OK, I'm not a cash FX trader, but isn't the ability to earn interest while carrying positions an advantage in the spot mkt? I should clarify that is also a double edged sword, as you pay interest in some cases. Also, I realize that with certain futures brokers, a trader can keep their margin in T-bills.
Ask yourself: What is my account size, relative to the size of the instruments I'll be trading? What is my leverage? What is my typical stop size and % risk per trade? How many currency pairs will I be trading simultaneously? Depending on your answers, futures, despite some of their key advantages over spot, may be completely unsuitable for your circumstances, particularly as you begin your journey. The number one advantage of spot over futures in my mind is precise position sizing, and therefore risk management. Example: $5,000 account, long or short 1 Euro future (6E), 2% risk per trade. Then your max stop size is 8 ticks, and you're at 30:1 leverage right off the bat. $10,000 account --> 16 ticks max stop, 15:1 leverage, etc. Are such tight stops and leverage levels an integral part of your strategy? If so... best of luck to you. If not, you're undercapitalized, further diminishing your odds of success. With spot, you can practice perfect, optimal position sizing / risk control with $100, with some brokers, and you're not forced to employ double-digit leverage, whether you want to or not. Also, you're off on a few things in your otherwise good list. 4 - that's apples to oranges. The greater tick value in futures over pip value in spot merely reflects greater underlying currency value. 6 - no conflict of interest with IB (not feasible even if they wanted to) and Oanda (feasible but not evidenced by users), to name two. 8 - the E-mini Euro FX and E-mini Yen have the same commision as their respective full-size contracts, not lower. That's double commission / tick size ratio. Plus the mini currency futures' liquidity is a tiny fraction, ~2% of the full-size... the spread is much wider... definitely not something you want to get into. 9 - not true, as has already been pointed out. If you are trading early Asian session on a shorter time frame, an hour gap on your charts every evening doesn't help. Even if you happen to be very well capitalized -- unless you are fortunate to have either a proven system or a successful mentor -- you'd be far better off starting very small with spot forex (live, not demo), until you turn consistently profitable over several months. Good luck.
Basically, nowadays spot-fx is only advantageous if one is trading a small account (as contracts are >$100k and mini currency futures never took off). In all other cases, currency futures are the market to trade.
No. The interest rate differential is built into futures prices. Without boring you with formulas, just compare currencies with different interest rates and it will be clear: Australian Interest Rates are higher than the US: AUD Spot is currently 0.7664, September futures are 0.7617 European Interest Rates are lower than the US: Euro Spot is 1.2233, September futures are 1.2275 As for the Futures vs Spot conumdrum... you could always use a broker which gives you both. If you look at IB's offering there's not much to seperate the two. Spot is certainly better for cross-rates, but for the majors it's a close call.
I have traded for 15 years and do decent size but still trade spot rather than futures. I do sometimes wonder if it is because I am a dinosaur and should change but I don't think so. With spot you should have several brokers on and hence if one is say 62 64 and all the rest are 63 65, if you want to go long you can obviously do so at 64. This happens a lot and is not sniping but rather one market maker has an interest to sell. Hence it is possible to usually trade on a 1 tick, or choice, price. Using futures you are reliant upon one outlet for prices and execution - if that goes down you are in trouble. Obviously by having several spot brokers there should always be an outlet to close/open a position. Finally liquidity and pricing appears to be an issue in futures when it is volatile. By choosing your forex broker carefully it should mean you can have consistent spreads in all market conditions whereas when it is exceptionally volatile it can be hard to achieve this in futures.