Thanks all for the reponse..Interesting! Looks like most think currency trading to be a rigged game..
Zoeth - Yeah..The zero sum concept intrigues me all the time, though I must admit I don't understand it fully. Will check the reference you mentioned..
You can successfully swing trade currencies through an ECN broker, but the advantages of using an ECN compared to trading currency futures are minor. Don't trade at all with a market maker and forget about day trading currencies, it's more effort and headache than it is worth. If you want to day trade, then trade futures. IMO, overall currencies are volative and erratic, while futures are volatile but still fluid, make sense?
Oh yeah.. I also forgot to mention that you can get completely screwed when they do rolloever every night.. something that doesn't occur with futures. Not that many poeple consider that when they try to do swing trades. And some firms are worse than others.
2nd.. most ECN charge you commission which ends up being higher than futures, unless you want to go through a dealing desk, in which its rigged.
Thats why so many poeple would just rather trade the futures.
Michael in theory ECN should not be dealing desk.
I think there are many more retail traders that trade forex spot than futures, just google forex and u will see how many website there are, this is a big business and the Futures Brokers noticed this and by now almost of them offer forex spot too. Also CME is trying to do somenthing to absorb part of this large market, before had tried with FXMarketSpace, and not with micro FX contracts, but is still far away.
I agree with you about the size of spot forex... but i think thats mainly because you can open an account with only $250..... No other broker in any other type of instrument has such light restrictions. These spot forex brokers know that, and thats why so many get suckered in. They're all bucket shops imo.
Doesn't matter how you cut it, when there's no central exchange, anything goes.
Agreed Michael H. In most casinos, the only game where the patron is not wagering against the house is card games. In card games the casinos collects a rake (commission) from each hand or at a fixed rate based upon time played. The closest casino games to card games are table games, where the patron wagers directly against the casino. Below is the link to the most recent NGC Gaming Revenue Report and I have attached a summary of the rolling twelve-month win per unit of table games vs. card games for the entire state of Nevada, the win and average are in thousands. As you can clearly see, it is considerably more profitable for the casino to bet against the patron than it is to simply charge a commission. Even if you exclude baccarat, table games are still approximately 3 times more profitable per unit than card games. That is the reason why there are very few ECN's and many market makers. Most market markers function exactly as online casinos, but without the strict regulations enforced in Nevada and the Indian Casinos. Trust me, they want to continue in this fashion.