I've decided to switch from day trading the ES to try going into currencies.
I currently have a Futures account with Dorman/zenfire in Chicago and have started trading 6A (Aussie Dollar) for practice.
Can anyone recommend spot FX brokers that work well with Ninja and have a decent data feed etc. Does anyone here trade currencies via futures market vs the spot market? I am still a little fuzzy about the pro's and cons of each and which one is better so all opinions welcome.
I tried MB with their feed on ninja and it worked great . Problem was no historical data and that didnt help me much . Word is that using the preffered platform your forex dealer provides ( usually free ) is best and thats what I use with FXCM and Oanda with very few problems .
You can use NinjaTrader for FX through Interactive Brokers, MB Trading both which require a paid NinjaTrader subscription. You can trade through GAIN Capital/Forex.com using NinjaTrader for free since we are paid direclty by them.
When trading FOREX you would want to check the following
(1) First check, whether your FOREX retail broker is a market maker operating a dealing desk or whether your FOREX broker offers access to an electronic communications network (ECN).
If your broker operates a dealing desk, he will be on the other end of your trades and you are trading against someone who knows exactly where you put your stops. I would not want to trade against a market maker, who has direct access to the interbank market and just marks up the price to his advantage before passing it on to me.
To check for this, you will have to look at spreads and commissions. The FOREX retail broker who trades against you will offer you an account without commissions and take a minimum spread of 2 to 5 pips depending on the currency pair. The ECN access provider will ask you for commissions and offer tighter spreads in return.
(2) FOREX is less regulated and you have a real counterparty risk. Currency futures are traded on CME, which is regulated via NFA and CFTC, the counterparty risk is virtually nil (compare: how many stock and future exchanges have not fullfilled their obligations during the last 100 years, as opposed to financial institutions). FOREX dealers do not keep your funds in a segregated account as required for futures brokers.
(3) If you trade against a FOREX dealer - market maker, liquidity may also be quite low, and you may get bad fills as well. So the only reasonable choice for me would be a FOREX broker providing access to an ECN.
(4) FOREX offers higher leverage than currency futures, but I would never use that, as it might blow up my account quickly.
I have an account with Interactive Brokers. They provide access to an ECN and charge commissions, but provide indirect access to some of the interbank markets. As far as I know, Gains Capital acts as a FOREX dealer, so I would exclude them from my list. Please correct, if this is false. However, IB offers no historical volume data, and this sends me back to currency futures.
I will stay with 6E and not switch to EURUSD, but this is my personal choice.
Last edited by Fat Tails; June 5th, 2010 at 01:52 PM.
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I thought MB and PFG were STP's, but I could be wrong. Regardless, MB was my first choice and I opened an account with them, but I wasn't able to set up electronic wires through BofA (BofA's problem, not MB's) and at the time you could only ach up to $5,000 in a 30 day period, so I never funded it and ended up opening an account at IB.
Best thing about IB is they are cheap, fills are good, they don't steal from you, and you can trade anything with them. Otherwise, they have $10,000 minimum account, $25,000 usd per trade minimum, and low leverage, which could be a problem for some people.
If you primarily day trade, I would recommend looking at cl before switching to currencies.
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