not sure about FOREX

Discussion in 'Forex' started by cocoa, Aug 30, 2005.

  1. cocoa


    I've been trading futures, and am considering the FOREX, but I'm just not sure I'm comfortable with a system without a centralized exchange.

    If I'm getting my quotes from my dealer, and my dealer takes the other side of my trades, isn't this system ripe for fraud?

    Or am I just too paranoid?

    How do you keep your broker honest?
  2. it's a freaking scam.
  3. debud


    Whenever you place a trade in any market, someone takes the other side. Qoutes from the different dealers are pretty much in sinc. If in doubt just look at an independent quote source.
  4. Depends on your broker of course. Most operate as MM's, set the spread, and can screw you at will. That said, it doesn't automatically mean that all brokers do this.

    I prefer to use a broker using an ECN model. They charge a commission, and don't take the other side. (the party taking the other side is the one with the best bid/offer out there, and they have no idea where your stop is). They don't requote, and trades are usually instantaneous. They also don't set the spread, but have many sources of MM's posting prices (banks, other brokers, and even individuals). The spread is the best prices from all these sources. I personally use IB as I trade lots of stuff. IB operates as an ECN in Forex, with spreads usually 1 pip in EUR/USD, and 1 or 2 in USD/JPY. These are the only two I scalp due to the spreads and liquidity. There are other pairs with plenty of liquidity for day trading though.

    Other ECN forex dealers you might want to look into are Hotspot FX, and coesfx.

  5. And anyone making a living at it must be a liar, a shill or delusional, living in a fantasy world. Right.
  6. Consider reading the other threads on Forex Brokers. I used to trade E-mini S&P futures and Nasdaq 100 options when they were high flyers. I have settled into the interbank forex market. I have been trading this market for 3 years without a hitch. Sure, there have been some slippage, particularly during Non-farm payrolls in 2004. My broker, FXCM, has always corrected my entry or exit to give me the price that was shown on my ticket. This market is not a scam. Try a mini account for a while and you will see for yourself. This can be done with $300. Or just let your fear keep you from making money. Remember the three Mantras in trading...Fear, Greed, Laziness. Do your due dilligence and you will find that there is plenty of money to be made in forex, even with a interbank dealer.
  7. Hoi


    Just take a broker (like IB) who offers you both: Forex-spot, and FX-Futures (Globex and EUREXUS), then you can select the instrument that fits you most.
  8. MTE


    Retail FX is not interbank market!
  9. daytrading FX is a freaking scam

  10. This is a freaking scam artist
    #10     Jan 13, 2006