CME currencies vs. forex

S

SideShowBob

I'm going to be implementing what I thought would be a futures trading strategy, but in looking at backtesting there are a few places where a huge gap overnight (usually over a weekend) completely nailed me. I remember reading that with forex your stops are guaranteed. Is this actually the case? Could I for example either trade forex instead of CME futures, or maybe hedge my currency trades using forex (so for example if the yen drops 5% overnight I'd get my entry at a 2.5% loss and have a 2.5% gain on that position to offset my loss in currency futures).

Has anyone done this or considered doing this? Do all forex brokers honor stops like that?

SSB
 
Nobody in the entire world, in any market, guarantees stops.

I hope no one ever asks this question again.

Cash forex might help you avoid getting ripped apart too badly overnight as there is somewhat round-the-clock liquidity, and Globex futures are thin during that time, but in any case if a market gaps against you you will get a horrible fill on your stop.
 
Thanks for the heads up. I remember reading about guaranteed stops awhile ago and I always wondered how they could do it....I guess they can't.

Assuming low commissions for CME ($2 per side) do you think the trading costs are higher with forex or currency futures?
 
Side Show, what Equity says is the absolute truth, there are no, absolutely no guaranteed fills any where in any market. Remember this it is one of the many perils in trading for a living.


The Ever Venomous VIPER
 
I believe him. I did some googling and found links that discussed how it used to happen but has since ceased to exist. Too bad....free money is free money :)
 
You can always leave an order in the cash market as an EFP. Most good brokers have the facility to do that if you are worried about the market gapping between times CME is shut and cash market is going.


BE LUCKY!
 
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