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Why do YOU trade commodity and index futures rather than forex?
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Why do YOU trade commodity and index futures rather than forex?

  #21 (permalink)
10 out of 10
Sacramento, CA
 
Futures Experience: None
Platform: None
Broker/Data: OX and DeCarley
Favorite Futures: Futures options
 
eudamonia's Avatar
 
Posts: 310 since Jul 2010
Thanks: 299 given, 424 received


Arpad View Post
How do you mean this, @eudamonia?

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, arenít they? So I donít understand your point.

Many of the most popular forex brokerages (Oanda etc.) do not allow limit orders.

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  #22 (permalink)
Breathe the body deep.
California
 
Futures Experience: Intermediate
Platform: FxTrade/Ninjatrader
Broker/Data: Oanda/MBT
Favorite Futures: Eur/Usd
 
Trankuility's Avatar
 
Posts: 269 since Jan 2011
Thanks: 54 given, 151 received

You're right about Oanda. But MBT uses Limits. I'm sure there are others that do too.

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  #23 (permalink)
Elite Member
Houston,Tx
 
Futures Experience: Advanced
Platform: NinjaTrader
Broker/Data: Mirus Futures/Zen-Fire
Favorite Futures: TF
 
ThatManFromTexas's Avatar
 
Posts: 2,302 since Feb 2010
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Arpad View Post
If it wouldnít be legit, arbitrageur algorithms would kick in. So it must be legit, mustnít 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.

My point is , with Forex, there is no central clearing house. You get a quote from a Forex dealer there is no way to verify that they quoted you the "Best" price in the market.

I'm just a simple man trading a simple plan.

My daddy always said, "Every day above ground is a good day!"
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  #24 (permalink)
 Vendor: www.thestrategylab.com 
Quebec, Canada
 
Futures Experience: Advanced
Platform: X-Trader, InfinityAT, Saxotrader
Favorite Futures: Emini ES, Emini RTY (TF), Crude CL, Eurex DAX, EuroFX 6E, Forex EurUsd and Hang Seng HSI
 
Posts: 32 since Mar 2011
Thanks: 40 given, 36 received

Hi Arpad,

Some traders to choose their trading instrument based upon the parameters or results of their trade strategy. Unfortunately, traders get married to a particular trading instrument instead of trading something that their strategy can exploit for more profits.

For example, pretend you backtested your strategy on many numerous trading instruments that are futures, forex and stocks. You then discover that your backtest results shows one particular trading instrument has outperform the profits of the other trading instruments you've tested your trade method on. Yet, the trading instrument that outperformed the others isn't something you really want to trade. Some traders will then allow their bias to get involved and decide to continue trading something they "prefer" versus trading something that produce the most profits.

Yet, in some cases there may be a time zone conflict that has impact on what we choose to trade. For example, I myself primarily trade the Russell 2000 Emini TF futures even though three other trading instruments rank higher on my backtest results of performance via my trade method. The reason why I don't trade the other trading instruments (Eurex Dax futures, Hang Seng HSI futures and Forex EurUsd currency) is because of a time zone conflict. Simply, I'm not willing to trade when I normally should be in bed asleep. Also, I've tried the "grave yard" shift trading and I was walking around looking like a zombie after a month of doing such.

Another example is that I have a trading buddy that's married to the Emini ES futures even though his strategy easily outperforms in backtest results for trading Light Crude Oil CL futures. Yet, he chooses to continue trading the Emini ES futures even though there's no conflict in his time zone schedule.

However, the above examples aren't the only reasons why some traders may decided to choose to trade one particular trading instrument versus another because I've learned that some traders chooses a particular trading instrument based upon available capital in their accounts, trading restrictions, peer pressure, diversification and so on.

Yeah, to take this one step further, some traders that are consistently losing have not tested their trade method on other types of trading instruments to determine if they would be a profitable trader in trading a different trading instrument.

P.S. I'm up early this morning only because of some heavy duty upgrades I need to finish on my backup computer.


Mark

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The following 3 users say Thank You to wrbtrader for this post:
 
  #25 (permalink)
10 out of 10
Sacramento, CA
 
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Favorite Futures: Futures options
 
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Trankuility View Post
You're right about Oanda. But MBT uses Limits. I'm sure there are others that do too.

I'm sure there are some other firms that are starting to use Limits; however, from my experience most of the major brokerages are market orders only.

Also the last time I traded with MB for forex the main thing I noted was that their commission structure was twice the price of trading the futures (think it was $10 a rt for a standard lot vs. $4.5 a rt for a single futures contract). Since I was trading the euro this was even more troublesome since the EURUSD is a $10/pip contract vs. the 6E being a $12.5 a tick contract. Other contracts like the GBPUSD vs 6B don't even compare. The average spread is 3-4 wide on the GBPUSD with most fx brokers. So at MBT for example you are looking at paying $40-50 rt vs. $22 for the 6B (2 contracts on the 6B is roughly equivalent). For anyone that trades more than a few times a day it is a major cost difference.

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  #26 (permalink)
Trading Apprentice
Los Angeles, California
 
Futures Experience: None
Platform: Ninja Trader
Favorite Futures: oil, gold
 
Posts: 34 since Mar 2011
Thanks: 0 given, 6 received

The reason I trade index futures is because I am comfortable with them. I've been trading them for a long time and I am happy with my success rate. Yeah I could probably learn to trade on the forex. But why change my ways if they're not broken?

Its a matter of simple time allocation. I try to spend as little time as I can on trading so that I can spend time doing other things I like to do. Making a change to forex means several months worth of focus and at least a year of getting comfortable with it. And I'm not getting any younger!

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  #27 (permalink)
Elite Member
Hungary
 
Futures Experience: Beginner
Platform: N/A
Favorite Futures: Forex
 
Arpad's Avatar
 
Posts: 34 since Dec 2010
Thanks: 145 given, 9 received

@wrbtrader,

Hi Mark,

Thanks for your insights!
I appreciate it.

Arpad

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  #28 (permalink)
Membership Revoked
 
Futures Experience: Beginner
 
Posts: 1,081 since May 2010
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Because my trading style is not working on forex.

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  #29 (permalink)
Membership Temporarily Revoked
Boston
 
Futures Experience: Advanced
Platform: Mt4
Favorite Futures: Fx
 
Posts: 16 since Apr 2011
Thanks: 0 given, 3 received

The great thing about these forums is that dialogue can lead to real understanding/knowledge. The truth is both futures and forex are fine instruments to trade. I trade both, if a setup is happening on the futures side I take the trade, if a setup is happening on a FX pair i'm watching I take the trade. There seems to be a lot of misconceptions regarding fx that are completely false on this board. First of all, many forex brokers are indeed registered, regulated entities with capital requirements and segregated accounts. Secondly, if you are trading at a broker that is straight through processing all orders and offering a conflict free trading environment you will have a fine place to execute your trading strategy. Many brokers are aggregating the price feeds from 10-15 of the largest banks/financial institutions from around the world which in essence is creating the best universal pricing feed. For more examples of why some think FX is better the futures...

Advantages Forex Futures
24-Hour Trading YES No
Minimal or no Commission YES No
Up to 500:1 Leverage YES No
Price Certainty YES No
Guaranteed Limited Risk YES No


Read more: Forex vs. Futures | Why Trade Forex? | Learn Forex Trading

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  #30 (permalink)
Membership Temporarily Revoked
Boston
 
Futures Experience: Advanced
Platform: Mt4
Favorite Futures: Fx
 
Posts: 16 since Apr 2011
Thanks: 0 given, 3 received



FXVIP View Post
The great thing about these forums is that dialogue can lead to real understanding/knowledge. The truth is both futures and forex are fine instruments to trade. I trade both, if a setup is happening on the futures side I take the trade, if a setup is happening on a FX pair i'm watching I take the trade. There seems to be a lot of misconceptions regarding fx that are completely false on this board. First of all, many forex brokers are indeed registered, regulated entities with capital requirements and segregated accounts. Secondly, if you are trading at a broker that is straight through processing all orders and offering a conflict free trading environment you will have a fine place to execute your trading strategy. Many brokers are aggregating the price feeds from 10-15 of the largest banks/financial institutions from around the world which in essence is creating the best universal pricing feed. For more examples of why some think FX is better the futures...

Advantages Forex Futures
24-Hour Trading YES No
Minimal or no Commission YES No
Up to 500:1 Leverage YES No
Price Certainty YES No
Guaranteed Limited Risk YES No


Read more: Forex vs. Futures | Why Trade Forex? | Learn Forex Trading

also free charting, no commissions, 24/5 trading...deep liquidity too...

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