I've kind of been out of it for a while. In the old days we used to trade swiss francs on the merc when the President said the dollar must go down. But I've never traded forex. How do you do it at IB?
thanks for the reply. I'm pretty comfortable with futures, but I don't know if anyone trades currency futures anymore. I fooled around on the paper trader at IB but it was kind of confusing. Would appreciate someone pointing me to a good place to learn forex. These days it doesn't do much good to make money if your money isn't worth anything anymore.
Forex trading on IB is pretty good. I trade it occasionally. Their FXTrader module is pretty good and their pip spread is very good well at least for the major pairs -- I usually trade the YEN/USD or the USD/EUR and the spread is 0.5 to 1 pip. Just be carfull of the leverage which can kill you. I remember losing 12K on an overnight position going short the Pound/USD because the BOE had a surprise announcement. I learned from that to have tight stops. good luck, Sid
I'm a heavy forex trader with IB (but not having traded forex with other brokers, can't compare IB to others). With IB, there are no lots. You indicate the amount of currency you want to buy and the currency pair (e.g. buy 54,615 EUR.CHF). If you don't have the currency you're purchasing with, a margin loan is automatically generated. Interest earned on the long currency and owed on the short currency is accrued nightly. Otherwise it's pretty straight forward. Spreads are very tight. Commissions are low. Price improvement on limit orders is routine. Apart from the occassional execution against another IB customer's order, IB does not take the other side of the trade, so you're buying/selling directly with the liquidity providers (e.g. Deutsch Bank). To me, IB operates with complete transparency which seems to be in short supply in the retail forex world.
Just out of curiosity how heavy are you trading? hope I'm not way to inquisitive I trade, as well, currency market but with other broker and just want to know how they handle big positions, do you have any issue regarding filling huge orders? what about slippage?...and who is your counterparty when dealing through IB. Just an aside note I'm not in love that much with thier TWS platform, do you know if I can use another platform but at the same time IB to be my broker many thanks, regards
Your counterparty is always IB, same as with equity and futures trades. IB doesn't allow any single currency order to be larger than US$5mln in size. Regarding slippage, you don't submit a large order "at market" do you? You probably always use a "limit" order.