Welcome to NexusFi: the best trading community on the planet, with over 150,000 members Sign Up Now for Free
Genuine reviews from real traders, not fake reviews from stealth vendors
Quality education from leading professional traders
We are a friendly, helpful, and positive community
We do not tolerate rude behavior, trolling, or vendors advertising in posts
We are here to help, just let us know what you need
You'll need to register in order to view the content of the threads and start contributing to our community. It's free for basic access, or support us by becoming an Elite Member -- see if you qualify for a discount below.
-- Big Mike, Site Administrator
(If you already have an account, login at the top of the page)
I need a little help. I've never traded Forex before. I received an email from a broker that will match my deposit 100% and there are no commissions or exchange fees so I am tempted. I currently trade oil, gold and natural gas. I have a method I've been very successful with that scalps for 2-3 ticks. Is that possible in Forex? I've heard that you are betting against your broker so you may get awful, wide spreads. Any advice is appreciated.
Can you help answer these questions from other members on NexusFi?
On sim I presume otherwise if you were already successful why move to spot Forex?
The spot forex broker will be offering 'free money' because they know they will almost never have to pay out because the people opening the account will lose their own money. There will probably be a minimum number of trades you can make before you are allowed to withdraw 'their money'.
There are no exchange fees because forex doesn't have an exchange, your broker controls the data you trade off. No commissions because they can set the spreads as wide as they like. Unlike a futures platform their own platform will not let you place limit orders on the favourable side of the spread, not good for scalpers. There may also be a platform limit on how close an exit order can be set to the current market. IMO trying to scalp spot forex you may as well just throw the money away.
1. That broker will, more than likely, be taking the opposite side of your trade and as such your execution never reaches the open market. There are no exchange fees in forex so its a meaningless promise anyway.
2. They are playing the odds. With such a high failure rate amongst new traders the likelihood is very highly in their favour that your deposit will be going straight into their greasy paws. In the case of most new traders its easy money for them.
3. If you manage to be one of the few that consistently wins , then you are going to see other issues creeping in such as slippage, bad fills, disconnections, platform delays, weird spreads, problems withdrawing money etc...your broker wants you to go be profitable somewhere else.
4. Scalping gold on forex? Forget it right now. Trust me on this. THe spread can go from 40 - 120 in a split second. If youre trying to scalp 150 pips at $10 per pip, and you get a bad spread you could have paid $1200 just to be in that trade. Best case scenario is your spread is 40 pips - then you are paying $400 to be in that trade (at $10 per pip). Ok so gold can shred 200 pips quicker than you can blink so either way you are going to get rich or poor very fast.
5. On gold, if youre holding for bigger targets like say 1000 pips (easy for gold) then I hope you have deep pockets because it can take a few goes to catch that move. Just the spread alone on each of those failed attempts is what hammers your account and cause you to sweat bullets.
6. Do some research and find out where the headquarters are. Cyprus? Forget them. If its someone like Oanda then maybe..
7. If they are a market maker (very likely) and you are a consistent winner then dont expect to be with them for long. They will close your account. Their business is to make money, not have profitable traders on their system chipping away at their profits.
8. If you are consistently profitable as a scalper then the futures market is the best place to scalp. Run a comparison on the amount of trades you do per month and see what the difference is in cost to trade. Its a no brainer.
9. They do make a commission on every trade you do. Its hidden in the spread.
I traded on the forex market and luckily managed to make money. Im on futures now primarily because of the cost to trade, regulated market on a central exchange, volume profiling and orderflow. All of these are non existent in spot.
The is one great benefit the forex has that futures does not. You can control your degree of risk by dialing down to micro and mini lots and still give yourself a reasonable stop loss. Futures on the other hand 1 contract can't get any smaller so you have to shorten you stops and you may find you're getting stopped out to fast. You can trade the "mini" contracts but I found they tend to be illiquid. I trade Forex and do just fine, but as many have said if you have a system the you are consistently profitable with were you can tolerate the risk why change it.