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

  #31 (permalink)
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Also, this is why I was mad at not looking at the bigger picture - first image a clean chart and the 2nd is my take on it...it could be off, take the 1st chart and see if you can spot things I have done wrong on the 2nd chart

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  #32 (permalink)
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Deucalion View Post
If you insist Live trades from Friday, 60odd ticks....this is the execution chart...the structure and context charts are bigger 60M / 240M and daily. Look what I missed on the long side later on if I was paying more attention to the bigger 240M chart, tells you how little I know

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Be very careful with tick charts on spot, data is very bad for most providers. This is a paid DTN iQ forex feed.

It looks like scalping to you is 30 ticks as a minimum, using 1000 tick charts as a minimum.
I was thinking along the lines of 15, but that's why I
ask real traders what they do. So your stop would never exceed 30 ticks, regardless of the
value of your trading account? (You previously mentioned 2%.)

I also try different Auto Breakeven values. Maybe you have an opinion on that?

I always seem to come back to thinking about scalping. Reason: There are small moves everyday.
There are not big moves everyday. I also like (suffer from impatience I suppose) some activity, instead
of hanging around for hours for a move that might never come.



Patience is the art of concealing your impatience.

-Guy Kawasaki

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  #33 (permalink)
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stephenszpak View Post
It looks like scalping to you is 30 ticks as a minimum, using 1000 tick charts as a minimum.
I was thinking along the lines of 15, but that's why I
ask real traders what they do. So your stop would never exceed 30 ticks, regardless of the
value of your trading account? (You previously mentioned 2%.)

I also try different Auto Breakeven values. Maybe you have an opinion on that?

I always seem to come back to thinking about scalping. Reason: There are small moves everyday.
There are not big moves everyday. I also like (suffer from impatience I suppose) some activity, instead
of hanging around for hours for a move that might never come.



Patience is the art of concealing your impatience.

-Guy Kawasaki

Not sure how to respond to that - going for smaller targets forces cause me to pay less attention to the bigger picture, when I stop looking at the bigger picture, I lose the critical ingredient of market structure and context.

For me, that is a fatal flaw. Institutions don't look at small charts. Why should I? I do not believe in behaving like retail trader. So if I miss a hundred scalps, so be it. Missing smaller moves makes my performance under - optimised, in exchange for avoiding a catastrophic mistake. I know where I stand on that choice.

What makes me madder is missing the big picture. But that's me. Auto Breakeven - never used, dont need it.


PS - what's easier? scalping or swing moves. Human nature prefers easy in, easy out. Therefore scalping seems the easier thing to do, and therefore I must attempt the opposite.

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  #34 (permalink)
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Deucalion View Post
Not sure how to respond to that - going for smaller targets forces cause me to pay less attention to the bigger picture, when I stop looking at the bigger picture, I lose the critical ingredient of market structure and context.

For me, that is a fatal flaw. Institutions don't look at small charts. Why should I? I do not believe in behaving like retail trader. So if I miss a hundred scalps, so be it. Missing smaller moves makes my performance under - optimised, in exchange for avoiding a catastrophic mistake. I know where I stand on that choice.

What makes me madder is missing the big picture. But that's me. Auto Breakeven - never used, dont need it.


PS - what's easier? scalping or swing moves. Human nature prefers easy in, easy out. Therefore scalping seems the easier thing to do, and therefore I must attempt the opposite.

Thanks for the reply and your views on this.

- Stephen

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  #35 (permalink)
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Albuquerque, NM, USA
 
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What about using futures data to help with spot trading?

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  #36 (permalink)
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I assume you are talking about currency futures vs spot. Spot is much more accessible to the masses, but the futures are much more regulated, and offer a wide range of advantages over spot. don't even think about it if you got access to futures trading

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  #37 (permalink)
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Piperion's Avatar
 
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Actually this answers your question better, found it on the web:

*** Cash (Spot) Forex ***

No Central Exchange
This means that the market you're trading is the market your broker is making for you. This can lead to manipulation at times. There is a reason you hardly see volume in Spot Forex. It is because the real volume is very different than the "trillion dollar" volume you read about in all the marketing. The volume in this market is specific to the volume of order-flow from a specific broker, depending on how many accounts they have and the size of those accounts.

Non – Regulated
Slowly but surely, the Spot Forex market is being regulated. It is still one of the least regulated markets around which really can lead to manipulation and risk. Most importantly, if you run into a problem with your account, you really have little to no recourse as there is no regulating body that 100% regulates the Forex markets as much as other markets.

Broker Trades Against Client
Most but not all Forex brokers don't charge any commissions or fees. Instead, they get paid on the spread. What they do is constantly make a spread that ensures they will profit from your trades. When you push the button to buy or sell, they are on the other side of your trade. This means that your goals and their goals cannot be in alignment as you are trading against each other.

Counterparty Risk
When you are trading a semi-non-regulated market, you have to make sure you know exactly where your account is actually being held. Is it being held at a large bank or some account that the broker has rights to? There have been some disaster stories such as Refco not long ago and others that come to mind. Make sure you know where your account is being held and how safe it is.

No Commissions
You will see marketing for the spot Forex market that suggests "free trading"… If you believe that, I have some beautiful land in the desert for sale with a huge lake in the backyard and plenty of green grass, trust me… Anyway, most but not all Spot Forex brokers don't charge commission, they instead widen the spread in the real market, offer that artificially wide spread to you and get paid on the spread. Typically, a spread in a major pair might be 2-3 pips but can easily go as wide as 5–10 pips at times. At $10 a pip for most, this can mean that you are paying $20 - $30 to get into the trade. At that rate, commissions would be very cheap so don't be fooled when you see the "no commission" trading marketing material.

Huge Leverage
In Spot Forex, 400:1 leverage is not uncommon. You can open an account with as little as $500 dollars and begin trading. That is not ideal but it can be done. Don't forget, leverage can work for you and against you, so be careful.

Large Trends
The Forex market experiences large moves almost daily. There is always a currency pair trending strongly which means very frequent trading opportunity.

*** Forex Futures ***

One Central Market (CME)
The Chicago Mercantile Exchange (CME) is the home of the Forex Futures. The CME is one of the largest exchanges in the world and is very well capitalized. Some of the largest Banks use the CME Forex Futures to hedge currency risk. I actually began my trading career on the Currency floor of the CME and understand the power of a central exchange.

Transparent Volume
Because there is a central exchange, we can see trading volume and open interest easily.
Very Regulated (SEC, NFA)
The CME actually has double regulation. They are a futures exchange so they are under the watchful eye of the NFA and the SEC. They are also a publicly traded company so they have another level of regulation that comes with that.

Trades Matched on the Globex system
As with other Futures markets, the Forex Futures are traded in the trading pit but also on the Globex system. The Globex system is an order matching system much like NASDAQ for stocks. There is no broker on the other side of your trade. Instead, when you buy, your order is matched up with a seller like you, not a broker. This leads to a very fair and free market.

Trading Times and Markets
While people are trading the Spot market at all hours of the day and night, this is not so in the Forex Futures. The higher volume time to trade is the US day session from early in the morning until about 2pm CST. Outside of those times, there is a substantial drop off in volume, especially overnight. Also, while the CME has most of the Forex pairs that the Spot market has available, at this time, there is not enough volume to trade any Forex pairs outside of the majors against the Dollar. For example, trading the Dollar / Pound futures during the day in the US is fine. Trading that market or almost any other during the US night session may not be a good idea as there is so little volume.

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