$1,000,000
I've traded with Oanda using their FXTrade program and found it to provide instant fills
MetaTrader 4 uses an indirect fill system and is reported to be slower
most fx brokers work/are open on a Monday(Sun) to Friday basis and may or may not
close for national holidays. trading at Oanda can be done 24/365 , although they res-
tricted trading last Sunday - Greek election, but they don't staff on the weekend, also
the spread widens for instance on the euro to 10 pips and can widen more
I trade futures only now using the NinjaTrader charting/order entry program 'free' from
AMP and other brokers, using the CQG feed, CQG collect $0.20 per rt included in the
total commission
I'm a TA/chartist and use the MT4 from Alpari US for All my analysis/trading decisions
the Oanda MT4 because of the extra trading hours has more price bars, If trades have
occurred during the weekend and which I don't want to include in my analysis
basically there's no difference between the spot/futures price formation, currently the
futures are about +10 pips higher in price than spot, also only 4 decimal places
there's a difference between the Bid/Ask prices of all futures contracts, usually 1 pip
and can be 2 pips/ticks, and depending on how the price moves when one clicks the
Market Buy/Sell order button, one may or may not be filled advantageously, or, one can
use Limit Order where one is filled or not at that specified price
daily 6E volume is between 200+K up to 400K with occasional multi thousand orders
hitting the market which often spikes the price 15-40 pips and will be reflected usually
in spot prices also spiking, similar spikes will occur on hundreds orders
I'll guesstimate that the M6E daily volume is 10% of the 6E so it's not best for 'scalping'
and whether true or not, the micro contracts supposedly have market makers meaning
one's order will be filled, I've always had my orders filled and no complaints about the
fill price. I have a 1m M6E and 6E chart displayed and in MT 5 15 60 4H and D loaded
and don't forget to set M6E in the Basic Entry if that's what you're trading
NT demos are available from AMP etc and to enter orders go to Menu/File/New and
click on Basic Entry which is the order entry utility, also know as the Chart Trader with
the paid version of NT - just attached to the chart able to be expanded/closed
also there's several chart types available with NT, Seconds, Tick, Volume etc but the
charting tools are poor in comparison with MT
there are several data feeds available for NinjaTrader but for the $500 AMP account
the only one is CQG's, a large old and dependable data provider, but, occasionally
there are problems with connecting, disconnections etc and these can be either NT
itself or an ISP on the routing, not so far as I know CQG
if one has a dis/connection problem, besides ET:
the NT Support or forum: http://www.ninjatrader.com/support/forum/index.php
CQG support: 1 800 950 9748
AMP's 24 hour Sun thru Fri Trading Desk: 1 800 560 1640
AMP's business hours are Mon thru Fri: 7 - 4 CT
the M6E is the micro version of the 6E Euro FX contract which is for â¬125,000
M6E: contract size: â¬12,500 months: H,M,U,Z pip/tick value: â¬0.0001 / $1.25
M6E margin: daytrade: $100 o/n: $270 rt commission: $1.99 - confirm with broker and
check margin statement after first trade - I was first charged $3.06 , amended to $1.99
one oddment is that 10 M6E contracts traded o/n = $2,700 whereas the o/n margin for
one 6E contract is $4,725.00 . 6E daytrading margin $500 rt comm: $5.94
futures contracts are traded in an open cry exchange 'pit', and/or the CME Globex elec-
tronic exchange
NB: futures close for a period before re-opening for the night session, the currencies
close for one hour at 2/5pm PST/EST, and note that if you don't have $270 margin in
your account while daytrading you'll be closed out by AMP at 1:55 and pay $25 + comm
AMP Futures new account minimum $500 - apply online http://www.ampfutures.com/
the advantage of trading spot fx is that an account with Oanda can be opened with $1
one can begin trading with a small amount after first demo trading, testing not only
one's system/method but also ones psychological/emotional reaction to losing, using
an amount of money that hurts a little, but doesn't bankrupt one's life savings
trading futures contracts means trading a fixed contract size
Oanda: 12,500 eurusd @ 1.25648 @ 50:1 - max leverage - margin: $314.12 â
in other words, 3 times the daytrading margin of the M6E contract, and more than the
M6E o/n margin
no interest charges are applied to futures contracts
one consideration partciularly after the MFGlobal fiasco is that Oanda Canada and
other Canadian brokers who participate in the Canadian Investor Protection Fund -
CIPF insure All client account types - stocks, futures, fx etc up to C$1,000,000
I've traded with Oanda using their FXTrade program and found it to provide instant fills
MetaTrader 4 uses an indirect fill system and is reported to be slower
most fx brokers work/are open on a Monday(Sun) to Friday basis and may or may not
close for national holidays. trading at Oanda can be done 24/365 , although they res-
tricted trading last Sunday - Greek election, but they don't staff on the weekend, also
the spread widens for instance on the euro to 10 pips and can widen more
I trade futures only now using the NinjaTrader charting/order entry program 'free' from
AMP and other brokers, using the CQG feed, CQG collect $0.20 per rt included in the
total commission
I'm a TA/chartist and use the MT4 from Alpari US for All my analysis/trading decisions
the Oanda MT4 because of the extra trading hours has more price bars, If trades have
occurred during the weekend and which I don't want to include in my analysis
basically there's no difference between the spot/futures price formation, currently the
futures are about +10 pips higher in price than spot, also only 4 decimal places
there's a difference between the Bid/Ask prices of all futures contracts, usually 1 pip
and can be 2 pips/ticks, and depending on how the price moves when one clicks the
Market Buy/Sell order button, one may or may not be filled advantageously, or, one can
use Limit Order where one is filled or not at that specified price
daily 6E volume is between 200+K up to 400K with occasional multi thousand orders
hitting the market which often spikes the price 15-40 pips and will be reflected usually
in spot prices also spiking, similar spikes will occur on hundreds orders
I'll guesstimate that the M6E daily volume is 10% of the 6E so it's not best for 'scalping'
and whether true or not, the micro contracts supposedly have market makers meaning
one's order will be filled, I've always had my orders filled and no complaints about the
fill price. I have a 1m M6E and 6E chart displayed and in MT 5 15 60 4H and D loaded
and don't forget to set M6E in the Basic Entry if that's what you're trading
NT demos are available from AMP etc and to enter orders go to Menu/File/New and
click on Basic Entry which is the order entry utility, also know as the Chart Trader with
the paid version of NT - just attached to the chart able to be expanded/closed
also there's several chart types available with NT, Seconds, Tick, Volume etc but the
charting tools are poor in comparison with MT
there are several data feeds available for NinjaTrader but for the $500 AMP account
the only one is CQG's, a large old and dependable data provider, but, occasionally
there are problems with connecting, disconnections etc and these can be either NT
itself or an ISP on the routing, not so far as I know CQG
if one has a dis/connection problem, besides ET:
the NT Support or forum: http://www.ninjatrader.com/support/forum/index.php
CQG support: 1 800 950 9748
AMP's 24 hour Sun thru Fri Trading Desk: 1 800 560 1640
AMP's business hours are Mon thru Fri: 7 - 4 CT
Hey Wallace, me again to nit pick on futures vs spot
Firstly, I see you've included a lot more info on spot this time (a few things were some of my talking points from before,) so cool that you've presented a very fair and level assessment of both.
I just wanted to point out something quick:
The contract's quote isn't just +10 pips from spot.. it all relates to the future's contract coming to expiry, cost of capital and interest rates. As the contract gets to within a few days of expiry, you'll notice the price is nearly exactly the same as spot, but the further out you go the greater the chance you'll notice a price difference. (Pull up an AUD 6A contract that's 1Q+ away from being the front month and you'll see what I mean.)
"Interest", in the sense you mentioned elsewhere in your post, is partially accounted for in this price difference (I say partially since there are a few other factors weighting on contact price differences as well.) After all, if absolutely no interest was charged (directly or indirectly) in futures, we'd all be rich floating carry trades on spot and hedging with futures.
Just saying.
---
(we've had this talk before... but....)
Total cost is still a valid difference between the two markets:
For the M6E contracts your rate of $1.99 per contract with a tick/pip value of $1.25 puts a total cost of 1 contract traded at ~$2.24.
(Note: this assumes you only trade when the spread is that thin, even during liquid times it can be 2 ticks for significant amounts of time.)
Using Oanda as the Spot example, the average spread during liquid times is 1.2 pips, and there are no commissions to factor in. That puts $12,500 units trades (equal exposure as the M6E contract) at ~$1.50 total cost.
The last time we talked about this very subject, you dismissed this factor by saying the cost of spread when trading was "academic". Which I can't agree with, since by that logic trading with a spot, no commission, broker would be free (which clearly isn't the case.)
---
Anyway, just wanted to contribute. I'd love to hash out some more about this with you if you're game.
