Currency Futures?
Posted: Thu Oct 25, 2007 9:36 pm
I've been getting REALLY pissed off with the ES (S&P 500) price movement lately. The swings are getting messy, the choppy backfill is getting ridiculous, it goes comatose for huge amounts of time, and the overall price ($/contract) movement there is always fairly tame.
I talked to a trading friend of mine who trades 100 lots in the EURUSD, JPYUSD, and GBPUSD on a longer time frame setup. He used to trade a short term (3 min) chart in the ES around 5 years ago. He asked me what kind of intraday swings were on a normal day... when I told him around 10-15 ES points on a good day he was astounded. Apparently back when he traded it 50 pt days were the norm, and when that dried up he left the market to trade FOREX because it had bigger price swings and greater movement.
Looking back through charts last night I was ASTOUNDED by the clarity of the charts, the swings, the lack of fakeouts, choppy backfill, everything. And the moves were big enough to make some damn good money. So i'm working towards moving into trading currencies and dumping the S&P all together.
So theres the novel... heres the question. After doing some mock trading today with my NinjaTrader account and TS data feed and looking more into the normal spread in the FOREX markets, 1-2 pip spreads are a huge amount of "commissions" when compared with a normal e-mini futures contract. How in the hell can you guys justify this?
Trade the Markets has been releasing a couple free videos this week in their newsletter talking about currency trading and the advantages of Currency Futures over FOREX. I'm really considering opting to trade the futures contract rather than deal with the FOREX bullshit. Here is my reasoning... please correct me if i'm wrong.
The TTM vid (go to about 6:31 into it) http://www.tradethemarkets.com/public/1370.cfm
and this one... http://www.tradethemarkets.com/public/1371.cfm
- Futures have quoted volume, FOREX doesn't.
- Less commissions (TS quotes 2.82 per side, or 5.64/contract)
- Higher $/Pip in most cases (EURUSD = 10.00/pip, @EC = 12.50/pip)
- Regulated Market
- Smoother Bid/Ask spread
- Market Depth available in Futures
- Size is quoted in the tape
So the way i'm looking at this is... Futures cost less for commissions (5.64 roundtrip vs. 2 pips or 20.00?), they have volume quoted, prices can be filled at bid and ask, not just the bid...
Why don't more people trade the Futures contracts? Same price movement, less cost, more profitablilty, why the hell is anyone trading the Forex market over currency futures?
My guess is a lot of people aren't aware of the differences and they follow the herd. But i'm new to FOREX and I don't know the ins and outs. I suspect for some big players there isn't enough volume to support dropping 500 contracts without slipage, but for the rest of us joe-smoes, <30-40 contracts shouldn't have significant slipage...
Thoughts?!?!
I talked to a trading friend of mine who trades 100 lots in the EURUSD, JPYUSD, and GBPUSD on a longer time frame setup. He used to trade a short term (3 min) chart in the ES around 5 years ago. He asked me what kind of intraday swings were on a normal day... when I told him around 10-15 ES points on a good day he was astounded. Apparently back when he traded it 50 pt days were the norm, and when that dried up he left the market to trade FOREX because it had bigger price swings and greater movement.
Looking back through charts last night I was ASTOUNDED by the clarity of the charts, the swings, the lack of fakeouts, choppy backfill, everything. And the moves were big enough to make some damn good money. So i'm working towards moving into trading currencies and dumping the S&P all together.
So theres the novel... heres the question. After doing some mock trading today with my NinjaTrader account and TS data feed and looking more into the normal spread in the FOREX markets, 1-2 pip spreads are a huge amount of "commissions" when compared with a normal e-mini futures contract. How in the hell can you guys justify this?
Trade the Markets has been releasing a couple free videos this week in their newsletter talking about currency trading and the advantages of Currency Futures over FOREX. I'm really considering opting to trade the futures contract rather than deal with the FOREX bullshit. Here is my reasoning... please correct me if i'm wrong.
The TTM vid (go to about 6:31 into it) http://www.tradethemarkets.com/public/1370.cfm
and this one... http://www.tradethemarkets.com/public/1371.cfm
- Futures have quoted volume, FOREX doesn't.
- Less commissions (TS quotes 2.82 per side, or 5.64/contract)
- Higher $/Pip in most cases (EURUSD = 10.00/pip, @EC = 12.50/pip)
- Regulated Market
- Smoother Bid/Ask spread
- Market Depth available in Futures
- Size is quoted in the tape
So the way i'm looking at this is... Futures cost less for commissions (5.64 roundtrip vs. 2 pips or 20.00?), they have volume quoted, prices can be filled at bid and ask, not just the bid...
Why don't more people trade the Futures contracts? Same price movement, less cost, more profitablilty, why the hell is anyone trading the Forex market over currency futures?
My guess is a lot of people aren't aware of the differences and they follow the herd. But i'm new to FOREX and I don't know the ins and outs. I suspect for some big players there isn't enough volume to support dropping 500 contracts without slipage, but for the rest of us joe-smoes, <30-40 contracts shouldn't have significant slipage...
Thoughts?!?!