Why does forex have a bad rep? | Currency Futures


futures.io - futures trading strategies, market news, trading charts and platforms


Currency Futures


This subforum allows you to find traders that trade Currency Futures. You may post about anything to do with trading currency futures in this section




 

Why does forex have a bad rep?

  #3 (permalink)

Sydney, Australia
 
Trading Experience: Intermediate
Platform: Sierra Chart, IRESS
Broker/Data: IB, IQFeed
Favorite Futures: ES, SPI, ASX stocks, options
 
Posts: 399 since Jun 2015
Thanks: 169 given, 460 received


Most of the gambling commentary comes from the fact that you can get an insane amount of leverage plus a lot of the retail brokers are bucket shops offering "nil" brokerage who take the other side. The low perceived cost of trading plus the excitement of the markets attract gamblers hence the perception.

Having said that, ECN is good but the real issue is if you trade short term you have absolute zero idea of order flow (which is level 2) so you are at an extreme information disadvantage. FX is not just used for speculation, a lot of the flow is from actual business related transactions. For example, if Big Company Co. wants to exchange 1b USD to EUR, they can do it at any time and at whatever price they want to and you would have no idea when/where/why.

Considering you can get a more complete set of information trading futures such as the e-mini's, I see no reason to trade spot. If the reason you trade spot is because you only have $500, then you shouldn't trade at all until you add more zeros to that number.

Not sure about spot FX and FX Futures, I think there was a thread here talking about which one leads which but there is still an information disconnect I think as it is still two separate "markets" which will influence each other.

Visit my futures io Trade Journal Reply With Quote
The following 2 users say Thank You to PeakGrowth for this post: