I don't understand the benefit in investing in Forex when you can invest in Futures.
1) In Futures you pay no spread. So you don't pay a pip to enter and then exit a trade. Instead you pay a small commission just like for trading stocks.
You seriously don't think there's a spread in futures or equities? Any liquidity takers in such markets are paying the spread. And please don't tell me you'll be a 100% passive liquidity provider in every single scenario.
2) Maybe the leverage is higher in Forex, I am not sure, but truthfully the higher the leverage you actually use the more likely you will lose your money.
3) Real data volume that is the same for all Futures traders from all brokers. Whereas at any given time the price of for example the EUR/USD can be different on a chart depending on what Forex broker you are trading with.
2) Both spot and futures markets have sufficient leverage available for a trader to blow their brains out.
3) Currency futures only represents a fraction of the total currency and currency derivatives market volume. It's a nice way to infer what the volume levels are like on spot/forwards/swaps/etc.. but it's just as much of an incomplete picture as the volume feeds you get from spot brokers (tick volume.) Further, the pricing being different might be true, but the prices are typically not crossed (unless the feed provider likes getting arbed to death,) and variances are just different feed's spread.
Speaking of spread differences, ever compare the futures contract spreads for AUD/NZD with spot? Or the pound crosses between spot and futures? Really, outside of the few major pairs, futures can be both illiquid and have much wider spreads.
4) Futures brokers are not trading against their own clients or keeping their clients trades within house. Instead all trades go to the same place so even if I lose my internet connection if I have a stop and target set, they can still be filled during my down time.
5) No strange spikes. You will obviously have movement during a news report but if no report has happened, you don't get a random spike appearing on a future chart that stole your money by hitting a stop and then going back to normal. I will say, you should trade during normal market hours since there is a wider difference between the bid and ask after hours and more stop hunting.
4) What? Firstly, on a fair price feed, who cares who the counter party is? Second, most common retail FX platforms do not require your computer to actively trigger stops; they have server-side stop loss orders like you'd find in other markets. Where is this FUD coming from?
5) This is a problem if your broker is shady... and there are a lot of overseas, unregulated, brokers out there. However, assuming you're comparing a half decent spot broker with futures, then when liquidity is pulled in spot it is often pulled in futures as well.. spreads widen on both fronts during news or during less active times of day.
I get it, you're a futures guy.. your other posts make that clear... but just because you went one way instead of the other doesn't make one product superior. There's some advantages that futures have over spot, and some that spot has over futures.. Pick the shade of gray that best fits your needs...
