This is true, but crosses and non majors tend to have a larger spread and are riskier. My main goal is to minimize risk, then I think about profits. If you have carry trade positions (yen / iceland kcrona), you obviously need intra bank, but it is intra bank and not forex shops, and we are talking about very large positions, which are out of realm of majority of retail traders. Most of the strategies can be achieved with major pairs and therefore with futures. I try to keep things simple, it really helps. Regards, redduke
This subject, it seems, has been coming up on ET an awful lot, and, speaking for myself, it's getting tiring. There are MANY key advantages currency futures hold over cash forex. And... there are MANY key advantages cash forex holds over currency futures. Both have been discussed here, repeatedly. Furthermore, "forex", "spot forex", "cash forex" or even "retail forex" are anything but homogeneous. Dramatic differences exist among dealers, brokers and ECNs; lumping them all together into one big gray mass, to stay away from, is both grossly inaccurate and shortchanges yourself, the trader. The choices you make matter, a great deal. The bottom line is, as always: it depends on who you are and how you trade. In particular, as I've stated before: any would-be currency trader with less than $10,000 - $20,000, at the very least, should NOT trade currency futures. They'd find themselves critically undercapitalized, right from the start. For better or for worse, that includes the majority of retail traders. There's one extremely good reason.
Hi Late_apex, This actually is a bad reason. If one is undercapitalized and not able to afford trading 1 currency contract, he should not be trading. Instead, getting a job to make at least some small stake and then consider trading. Letâs call it retail forex, does allow one to trade with minimum capital, and if someone wants to feel what it is like to trade with real money it is Ok. But if you want to trim costs, lower risk and trade in regulated environment, even if you only have 10-20k, I do not see a value in trading retail forex. I still have an account with oanda, but finally realized the advantages of futures (cheaper, central exchange, regulated). The only pair where costs are closer to futures is eur/usd at oanda with 1.5 pips spread. Regards, redduke
RedDuke, I saw you from Oanda's forum. You were asking about short-term trading with large tade size like 10mio. How was your experience with Oanda? Did you have any problem with them for trading large size with short-term style?
I actually never got to the large size (over 2 mil) with Oanda, so still very curious. I heard from one person, that he had problems, but I have no details and am not sure how much there is to it. Michael Stumm answered my posting and said that 10k or 10mil will be treated the same.
Thanks for your reply I can see you switched to currency future. Did you try any ECN broker like IB before switching to future? I know currency future is centralized and regulated. However for your trading style, doesn't spot forex give you more opportunities?
I actually switched to DAX futures, I was using currency futures as am example for someone who really want to trade currencies. Actually with my style of trading (short term) futures suit me better.
No, I still don't see no real benefits in trading in cash forex. For most of the traders, currency futures should be their premium choice unless you have some strange/specific reasons otherwise.