If you want to see real currency market - go interbank - thats where the prices are coming from, but there min lot is 1 mio, and noone guarantees execution of your orders, requoting is usuall thing, leverage is not that big (though it depends how you work it out) slippage is also something to be ready for.
Do you really believe it can't be done and isn't done quite often? Granted, they may not 'see' your stops, but they know where the stops are and will try to take you out. I'm talking from my experience in other markets (albeit limited in some). I have not traded currency futures. Perhaps if others concur they don't gun stops I'll take a look. I see how they wish to present themselves, but they are making a market, thus the comparison. A lot of stockbrokers have taken to calling themselves financial advisors, but I just don't see how they're operating any differently.
Yeah, this is what I don't get? At least with FXCM, you are a customer, and there's some hope they'd want to retain you. Unlike pit traders and market makers in the futures, which only deal with you through your broker and seem to live in this world to screw anyone possible out of a dime. I mean, does everyone not notice that it is in FXCM's best interest for their customers to succeed? They want their cut, but it is a parasitic relationship. Suckers may be born every minute, but you can only kill off so many before you develop a reputation. Trading ES and YM is a blood hunt...check out all the recent 100 point random spikes. And stops? hah, you'd have been taken for 2x on your happy little stop had you been on the wrong side of that YM spike and not paying sufficient attention. Everyone is sounding paranoid...yes their minis may indeed be bucket shops since their overhead is so small, and it is attractive to newbie traders...and newbie traders are likely to fail. But their full-size contracts are in all likelihood legitimate, because they would make some good money off the spread and rollover interest on them, plenty enough to run a firm. 500 decent traders, roundtripping 5 lots 5 times a day. 25,000 trades a day...with a 5 pip spread (say they net 3), at $10/pip, they make $750,000 a day...not bad money. I think you can run a business on that. In fact, you might be able to afford to take a loss on the newbies in the hopes of building a stable of full-sizers. Maybe even a marketsurfer or two!
I've trade currency futures for a long time and I know the interbank FX game fairly well, but I've never traded with these forex shops. Tell me this, their software gives you charting and a price feed but where do the prices come from? Do they purport to represent the interbank prices or are they feeding you what they are prepared to bid/offer? If the latter, why couldn't you arb their bid/offer against the interbank? ps. I suspect that the vast majority would be better off with currency futures where you know you have a transparent market.
I don't think this is the case with the spot broker model. You trade against them (they are the counter party, not Joe Blow out in cyberspace), so its not the same as a normal broker relationship. If too many people succeeded then they would be losing money. The odds are against most newbies succeeding so they milk them for as much as possbile before the inevitable time that they tap out. So they have to keep on promoting the glamorous world of commission-free 24 hour currency trading just like a casino with the edge that is always open. It is the closest thing to the bucket shops of Livermore's day that I have seen. I don't say that to discourage forex trading, but compared to everything else I've traded you are behind a bigger 8-ball. But for trendiness it is a great market. I have long wished for a centralized ECN type of exchange to trade it on. There have been several attempts at this but they have all seemed to come up short. The fact is that small speculators are really only a drop in the bucket (no pun intended...) to the true volume of forex done between banks everyday, and they don't need a central exchange (nor a spot broker) to operate.
Steve_IB, I know that IB don't have option on currencies in the moment, but does IB have options on FX futures? Thx