"reasons I choose to trade in the spot market. "
- Thread starter cfets
- Start date
My guess is that retail trading with a truly good/ honest/ reliable retail spot FX firm is very much like remote prop trading with a reputable prop firm that has had professional risk management practices, in order to save the retail customers' time/ energy/ cost for managing some risks that could be encountered in retail trading futures. Just 2 cents!
Iâve seen the above type of observation before. This question arises: Is this âtruly honestâ etc fx retailer like the Unicorn, i.e., totally mythical, invented, and hallucinatory (a cousin to moonbeams and pixy dust), or is it more like the White Whale, actual (in Melvilleâs telling) but extremely hard time to find in the great forex sea. The answer? It doesnât really matter because the wannabe drawn to the forex sea wonât be smart enough to find the truly honest fx retailer, if it exists. And if, like the Unicorn, it doesnât exist, well, finis. Same result either way.
My theory is we retail traders should start trading spot forex Now with a fairly good firm for the aim of practically testing our strategy.
Retailer firms are competing with each other. A truly good one will emerge/ surface sooner or later.
As long as we can prove a strategy is profitable consistently (with the fairly good retail broker), we can Later easily switch to a better one in due course.
Another 2 cents.
"reasons I choose to trade in the spot market. "
Because I am stupid!
Sorry just feeling a little punchy! Seriously though, I have studied the pros and cons and I can't find justification for spot forex. Low dollar account opening- this is really bad IMO, causes many to blow out, unless you are trading mini lots. Commission/Spread is way higher unless you trade mini lots. Non regulated bucket shop BS. Free charts, who cares, it is built into the spread unless you just sim forever. Currency futures track hand and hand most times with spot forex and I haven't seen the spread widen during RTH, ever, only at night. Oh yeah, no favorable tax treatment either, unless things just recently changed. Unless you want to get your feet wet with mini lots don't do it. The increased leverage will wipe you out, period, unless you are a skilled pro which most aren't in spot forex. Sorry to rain on your parade, but it's the truth as I see it. Willing to hear rebutals.
Dan
Because I am stupid!
Sorry just feeling a little punchy! Seriously though, I have studied the pros and cons and I can't find justification for spot forex. Low dollar account opening- this is really bad IMO, causes many to blow out, unless you are trading mini lots. Commission/Spread is way higher unless you trade mini lots. Non regulated bucket shop BS. Free charts, who cares, it is built into the spread unless you just sim forever. Currency futures track hand and hand most times with spot forex and I haven't seen the spread widen during RTH, ever, only at night. Oh yeah, no favorable tax treatment either, unless things just recently changed. Unless you want to get your feet wet with mini lots don't do it. The increased leverage will wipe you out, period, unless you are a skilled pro which most aren't in spot forex. Sorry to rain on your parade, but it's the truth as I see it. Willing to hear rebutals.Dan
Observation 1: There is nothing particularly "mythical, invented, and hallucinatory" about, say, Oanda, MBT or IB.
Observation 2: They are not that hard to find in the vastness of "the forex sea". (Hey, nice metaphor!)
Observation 3: If someone can't make money trading with one of those retail dealers (and is not scalping), they will not make money trading currency futures either.
Quote from dandxg:
"reasons I choose to trade in the spot market. "
Because I am stupid!
Smaller account requirements in and of themselves aren't a bad thing. Larger leverage in and of itself isn't a bad thing. It isn't the low account minimums that cause them to blow out. Newbies who blow out because they misuse leverage or have no plan have nobody to blame but themselves. Those who can take it for what it is and learn something from the trading process can gain valuable training at a lower cost. Those who can see it for what it is and take advantage of the benefits of smaller lot sizes with regards to money management see it as a huge benefit, in particular with the brokers that offer very small lot sizes (less than 10K) such as IBFX and O&A.
That is a blanket statement and does apply to many retail forex shops but doesn't apply to some retail bucket shops. When trading small size this benefit really is positive in the customer's favor. Try trading $25K lots on IB and see how much your round turn costs in pips when you include your commish + spread.
This is the biggest problem with bucket shops imo and a very valid point. It's their game, their home turf and they can do basically whatever they choose, including shutting down your game if you start making too much money.
Good points.
Patrick
Dan,
As a loyal IB user who personally prefers to trade futures over forex (because I have spent the time to really get to know eur/usd futures) I still disagree with you wrt one bucket shop.
I would happily recommend that someone used Oanda on ultramini size to learn to trade forex. The conditions would be:
- dont be a fool who tries to trade news event (this sort of cleverness inevitably leads to disappointment when it proves anything but simple).
- don't try to scalp very small trades ... go for 12-30 points as a minimum winning trade size and do try to get wins between 2 and 3 times your losses (if they are not then u are going to have to have spectacularly good win percentages).
- assess the risk of each trade correctly (say, risk <1% of your current trading account with the risk = size*(stop+slippage+spread) so that issues of excessive leverage don't bite you.
- scale up slowly as you master it.
When your size gets bigger then consider moving to futures.
As a loyal IB user who personally prefers to trade futures over forex (because I have spent the time to really get to know eur/usd futures) I still disagree with you wrt one bucket shop.
I would happily recommend that someone used Oanda on ultramini size to learn to trade forex. The conditions would be:
- dont be a fool who tries to trade news event (this sort of cleverness inevitably leads to disappointment when it proves anything but simple).
- don't try to scalp very small trades ... go for 12-30 points as a minimum winning trade size and do try to get wins between 2 and 3 times your losses (if they are not then u are going to have to have spectacularly good win percentages).
- assess the risk of each trade correctly (say, risk <1% of your current trading account with the risk = size*(stop+slippage+spread) so that issues of excessive leverage don't bite you.
- scale up slowly as you master it.
When your size gets bigger then consider moving to futures.