forex or futures?

R

rory_h

I have alot of swing trading experience with stocks over the years and would like to transition to day trading sometime in the next few years. The problem is, all my money is in retirement accounts, so because of the 3 day settlement rule, day tradeing one of those accounts would not be practical, and i don't have 30k to open a margin account. So the question is, where can i dip my toes into the day tradeing world with a small account (2-10k), and not get them cut off because of the leverage and slippage! I need to be able to bet small to learn to stay alive. A demo account would be great, but at some point that's like playing poker with matchsticks:)
So it appears i need to chose between forex or futures..Any of you guys been down this road?
 
Quote from rory_h:
----my money is in retirement accounts.....
----where can i dip my toes into the day trading world.....
----I need to chose futures......
More...
For curiousity sake, go to the Velocity Futures website, click on "Open An Account", click on "IRA", read through the "fine print" and determine if you feel comfortable trading within a retirement account. You could also contact Millenium Advisors and ask which other firms they deal with for this. :cool:
 
like Vulcan Trader i'll suggest after a learning demo period - string length - open a live
account with at first a small amount of money, also agree on FXCM or Oanda

there's pros and cons for both fx and futures however while one can set one's own fx
leverage, for futures it's fixed, very high and o/n margin increases, fx doesn't increase

with enough margin/leverage one can trade the equivalent of a 6E futures contract but
at a higher margin - $125,000 futures contract, margin $500 to day trade 1 pip = $12.50
o/n $3,500
@ $12.50/pip, net 10 pips profit per day x 21 trading days = $2,625.00 a month as an
example
fx lends itself to day-to-day/s trading in part because it is a 24hr market so unless one
is trading with more capital 1 pip = $1.00 in a mini or $0.10 in a micro account plus the
stress level may be higher day trading
a note that after the May 6 'crash' day trading futures margins increased to $1,000 -
futures margins are first set by the exchange they trade at and individual brokers then
decide what amount they'll require from their clients

see these 2 threads for more discussion on the differences:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=172952
http://www.elitetrader.com/vb/showthread.php?s=&threadid=172655
 
Quote from Wallace:

like Vulcan Trader i'll suggest after a learning demo period - string length - open a live
account with at first a small amount of money, also agree on FXCM or Oanda

there's pros and cons for both fx and futures however while one can set one's own fx
leverage, for futures it's fixed, very high and o/n margin increases, fx doesn't increase....
More...

Now tell the newbie the most serious cons of forex, the fact for example that each broker spits out his own quotes where in futures that cannot happen and you are guaranteed a trade if limit price is exceeded.

This is why forex brokers can rip you off any time they want.
 
maybe i should have titled this thread "stocks, futures, or forex". Thanks Nazz for pointing toward Velocity. What i have learned,is that margin IRA accounts do exist at a few firms, mostly futures firms. That in effect, eliminates the 3-day settlement problem with a regular IRA account on stocks. At this point, I'm leaning towards IB for their diversity of trading, till i find my niche.
 
Forex:

Pros:
- Micro lots
- Variable lot size (at some places)
- You can trade as big or as small as you want. Want $0.01 per pip? No problem.

Cons:
- Unregulated
- Shady brokers
- Stop hunting
- Trading within the brokers' fake-liquidity pools with padded bid/ask offers rather than trading against everyone else
- Taxes. No one understands Forex taxes.


Futures:

Pros:
- Regulated, none of that shady stop hunting crap, and you're competing against all other futures players, not just your broker's customers
- Futures taxes are a piece of cake. It's one line.

Cons:
- You're forced into leverage. ES is $12.50 per tick, you cannot trade smaller than that. If you like currencies, there are currency futures, but they are like $6 or 7 or something per tick (I forgot how much cuz I don't trade them), which means you NEED a certain sized account to survive drawdowns.
 
You must log in or register to reply here.
Back
Top