FOREX vs. Futures

[jefftheripper]

Ok, figured I'd do a follow up for any newbies that stumble upon this topic. I opened a demo account with the metatrader 4 platform. It is great and blows away the system I was using that was provided from my futures broker.

Rhody Trader is right that when you trade a futures currency contract it is still bundled with the US $. In fact I can watch the live tick for tick action on mt4 and place a trade on the currency in the futures market which will follow the forex pretty close, though sometimes it's backwards. For example, if I'm watching the usd/chf (swiss franc) and it signals to go short, I have to go long on the swiss franc futures contract for the same trade.

The advantages I see for forex are:

1. great charts with the ability to add trendline, fibs, multiple indicators etc. and it's free, where if you want real time charts for futures you have to pay a fee to each exchange.

2. with forex you can choose you lot size (1 lot, 2 lots 5, 10, you get the idea). The value of a pip on a lot size varies with the price of the currency. But right now 1 lot of the Canadian $ will be close to $1 per pip where as in the futures contract of the same currency one tick is worth $10. Therefore, with the forex you have more control of how much money you want to risk.

3. A disadvantage with the forex appears to be the brokers themselves. Many trade against their customers and seem to use unethical tactics. I've done alot of research and have decided that for me and ECN type broker is the best and benefits if their customer does well and keeps trading.

So I have decide I am going to trade Forex and keep my futures account open with a different broker and trade it too. I am learning to be pickier about my trades so hopefully I won't overtrade as I have in the past.

I hope this helps and makes sense.

 

[peace]

The advantages I see for forex are:

1. great charts with the ability to add trendline, fibs, multiple indicators etc. and it's free, where if you want real time charts for futures you have to pay a fee to each exchange.

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Hi jefftheripper

Thanks for the update.

With respects to your 1st point, it is possible to access free realtime charts and data when trading futures, it all depends on which broker you use. For example, ODL futures (not the spreadbetting arm) provide free data and charts for all of the exchanges they allow access to. Sucden financial provide free realtime charts and data for all globex listed securities. Incedentally, both are UK based brokerages.

Charts from both brokerages provide the functionality to add trendlines, fibs, multiple indicators etc.

Obviously going the futures route provides access to volume, for those of us that use it, that is a positive. The compartively higher margins and less scope to customise positions due to fixed contract costs are not to everyones liking.

Peace

 

[jefftheripper]

With respects to your 1st point, it is possible to access free realtime charts and data when trading futures, it all depends on which broker you use. For example, ODL futures (not the spreadbetting arm) provide free data and charts for all of the exchanges they allow access to. Sucden financial provide free realtime charts and data for all globex listed securities. Incedentally, both are UK based brokerages.

Charts from both brokerages provide the functionality to add trendlines, fibs, multiple indicators etc.

Obviously going the futures route provides access to volume, for those of us that use it, that is a positive. The compartively higher margins and less scope to customise positions due to fixed contract costs are not to everyones liking.

Peace[/QUOTE]


Thanks Peace, I wasn't aware of that. In fact I was told the exchanges such as CBOT, CME etc charge a fee for real time fees. I was under the impression I'd have to get a platform like Ninja Trader and pay for a data feed.

Good to know, thanks again.

 

[nine]

Most brokers do provide some sort of charting for their futures.

Be aware though that the volume you get for futures is volume for that futures market. Thus, although it at least represents that whole futures market, it doesn't represent the cash market. And given that it seems that, from time to time, one market might be used to force the other market the volume is potentially misleading. Just be aware of that and treat appropriately - nothing offers volume quite like the stock markets.