Currency Futures Vs Spot

Quote from Rhody Trader:

I traded spot through IB for a little while and found it to be a pain. Maybe it's gotten better since.

If you're planning trading futures through IB, why not just use those prices? If you use spot you would have to do everything in reverse for USD/JPY since the futures are quoted the opposite way around from spot.
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the main problem is that i use tick charts. futures have less ticks then spot and the bars take longer to form and i get in later. i hate time based charts. thats my real dilemma i get better looking charts with spot charts due to a higher tick count but i get the headache of having to deal with spot fx brokers. thats the main reason i want to know if using spot charts are good enough to trade futures.
 
Quote from Blinz45:

the main problem is that i use tick charts. futures have less ticks then spot and the bars take longer to form and i get in later. i hate time based charts. thats my real dilemma i get better looking charts with spot charts due to a higher tick count but i get the headache of having to deal with spot fx brokers. thats the main reason i want to know if using spot charts are good enough to trade futures.
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Why not just change the duration of the tick charts?

I use tick charts as well for my spot and futures chart for the Euro.
 
This question has been debated a million times here on ET. Do a search and you will get some reading material for your morning constitutional.
 
Quote from Rhody Trader:

While that might be the case for other futures, it is most certainly not for the financials. Forex futures prices account for the interest carry involved. Basically, they are priced (through arbitrage) so that one couldn't earn an excess return by holding opposing spot and futures positions. That's why the spread narrows between spot and futures as the later approaches expiration.
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So there is a slight inaccuracy in my statement, but it is still a future price. (the price with interest in the future.)
 
Quote from Blinz45:

thanks for the responses so far. the main reason i want to trade futures is because i've been through the retail broker bs many times. my current broker is IB and they are an ecn style forex broker but i hear bad things about them. i could just use the IB forex feed and trade futures off that that. i'm a scalper so the correlation will be important. i only trade the eurusd and usdjpy. i was wondering whether those are good to trade off based on tick data from spot.
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You wanna scalp futures off the spot chart!?:confused: Are you kidding?

As others have mentioned, you can probably get away with trading longer time frames, but scalping...I said it once, I'll say it again...WATCH WHAT YOU TRADE!
 
your wasting your time.

the futures against the spot or forwards are arb'd to death.

this was one of the first arbs to go with electronic trading.

people are obsessed with risk free arb trades.

THEY DO NO EXIST ANYMORE.

take a view on the currency in question and trade it like everybody else.
 
Quote from THE-BEAKER:

your wasting your time.

the futures against the spot or forwards are arb'd to death.

this was one of the first arbs to go with electronic trading.

people are obsessed with risk free arb trades.

THEY DO NO EXIST ANYMORE.

take a view on the currency in question and trade it like everybody else.
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My trading has nothing to do with arbitrage. When i say scalp i dont mean 1-2 pips off chart imbalance. i mean take 5-10 pips on a genuine move. I have a few custom indicators that don't work that well on futures charts thats my biggest problem. futures charts are either way too early of just very late.
 
Quote from Blinz45:

My trading has nothing to do with arbitrage. When i say scalp i dont mean 1-2 pips off chart imbalance. i mean take 5-10 pips on a genuine move. I have a few custom indicators that don't work that well on futures charts thats my biggest problem. futures charts are either way too early of just very late.
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what other people are saying is this: that's just impossible, they trade exactly in the same way. They are arbed to death.
 
Quote from Blinz45:

the main problem is that i use tick charts. futures have less ticks then spot and the bars take longer to form and i get in later. i hate time based charts. thats my real dilemma i get better looking charts with spot charts due to a higher tick count but i get the headache of having to deal with spot fx brokers. thats the main reason i want to know if using spot charts are good enough to trade futures.
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Spot forex does not quote trades -- the trades are just not available in the data stream. Only bids and offers are quoted. What you typically see depending on your charting software is the midpoint of the best bid/ask at any given time. Every time the bid or ask levels change for any reason you get another "tick". There is also no trade volume with spot. With futures every tick is a real trade (with possible variations due to quote snapshots or aggregations). With spot a higher level of ticks is actually showing a higher level of quote (bid or offer) changes, which is not necessarily indicative of any trades going on. Also, spot is not a localized market -- trades can be happening at any time between counterparties somewhere in the world that may not show up in any way in your quotes.

Most of this may not matter depending on your approach, but it may be important to bear in mind that the information contained in spot ticks is not indicative of trades. Still, when bid/ask midpoints move from one price to another, you can trade with the quotes at the new level, and whether or not anyone else has traded at the new level may be irrelevant (and also cannot be known).
 
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