Why is there a common perception that it is impossible to make money in the "retail" forex market but if you trade futures you are almost guaranteed to do well? Important note: I only talk about EUR/USD here, not any exotics or index CFDs. I trade both but only EUR/USD in FX. I mean, my broker has never and will never quote this instrument out of line from other brokers or futures (adjusted for the built-in swap, of course). Likewise, the spread is almost always 0-0.3 pips. The commission rate is OK. The trades are executed with no delay. The money is being paid out. So, do you think that trading futures gives you a higher chance of success compared to FX and why?
Spot Forex market is extremely liquid, yet that liquidity adds a lot of randomness to charts, indicators, and any ML algorithm you'd like to run. Not to mention stop runs by brokers are common. Futures has a lot of liquidity, but it's more speculative, giving you more of a psychological playing field and less brownian noise. At least this is my perspective, I'd be interested in hearing others.
It's just more volatile so people new to the game tend to try to scalp and inevitably get taken out by randomness. It's also much more responsive to news imo.
1. Leverage. The stat-vol is so low (6-7% annual) that you clowns feel the need for 400x leverage. 2. The dealer-mkt/decentralized nature makes it ripe for fraud and counter-party risk. So even if you are the 10% that is net profitable, they will probably not let you wire out. 3. The lure of trading a global 24H market as it appears cosmopolitan to you degens. 4. The only ppl making money in FX are those piggybacking institutional flow and that pretty much ended in the mid-90s. 5. FX vol is basically random. 6. You feel that you have a macro-edge when in fact the news is baked in and you're lucky if you have an associate degree in shop class. 7. Most FX flow is derivative to swaps and GL with deciphering why it moved 12 pips. 8. Your underlying premise that ppl do well in futures yet lose in dealer mkts is likely true, but only bc of the barrier to entry in opening an FCM account and the tighter mkt and you need the $ to swing one contract. No micro-lots.
Another myth - stop running... NEVER did I see anything like that. It might be the case for the market as a whole and some inexperienced traders might perceive that as the broker playing with them but it is just not true. Again, I am not talking about some exotic pairs in the middle of the night where it is to be expected but the most liquid pair EUR/USD during London/NY sessions.
Wiring out is not a problem because my money is in a separate bank account in my name - so, all they can not wire out is the last day's profit. Their very unlikely bankruptcy will not even make me blink - the money is just in my possession (well, under the bank's custody, to be precise), at all times. Can you get such an arrangement in futures? I talked to several FCMs and none of them allows it. FX vol in terms of ATR is much more stable than in equity indexes, for instance, where you can have 8 weeks of 20-point daily range and suddenly a 200-point day, and then another 4 weeks of small range. In EUR/USD the range is much less variable - it is 80-90 pips almost like clockwork, every single day. I think this is a huge hint. People do well in futures - well, I wish FCMs published the same stats as European brokers where you can see that "75.98% of clients lost money trading CFDs with this provider". I wonder what the stats would be for futures?