Your best bet to start out with, is to trade/learn with Oanda. Your trade size options there are as good as it gets since you can trade any size, 1 unit 187 units, 124,999 units, etc. This can be a very valuable MM tool. Fills are instant and you get interest on your cash balance. Also, the spread on the E/U is 0.9. This is certainly cheaper than paying a 1 point spread as well as a commission. I have accounts with an ECN and Oanda. I use Oanda 99% of the time since it's cheaper for me to trade there.
That is until the spreads get widened. BTW I.B. spread on the euro avg .5 pips. That, with a $2.50 commission... Beats Oanda with regularity. Thats why I left them. Especially as your size increases... My commission on a 100K Euro trade is $2.89 with that 1/2 pip spread. Of course I dont alwasy get .5 pip spread I get 1.0 pip spread as well, but thats the widest it gets Even during News.... USDCAD is 2 pips, USDJPY is 1 pip.....and so on. Personally I like the commission model better. I tried it the Oanda way, I liked the niftiness of the tool, etc.. but in the end I prefer I.B. and their commission model.
what? spot FX is scam? Where did you all get this idea from? You guys are right about the bucket shops because of little regulations on the spot FX market. But the market is the real deal, I'm talking about the inter-bank market of course. Most institutions prefer the cash market than the futures market because their hedging needs can be tailored to the exact requirement, while in the futures market everything is set out by the exchange (fixed contract size, etc). So if you have 500K to invest, get a direct access broker who has access to the inter bank market and go with spot I say. But if you have less than that go with futures, at least you get some order flow information. Spot FX is the banks' game, it's damn hard. No order flow, no tape, no nothing. Be prepared.
How does your babble answer the question being asked? Why can't a person with 500K invest in the Futures market? Just because hedging can't "be tailored to the exact requirement"? lol
Sorry I didn't make myself clearer. *All of these apply to the inter bank market and maybe also an exchange traded currency with some sort of specialist system, they don't apply to bucket shops. 1. Commission is lower. 2. Liquidity is better. You can move a very large volume without moving the market. I know of a trader who trades in 200 contracts a clip and it usually doesn't move the market a bit even during the early Asian session. 3. Normally the first to react to news. OK maybe not, arbs have taken over. 4. In an exchange traded market stops are a little more likely to get picked up, everyone knows where they are. But in spot forex, only the bank you're dealing with know your stop. (However in spot forex there are some well-known stop levels, too, it's like a norm, everyone places them there) 5. Mispricing are more likely to happen. I say more likely but not so much nowadays, maybe you get one or two a day, but it's hard to catch. 6. I don't think you ever get front-runned unless you're trading ultra big volumes. I could be wrong. 7. It's damn hard and fun. being said all these, I still advise you to play with futures instead of spot FX unless you know what you're doing.
You clearly know what you speak of. Might be coming from years of experience right? Now go run off and play with your toy.
There is an alternative product to these choices. It's the hybrid FX contracts on USFE. USFE is the old Eurex US exchange. They have FX contracts that price exactly like spot FX, but have all the protections and tax benefits of futures contracts. They aren't doing a ton of volume, but the bid-ask spreads are pretty good in the Euro (FSED) and Yen (FSDY), usually 1-2 pips wide. The spreads in the Sterling, Swiss franc, Canadian dollar, and Aussie dollar are pretty decent. You can watch their order books live from their website.