DOW vs Forex

DESKPRO

Active member
120 0
I have been trading the DOW using SB and am thinking of trading the forex ?(EUR/$) . Has anyone done both and if so how do theu compare or differ. Are there certain times of the day that the forex tends to move like the dow eg US figures, etc... read somewhere that forex tends to trend more than the DOW and TA seems to apply more to forex. Also while just observing SB prices vs live FX there tends to be less SB bias ... is this observation correct. Any thoughts appreacited.
 

darrenf

Well-known member
481 3
I have sb'd fx for some time now and I have to say that the sb price tracks the "real fx" prices very well, with little (what some would term as bias) difference other than at extremely volatile times.

I really don't see this as an issue as the nature of the fx markets means that even between "real" fx brokers, their prices can differ by similar amounts anyway. If you look at the sb spreads of say cmc and capital spreads (and probably some others), they are equally as good as "real" brokers. The only way to get lower spreads is via futures whch limits the currency pairs you can trade (eurusd is most liquid future I beleive).

I have said it a number of times on here before but if you want to trade fx (other than futures), the sb companies are as good a bet as the real fx co's.

The only disadvantage with SB imo is that the dealing platforms tend to be less flexible. (My main issue atm is that the sb's do not offer if done orders). However, if daytrading and constantly watching the screen, this also should not be an issue.

I use cmc spreadbet for dealing fx. Yes, their customer service is pretty poor and the dealing platform not the best for fx but they have low spreads (lower than many "real" brokers) and I have never had a problem with fills/ slippage/ bias etc. The only time I have had slippage on an order was last friday when the markets went mental but this was only 4 pips. Not bad compared to some other real brokers (GCI in particular seem to have had real problems judging by another thread on here).

Haven't really traded the dow before but have studied the dow a fair bit and I find fx to be much more tradeable, ie longer trends, plent of volatility etc. There tend to be good moves early morning when european trading kicks in usually 7 - 8 am is when a move can kick off and you can sometimes pick up the start of a move around 1 to 1.30 pm when US trading/ news kicks in.
 

DESKPRO

Active member
120 0
Thanks , see there was a trend at 7:00pm and also another one at 1:00 pm today. just like you said. Will monitor over next few days to see frequency of these.
 

options

Senior member
2,374 218
'I have said it a number of times on here before but if you want to trade fx (other than futures), the sb companies are as good a bet as the real fx co's.'

I constantly trade both at the same time, and even though the sb is a pip less on eur/usd, they lose out at the end of the day because of their 'jigging'. Imv.

Dow v fx. Dow 3 steps forward 1 back. FX 2 steps forward 1 back.
 

JonnyT

Senior member
2,560 22
The Dow isn't in the same league as Forex.

Stock indices are mainly for mug punters.

JonnyT
 

scpope

Junior member
33 0
The main problem I see with trading any market via sb, when day trading, is the spread/bias. If you use tsim lite (http://www.tradingsimulation.com/tsimlite/) to display live IB price as well as the live sb price, it is amazing how much the sb price swings around the 1pip IB spread. On finspreads, a 4 pip spread is effectively an 8 pip spread because of the swings. In volatile markets like recently then trading with a 30pip stoploss to prevent being whipsawed is possible, but to effectively trade longer term with 5pip stoploss (as JT does) just isn't possible IMHO.

Try displaying both prices live and you'll see what I mean.

I think sb's are ideal for swing, trend trading, but apparently some people on these boards do day trade successfully. One day I hope to find out how!

Stephen
 

trendie

Legendary member
6,674 1,227
I have become a keen convert to FX ( GBP/USD ).

The Dow is great re: SB, but daily spreads are 5 points. ( D4F )

GBPUSD is 3 pointsd ( D4F ).
Also, you can trade any time of day ( although sometimes may be more volatile/profitable than others )
This may be beneficial if you want to trade without giving up your job.

You dont get the 9:30am-10:30am whippy behaviour on the Dow, as it adjusts to overnight news etc.
( although you can trade it if you have kevlar pants )

overall, I am adjusting my strats for FX. :)

ultimately, horses for courses.

good luck whatever you choose.
 
 
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