Can I ask again.... ??? HELP - FX Currencies vs FOREX

OzWizard

Corporal Punishment
Messages
88
I will soon be funding an account to trade currencies. With ALL the problems I see in FOREX I am seriously just looking at FUTURES FX currencies. I have a USA broker I use for my E-Mini S&P and they offer 1 pip spreads (usually), $250 margin per contract / lot, $6.50 round turn commission.

SOMEONE please tell me why FOREX to trade AND not Futures FX.... ???

Thanks, OZ:D
 

No Time

Private, 1st Class
Messages
44
Yo OZ,

If you are trading currency futures, then why not trade both futures and "spot" forex?
 

Pharaoh

Colonel
Messages
19,691
Spot Forex, FX, and Forex are pretty much synonyms for trading forex. Futures contracts can be for currency or many other things (i.e. pork bellies, gold, wheat), and the expiration of the contracts is measured in weeks or months. Some of the strategies for futures are identical, some are a bit different. Personally, I don't know a huge amount about trading futures, so will leave off here and hope someone with more experience in that area can further enlighten all of us regarding exactly how similar/different that kind of trading can be.
 

OzWizard

Corporal Punishment
Messages
88
'P'.. look at my other post...

... NO way they are the same.... ???

.. there is a reason why ALL are not trading in the FUTURES???

It looks SAFER... (CME regulated) ... but why give that up for FOREX??

Please SOMEONE expalin?????
 

3BlackCrows

Corporal
Messages
83
The differences are:

1. With FX Futures you are trading 1 currency ie: Us Dollar or EuroFX whereas with Forex you are trading pairs (Eur/Usd, Gbp/Usd etc...).

2. Futures markets (like the stockmarket) are very gappy and can have very big bars. This means you have to have far bigger stops and increase the likelyhood of being stopped out.

In contrast the Forex market is very fluid. You don't have gappy price action so stops can be somewhat smaller and the trends are very smooth (apart from when price is in a range).

3. Futures markets can be manipulated. Floor traders can see where your stops are and can/will stophunt you whenever they can by buying or selling a lot of contracts in order to move price. These are people with very big pockets and can move the market on a whim. This is part of the reason for the big bar/gappy scenario.

Probably the number one reason people trade SpotFXis because Forex is very heavily advertised. It's the new 'fad' if you like.

One good way to trade Forex however involves the correlation between Currency Futures and Forex pairs.

For example you might get a warning of the finish of an uptrend early on say the Eur/Usd pair.

The reason is it might be trending nicely but a reversal signal will sgow up on the USDollar chart. Therefore you could position yourself early ahead of a change in trend.

Overall it's been said (and is quite true) that the Forex market offers all of the benefits of other financial markets with none of the drawbacks.

People lose there money for a number of reasons:

- They choose a small start up broker or a dealdesk
- Undercapitalisation
- Blaming bad trades on everyone but themselves (though there are genuine cases but usually always involve dealdesks
- Jumping in too soon before the are consistently profitable on a demo

Hope this helps - Happy Trading! :)
 

OzWizard

Corporal Punishment
Messages
88
IMHO, I have to disagree SOME.......

The differences are:

1. With FX Futures you are trading 1 currency ie: Us Dollar or EuroFX whereas with Forex you are trading pairs (Eur/Usd, Gbp/Usd etc...).


3. Futures markets can be manipulated. Floor traders can see where your stops are and can/will stophunt you whenever they can by buying or selling a lot of contracts in order to move price. These are people with very big pockets and can move the market on a whim. This is part of the reason for the big bar/gappy scenario.
:)
CME FX Products: Traded Against the U.S. Dollar
CME offers FX futures on 19 currencies, including major world
currencies such as the euro and yen, as well as the currencies
of countries with emerging markets, such as Mexico and China.
These products are all available for trading electronically on the
CME Globex platform. In addition, two of the contracts listed
below are CME E-mini products – CME E-mini Euro FX and CME
E-mini Japanese Yen. These smaller versions of the regular-sized
contracts are attractive to individual traders.

Also, this is an ELECTRONIC "Globex" market... NO Floor Traders here!!

OZ ;)
 

No Time

Private, 1st Class
Messages
44
Yo 3Black,

Nice explaination of the FuturesFx vs. SpotFx.

People lose there money for a number of reasons:

- They choose a small start up broker or a dealdesk
- Undercapitalisation
- Blaming bad trades on everyone but themselves (though there are genuine cases but usually always involve dealdesks
- Jumping in too soon before the are consistently profitable on a demo

Hope this helps - Happy Trading! :)
So True!!! Especially to an individual trader in FX.
 
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