point 1. - fair point point 2. ok, so is good money management paying massive price on the spread, against someone who screws around with quotes, trades against you blah blah blah, yada yada yada......yaaaaawn. no. thats not good money management, risk management, a good plan etc. its good nothing. its just stoooopid. i will give you that a trader can start out modestly and make it big, and i am sure not saying that you need $$$$$ to be a real success. what i am saying is that a wise INTELLIGENT person wouldnt play a game so far behind the curve. but a greedy one would. a good gambler plays poker. a poor gambler plays roulette. the difference is the degree of edge which one has control over. listen son. you are just getting *well rodgered* playing bucket shop bingo with a $500 account. may as well put it on the dogs. {*moderator edit}
Next time a big figure is due for release watch the volume on the CME for its most liquid contract, the Eur/$. Max number of lots is tiny (perhaps 40) until the market has found its level a few seconds later. Then get currenex, hotspot and lava and see the volumes you can trade. I think you may then change your view. So far I have been talking about US numbers. The situation is even more extreme for UK figures. You talk about amounts done across platforms as a sign of depth etc etc - to me that is irrelevant. Currenex has a 1 pip price all day in about 30 million but currently you could get 150 million done on a 3 tick spread. However when it is volatile it isnt so tight in 150 million. Having liquidity and doing trades as a platform is easy when it is quiet , the important thing to me is when it is extremely volatile . My experience (and I do both - spot fx via ECNs and futures on TT) is that you can do far better amounts at volatile times across ECNS than via futures on TT. Of course this is just my view and anyone is entitled to disagree.
Good money management is sizing your trade to match your edge. AFAICT, not all FX brokers are the same. You seem to think otherwise. So are you hanging out in this forum just to piss on everybody's parade, like some anti-TA posters love to hang out in the TA forum all the time? No. A good strategist plays poker ... and wins. A poor strategist plays poker ... and loses. A gambler (aka a non-strategist) plays roulette ... and loses. Unless he has more dumb luck than brains. Gamblers have no edge; that's what makes them gamblers. Strategists may have an edge, depending on how good they are. Proper position sizing will never take a negative expectation bet/trade, and will never overleverage a positive expectation bet/trade. That's the whole point of position sizing. It doesn't matter how much $$$ you bet, it's how you bet it that counts.
i kind of agree that liquidity isnt really an issue here as most on et are just too small to register. its just that all these folk keep banging on about it when it is totally irrelevant for their size. sure - size across many ecns will outweigh that on just globex. thats obvious. but as far as an individual destination goes, globex is only beat by ebs and reuters. how come none of you guys have mentioned ebs or reuters ? - after all, you are all trading against the interbank market - and thats where they do their business. btw: tt is just a front end. it has little to do with globex.
i think youre just pulling the semantics card here to gain the upper hand. 1. position size? well 4 me that comes under risk management. to me, money management is how much i keep in my account, the markets/margin i trade etc ie money management. position size dictates how much i get hurt if i lose - so its risk management imo. i guess i always did differ from what the common accepted ways are! 2. ok call it strategy if you like, but trading against a bucket shop is a damn poor strategy if you ask me. you will find livermore would have agreed with me on that i think!
Not enough said? Sure, here's a longer version... You've actually got a perfect metaphor there -- as in being robbed at gun point -- a gun might as well be pointed at the trader's head, to efficiently separate him or her from their cash in no time. Namely, I believe very strongly that CME currency futures are unsuitable for 1) virtually all beginning traders and 2) most small speculators, beginners or not. "Small" in this context was defined in the same post of mine you are quoting, as under $10,000-$20,000 risk capital / account size. With a $10K futures account, trading the smallest size possible, 1-lot Euro-FX future (contract size EUR 125,000, around $150,000 these days) does force you into 15:1 leverage right off the bat. Even more typically, with $5K, you're forced into 30:1. You have no choice in the matter. Or you've got around $10K and go for scaling in / scaling out with 2 or 3 contracts, just because you can, margin-wise. Still 30:1. The mini currency futures contracts are only half as bad, in terms of forced leverage, but sacrifice too much to the full-size ones: a tiny fraction of the liquidity; commonly seen multiples of the 1-tick bid/ask spread; double the relative commision cost; only Euro and Yen to choose from. In my view, such leverage levels are clearly excessive for the two categories of traders named above, leading to ruin. Intelligent Kelly sizing: maybe you could provide a numerical example of that? I'd be interested. Trade smartly, not greedily: afraid not much of a chance of that happening. Again, talking about nearly all beginners and the majority of small speculators. At the end of the day, I'd be the first to agree that currency futures are a phenomenal trading instrument, offering virtually unlimited profit potential to those willing and able to treat them with the respect they deserve, given their size, volatility and price behavior. However, throw the typical under-capitalization (hence excessive leverage) into the mix, and that potential all but disappears. For those with limited capital, limited experience / skill set, or both, a reputable flexible sizing cash forex dealer would be a heck of a smarter choice than currency futures.
I will try and answer your questions but think it is a shame that people can't have a discussion without resorting to sarcasm and sniping comments. Of course people have differing opinions - that is why this is a discussion board and also there is a market. Liquidity is an issue, even if you are not trading for a large hedge fund or a bank. I gave the example of Currenex being 3 pips in 150 million when it is quiet. Of course I dont need all that liquidity and would never imply I do. However you said that as Globex has the 3rd biggest volume then there must be more liquidity in futures than across any single broker counterpart or any single ECN. I am afraid, in my opinion, this is false. I gave the example that when it is very volatile , like say just after numbers are released, you can only trade in a max of 40 lots (equiv roughly to say $4m)on globex. I should imagine that for a number of people on this board this is an issue. That can in no way be described as big size. This contrasts with some of the better ECNs where you can get 20 -30 million done quite easily. Again not big size but even in this relatively small size it does show the charecterstics of the different platforms and their liquidity at certain times is important and relevant. Why did I not mention EBS or reuters? Because I am not a bank and dont have access to it (although EBS prime is a possibility) and so can't see the relevance. This was a discussion about which is the best place to trade fx for non bank participants. I would say though that the fact I dont have EBS access is not neccasrily a bad thing. As you may be aware when it is highly volatile EBS does not have tight quotes as what bank wants to post tight spreads to let other banks hit him. For whatever reason across ECNS these days banks are wanting to encourage volume and so are offering a service that isnt avaiable to banks. That is an edge. How long will it last - who knows? I am at a conference on Thursday and hope to find out more what the plans are etc. Thank you for telling me tt is a front end system although I was fully aware of that. As I said before I do fx via ECNs and futures. However for my style of trading ECNS have far greater liquidity even in Euro dollar. To be honest the futures prices for cable and even more so eur/£ are pitiful. I hope the futures changes but until it does the only way I can do my low level of volume is via ECNs.
Would a sports bettor wager with a "reputable" bookmaker on these terms: 1) the bookie gets to set the final score of the ballgame, and 2) the bettor must loan the bookie more than 100% of his wager with only a promise that the loan will be repaid if the bookie can afford to repay it and if, of course, the score the bookie assigns to the ballgame makes the customer's bet a winner? No sports bettor would take those terms. They're preposterous. But they are the terms that obtain in retail forex. Why urge them on inexperienced, would-be traders? Wouldn't the wannabe be wiser not to trade forex at all, putting his small bankroll to work in another way, perhaps with an eye towards a fair and square opportunity later on?
excuse me but da idea of puttin' me money into a highly unregulated industry[fx spot brokers] and wait to be defrauded in 1 way or another or for da firm to have serious problems it's just madness...especially if u are talkin' bout movin' some size [hint hint--liquidity] and therefore have some cash deposited in your acct....shouldn't be the safety of your funds da primary concern? if somethin' bad happens where u gonna go complain? who's door u gonna knock?? and how can u sleep at nite, or maybe u just don't give a damn???