If you want to play with the big guys and are too worried about spread to trust the others then http://www.sfc-uk.com/ offer actual inter bank rates. Some blurb: Minimum Investment: $50,000.00 USD Minimum transaction size: $500,000.00 USD Pip spread: The actual interbank spread. Customers: The client base includes; banks, financial institutions, brokerage houses, fund managers, CTAâs, corporates, introducing brokers, on-line trading companies, high-net-worth investors and knowledgeable individuals around the world. Services: SFC is a specialist principal and price-maker in the field of Spot Foreign Exchange and maintains a centralised 24-hour spot interbank desk that is regarded as one of the most respected in its class in London. Every client has a direct access to SFCâs spot desk, thus avoiding âcorporate desk or A.E. cultureâ .The clients calls are less time-consuming, more clearly focused, hence given accurate prevailing interbank prices without delay by the traders and any orders can immediately be watched by the spot desk. SFC purely concentrates on Spot Foreign Exchange and developed a huge business and an exceptional net-work of contacts and clients over the last decade. SFCâs spot desk is able to provide constant liquidity to its clients around the clock, anything from USD 0.5 mio to USD 500 mio or more. At SFC, the margin rates are highly flexible, tailoring to the clients needs and style of trading and remain very competitive within the Foreign Exchange industry.
Hey, I know someone from SFC- serious people. as for: After all I said, I'm not in any way against forex, no. This is the only market I trade for years, and find it to be the best for me. As I said, these things shouldnt prevent trader to be successful. Any business has its dark sides, and I dont see in all said here big problem. I'm trading, and trading not badl, so I dont care. Avatar - cheers. best wishes, Rezo.
Hi Rezo, I'm always open minded to things. I just like to know exactly what I'm up against. If I don't understand what I'm dealing with, then I have no hope of finding an edge let alone being profitable. Some people do make money out of forex so it can be done. The key is to understand how it can be done within the mechanics of what is available and then do it. That is what I am trying to achieve at the moment, To understand the mechanics and then find a strategy that will have positive expectancy... Best Natalie
there are no tricks to making money in forex. using TA to ride trends is what it is all about. this is not like the SOES days when method was all that mattered. best, surfer
Natalie, You seem very shrewd, and I think your skepticism is well-founded. These firms are preying on the desire of small traders to play with the big boys. Traders tend to underestimate how badly giving up the spread both ways will hurt them, and these spreads are anything but small. How dumb can someone be to give their counterparty their stop level? Sure, stops get run in the futures, that's why only fools follow the advice in all the trading books to "place your stops at natural support and resistance" or some other such obvious level. But at least your stop is not sitting on the counterparty's sheets. And anyone trading size in futures knows to keep the stop themselves or put it on globex. Regarding the term "bucketshop." These fx dealers are clearly bucketshops. Literally, it means someone who fills your order internally, ie by throwing it in a bucket rather than sending it to the exchange to be executed. Although it has aquired a pejorative connotation, there is nothing inherently wrong with the practice, provided it is disclosed and the shop is prepared to pay off winners. It is exactly the model a bookie uses, ie he takes your bets and holds them, but if the action gets too lopsided he will attempt to lay them off. Among the problems I have however, are the idea that I would leave a stop with the dealer, that I depend on the dealer for my market quotes and that there is no exchange regulation. Yes, some are registered with the CFTC and NFA, and I think that is important. I think it would be very foolish to trade fx without an independent source for quotes, but of course the cost would eliminate one of the attractions. The margin on a futures contract is very low, too low in fact for the risk. If you are trading with more leverage than about 30% margin:equity you are just asking for big trouble. Personally, I cannot see the advantage of fx over futures, and I see plenty of advantages of futures over fx.
Advantages of futures over fx: 1. Favorable tax treatment 2. More tightly regulated market 3. Tighter spreads and low commish mean cheaper trading 4. Availability of excellent execution platforms, eg IB's TWS 5. Low cost quotes that are independent from dealer 6. Stops are confidential 7. On Globex you see depth of market 8. Electronic and pit traded contracts mutually offset, so you can call in orders if globex goes down 9. Account equity can be used for other markets when not trading currency 10. Open interest and Commitments of Traders available Advantages of FX: 1. Can trade with microaccount 2. Prices are quoted using interbank convention, rather than in dollars
1. For traders with small acct it may be an advantage. However, FXCM has 5 pips spread on EUR/USD with Mini vs 4 pips with Standard account. Plus $1 rollover fee / contract. So if you trade with 1 mini and 1:4 margin and always hold overnight, rollover fees can amount up to 10% of your account size per year. 2. I would not treat it as a serious advantage...
The only advantage I can see is that when you move up to hourly/daily levels, some of the currency pairs trend very nicely indeed, which could be something to latch onto expecially if you are estimating entries near the day's low in an uptrend (vice versa for downtrend) Basically almost like a technique I use for ES (When it is trending nicely and not jumping around) but using much bigger timeframes. Other than that I'm not seeing much of any advantages at all to trading FX but I'm working on it... Best Natalie