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Trading FX using FX Futures
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Trading FX using FX Futures

  #1 (permalink)
Elite Member
Cairns Australia
 
Futures Experience: Beginner
Platform: MC,NT7
Broker/Data: Dukascopy
Favorite Futures: FX
 
Posts: 51 since Dec 2009
Thanks: 96 given, 9 received

Trading FX using FX Futures

Apparently there is a tradable relationship between FX Futures and FX, where Futures are used for entries on FX. I haven't looked into it yet but its on my list. Has anyone played with this combo? What is the basic principal?
Thanks

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  #2 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
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Yes and no, works on the euro but not really well on the yen or cad and the gbp is questionable....follow them in real time.

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  #3 (permalink)
Trading Apprentice
Nashville, tn
 
Futures Experience: Beginner
Platform: ninja
Favorite Futures: currency futures
 
needpips's Avatar
 
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kbit View Post
Yes and no, works on the euro but not really well on the yen or cad and the gbp is questionable....follow them in real time.

Dont think it works on the pound at all!

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  #4 (permalink)
Elite Member
Italy (IT)
 
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LukeGeniol's Avatar
 
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I have used the futures data to trade forex spot in the past, EUR and GBP, the price is almost the same, sometimes differs of some ticks , but the range is the same. I used it to do volume analysis and it was enough useful. I don't know what is your purpose for using the futures data.

Take your Pips, go out and Live.
Luke.
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  #5 (permalink)
Elite Member
Toronto, Canada
 
Futures Experience: Advanced
Platform: NinjaTrader, MT4
Broker/Data: Amp/CQG, Citibank
Favorite Futures: CL, GC, 6E, ES, TF, EURUSD, GBPJPY, AUDUSD
 
Beljevina's Avatar
 
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Stem1 View Post
Apparently there is a tradable relationship between FX Futures and FX, where Futures are used for entries on FX. I haven't looked into it yet but its on my list. Has anyone played with this combo? What is the basic principal? Thanks

I use the mix of 6E and EURUSD all the time. Marking key levels like the open/closes/ previous day's highs/lows and resistances/supports are high likelihood areas of reversals in either pair; and if one reverses, so does the other. (Volume) Points-of-control are also quite helpful to me on the spot side. I am a VSA trader, and I use the volumes in both the spot and 6E to enter in areas of reversal. I have also traded GBPUSD/6B with the same cross-pair principles, although not nearly as much as with the euro.

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  #6 (permalink)
Elite Member
Cairns Australia
 
Futures Experience: Beginner
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osijek1289 View Post
I use the volumes in both the spot and 6E to enter

Are you using 6E Volume to trade FX or are you using broker supplied FX volume for FX?

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  #7 (permalink)
Elite Member
Toronto, Canada
 
Futures Experience: Advanced
Platform: NinjaTrader, MT4
Broker/Data: Amp/CQG, Citibank
Favorite Futures: CL, GC, 6E, ES, TF, EURUSD, GBPJPY, AUDUSD
 
Beljevina's Avatar
 
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Stem1 View Post
Are you using 6E Volume to trade FX or are you using broker supplied FX volume for FX?

I know it sounds confusing, but I use both - when both show stopping volume or a upthrust end, I am more confident in my entries. I may enter on my spot fx broker (via MT4) or via futures. I have a high confidence level in my spot fx volumes and am very comfortable applying basic VSA principles; although it is tick volume, and some like to dispute it's applicability, it works.

My MT4 liquidity provider is Citibank, one of the largest in the world with a robust client base, and a healthy tick volume, with a proper realtime feed back into MT4, something not all MT4 providers are able to deliver. (although the big names, using the MT4 BetterVolume indi can at many times be just as good for bar-to-bar differences that are key to VSA). Hope that helps somewhat.

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  #8 (permalink)
Trading Apprentice
NYC
 
Futures Experience: Beginner
Platform: T4
Favorite Futures: Oil, Euro FX future, Stocks
 
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osijek1289 View Post
I know it sounds confusing, but I use both - when both show stopping volume or a upthrust end, I am more confident in my entries. I may enter on my spot fx broker (via MT4) or via futures. I have a high confidence level in my spot fx volumes and am very comfortable applying basic VSA principles; although it is tick volume, and some like to dispute it's applicability, it works.

My MT4 liquidity provider is Citibank, one of the largest in the world with a robust client base, and a healthy tick volume, with a proper realtime feed back into MT4, something not all MT4 providers are able to deliver. (although the big names, using the MT4 BetterVolume indi can at many times be just as good for bar-to-bar differences that are key to VSA). Hope that helps somewhat.

Do you find volume in FX is of significance as that in Equity? As of now, I don't pay attention to FX volume at all due to it's misleading info. What do you think?

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  #9 (permalink)
Elite Member
Cairns Australia
 
Futures Experience: Beginner
Platform: MC,NT7
Broker/Data: Dukascopy
Favorite Futures: FX
 
Posts: 51 since Dec 2009
Thanks: 96 given, 9 received


osijek1289 View Post
I know it sounds confusing, but I use both - when both show stopping volume or a upthrust end, I am more confident in my entries. I may enter on my spot fx broker (via MT4) or via futures. I have a high confidence level in my spot fx volumes and am very comfortable applying basic VSA principles; although it is tick volume, and some like to dispute it's applicability, it works.

My MT4 liquidity provider is Citibank, one of the largest in the world with a robust client base, and a healthy tick volume, with a proper realtime feed back into MT4, something not all MT4 providers are able to deliver. (although the big names, using the MT4 BetterVolume indi can at many times be just as good for bar-to-bar differences that are key to VSA). Hope that helps somewhat.

Makes sense. Its nice to hear broker supplied volume having some relevence, but it probably depends on the broker.
I'd like to understand the relationship between 6E and EURUSD a little better. If FX is a network of banks and ECNs with a certain group of players, and 6E is a seperate group of players on a seperate exchange, how is it the two move together? What is the mechanical link and who is dragging whom about?

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  #10 (permalink)
Elite Member
Toronto, Canada
 
Futures Experience: Advanced
Platform: NinjaTrader, MT4
Broker/Data: Amp/CQG, Citibank
Favorite Futures: CL, GC, 6E, ES, TF, EURUSD, GBPJPY, AUDUSD
 
Beljevina's Avatar
 
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Stem1 View Post
Makes sense. Its nice to hear broker supplied volume having some relevence, but it probably depends on the broker.

Yes, broker's feeds on volume tick counts for spot fx can vary dramatically. The reasons for this are the huge vagueness and general avoidance with which volume is spoken about by various brokers. While it's easy to slag MT4 brokers, including the top 'brand names', they all have much mystification and general avoidance around describing the source of the volume tick data they echo back into whichever trading platform one is using (for spot fx). Many do not want to disclose bank(s) used, nor in any way describe does the volume include their own client base, and/or is the external bank feed an aggregate of multiple banks and so on. Tick volume size can vary by the order of hundreds between an offshore/non-western hemisphere broker (ie., Russian brokers) vs. one with a strong foothold in NA (ie., Oanda, FXCM, MB Trading, etc.) An extreme example is CMC markets who through their java platform do not even disclose volume for spot fx (and I believe stocks or other instruments) - I had only briefly tested CMC at one time, and frankly, lacking this data is just another way of stacking things against the ordinary trader, in favour of the house. (That's my polite response)

It's important not to get too hung up about the actual volume level in spot FX (with whatever decent broker feed one has), if VSA is being practised. In spot volume (as elsewhere VSA is being practised), it is the relational difference that one looks to, bar to bar, for whatever timeframe is being analysed. More ticks presumably brings a greater mix of client inputs and is generally healthier. I would classify VSA as one-third volume count dependant, but the remainder is the spread/height of the bar being studied, it's reaction, and where it has closed. One then interprets the chart stringing together all the likelihoods that are presented by these 3 major factors, and an overall picture of strength and intent is ideally built. As I mentioned before, basic support/resistance and other variables obviously need to be factored in (ie., sentiment, what are equities doing, fundamentals, news, etc.)


Stem1 View Post
I'd like to understand the relationship between 6E and EURUSD a little better. If FX is a network of banks and ECNs with a certain group of players, and 6E is a seperate group of players on a seperate exchange, how is it the two move together? What is the mechanical link and who is dragging whom about?

I'm afraid I probably would be making stuff up if I ventured here. We know that banks, hedge funds trade currency futures, and that they as do the spot traders have their reasons for choosing the instrument they do. Generally speaking, 6E will be within 20 pips of it's spot cousin; I believe that spread tightens as the contract end date approaches. I'm not sure either drags the other around to any great extent, although historically there may be examples that will disprove this. If anyone has a source for a more technical and scientific explanation of this relationship, I too would love to explore it.

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