Trading FOREX vs Emini SP500

Discussion in 'Forex' started by VinMan, Nov 1, 2010.

  1. VinMan


    Does anyone trade both FOREX and Emini futures?

    I was wondering some of the benefits of both as well as negatives.

    I just started trading FOREX after trading equities and I am finding FOREX much better for me as they trend. I am wondering if I should try emini futures.
  2. bstay


    I trade both equities and forex. I found forex "easier" too as there are three sessions to find opportunities (Tokyo, London, NewYork) and a move can trend for hours giving better risk-to-reward. Also, a typical forex broker account is scalable so you can trade Standard, Mini, Micro lots and easier to share-size if you trade small at the beginning. No commissions (paying for spreads) and no platform fees.

    With futures, I have to incur additional exchange data fees and cannot share-size that much due to minimum contract size. Of course this is no issue if you already trade bigger risk amounts. A good charting platform like eSignal will come with monthly software fees.
  3. VinMan


    For my personal style, it seems FOREX does what "it's supposed to do" as long as I manage risk. I also like the cost structure where I basically net my profit. I found with equities I had to overcome the costs and I just was not successful.

    You brought up a good point about data feeds etc...I did not even think of that.

    I suppose there are a few other costs associated with futures much like equities.
  4. bstay


    with forex, you can do some kind of prediction/expectation where prices will go. and due to the 24hrs duration prices have time to get there. with equities you have to deal with market open, lunch doldrums, reversal times, and market close. equities duration is a short 6.5hrs if you are scalping/daytrading.
    like in the pictures, if you expect price to reach fibonacci 100% or 161% or 261%, it gets there most times. i can't do all these work with equities, not sure about emini futures.
  5. I trade both S&P minis and forex futures. Been doing it for over 3 yrs full time. My trading these days is as follows: 70% euro and GBP futures, 30% SP minis.

    If you already have a futures acct you might as well just keep it and trade the FX futures. The trends on euro and gbp(spot or futures) are alot more prevalent than SP minis. Most of the big guys(major banks, hedge funds, etc) have their automated FX trading boxes geared with fib and S&R parameters that make it more of self fulfilling prophecy that make it easier to hitch a ride on their tail. Just telling you from experience...
  6. bstay


    Make sure to check out referring agents such as so that you collect rebates as you trade. Your forex account is opened directly with the list of brokers offered but make sure you follow the instructions to get the rebates.
  7. Agreed...although there is a consistent correlation within the 6E and ES..the way I trade anyway...:D

  8. so far as platforms go, NinjaTrader is used by a lot of traders, it's basically free and
    most futures brokers provide it (MT4 has better charting + historical)
    the eurusd/6E has a larger daily range than the ES, tho ES volume is ten times
    commission is much lower with futures - about $4.50 roundturn

    the only problem I have with futures is if either the exchange feed goes down or my
    ISP/computer/power; with such failures I can phone my fx broker and have the trade
    closed but I think it's not so easily done - if at all - when trading futures
  9. The forex isn't that different from other markets, but it has a few advantages in my opinion.

    1. Open 24 hours. It's closed only from Friday 2pm PST to Sunday 2pm PST.

    2. Extremely liquid. The most liquid market in the world. Get in and out whenever you want.

    3. Extreme leverage. I use Interactive brokers, and with $100,000 I can trade over 2 million dollars worth. Other brokers even provide more. Though you should never risk more than 1% of your account balance.

    In the end, it's just another vehicle to trade. As with everything:

    1. The larger timeframes provide better trends.

    2. If you don't manage your risk, you will be swallowed alive.

    3. Trading rule #3, 4 , 5 etc. etc.

    What it comes down to is this: If you are a succesful trader in futures, or equities, you should have no problem in the forex. If you are not a succesful trader, you will fail in the forex as well.
  10. bstay


    well said.
    #10     Nov 2, 2010