Best way forward

[shadowninja]

Up to now, I've been using spreadbetting to trade Forex (so not really trading, then!). I am pretty comfortable with this and know where I stand. I also am only playing with fairly small sums of money (I'd be looking to make no more than £20k to £30k profit per year). I know that some of you actually use brokers and really do trade Forex. Should I be doing this anyway?

What are the pros and cons of using a spreadbetting company that's FSA registered (IG Index)?

Thanks.

 

[Jack o'Clubs]

Another thought Ninja would be to trade the CME forex futures. Without being specific to forex trading, my general feeling is that you're least prone to 'manipulation' when you're trading in a genuine market, rather than making the other side of someone's book. The futures are good for the major dollar crosses, although if you go off-piste at all, the liquidity suffers (or are not available at all). IIRC, some of the 'proper' forex brokers are really just as conflicted as spreadbetting companies, in that they're taking the other side of your trade: it's not all DMA. On the other hand, if you've no tales of woe from your forex spreadbetting is there a good reason not to just stick with that?

 

[BSD]

Good question...

I have a FX broker I'm thoroughly satisfied with in all regards bar one, OANDA, the only albeit important isssue I have with them is that most unfortunately they don't insure customer funds as I found out thanks to TheBramble...

FX futures traded at a proper exchange are definitely the only alternative to the universe of FX "spot" brokers I'd countenance, and one of the best brokers out there apparently is Interactivebrokers.com. Actually had an account with them once, but I really think their software, the infamous "Trade"station, is not much more than a great example of how a couple of unsupervised software geeks left to their own devices and intent on demonstrating their abilities to the world, while with great verve ignoring clients true needs, can thoroughly muck up and overcomplicate beyond all rational belief a simple order sheet.

Do I really need to go down that road again...

Isn't there some broker out there with the integrity, competitive prices, (totally like Oanda in these respects) and fund guarantee of Interactivebrokers, but with a simple, fast, intuitive and effective user interface like Oanda, lol.

We don't want much...

 

[TheBramble]

Markus, totally with you on that one. Almost broke my heart to part company with OANDA, but risk is risk.

Their platform is cool, Spartan and functional - just the way I want it. Spreads are commercially attractive and their execution without fault. A real pity.

IB is a kludge in every respect in comparison - other than funds security - which is, as you say, a biggie.

IF IB got their act together and did a decent front-end for FX (I’ve looked at some 3rd party offerings and they’re not terrific) they'd have a good shot at OANDA's customer base. Likewise, I suspect, if OANDA got their act together and fixed their client risk exposure as per IB, they'd take a damaging slice out of IB's FX traders base.

I'm sure both companies are aware of this - I guess it's down to which one can move first. There's millions to be made for the first past the post...

 

[combotrader]

FX broker

HOw about Tradestation ? I am about to open an acccount withthem, but just found out cannot link MT4 with them. They use Gain capital - NFA registered with good liquifity. Saw their CEO pontificating on Bloomberg the other day.

Thinking about TS - never used them before, still using IB and IG. Note, now that I am "winning" on cable, betting miniscule amounts, 0.5p, am getting probs with execution and my stops. Expected of a bucket shop I suppose...

ANy thoughts on TS as fx broker ?

CT.

 

[BSD]

I'm sure both companies are aware of this - I guess it's down to which one can move first. There's millions to be made for the first past the post...

Totally agree, it's not just a cost that can be postponed as long as possible, it's a potential huge new revenue attractor for whoever gets there first.

 

[BSD]

Combo, as Tradestation.com have Gaincapital handle their FX business, funds are again not insured. No idea why they outsourced that.

 

[BSD]

Does anybody have any experience with

dbFX: Deutsche Bank's Online Margin Foreign Exchange Platform for Individuals ?

While we're waiting for OANDA and Interactivebrokers to achieve perfection ?

 

[Trader333]

Quote From Markus: the infamous "Trade"station, i.......

Presumably you meant Trader Work Station (TWS) ?

Quote From Tony: IF IB got their act together and did a decent front-end for FX

Tony, I am curious to know what it is about the FX platform on IB that you don't like ?


Paul

 

[BSD]

Presumably you meant Trader Work Station (TWS) ?

Oui, the way I put it could be mistaken with tradestation.com. Not my intention.

 

[fibonelli]

I know of FuturesBetting which is a Gibraltar (FSC regulated) based spreadbetting co which has a unique business model.

btw I don't have any connections with them.

 

[fibonelli]

Does anybody have any experience with

dbFX: Deutsche Bank's Online Margin Foreign Exchange Platform for Individuals ?

While we're waiting for OANDA and Interactivebrokers to achieve perfection ?

4.3 We may, at our discretion refuse to accept any dealing instructions from you but will notify you of any such refusal, without giving any reasons, promptly following receipt of your instructions. In addition, a dealing instruction which for any reason, including failure of the On-line Facility to accept or process such instruction, is not received by us in a manner in which it can be processed shall be deemed rejected by us. We may cancel any instructions previously given by you provided that we have not acted on your instructions.
http://www.dbfx.com/about-us/client-agreement.html

 

[BSD]

Fibo, I agree that initially that sounds scary, but it appears that that's something generic amongst brokers for legal reasons under extreme conditions, Interactivebrokers.com have the same:

21 D. IB's Right to Refuse Orders: These provisions do not evidence a commitment of IB to enter into foreign currency exchange transactions generally or to enter into any specific foreign currency exchange transaction. IB reserves the right, exercisable at any time in IB's sole discretion, to refuse: (i) acceptance of Customer's orders, or (ii) to quote a two-way market.

While that would be dodgy with a no-name provider I'd say, or rather hope, that that's less of a problem with the established players. Certainly never had any problems of that sort during my tenure at IB.

 

[shadowninja]

Thanks for the replies and on-going discussion. Provides for useful thinking and evidently not as simple an answer as I'd hoped. I just wanted to know what options were available, should my activities take a different route.