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daedalus

Futures Vs. Forex

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I think this can be a great discussion.

 

Couple things... i think FX is more conducive to candlestick analysis because there is less manipulation by a pit/pros to headfake traders, etc...

 

And 2, lets just keep in mind that the same stuff applies on all timeframes but as with anything, if we start drawing down to 1 minute charts we are going to see an increasingly hard picture to decipher. The 1 hour charts are a great way to observe this because they are substantial enough IMHO to prove the failures/success of price action.

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Couple things... i think FX is more conducive to candlestick analysis because there is less manipulation by a pit/pros to headfake traders, etc...

 

FX has less manipulation than futures? Seriously?

 

:confused:

 

I've seen it all here now.

 

:roll eyes:

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FX has less manipulation than futures? Seriously?

 

:confused:

 

I've seen it all here now.

 

:roll eyes:

 

 

You beat me to it! :doh:

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Thats your opinion... sorry we don't agree.

 

I just see A LOT less blatant stop runs and headfakes in the currency markets than I do trading the ES, NQ, and ER2.

 

Is it still there? Of Course... but I feel its on a lesser level.

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Thats your opinion... sorry we don't agree.

 

I just see A LOT less blatant stop runs and headfakes in the currency markets than I do trading the ES, NQ, and ER2.

 

Is it still there? Of Course... but I feel its on a lesser level.

 

Reading a post like this, one can only assume that you are a new trader. If you feel that your stops are getting run, you are simply not seeing market action correctly. I have never seen a post on any forum where a person is suggestion that the CME is delaying their quotes, changing prices after the fact, and not allowing a winning trader to withdraw money.

 

 

Anyways... It doesnt matter how you view the bars, be it 1 hour, 5 min, or 10,000 volume. Candle patterns are SECONDARY. The primary system should be a way to define support and resistance levels. There are a million ways to do this, be it, market profile, horizontal sr, pivots, bollinger bands, etc.

 

It is really easy to look at a chart and say, oh there's a doji at the bottom of a downtrend, I would have gone long. But one doesn't know it was the bottom of the downtrend till well after the trade.

 

Ive said it million times before, and Ill say it again: Candle Patterns, by themselves, will make you go broke.

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Thats your opinion... sorry we don't agree.

 

I just see A LOT less blatant stop runs and headfakes in the currency markets than I do trading the ES, NQ, and ER2.

 

Is it still there? Of Course... but I feel its on a lesser level.

 

Reading a post like this, one can only assume that you are a new trader. If you feel that your stops are getting run, you are simply not seeing market action correctly. I have never seen a post on any forum where a person is suggestion that the CME is delaying their quotes, changing prices after the fact, and not allowing a winning trader to withdraw money.

 

I have to concur. Don't want to take this discussion off-topic though. I'll just wait until Daedalus experiences a 200 pip stop run right after a delayed trade off of a news event in retail spot FOREX. You won't see this happening in the regulated IMM currency futures at the CME, by contrast.

 

Live and learn.

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I have to concur. Don't want to take this discussion off-topic though. I'll just wait until Daedalus experiences a 200 pip stop run right after a delayed trade off of a news event in retail spot FOREX. You won't see this happening in the regulated IMM currency futures at the CME, by contrast.

 

Live and learn.

 

 

Been around for years guys... but thanks for your concerns. Maybe its just because i'm not dumb enough to trade in front of news events so I don't experience that "manipulation". But news events aren't exactly manipulation IMHO and anyone stupid enough to get caught in that situation deserves to lose their money.

 

Its beginning to feel a lot like ET in here... :crap:

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Been around for years guys... but thanks for your concerns. Maybe its just because i'm not dumb enough to trade in front of news events so I don't experience that "manipulation". But news events aren't exactly manipulation IMHO and anyone stupid enough to get caught in that situation deserves to lose their money.

 

Its beginning to feel a lot like ET in here... :crap:

 

It's not just trading in front of news. There are many other ways forex is way more manipulated than futures:

  • Giant random spikes to take out stops
  • If a trader is too profitable, execution slows down
  • Unable to withdraw money if account is up
  • Absolutely no regulation
  • Trading against the broker, who controls the quotes

 

I really dont know how you actually believe futures are more manipulated than forex. The CME and your broker are just facilitators of trade, while you are literally trading against the broker in forex, who just happens to control the quotes. That doesn't seem like its on the up and up to me. I have never heard of one trader say that they cant get executed on globex because they are too profitable.

 

And to think, that there are a group or traders that just go around hunting stops is laughable. Now price might seem that its gets attracted to your stops and then reverses, but it's ludicrous to think the pros/pits traders are out to get you. Its the function of where you are putting your stops. If you put them in obvious areas, well, then how can you say they are stop hunting? Even if they are, there are still many more ways forex is rigged against the retail trader.

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It's not just trading in front of news. There are many other ways forex is way more manipulated than futures:

  • Giant random spikes to take out stops
  • If a trader is too profitable, execution slows down
  • Unable to withdraw money if account is up
  • Absolutely no regulation
  • Trading against the broker, who controls the quotes

 

 

And to think, that there are a group or traders that just go around hunting stops is laughable. Now price might seem that its gets attracted to your stops and then reverses, but it's ludicrous to think the pros/pits traders are out to get you. Its the function of where you are putting your stops. If you put them in obvious areas, well, then how can you say they are stop hunting? Even if they are, there are still many more ways forex is rigged against the retail trader.

 

Lets go through these and i'll itemize which ones are outright FALSE.

 

1. Big random spikes, i don't deny they are there. I'll agree with you on this point, but I don't think its ANY worse than Futures.

2. Trader too profitable, etc.... THAT 110% B.S.!!! If your using some craptastic bucket shop broker sure... but its a scam anyway if you are. Use a true ECN broker like MB Trading and THERE IS NONE OF THAT.

3. 110% False if you use a REAL ECN broker.

4. No regulation, i agree, there is less regulation than futures markets without any shadow of a doubt.

5. Trading against the broker... again... USING A REAL ECN avoids this complication all together! A broker like MB Trading makes their money off COMMISSIONS like any other broker. I've attached a screenshot from my broker applet... which shows the REAL TIME liquidity and spread on each pair that changes with market conditions.

 

attachment.php?attachmentid=7649&stc=1&d=1220021336

 

Group of traders that go around a hunt stops? The pros/pit isn't out to get me? Really? They certainly aren't my friend in a trade. They will purposely try and screw retail tradrs out of money. Why do you think when a market like the CBOT goes down the pit traders in the CME start pushing the market as far as they can in the opposite direction? Its to f**k all of the traders caught in positions in the opposite direction over at the CBOT.

1.jpg.32957f75a9130dc0b45f01143ad5a507.jpg

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Group of traders that go around a hunt stops? The pros/pit isn't out to get me? Really? They certainly aren't my friend in a trade. They will purposely try and screw retail tradrs out of money.

 

If you know this, then use it to your advantage. If they are purposely screwing the retail traders then take the opposite side, use your amazing and spectacular knowledge to your advantage.

 

I guess since you like 4x so much, there are no pro's there to screw you either.

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Regardless... i'm sorry I got us off on this tangent. I've gotten a bit heated and I don't have any reason to take it out on anyone in here that doesn't agree with me.

 

So lets stop bickering like little immature kids over at elitetrader and get back on topic with some constructive posts.

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thats why I said CBOT... last year... All the YM traders got stuck short and the CME pit pushed the markets 200 points against them.

 

I'll borrow a prior quote of yours to relate to this.

 

"But news events aren't exactly manipulation IMHO and anyone stupid enough to get caught in that situation deserves to lose their money."

 

STUPID is the common denominator. If you don't have a hedging plan you have no business trading futures. Thank god I was paper then and saw what could have happened without a proper business plan! The vehicle makes a difference, but the plan is what can make or break a trader. :)

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I've attempted to move the posts about futures vs. forex into a new thread. As a mod of this one area, I can only move into a new candlestick corner thread. We'll keep it here unless another mod wants to move it.

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Trading against the broker... again... USING A REAL ECN avoids this complication all together! A broker like MB Trading makes their money off COMMISSIONS like any other broker. I've attached a screenshot from my broker applet... which shows the REAL TIME liquidity and spread on each pair that changes with market conditions.

 

Seriously, mate.

 

How do you think using an unregulated, uncentralized ECN is safer than a regulated currency futures market like the IMM at the CME?

 

Do you really know who is behind the market moves at your ECN? That price feed is manipulated like a bookie moving the betting line in order to attract bids.

 

Simple enough really.

 

Maybe some forex pros will come aboard to dispell this myth once and for all.

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ohhhhhhhhh my god.

 

1. I never stated that an unregulated market was SAFER than a regulated market. In fact, I said the opposite. What are we worried about with an unregulated market again? Whats going to happen? Am I going to wake up tomorrow and the market will have dissapeared? Will the world cease to trade currencies? Are all the banks all of a sudden not going to want to be able to hedge against currency flucutations? Give me a break!

 

As far as I can tell the only real downside to an unregulated market is that there is no quoted volume in spot forex, unlike in IMM at CME. But if you don't use it, whats the big deal?

 

2. THE PRICE FEED ISN'T MANIPULATED THROUGH AN ECN.

 

Go do some google searches on what an ECN is...

 

ECN don't dictate prices... thats the entire POINT of an ECN. What you're talking about is what bucket shops do like FXCM and any forex broker that offers a "fixed spread"... Those shops ARE betting against you and those shops DO manipulate order prices.

 

I'm not the one putting all of this forex b.s. myths in this thread. Every one of these arguments have been propagated for years by threads like this... Go do a search on the babypips.com forum and I think you'll find all the answers to the questions you've been searching for.

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daed - I am curious, so understand not an attack here.

 

What firms are like what you've said here where you just pay a commission and in theory the firms do not care if you win or lose? I would like to take a look and see a few examples of firms like that.

 

Do you personally regularly w/draw profits from your account w/o issues? Do you see any of these mysterious spikes that you do hear about?

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daed - I am curious, so understand not an attack here.

 

What firms are like what you've said here where you just pay a commission and in theory the firms do not care if you win or lose? I would like to take a look and see a few examples of firms like that.

 

Do you personally regularly w/draw profits from your account w/o issues? Do you see any of these mysterious spikes that you do hear about?

 

MB Trading (EFX Group) is their introducing broker and who I use personally. Even the big names for futures like GFT, etc are still all offering fixed spreads which means they are pretty much screwing you. EFX actually gives you Level II on all of the forex markets, which you can't really get with most bucket shops. But finding a true ECN is hard to come by as they are relatively new to spot forex. They are based on a traditional brokerage structure. Rather than paying a fixed spread like other brokers I pay a set commission for my trade and I get the best spread on the pair at the prevailing time. I mean, sometimes there is NO spread on some of the pairs, but with other brokers your still going to be getting hit with their fixed spread of 2-5 pips on every entry and exit. That is how the bucket shops make tons of money. ECN's charge you a commission to make their money and in return offer you the REAL prices and spreads in an unmanipulated fashion.

 

I have also NEVER had a problem withdrawing ANY amount of money from my trading accounts. I have a trader friend that trades 100 lots with dbfx.com (which I don't think is an ecn actually) but he clears between 100-300k a month and has never had an issue withdrawing more than 100k from them whenever he wants. That is one of the biggest myths that really hasn't been true for the past 5 years. You can access your funds any time you want with no problems. I've never heard of an instance where this was not the case.

 

Hope this clears some of this up!

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What firms are like what you've said here where you just pay a commission and in theory the firms do not care if you win or lose? I would like to take a look and see a few examples of firms like that.

 

Do you personally regularly w/draw profits from your account w/o issues? Do you see any of these mysterious spikes that you do hear about?

 

Interactive Brokers is one of them. I never had issues withdrawing money from my account. See the below link with regards to trading Forex with them.

 

http://individuals.interactivebrokers.com/en/trading/pdfhighlights/PDF-Forex.php?ib_entity=llc

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MB Trading (EFX Group) is their introducing broker and who I use personally. Even the big names for futures like GFT, etc are still all offering fixed spreads which means they are pretty much screwing you. EFX actually gives you Level II on all of the forex markets, which you can't really get with most bucket shops. But finding a true ECN is hard to come by as they are relatively new to spot forex. They are based on a traditional brokerage structure. Rather than paying a fixed spread like other brokers I pay a set commission for my trade and I get the best spread on the pair at the prevailing time. I mean, sometimes there is NO spread on some of the pairs, but with other brokers your still going to be getting hit with their fixed spread of 2-5 pips on every entry and exit. That is how the bucket shops make tons of money. ECN's charge you a commission to make their money and in return offer you the REAL prices and spreads in an unmanipulated fashion.

 

I have also NEVER had a problem withdrawing ANY amount of money from my trading accounts. I have a trader friend that trades 100 lots with dbfx.com (which I don't think is an ecn actually) but he clears between 100-300k a month and has never had an issue withdrawing more than 100k from them whenever he wants. That is one of the biggest myths that really hasn't been true for the past 5 years. You can access your funds any time you want with no problems. I've never heard of an instance where this was not the case.

 

Hope this clears some of this up!

 

Yes, it does - and thanks for taking the time to explain your understanding of the difference between ECNs and FX bucketshops.

 

One question - how do you make sure that your $$$ are protected in the event of an unforeseen event, such as a firm bankruptcy, which happened to Refco. What then?

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Well MB Trading is registered with the NFA and they are some of the few that are going to make muster with the new capital requirements.

 

Beyond that what can any of us do if our brokers go bankrupt? I honestly am asking because you raise an excellent point that regardless of futures or forex, what does happen if our brokers go under?

 

Short of looking at their balance sheets every quarter/year what can we do to protect ourselves?

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Use brokers who provide

'Customers Segregated Accounts' with Banks

and keep check on the credit rating of the particular bank

 

This is what I do with the money market account to transfer deposit to brokers affiliated trading accounts

 

I am not sure if this is adequate though.

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It's not just trading in front of news. There are many other ways forex is way more manipulated than futures:

  • Giant random spikes to take out stops
  • If a trader is too profitable, execution slows down
  • Unable to withdraw money if account is up
  • Absolutely no regulation
  • Trading against the broker, who controls the quotes

I really dont know how you actually believe futures are more manipulated than forex. The CME and your broker are just facilitators of trade, while you are literally trading against the broker in forex, who just happens to control the quotes. That doesn't seem like its on the up and up to me. I have never heard of one trader say that they cant get executed on globex because they are too profitable.

 

And to think, that there are a group or traders that just go around hunting stops is laughable. Now price might seem that its gets attracted to your stops and then reverses, but it's ludicrous to think the pros/pits traders are out to get you. Its the function of where you are putting your stops. If you put them in obvious areas, well, then how can you say they are stop hunting? Even if they are, there are still many more ways forex is rigged against the retail trader.

 

You're basically talking about RETAIL FX - and as futures are primarily a wholesale preserve, you're comparing apples with oranges.

 

In terms of the wholesale markets it's very simple. Cash (spot) FX is the dog. Futures are the tail. Tail doesn't wag dog in this particular case. End of story.

 

GJ

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