spot vs futures spreads vs coms

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druwainwright

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I have been trading FX for over a year now and starting to make excellent profits. I have been using 2 different styles of fx trading:

1 FX cme futures via cqg and pro real time
2 Spot FX using MT4 for charting and Cap spreads /ETX for placing the trades.

I would love to hear form some of the pro guys on here as to which they trade - futures or spot and which brokers / charting they use. I have taught myself how to trade and i have reached the stage where im asking myself if i am doing things the pro way or am i missing something. This thread isnt about strategys - just charting and brokers and the mediums used to track and take trades...

Thanks

Andrew
 
druwainwright said:
I have been trading FX for over a year now and starting to make excellent profits. I have been using 2 different styles of fx trading:

1 FX cme futures via cqg and pro real time
2 Spot FX using MT4 for charting and Cap spreads /ETX for placing the trades.

I would love to hear form some of the pro guys on here as to which they trade - futures or spot and which brokers / charting they use. I have taught myself how to trade and i have reached the stage where im asking myself if i am doing things the pro way or am i missing something. This thread isnt about strategys - just charting and brokers and the mediums used to track and take trades...

Thanks

Andrew
Click to expand...

i trade currency futures on cme, using ninjatrader for dom and charts, and vcap as broker. there is no spread ( as there is in spot) just a small commission.
eg: eur/usd is $12.50 per tick and my comms are about $5- therefore in terms of spot where this is no comms but a spread as the cost then my cost would be a spread of 0.4.
and i could do $7.50 profit on one tick/pip if that is what i wanted to trade.
for me it is about thr roi. what am i getting back w.r.t. that which i am putting in.
this may not be that important depending on your timeframe, but for me i scalp / daytrade and only look for a few ticks and as such the cme currency futures give a better return for me as opposed to spot.

happy trading
 
flyingeagle said:
i trade currency futures on cme, using ninjatrader for dom and charts, and vcap as broker. there is no spread ( as there is in spot) just a small commission.
eg: eur/usd is $12.50 per tick and my comms are about $5- therefore in terms of spot where this is no comms but a spread as the cost then my cost would be a spread of 0.4.
and i could do $7.50 profit on one tick/pip if that is what i wanted to trade.
for me it is about thr roi. what am i getting back w.r.t. that which i am putting in.
this may not be that important depending on your timeframe, but for me i scalp / daytrade and only look for a few ticks and as such the cme currency futures give a better return for me as opposed to spot.

happy trading
Click to expand...

Hi

Thanks for replying. I have been using cme fx futures as well along side pro real time and cqg dom trader. My issue is tax. To the best of my knowledge futures are taxed using UK capitol gains tax laws which results in loosing 18% of all profits after your personal allowances. This then makes spread betting more interesting as in the UK its tax free (at the minute anyway). I did some calculations and i have realised that spread betting is actually more cost effective as long as you plan to declare the futures income :cheesy:

You are the fist person i have come across using cme for fx! How do you find it?

I generally look for at least 10 pips per trade. I have tried scalping for 3-5 pips but the risk to reward never feels right! What way are you doing this - if you dont mind me asking :)
 
flyingeagle said:
there is no spread ( as there is in spot) just a small commission.
Click to expand...

There most definitely is a spread in futures trading. It's not as visiable in futures as in forex because price feeds are so often traded prices on the futures side, where they are indicative in spot forex, but they are definitely there.
 
Rhody Trader said:
There most definitely is a spread in futures trading. It's not as visiable in futures as in forex because price feeds are so often traded prices on the futures side, where they are indicative in spot forex, but they are definitely there.
Click to expand...

I understand tour point but regarding tax it has to be a spread set by a spreadbetting broker rather than one that has formed on the live Market due to price action. What do you trade out of interest
 
Rhody Trader said:
I trade spot, but I'm in the states. Doesn't matter too much whether I go spot or futures for tax purposes.
Click to expand...

I dont hnk the new UK government will allow tax free trading for too much longer - tey are clamping down on everything!

Why spot rather than futures? I love dom traders and for some reason they only work with futures! Its such a tidyer way of doing things.
 
how did i know, someone would bite on this.
in spot forex your costs to trade are expressed in terms of a spread while there is no comm.
in futures forex your costs to trade are expressed in terms of a comm while there is no spread. of course, there is a spread of 1 tick between the bid and ask but this has nothing to do with your costs. this spread naturally is very visible, along with the depth of the market at the different levels right on your dom.
as for liquidity, there is plenty for the average trader. or if you disagree then how much are you wanting to take out of the market on a daily basis? $500? $2000? this can be done.
andrew
i have always traded futures and for the most part scalp ym, nq and es being the us indecies. for these i use a dom and so to scalp forex as a futures contract whilst not paying a spread through my existing dom was a natural extention of what i was already doing. i think it is a better way to trade.
happy trading
 
flyingeagle said:
how did i know, someone would bite on this.
in spot forex your costs to trade are expressed in terms of a spread while there is no comm.
in futures forex your costs to trade are expressed in terms of a comm while there is no spread. of course, there is a spread of 1 tick between the bid and ask but this has nothing to do with your costs. this spread naturally is very visible, along with the depth of the market at the different levels right on your dom.
as for liquidity, there is plenty for the average trader. or if you disagree then how much are you wanting to take out of the market on a daily basis? $500? $2000? this can be done.
andrew
i have always traded futures and for the most part scalp ym, nq and es being the us indecies. for these i use a dom and so to scalp forex as a futures contract whilst not paying a spread through my existing dom was a natural extention of what i was already doing. i think it is a better way to trade.
happy trading
Click to expand...

Good info - thanks...

Im currently trading FX but i do plan to look at ftse and s and p as well. I have been doing a little on them but nothing substantial yet! I think futures are the way forward as they are what they are - no manipulation and if you have a direct link to the exchange via cqg / nija etc etc then what you see is what you get.

:cheesy:
 
druwainwright said:
Why spot rather than futures? I love dom traders and for some reason they only work with futures! Its such a tidyer way of doing things.
Click to expand...

I've traded futures too, but spot has far greater flexibility when you consider that the smallest futures contract (micro) is roughly ten times the same size of the spot micro contract (depending on the currency). I can be much more precise with my risk when trading spot.
 
flyingeagle said:
in spot forex your costs to trade are expressed in terms of a spread while there is no comm.
in futures forex your costs to trade are expressed in terms of a comm while there is no spread. of course, there is a spread of 1 tick between the bid and ask but this has nothing to do with your costs.
Click to expand...

If you consider the spread a cost in spot forex trading - and I'm not saying you must - then you must view it as a cost in futures as well. Certainly if you pay a commission when trading spot (which is the case for SPT brokers) then that's considered a cost just as the round-turn futures commission is considered one.
 
I am a newbie here and just wanna say Hi to everyone. I am Daniel from Pennsylvania, US.
 
Last edited by a moderator:
I only trade futures, all kind of futures, not only FX.

The reason I trade FX and not the spot is that de spread in the spot flies in all directions while the FX goes much smoother and much slower then the spot. I find that the spot takes out my stops to fast.

I started with NQ and ES but found out that I can use my same tactics for scalping all future markets including the FX and even make easier / more money trading other markets then the indexes. Thats why I don't trade 1 market anymore but watch and scalp / trade 14 future markets at the same time.
 
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