Discussion in 'Forex Trading' started by chipmunk, May 10, 2012.
Currency futures are much safer/better than forex trading?
Yes but the "lots" are bigger so you can't trade a $500 account and the leverage is smaller with most brokers.
"better" is subjective, and depends on what you trade, your style, and requirements.
I don't know many scalpers who can deal with the non-liquid contracts of more exotic pairs...
Some currency cross traders wouldn't be very happy with futures either in general. . .
People who like to put on synthetic hedges with precise order sizes... or carry traders... also might not enjoy futures.
So I wouldn't say the 'general' consensus is anything outside of different markets fit different styles and traders.
As for safe... well, that's a whole other subject.
the big deal right now is the IRS confusion over the 60/40 split. I trade spot and took it for 2011 and so far so good. But Green, who I respect says in his view spot is not eligible for the favorable tax treatment.
No, I would not say futures are safer. If the broker goes bust there's no question you lose what's in your futures account, no questions asked.
Hard to say about forex, depends on how SIPC looks at it.
When you consider accrued interest I would say as far as cheaper, futures have an edge.
But like Jack said, there are many other advantages to spot, namely complete control over position size.
The reason for most failures is undercapitalisation, and if you are trading spot that will never happen to you. And for a small trader like me that makes it
SAFE AS MILK