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Why do you choose forex?

  • #1
  • First Post: Jul 5, 2012 7:06am Jul 5, 2012 7:06am
Recently i've been forced to start trading futures instead of spot forex and instruments other than currencies. After a month or so i keep asking myself, why would anyone trade forex?

I can only come up with 2 reasons, one of which will probably never be a reason for any of us here

1. Small accounts / high leverage
2. Trading size so large that it's easier to get positions on (or off) on the spot currency market

I can think of possibly a third reason, the overshoots or 'noise' is larger in the spot market, but this is going to be pretty hard for people in category 1. to exploit. Anyone have any other reasons?
  • #2
  • Jul 5, 2012 6:31pm Jul 5, 2012 6:31pm
Please forgive my ignorance.
I am a newbie.
don't they charge bigger spreads on futures?
I always think costs of spot trading is the lowest.
  • #3
  • Jul 5, 2012 7:21pm Jul 5, 2012 7:21pm
I'd like to add a 3rd
-trends very well. This is the only place in the world where you can get a 1000 pip move in a month. Like in EURAUD.

Other than that. Probably nothing else.
  • #4
  • Jul 5, 2012 7:30pm Jul 5, 2012 7:30pm
For me personally, it is about startup capital and accessibility. Its nice you can open up an account with 300-500 dollars, and use it to learn, plus be able to actively trade. While I will not turn it into millions of dollars, I can get use to learning to deal with the emotions and trading. Create some small success there, and gradually move onto better things. Plus, if I keep my risk reasonable, I can get a better return than I could on Saving account. Granted, I have to be more active to get such a rate of return.

Stock markets, at least made that impossible(since to be an active trader you must possess a account of at least 25k, and most brokers will let you short with about 2,500), on a intraday basis. I don't know about commodities, but I know there isn't stories of starting out with a few hundred dollars and turning it into a livable thing anymore happening anymore.

It really isn't about low commission, because after you do the math, some places charge just a little less or equal what you would pay for opening a commodity trade. Unless your trading the Eur/Usd exclusively, which have some tight spreads.

For awhile, it was also about time, you had different times you could trade. Now that doesn't matter much since futures have some 24/5 markets too.

I am thinking of switch over to Commodities too once I can have enough money to do so. But mostly to trade the e-mini's like the s&p 500, etc, not currency futures.
  • #5
  • Jul 5, 2012 10:57pm Jul 5, 2012 10:57pm
Quoting pipfarming
Please forgive my ignorance.
I am a newbie.
don't they charge bigger spreads on futures?
I always think costs of spot trading is the lowest.
Nope. Currency futures trading costs are around half a pip, so futures are cheaper. In lots of cases a lot cheaper- especially on the more exotic pairs with outrageous spreads when on futures you still pay half a pip.

What bothers me about futures are the expiry dates, at which point you'd have to reenter your positions. You don't have that problem with forex.
  • #6
  • Jul 6, 2012 12:49am Jul 6, 2012 12:49am
Quoting thelws
I'd like to add a 3rd
-trends very well. This is the only place in the world where you can get a 1000 pip move in a month. Like in EURAUD.

Other than that. Probably nothing else.
Try the South African JSE alsi top 40 index , Ive seen it move 1300 points in a day ,and thats a 8hr trading day It averages out at around 350 -450 a day.Now that beats FX any day . And because of SA gold mining industry it tracks gold very well and follows the Eropean mkts cos of trade agreements with europe . Why trade the leader ,trade the follower. downside is its heavier spread with int brokers offering it ,but if u live in SA everything else is a joke.
  • #7
  • Jul 6, 2012 4:27am Jul 6, 2012 4:27am
Quoting Jse Alsi
Try the South African JSE alsi top 40 index , Ive seen it move 1300 points in a day ,and thats a 8hr trading day It averages out at around 350 -450 a day.Now that beats FX any day . And because of SA gold mining industry it tracks gold very well and follows the Eropean mkts cos of trade agreements with europe . Why trade the leader ,trade the follower. downside is its heavier spread with int brokers offering it ,but if u live in SA everything else is a joke.
You sort of answered your own question. Thing is, not everybody in the world is going to trade exotic instruments. They might not originate from that area and thus not know the market well enough to trade it.

For example, I come form a place on earth where we are one of the major exporters of palm oil. Palm oil futures is close to untraded at most parts of the world. Yet over here, it is one of the biggest exchange movers. Does that mean you will suddenly start trading palm oil futures? In a foreign land with a foreign exchange?

People tend to trade what they are comfortable with. Forex is just one of those that fit the bill. It's probably a close call between futures and forex for me.
  • #8
  • Jul 6, 2012 5:50am Jul 6, 2012 5:50am
I didnt ask a question ,but the question was asked at the top of the thread and I gave my answer . This is not a competion but just reasons why/what to trade other than FX .Its also a index not a comodity like palm oil, sugar wheat etc. Its also an index thats highly corelated to the gold price. Very exotic I know (sarcasim intended)
  • #9
  • Jul 6, 2012 9:19am Jul 6, 2012 9:19am
I chose forex for various reasons:
1. Very low commission compared to stocks
2. Variety of brokers I can choose from
3. A lot of learning material (on- and off-line)
4. Higher leverage (but that turned out to be one of the major disadvantages also...)
  • #10
  • Jul 7, 2012 5:54am Jul 7, 2012 5:54am
There is a wider spread in most fx markets compared to futures, stocks etc. Therefore you could say more potential trading opportunities...?
  • #11
  • Jul 7, 2012 4:03pm Jul 7, 2012 4:03pm
1) It's easy to get into.

2) There's a ton of information and education available.

Although a lot of people trade and get into Forex trading, a lot get discouraged due to unsatisfactory results and quit never to be heard from again.
  • #12
  • Jul 9, 2012 11:55am Jul 9, 2012 11:55am
1. leverage. 1-10 is more than enough.
2. the ability to start with a small account
3. no gaps.
  • #13
  • Aug 4, 2012 2:33am Aug 4, 2012 2:33am
comparing stocks and bonds , fx is the fast mover
  • #14
  • Aug 7, 2012 4:03pm Aug 7, 2012 4:03pm
There are many opportunities to trade and make money in multiple pairs in the FX market that is not available in any other market.
Trade Garlic
  • #15
  • Aug 12, 2012 2:04pm Aug 12, 2012 2:04pm
Quoting havaiana
Recently i've been forced to start trading futures instead of spot forex and instruments other than currencies. After a month or so i keep asking myself, why would anyone trade forex?

I can only come up with 2 reasons, one of which will probably never be a reason for any of us here

1. Small accounts / high leverage
2. Trading size so large that it's easier to get positions on (or off) on the spot currency market

I can think of possibly a third reason, the overshoots or 'noise' is larger in the spot market, but this is going to be pretty...
1) high leverage
2) small deposit to start
3) lot of news (volatility)
4) lot of pairs
5) low spread and comissions
6) posibility to become rich
  • #16
  • Last Post: Aug 12, 2012 4:45pm Aug 12, 2012 4:45pm
Quoting havaiana
Recently i've been forced to start trading futures instead of spot forex and instruments other than currencies. After a month or so i keep asking myself, why would anyone trade forex?

I can only come up with 2 reasons, one of which will probably never be a reason for any of us here

1. Small accounts / high leverage
2. Trading size so large that it's easier to get positions on (or off) on the spot currency market

I can think of possibly a third reason, the overshoots or 'noise' is larger in the spot market, but this is going to be pretty...
I find the wording you use interesting. You have been "forced" to stop trading spot and trade futures. Hmm.... Did someone in a ninja suit break into your place and threaten you with bodily harm if you didn't stat trading futures???
Mark ... Everything you have been told is a LIE
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