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Any advantages trading spot over futures?
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Any advantages trading spot over futures?

  #11 (permalink)
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Hello,

here is a link to an article by Sam Sieden on the differences between spot and futures.

Lessons from the Pros - 08/30/2011 Issue - Featured Article: Spot Forex vs Forex Futures?

best regards.

-zhao

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  #12 (permalink)
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Is it reasonable to trade the Cash (Spot) Forex from
Sunday's afternoon (at the open) to Monday (morning) {EUR/USD only}?

So I'm thinking about a 12 hour time frame, each week. (I work full time so I
have no other free time to speak of.)

Is there enough liquidity?
Is this a bad idea for some other reason?
Is this 12 hour stuff pointless?

Thanks for any comments,

- Stephen

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  #13 (permalink)
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stephenszpak View Post
Is it reasonable to trade the Cash (Spot) Forex from
Sunday's afternoon (at the open) to Monday (morning) {EUR/USD only}?

So I'm thinking about a 12 hour time frame, each week. (I work full time so I
have no other free time to speak of.)

Is there enough liquidity?
Is this a bad idea for some other reason?
Is this 12 hour stuff pointless?

Thanks for any comments,

- Stephen

Sunday afternoon ( I am assuming US East coast time since you are from MA ) is a hard time to trade because ALL the futures markets are closed, and you would just be trading against the broker if you were trading spot forex.

London opens after midnight, and the US of course , Monday morning.

Also, the first few hours of the week are not the best time to trade. The markets are digesting all the information from the weekend and trading can be volatile and slightly more random than usual.

Math. A gateway drug to reality.
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  #14 (permalink)
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traderwerks View Post
Sunday afternoon ( I am assuming US East coast time since you are from MA ) is a hard time to trade because ALL the futures markets are closed, and you would just be trading against the broker if you were trading spot forex.

London opens after midnight, and the US of course , Monday morning.

Also, the first few hours of the week are not the best time to trade. The markets are digesting all the information from the weekend and trading can be volatile and slightly more random than usual.

Thanks a lot. It sounds at least possible to trade from midnight into the morning (maybe 8 AM).
I found out about a week ago that NinjaTrader offers MarketReplay data for the 6E (and a number of
other futures). I just e-mailed them to find out if they offer Cash (Spot) Forex EUR/USD data.
That would make things a little simpler. I must do better in Replay.

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  #15 (permalink)
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stephenszpak View Post
Is it reasonable to trade the Cash (Spot) Forex from
Sunday's afternoon (at the open) to Monday (morning) {EUR/USD only}?

So I'm thinking about a 12 hour time frame, each week. (I work full time so I
have no other free time to speak of.)

Is there enough liquidity?
Is this a bad idea for some other reason?
Is this 12 hour stuff pointless?

Thanks for any comments,

- Stephen

Just look at the price action and judge for yourself. I personally don't think it's worth it, the price action is not the best.
You can of course trade spot FX and the spreads are not that bad, you will get filled without any problems unless you are trading millions... - I've done it... but I don't think there are any big players active so beware of the chop.

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  #16 (permalink)
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TheSeeker View Post
Just look at the price action and judge for yourself. I personally don't think it's worth it, the price action is not the best.
You can of course trade spot FX and the spreads are not that bad, you will get filled without any problems unless you are trading millions... - I've done it... but I don't think there are any big players active so beware of the chop.

Thanks. I would rather have another instrument to be involved with, but that isn't likely near term.

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  #17 (permalink)
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This is a bit of dead thread but I am going to question the so-called accepted "facts" about spot. Namely -

Broker/dealer manipulation
Stop hunting
Spreads
Inconsistent data
Lack of transparency

Fat Tails posted somewhere about a week ago a statement about 6E action versus spot. I am going to post what I did next with respect to Euro only, for now.

I compared (visually only) data from FXCM, DBFX, PFG for spot euro with 6E data from DTN, PFG and Rithmic. The comparison was done on tick charts, range charts, minute charts for all. On 2 platforms - Ensign Windows and Ninja 7 running on a 64bit 16GB Intel Sandy Bridge i2600K machine with plenty of mojo (100MB fibre optic connection with dedicated gigabit router with average ping speed to Chicago severs of 19 - 27milliseconds)

As far as actual data feed is concerned (not fills and stops and entries), I was surprised to see more consistency in spot data across the board, less spikes, fewer "tails" and more "bodies" on candles in spot. It was the 6E that was more inconsistent in the feed itself, with inexplicable spikes. The patterns and waves in spot "looked" more consistent that one usually finds with deeper liquidity instruments.

Quality of feed for 6E is consistent between different providers, likely because they come from one source - the CME. Whereas, there seems to be greater difference in feed from the spot providers.

Also, only the DTN spot feed was high quality compared to FXCM, DBFX & PFG in that it did not drop ticks when the euro sped up during news events.

Based on that I explored spot further, opening a live PFG account for forex. PFG, for instance is an ECN with rates from 12 inter-bank parties. It is therefore not running your stops because they charge an NFA commission for a trade rather than the old fashioned way of making money on the spread.

I have had zero issues with live fills with live spot with PFG. Then there is the issue of size, I want to play in the big boys league because I want to think like the big boys, rather than be in the small pond. That means spot and not 6E.

Many times it seems to me that 6E lagged (albeit fractionally and almost imperceptibly) the spot. But enough for me to remain convinced that I will no longer trade the 6E. Being a visual, discretionary trader, this fits well with me. I am more comfortable with spot already than I was with 6E.

And as far I can see, not regretting it so far. As I think there are ways to avoid all the pitfalls that everyone thinks about spot. It is not a recommendation, but simply an observation for my way of trading. Which is gauged by my actual live account performance metrics. And in that, spot is leading.

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  #18 (permalink)
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Deucalion View Post
...
Also, only the DTN spot feed was high quality compared to FXCM, DBFX & PFG in that it did not drop ticks when the euro sped up during news events.
...

What about if you use the DTN feed to fill your chart but your broker is PFG, when you place an order are you not afraid of the discrepancy that can occur between both entities. Say the DTN last price is 1.3000 and your broker 1.300?. How do you cope with that ?

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  #19 (permalink)
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This is a re-hash of what you said in the "Trading spot fx euro using price action" thread.

Maybe we can keep to that thread in the interest of not duplicating threads.

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  #20 (permalink)
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Nope, the difference is irrelevant to me (if it exists). Because I have chosen PFG whose quotes are superior being a multi party fx quote board, so its very accurate for fills.

The problem is with PFG data feed delivery for charting. How the ticks are delivered for charting, which is different from the actual price fills. So the difference might be off by a fractional pip on the fx quote.

And if I am off by even a pip (not just a fractional pip, but a whole pip) - like off by the fourth decimal and not just the fifth decimal, I am not scalping. So my targets are not degraded. A full pip makes no difference to me - not when you are going for swing targets and not 4 pips.

But like I said, I do not believe this is an issue in the first place. All of my charting comes from DTN - for every market, whereas all my fills are on the PFG ladder. If the marginal difference exists for any market (for fills), I can't feel a perceptible difference. And even it was there, so what if its off by a tick?

Traderwerks - yes, I forgot I had posted what essentially is two posts, but this is thread is a direct comparision of spt vs 6E - which makes this thread more relevant. And besides it was late at night - that's my my excuse

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