Considering a move to futures

Discussion in 'Forex' started by tommo, Oct 3, 2005.

  1. tommo



    I am a consistently profitable intraday spot forex trader but spreads really eat into my profits, 3 pips on eurodollar is just about acceptable but 4-5 on cable and yen is just wasted profit, im considering moving to futures where spreads are typically 1 point, i know there are commission costs but if you are trading a decent size position a few dollars in commission isn't anything.
    HAve any of you guys ever made the move to futures or from futures? How do they compare? Is there much to learn when moving from spot to futures?

    Alternatively can anyone recommend a good spot broker that has low spreads? I know oanda get good reviews but they have variable spreads which seems pretty dangerous.

    Thanks for your time,

  2. Oanda is top notch, why are variable spreads in function
    of volatility dangerous ??!! Nothing is more logical, it's just
    part of the game, my friend :cool:
  3. You might find that interactive brokers is a good forex broker as well ... check out the threads here about the forex offering. And if you don't like it you can do futures as well :)
  4. The average spread for the EUR/USD futures contract at the CME during London and NY hours is about 1.2 points, add to
    that the commission of about 5 $ and you have an effective
    spread of about 1.7 points so Oanda does slightly bettter
    with 1.5 pips.
  5. tommo


    thanks for the replies guys,

    the reason i considered variable spreads dangerous is because imagine you got in when the spread was 1-2 pips and then the spread for whatever reason (unexpected news etc) widened to 10 pips (which i have heard people have reported granted very rarely) you will therefore be holding a losing position even though the market hasn't really moved, or maybe stop you out just seems a little dangerous to me.

  6. Eurex just launched their FX futures. They, too, have a 1-2 spread in the euro, but the contract is 4 times the size of the contract at CME. Also, Eurex has waived the exchange fees (10 cents prop trading, 50 cents agency) and the Clearing Corp has waived the clearing fee (6 cents) through the end of the year.

    If you are able to get your broker to pass these savings through, it might be a good time to test the futures markets as a comparison.
  7. BurntToast

    BurntToast Guest

    out of interest, what is the average spread for the CME British Pound fx future?


  8. 1-2.
  9. BurntToast

    BurntToast Guest

    Thanks :)
  10. No chance. In volatile markets the futures liquidity in cable is non existant and the prices go very wide. Forget 10 pips can be 50!
    #10     Oct 3, 2005