spot forex and futures? whats the benefit? futures brokers are much cheaper?
Hi
FXCM has been recommended to me for trading spot forex currency pairs.
I mainly trade emini futures through a futures broker at .75 per contract per round trip.
It seems much more expensive in the spread commission of 3 pips to trade currency pairs through FXCM to get the same profit per pip.
What is the benefit of using FXCM or any other spot broker when I can just get .75 per round trip through a futures broker, I just can’t see the point of paying a 3 pip spread.
Am I missing something?
Julia dear, please stay in Africa if you have nothing relevant to contribute.
Extra tags:
Related posts:
- Forex Pairs or Individual currency futures what is the benefit of pairs over individual currency? Hi I can’t figure this one guys, what is tha benefit of using most forex brokers like FXCM for currency pairs paying a 1-3% spread...
- Whats better to trade FX with out of options, spread betting or spot trading? Whats best for UK resident? Currently at the time of writing I am 18 years of age and I have been practicing stock, commodity and currency trading in several different...
- Speculation in forex/futures/interbank/cash settlement only? In theory, the benefit of speculators in the market is to provide liquidity for those who need to hedge for business purposes. My question is,...
- In your opinion what is a better way to trade currencies for a living; spot-forex or currency options? Also…? I am 18 years old and I have been practicing spot-forex trading for several months now with FX Club and I am quite good at...
- What is the average spread on a currency futures contract? In the forex spot market spreads can range from 1.5 to 5 pips, what are they on the futures? For example the USD futures contract?...
Tagged with: benefit • Contract • currency pairs • emini futures • forex currency • futures broker • FXCM • profit • round • spot forex
Filed under: Forex Brokers
The only real advantage of Forex vs. currency futures is that Forex allows you to scale as small as you want to trade, while futures is only available with a contract size that may be too large for many accounts to safely handle. A person with a smaller account may find the ability to trade even a fractional micro-lot reason enough to switch.
Perceived advantages may include the increased liquidity of the major pairs on spot vs futures, but in reality the other side of your position is almost always taken by your forex broker, because he expects and usually wants you to lose.
Another advantage some point to is that it is much less likely to run through a stop in Forex than in futures, but at the same time I would submit that it is much more likely that the Forex shops would shade the price enough to trigger stops just to take their customers out of trades, which you don’t see on the regulated futures exchange.
Some say that forex has no commissions, but in reality, as you have noted, the spread is much more expensive than the commission.
Others point to the fact that you can open a Forex account at many firms for less than $100 and receive 400-1 margin, however, could also be suicidal to your account to use this type of leverage.
I have traded Forex for many years and educate traders as well, and I would encourage all of my clients to stick with the futures unless their account is under $10k. I have noticed that the business has become increasingly dishonest – there are only a couple of shops that are truly legitimate – one, Dukascopy, is excellent, but is increasingly difficult for Americans to deal with since the IRS crackdown on Swiss accounts and requires a very large minimum account size. I switched to currency futures two years ago and you couldn’t pay me to go back to Forex.
There IS no point. 3 pip spread is daylight robbery. So, stick with the futures or find a more reputable broker. I’m not a forex trader, but I know Dukascopy and IB are two big retail ECN brokers, and the spread for EUR/USD is normally 0.5 to 1 pip and 0.5 for USD/JPY.
try this site..maybe it could help you..
http://www.currency-trading-tutorial.net/