Thanks guys.

I raised the question simply because there has been a lot of talk about "I don't want to use a broker who trades against me". People cite that as probably the primary reason for not trading Forex.

Where personally, when I started trading Forex through MB Trading, I noticed zero effects or issues with them "trading against me". I opened the MBT Forex account so I could 1) learn more, and 2) use it for larger term swing trades on the Euro, while I maintained my primary Velocity account for my intraday trading.

I've used limit orders every time, usually placing a limit order @ the current offer and getting filled immediately. There has been no slippage, and there has been no bad spreads. In fact, the spread is almost always less than 1 pip.

Compare this to the futures market, I would have to trade the Micro EUR/USD (M6E) to offer a similar $1/pip risk. I still have no capability of buying into or scaling out of at less than $1.25/tick on M6E, whereas on Forex I could go as low as $0.10/pip. But that is fine, $1/pip is cheap enough.

So then compare the commissions, fills and spread. Futures commissions are much higher. Forex has clear advantage here, as the CME Euro is a secondary market with far less liquidity. On M6E in particular, the spread is enormously huge, often times 5 or 6 ticks.

The only thing left I can think of are: 1) Bad press by some Forex Dealers, like FXCM's recent bad press and $2MM fine from the NFA. This was a result of asymmetrical slippage. 2) Desire to trade a market other than currencies. Obviously if you want to trade an Index or Commodity, Futures are the way to do it.

But as the admin of the site, when new traders ask my advice, I'd like to see them position themselves for the most likely change of success. And I think that for some traders, especially less experienced ones, that means they should open a Forex account first, before a Futures account, so they can minimize risk during the learning process. If the CME Micro's were more liquid this wouldn't be necessary, but unfortunately that is not the case. The CME should really consider lowering margins and fees further on the Micro's to try to create more liquidity.

Mike

With the $1/Pip account, how much to you pay in fees round trip per trade?

With the $1/Pip account, how much to you pay in fees round trip per trade?

Let me go place a trade so I can remember I haven't placed a new swing trade in several days as I've been too busy.

MB Trading - Commissions

$0.42 per side, so $0.84 per trade. But this does not count the rebate they give you when doing limit orders, which is a discount of $2.95 per 100,000 lot. So after ten 10,000 lot trades I get a $2.95 rebate, or roughly $0.295 per trade rebate.

Mike

I guess it depends what you mean by "trading against you".

You probably think that when you place a trade, your broker puts that out onto the market and you get a fill when the order is matched against an opposing trader.

What really happens in forex when you place a trade is - nothing, nada, zip. The broker takes your trade and does nothing. by doing nothing they take on the risk. Hence "trading against you".

They know that most people will lose and therefore they aren't taking on an awful lot of risk.

If they take your trade to the market, they would just capture the spread on your entry & exit.

If they do nothing with your trade, they collect all of your losses. As most people lose, this is a lot more lucrative than capturing the spread.