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FXCM hmmmmmmm.
- Thread starter Girlpower
- Start date
Quote from AAAintheBeltway:
Advantages of futures over fx:
1. Favorable tax treatment
Someone please correct me if I'm wrong, but my understanding is FX are 1256 contracts and get the same 60/40 treatment as futures.
Other than that, AAA, I agree with you so far. I've been demo'ing a few FX accounts for awhile now, trying to get a feel for the market. I just haven't seen enough evidence (yet) that I need to be in there.
Quote from saschabr:
I think there are over 100 online FX firms existing.
The business must be lucrative. And the money must come
from somewhere.
Ive not seen any where near that many, and out of the ones that are popular and with NFA etc there are only a handful. A number also do currency exchange for business' and then give out far poorer rates where they can command spreads of 500pips or more depending on how far down the "food chain" you are. Go to a tourist exchange shop and see how far removed the rates are there compared to actual rates. Over 1 trillion a day is exchanged in ForEx at one level or another.
One big disadvantage for me with forex is that since it trades 24 hours I would like a way to automate my stops without giving them to the broker. The only broker I have found that will allow for a connection to their system is FXCM, but they charge you for the software and then an extra $10 per side, effectively taking the spread to 7 pips (and the last time I checked its not available for the mini contracts).
The futures guys have the forex guys beat by a mile on electronic access to their systems (like IB's API). And maybe its because stops would not be as accessible to them that they don't give this type of access. Or maybe they are just behind the curve for now, I don't know.
Natalie....I think you are right on to be skeptical, as everyone should be of ANY product they trade. Learn as much as possible so that you can quantify the risks as much as possible.
Again, I am not making a blanket statement that forex is worse than anything else, but I agree with AAA that there are big limitations that traders need to be ok with. Its clear that guys like Rezo are doing fine with them.
The futures guys have the forex guys beat by a mile on electronic access to their systems (like IB's API). And maybe its because stops would not be as accessible to them that they don't give this type of access. Or maybe they are just behind the curve for now, I don't know.
Natalie....I think you are right on to be skeptical, as everyone should be of ANY product they trade. Learn as much as possible so that you can quantify the risks as much as possible.
Again, I am not making a blanket statement that forex is worse than anything else, but I agree with AAA that there are big limitations that traders need to be ok with. Its clear that guys like Rezo are doing fine with them.
Quote from AAAintheBeltway:
How dumb can someone be to give their counterparty their stop level? Sure, stops get run in the futures, that's why only fools follow the advice in all the trading books to "place your stops at natural support and resistance" or some other such obvious level.........
....I think it would be very foolish to trade fx without an independent source for quotes.....
....The margin on a futures contract is very low, too low in fact for the risk.....
Well, AAA, first of all thank you for calling me DUMB, but I think someone like you, who's takling about something he has no idea about, has more chances to be called DUMB. I would ask you to filter your lenguage for the future.
I am trading forex for quiet while, and I dont place single trade without putting stop. Stop is essential for this market, and if you dont know where to put the stop than - you're dumb again. You know broker will try to "shave" your stop, so be clever and put it in place where you cannot be "fished". I alsready have put a post here, mentioning that stop less than 40-50 pips almost has no chance to survive. I also posted my stops are of 50-100 and sometimes a bit more, targets 100-300 pips, so its really how you trade, and not what your broker does... Is that smething to prevent trader who knows how to trade from being successful? 5-10 pips which broker can go and fish for? If you have 40-50 pips, he cant stretch the price that much, and especially those registered and regulated ones (not that its that well regulated, but still - noone wants to get reported. There was such case on forum, and FXCM posted to turn to them and in case there was no such price in iterbank and they find in unjustified, they would compensate the person. Here's the post http://www.moneytec.com/forums/_showthread/_s-/_threadid-3634).
So, my friend, if you dont know what you're talking about, and still posting about it with such great confidence, you will be the one looking a fool. Sorry, but thats the way I see it. I always put stops, and there were maybe 5% of my trades when I could say I was suspicious of being "shaved". As I said, its part of business, and you can do nothing with it. The only thing you can do - be smarter, but not a smart ass.
About the independent sourse for quoted - yes, its helpfull.
Margin - agree. I dont use more than 1:4 margin for trade. For ex. 50k acc - 200k contract per trade. That is enough for me to gegerate nice returns.
Sorry for such post, but you literaly called me dumb, so...no h.f. my friend.
Quote from izeickl:
Ive not seen any where near that many, and out of the ones that are popular and with NFA etc there are only a handful. A number also do currency exchange for business' and then give out far poorer rates where they can command spreads of 500pips or more depending on how far down the "food chain" you are. Go to a tourist exchange shop and see how far removed the rates are there compared to actual rates. Over 1 trillion a day is exchanged in ForEx at one level or another.
There are that many. If you search in google, you will get
tons of names you probably never heard of, some of these
firms have only a handful of customers, for sure.
Quote from saschabr:
There are that many. If you search in google, you will get
tons of names you probably never heard of, some of these
firms have only a handful of customers, for sure.
Indeed there are many (not 100s) and this is why you go with a company who has a very large client base (if they start pulling tricks do you not think people would notice and complain? Losing existing and new accounts), and someone who is registered and also doesnt just have a answer phone for customer support. Yes there are people trying to rip you off, name me one business that doesnt have any. Many people get upset in this market because stops are placed at res/sup lines and they get upset that the price moves 3 pips over their nice little horizontal line on the chart.
Quote from DT-waw:
What is the average spread on CME Euro FX futures? On LiveCharts I see 1~6 pips for EC03U. Plus r/t commish can cost around 1 pip.
In futures we call them ticks, but I would say 1~3 would be about right. One tick is $12.50, about what a discount broker will charge but IB is only $4.80. Another thing to consider is you can post a bid or offer and often get hit, so you have zero slippage.