Discussion in 'Forex' started by wercurna, May 30, 2002.

  1. George and the rest of you:
    Thanks for the suggestions and links.

    Now if you guys can tell me pip by pip which way the Yen and the Euro is heading for the next 10 days all will be well! :D

    Seriously, thanks.
    #11     Jun 1, 2002
  2. For EuroUSD, I don't trade this market but my colleagues Fx traders are long targetting 0.9500/0.9600
    #12     Jun 1, 2002
  3. what if any are the advantages of fx over the currency futures? with futures you get a heavily regulated fcm, an exchange clearinghouse to protect you against credit risk and relatively cheap data. you also get favorable tax treatment of profits.
    #13     Jun 1, 2002
  4. JayS


    I trade FX through a FCM thats a clearing member at the CME. Its a IRA setup through a Trust, so I can compound tax free (I can also do the same with futures, so this isn't a factor). If needed I could trade $10 million with 1 click and have my confirmation in around 1 second. Spreads are the same or tighter than futures and I trade commission free, the usual 4-5 pip spread on the majors (sometimes smaller). Margins are a little better at most FX houses but not really any difference with futures. Depending on the FX broker you can have protection via a segregated, FDIC insured account. This is just what I can think of at the moment.

    I also think the currency futures are a good trading vehicle just not my preference. I do have a futures acct also, just for info purposes.
    #14     Jun 1, 2002
  5. The cost of trading is basically different: with most FX brokers you get usually a 4/5 pips (=ticks) spread on (let's say) EUR/USD, whereas the same spread on GLOBEX/CME usually is around 3 ticks (=pips) but might go as low as 1.
    When the spread is low and you trade futures you get it, otherwise it is likely that you'll stick qith the standard 4/5 pips with FX brokers.
    Depending on the size you plan to trade, FX can be more expensive: on a 1 M $ trade, you can pay up to 500 $ with FX...
    Compare it with 3 ticks spread x 8 CME Euro FX contracts + 10 $ x 8 (commission) = 380 $

    Second difference: with FX you have to roll-over you positions daily, unless you trade forward. This adds a cost: each broker treats the matter differently, but if you trade FX minis (10k $ size) you'll pay 1 $/day for this service.

    Third. You can't trade spot FX opitions: no liquidity.

    Fourth. Futures datafeed is less expensive.

    #15     Jun 3, 2002
  6. vvv


    a couple of facts RE the spot interbank foreign exchange (fx) market, the by far most liquid and 24h market in the world, and where roughly 95%, according to greenwich associates, of the usd 1,2 trillion a day volume, according to the international bank of settlements, is purely speculative, breakdown of participants is roughly, speculative positions by banks, multinational corporations, financial cartels, global money managers and hedge funds, registered dealers, international money-brokers, right the way down to private individuals:

    the remaining five percent of fx trades are genuine transactions for physical exchange and delivery of currency for non-speculative purposes and hedging. this category of participants includes governments, import/export companies, international travelers, buyers of international money orders, and commercial enterprises that use currencies in their day to day operations.

    first, depending on how big you are, you'll be able to go to either a multibank portal like currenex, owned by, amongst others, credite suisse first boston and royal dutch shell, fxall, owned by a consortium of 15 banks, with the largest shareholders being goldman sachs, bnp paribas and credit agricole indosuez, etc.

    with these, spreads will typically be as narrow as one or two pips in the three main currencies, and eur/usd and usd/jpy comprise around 50% of of fx market trading volume, a full 75% of volume is transacted in the four majors, eur/usd, usd/jpy, usd/chf, gbp/usd.

    the ten largest participating banks are:

    1. Citibank 2. NatWest
    3. Merrill Lynch 4. Deutsche Morgan Greenfell
    5. Chase Manhattan 6. SEC Warburg
    7. JP Morgan 8. Goldman Sachs
    9. HSBC Markets/Midland 10. BZW

    as far as roll-overs go, the truth of the matter is obviously that you are either credited OR debited interest rate payments on open positions depending on whether you are long or short the currency with higher interest rates vs it's pair - meaning it's irrelevant over time, you'll pay some and you'll earn some.

    if your funds / credit lines do not allow for participation in a multibank portal, you have the nonbank retail sites.

    depending on whom you choose you'll obviously have varying spreads and other arrangements.

    re oanda, accts can be opened from usd 1 upwards, and the minimum deal size is also from 1 usd upwards. interestingly, they
    continuously credit or debit interest rates on open positions on a second by second basis, meaning no more roll-overs, and spreads are between 2 and 4 pips, depending on the currency pair, and eur/usd & eur/gbp sometimes as low as 1 pip, also price is tradeable immediately without having to indicate long/short or size, and also no requotes. plus a demo platform identical in all respects to the trading platform itself that you can test strategies etc on for as long as you desire.

    other above board competitors would be saxo bank, cmc, and ifx.

    here's a good article about the industry, although atriax has since folded, notwithstanding that it was set up by some of the largest participating banks in the interbank market like city, deutsche etc, there simply isn't enough place for too many multibank portals, and we are currently in a phase of consolidation. it also has to be remembered that in the interbank market, to date roughly over two thirds of all transactions are still being done over the phone, and the idea of doing business electronically is still relatively nouveau:

    and here is a free fx chart provider:

    #16     Jun 12, 2002
  7. Nemsy


    #17     Jun 12, 2002
  8. FX_Gigi


    Forex is a good business and I am trading Forex from two years and making good money with some losses in beginning.
    #18     Sep 4, 2013