Hey everybody, I've been with Oanda but have had some trouble with slippage, and I think I'm not getting the best possible deals on overnight rates. I was thinking of switching to FXCM, does anybody have any experience with FXCM, and what do they recommend? thanks ;-) FxPro2
If you are not happy with Oanda, which is one of the best, then your other option is IB, and you will not be happy with FXCM. But the best route is to switch from forex bucket shops to CME currency futures.
What advantages do futures have over spot. Sorry for the rookie question, I have only been trading spot so far, have yet to wade into futures territory.
I hope you realize that when you place spot fx trade it never goes to the banks to be filled, but is rather bucketed in your MM platform. In essence you are trading in virtual world. All this 3 trillion liquidity is there, but only for banks and large institutions. If you trade CME futures, you are actually trading in real market. 6 majors have great liquidity and tight spreads. Only if you need some exotic pairs or crosses, spot fx then is what you have to use. But keep in mind within spot fx your broker controls everything and sees all your stops, and without central price some unscrupulous behavior can happen. Regards, redduke
I never knew that. What brokers do you recommend to trade CME Futures? I trade through EFX Group right now.
Consider that trading futures has a lot of disadvantages. First higher total trading cost (spread + commission), some FX brokers offer the lowest spread available anywhere. Second, CME futures only offer tradable liquidity on 2 or 3 pairs (EUR/USD, USD/JPY), instead of up to 10 million per trade at Oanda on any pair offered. Third, the fixed lot size which doesn't allow accurate risk management. These are just a few of the advantages of trading spot FX. There are a number of people here at ET (and elsewhere) who continue to bash spot FX in favour of the futures market without mentioning all these disadvantages. I wouldn't blindly follow them. If you trade with one of the firms below (from the NFA Capital Requirement thread), you have little to worry about: Above $20 Million Oanda $163,000,000 FXCM $87,000,000 GFT Forex $76,000,000 Gain Capital $73,000,000 Interbank FX $28,000,000 I Trade FX $27,000,000
The spread on major pairs at CME is 1 tick where spot fx has anywhere from 1 to 4 ticks on major, and higher of exotics. Do not be fooled by no commissions, you pay them within the spread. Risk management has nothing to do with whether you trade 1 standard lot or 1 mini lot. It all depends on your style, leverage and your funds. Also, in spot fx you do not have volume, market depth and time and sales which are very important. And there is no central price as well, like I mentioned before. Try to execute few 10 million trade in Oanda and hold them for short time and then liquidate, you will get warning about this being not allowed, and I am not talking about during news times. And if you continue, you will be asked to close the account. FXCM usually put you on manual, not sure what they doing now. If they were really just after the spread, they would love you to do it over and over and over, but they are not. If you trade on long term with wide stops, then it does not really matter (to do this you need large account and minimal leverage which most do not have), but if your style is intra day, then watch out within forex bucket shops. There plenty good brokers to trade futures with, for example Velocity, Advantage, Mirus, IB. Regards, redduke
Be very careful of FXCM, they like to hunt your stops. They then claim ignorance when you enquire as to when did the market actually trade at your stop price.
The spread may be 1 tick during normal trading hours, but try to trade the EUR future at 1:00AM EST. Volume is very light. Reducing your exposure is a form of risk management. 1 standard lot is 100k and 1mini lot is 10k. Trading the mini is 1/10 the exposure vs. the standard. You can get tick volume, which I use a bit. Market depth and T&S's might be more useful if you are a scapler. Which I don't recommend you do trading spot. FXCM you can trade up to 10MM on the platform. Not sure what's the deal with Oanda. I don't think you need a large account to trade long term. Just trade the mini lot you are probably good if you have like 500-1000 margin/lot. I think people have such a bad taste for forex brokers because of their need to blame someone else for their troubles, instead of taking responsibility for their own actions.