Dodd Frank is the biggest impediment to highly competitive FOREX trading in the US. The most aggressive firms far and away are outside the US, but they want nothing to do with US customers because they don't wan to deal with the immense headache and expense of complying with DF. This creates a great monopoly for US firms that can then increase margins. Good for them, bad for us. Shame, because I doubt that was the intended consequences of DF. It was meant to protect the public from banks that are "Too Big To Fail" taking enornous risk. Oh well.
The conspiracy theorist in me would think regulators are protecting currency futures by making spot forex in the US market less competitive. (Not because they like the CME or ICE, but because futures are far more within their domain of control given the regulatory differences and method of exchange/clearing.) If we started to see some of the spreads and trading conditions found elsewhere in the world within the US, speculative volume might be drawn away from currency futures. (Keep in mind, currency futures are one of the few growing businesses ICE and CME have. Sure they make bank with their respective products, but currency futures are really growing in volume even as their bread and butter products stagnate.) Again, nothing to do with keeping the futures exchanges profitable... it's all about who they already have control over and the ease of oversight that comes from exchange based (centralized) regulatory environments vs the painful process of forcing control over an OTC product with splintered points of trade and splintered reporting. ... of course, I'm not the conspiracy type.. so these thoughts carry little weight in my mind.
padded spreads or "ETN" with commissions... does it matter? IB would seem like the best a small to even pro retail trader would get. If you are in Europe maybe some 2nd tier brokers that let you use their credit line with the top platforms but you're still paying commissions. More volume you have room to haggle yea but only so much. IB has the advantage of offering more markets besides FX. The interbank market is an aggregate feed. The best prices you can get is if you're somewhat of a "whale" with connections and you can call up the desk. Banks still use voice brokers I assume. Oanda EUR/USD at .9 was not bad at all.
Hi contra ,etc. I am trying to compare brokers -IB vs Oanda vs MBTrading. As a newbie I would probably start small ( 5000 units of fx pairs). Oanda and MBT would be my first 2 choices with IB last due to their $2.5 min commish. Oanda does not charge comm and I think MBT is $2.5 per 100k so MBT is about 30 cents with possibility of getting paid if you sit on bid/offer and get hit. I would appreciate it if anyone here can tell me why IB with their min comm would be a better choice that the 1st two. Thanks in advance.
no I don't ,the question is stupid , believe in god maybe? but in forex? I don't bel;ive in anything at the moment,maybe 6 pack ,let me get another 6 pack ..
if I get profitable, I'd like to eventually automate my trading system . Oanda charges $600 monthly to do autotrading which is too rich for me.
I'm not suggesting you should not start very small but as you have already calculated at that size any firm with a fixed minimum commission like IB won't work. My information regarding FX industry common practice is dated but at that size you also need to be careful that the feed you receive is simply too rich in house spread. That said, there is nothing wrong with trading that small and realizing that you have virtually know chance of making money against the stacked deck yet also realizing that the few dollars you are giving the house is tuition and that is better than droping $75 or $100 on a trade of more standard size say 100,000.
I'm not suggesting you should not start very small but as you have already calculated at that size any firm with a fixed minimum commission like IB won't work. My information regarding FX industry common practice is dated but at that size you also need to be careful that the feed you receive is not simply too rich in house spread. That said, there is nothing wrong with trading that small and realizing that you have virtually no chance of making money against the stacked deck yet also realizing that the few dollars you are giving the house is tuition and that is better than droping $75 or $100 on a trade of more standard size say 100,000.
Many people don't believe in forex. They think it is scam. But I do believe in forex as it is a money making machine and it is a real business throughout the world. Do you believe in forex?