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Forex or Futures Trading

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  #1 (permalink)
Darwin/Australia
 
Experience: Advanced
Platform: NinjaTrader
Broker: ninja
Trading: dax,6e
 
Posts: 26 since Jun 2009
Thanks: 11 given, 19 received

Hi,
I would like to get feedback on whether it is better to trade the forex or the futures markets. I have found in the past with forex trading you are really trading against SCAM brokers who steal your money, (their buisness model is designed this way). It seems you are placed in a sand pit and constantly preyed upon by these brokers. Common tricks are, if you are in profit the spread will widen to take your money, stop hunting is rife and slippage the norm. If I am correct in my thinking the futures markets have a centralised exchange, hence you are no longer trading in a sand pit, however there are restrictions.

Could I please have feedback regarding what markets to trade and what brokers allow for profitable trading.

thanks,
trader

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  #2 (permalink)
Vancouver, BC
 
Experience: Intermediate
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I investigated getting into forex trading a few months ago as well and came up with much the same conclusion that you described in your post. There appeared to be very few reputable brokers, so I decided to stick to stocks myself.

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  #3 (permalink)
Perdido Beach, AL
 
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You want to steer clear of brokers who are not an ecn. Otherwise you are in many cases trading against your broker. Guess who wins at that game...

Go with what you know. If you are achieving your goals with stocks...why change. One of the most deceptive things about Forex is the use of high leverage and the idea that you can make huge gains by just using leverage. Some brokers even offer 400:1 leverage. If I was trying to come up with a system to blow up your account I don't think I could come up with something more ingenuous than 400:1 leverage. Big leverage can lose as fast as it wins... There are a few forex traders on this board. Look up Poocher, Sefstrat, and I know I am forgetting a few others....

Overall though a market is a market. Support, resistance, price movement - are the same with little variation in the different markets. Some markets have a much bigger swing than others though. Look before you leap. A lot of good info on this forum.... good luck


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  #4 (permalink)
Darwin/Australia
 
Experience: Advanced
Platform: NinjaTrader
Broker: ninja
Trading: dax,6e
 
Posts: 26 since Jun 2009
Thanks: 11 given, 19 received

Thanks for the response guys, however i am still suspect of ecn forex brokers. Since the data is unregulated, i believe that not only are they making profit from the spread and commission they are still manipulating prices and spiking data through stops. I am of the belief that forex trading cannot be done profitably long term by small traders. The conditions for large account holders are different from small account holders. it appears the whole business model is grand theft against small traders. Have you ever wondered how MB futures is making their money in forex, is it really from commission, i think small traders are playing against a casino, in this case MB forex and the like are using loaded die, unfair decks etc. Unless forex data can be regulated through a centralised exchange you can never have a level playing field.
thanks,
Andreas

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  #5 (permalink)
Paris, France
 
Experience: Advanced
Platform: Market Delta & Ninjatrader
Trading: ES
 
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Posts: 2,565 since Jun 2009
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I asked a similar question on ET and I also asked it of some forex traders and a retired pit trader.

My conclusion is that if you're trading a size the futures can handle, it's safer to trade futures.

Advantages of Forex:

- you can trade micro lots which means you can trade just $1 and risk a few cents. This is useful to go from simulator to real money trading and slowly build up your size. for those without discipline problems this may not apply (not necessary)

- you can trade larger size than currency futures. this is probably not needed for euro but for some of the other currency pairs the futures may not have enough liquidity

If you go Forex, get a reptuable broker with 1 pip spread. Oanda was recommended to me by several forex traders. You can open an account with $500 maybe even less.

I decided to stick with futures and work on my discipline problem of wanting to cut winners short.

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  #6 (permalink)
Darwin/Australia
 
Experience: Advanced
Platform: NinjaTrader
Broker: ninja
Trading: dax,6e
 
Posts: 26 since Jun 2009
Thanks: 11 given, 19 received

Thanks for your reply Cunparis. I have heard horror stories about oanda, they are basically a bucket shop market maker, and are not interested in profitable traders. I am just wondering if futures brokers can play the same tricks say with instruments like the 6E, ES etc in stop hunting, increasing the spread etc. Is the data feed from the cme untainted in the hands of brokers like AMP.
thansk,
Andreas

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  #7 (permalink)
Paris, France
 
Experience: Advanced
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traderandreas View Post
Thanks for your reply Cunparis. I have heard horror stories about oanda, they are basically a bucket shop market maker, and are not interested in profitable traders. I am just wondering if futures brokers can play the same tricks say with instruments like the 6E, ES etc in stop hunting, increasing the spread etc. Is the data feed from the cme untainted in the hands of brokers like AMP.
thansk,
Andreas

You're welcome, glad I can help with your decision.

I know several successful traders using Oanda to trade the Euro and they recommend it. If Oanda were that bad I think they'd know. There are brokers that bad but I do not think Oanda is one of them. It also probably depends on your trading method. The traders I were referring to trade for big runners (50-100 ticks) and use wide stops (around 30 ticks). They're often in a trade for an hour or more. I do not think the forex brokers are powerful enough to run stops that extreme, other traders would take advantage of them doing that.

If you are scalping for a few ticks with a tight stop then the Forex brokers could push it a few ticks and stop you out. For scalping I'd definitely recommend Euro futures.

For futures the brokers process orders, they are not otherwise involved. It's a level playing field, they all use the same data source (the exchange, such as CME for most currency futures). Currency futures is a level playing field. The pro's who are not on the floor will have access to the same data as you, although they may have lower margins & commissions if they are members.

My advice is that traders who want to do currencies focus on the Euro and master that before trading something else. The british pound would be my second pick. Both are very liquid. No need to do anything more exotic unless one has a setup which doesn't occur very often.

In my trading I have found that trading Euro futures is not much different than trading other markets as far as logistics go (placing orders, stops, etc.). I've used the same setups on 6E & CL for example. Exactly the same.

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  #8 (permalink)
Elk River, MN
 
Experience: Intermediate
Platform: NinjaTrader
Broker: Amp Futures/Zen-Fire
Trading: ES
 
Posts: 30 since Sep 2009
Thanks: 7 given, 60 received

I highly recommend JadeFX. No dealing desk ECN type broker. EURUSD spreads as low as .1 and usually in the range of .4 to .6. They charge a .50 commission per mini lot so that makes an equivalent spread of under a pip.
The commission is how they make money. They don't touch the spread.

Also, they don't limit you on how close you can place a stop to the current price like most other brokers do.

And finally, they still allow hedging.

I switched to them after trying a couple of other so called low-spread brokers.

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  #9 (permalink)
Darwin/Australia
 
Experience: Advanced
Platform: NinjaTrader
Broker: ninja
Trading: dax,6e
 
Posts: 26 since Jun 2009
Thanks: 11 given, 19 received

Thanks Johnthom, could i ask you what data feed are using to trade ninja and forex. Do you encounter much slippage with this broker. I also noticed that they are not regulated at all.
thanks,
Andreas

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  #10 (permalink)
Wrocław, Poland
 
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J0hnth0m, can you use JadeFX with NinjaTrader?

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  #11 (permalink)
Elk River, MN
 
Experience: Intermediate
Platform: NinjaTrader
Broker: Amp Futures/Zen-Fire
Trading: ES
 
Posts: 30 since Sep 2009
Thanks: 7 given, 60 received

Sorry I should have made that clear. I use metatrader to execute my trades on this broker. I still use Gain on Ninjatrader for additional charting and because I don't like programming indicators for Metatrader.

The reason they can support hedging is precisely why they don't belong to regulatory agencies, which is not cheap and that cost is passed on to the trader anyway. They do limit leverage to about 200:1 which is more than reasonable. All in all I like their business model.

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  #12 (permalink)
Panama!
 
 
Posts: 44 since Jun 2009
Thanks: 1 given, 24 received

personally id trade futures unless $$ is a factor then trade FX but make sure you're using an ecn MBTrading ($400 acc min) or ducksacopy in switzerland (5K acc min) are both good choices.

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  #13 (permalink)
San Diego, Calif. USA
 
Experience: Intermediate
Platform: ninja trader
Trading: EUR/USD
 
Posts: 33 since Oct 2011
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I actually switched from futures to forex because I could get paid to place trades. I am a scalper and place A LOT of trades going for very tiny moves over and over again. MB trading pays me a dollar per hundred k, so the net effect is that I pay NO commissions.

The flip side is that the leverage is way better in futures, so if you are comfortable trading big lots, your margin will be far less in futures (approx $500 per 125K --on Mirus--vs. about $2500 in forex for $100k)...

Good luck!

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  #14 (permalink)
NY, NY
 
Experience: None
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traderandreas View Post
Hi,
I would like to get feedback on whether it is better to trade the forex or the futures markets. I have found in the past with forex trading you are really trading against SCAM brokers who steal your money, (their buisness model is designed this way). It seems you are placed in a sand pit and constantly preyed upon by these brokers. Common tricks are, if you are in profit the spread will widen to take your money, stop hunting is rife and slippage the norm. If I am correct in my thinking the futures markets have a centralised exchange, hence you are no longer trading in a sand pit, however there are restrictions.

Could I please have feedback regarding what markets to trade and what brokers allow for profitable trading.

thanks,
trader

I would recommend forex trading. The spreads on ECN forex brokers are much less than futures. It is also better for smaller traders because of the no minimum lot margin rule in forex.

Edit...I see this post is from 2009...

"A Jedi's strength flows from the force."
-Yoda
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