I don't trust myself not to leverage up to 100-200x or trying endlessly to discover a trading method that would utilize that type of leverage well. Also, I take the blame now when the market moves against me, not get paranoid it was the "crooked forex company" or some type of HFT in the Depository Trust & Clearing Corporation.
I enter good sized market orders with very loose staggered market stops in sets of three, but keep very tight mental stops, bailing if they hit.
Just started with futures and took consecutive losses from getting stopped out at first but kept trying and it was worth it. Once my position is established the stops are moved up and most of my "trading" time is spent obsessively debating where they should be. It's agonizing but some good profits in wheat and corn shrank down to just above break even because I just don't know how else to get that big weekly (hopefully someday monthly) gain in value otherwise.
The only good returns I've had are in gold, silver, palladium, wheat and corn. They were from the surviving orders made in march after the sharp declines reversed. Contracts were progressively added while risking under 1.5% of the bankroll in stop loss at a time.
I want to start doing a lot of sim trading with limit orders to try and be a profitable day trader who is not dependant on big swings - but I'm pretty overwhelmed as is and not sleeping well.
Next big move on the radar is a few months out to buy gold, silver, oil, nat. gas futures if the markets react one way or long bond / short Australian and New Zealand dollar futures if they move the other.
Someone wrote that financial firms put their weaker minded traders on commodity futures and that suits me just fine as a beginner who doesn't scalp and isn't yet profitable with day trades. I haven't wanted to talk about my trading because I'm not sure it will hold up in the long term as is - but it helps to write this out.
greatly minimize / reduce the nastiness? i would think so, yes.
there are also accounts that are commission-based rather than spread-based. so one could certainly mitigate most of my issues with forex by doing as you suggest.
there is still the issue of market-transparency, since you will never get a total EURUSD price feed, so to speak. you'll never know the sum-total of all volume at the corresponding price-levels for a given forex pair. it's just not a centralized market system. for some that is a good thing; for others, it's a scary thing.
With regulation in place of the manner in which securities orders are placed, you would assume that the majority of orders are placed properly. However, you correctly assume that there will be some orders placed for the benefit of the broker/dealer. The point is simple though, regulation will weed out a good portion of front running, while no regulation does nothing to address the problem.
So I could summarize your thoughts in order of importance like this:
· Many afraid of broker/dealer manipulation of data, offers and trades; fraud.
· Forex market is not centralized; hence there is no volume information.
· Costs, commissions are lower if you trade futures.
I also see the advantages of futures trading derived from the above things. So I also might consider trading futures rather than forex, or besides forex.
There are some things come to my mind – please clear it up if you can:
Please be aware of that I am beginner, and if I say something that seems I contradict you, it is not intentional and not an offence. It simply means I do not know, or would like to know the thing better.
Position sizing scalability
I suppose it’s not so easy to very adaptively size your positions with futures contracts; if you trade more than 10 contracts, it is easy, you can increase or decrease your position size by fragments of your starting position size, so you can set your position size accordingly if you apply fixed fractional pos. sizing, or you want to increase your bet size by 10-20%.
However, when you trade only 1 contract, what you can do? Raise you position size by 100% or decrease it by 100%, i.e. 2 contracts or no contracts at all.
If you trade forex, and you use a mini or micro account, you could size your positions very adaptively; raise or decrease it by 6 or 12% for example…
Based upon what you can read about this on Wikipedia or Investopedia, I think front running is either or both of the following:
· It is impossible, since HUGE amount of money trades on the forex market…
· It absolutely doesn’t matter if the broker applies front running techniques (if he can), because it’s not you who would cause the move that the broker would take advantage of, and you are only interested in that the price moves, for whatever reasons. You evaluate the movements, place your orders, and get your fills. It doesn’t matter if a big movement is with front running or without – the price moves in either case.
How does this come to forex trading? You can use limit orders also at forex trading. And if use limit orders, your costs are the same as if you could use market orders, aren’t they? So I don’t understand your point.
If it wouldn’t be legit, arbitrageur algorithms would kick in. So it must be legit, mustn’t it? If the broker alters the price data afterwards, it is an other thing, but that possibly could be avoided by choosing a big commodity futures broker who also offers forex.