To ppteam and currencies traders

SAR

ppteam,
Would you tell why you trade currencies futures instead of spot? I just took a workshop by Forex.  It was a good seminar but I still could not get clear reason from the speaker to tell the pros and cons of each.
It is too 2-3 pips spread decent or too big?  Global Future provides $5 per round trade. Are the cost good enough for a day trader?

Thanks in front.

ppteam

This is complicated. I will try my best. Other people are welcome to add or correct.

FX Future vs. FX Spot.

Pros:

1. FX Future has an exchange which is CME. So unlike FX Spot, it is a regulated market.
2. In a single future account, not only you can trade FX Future, but also you can trade all other futures, like ES/YM, etc.
3. Basically almost all USD majors are available in FX Futures: EUR/USD, GBP/USD, JPY/USD...
4. Unlike some FX shop dealers, CME won't trade against you. The data feed is always reliable and consistent.

Cons:

1. You cannot trade some pairs, EUR/JPY, GBP/JPY, in future market. They still have futures, but the volume is not there. EJ and GJ normally have bigger trading range than EU or GU.
2. No trading between 5pm-6pm on Mon to Thursday for FX future. Spot market doesn't have such limitation. This is a drawback if you wanna hold some positions into evening. On Sunday, Spot market opens at 5pm, future opens at 6pm.


Diff:

Take EU as example, one standard lot in spot is $100k, one EU future size is $125k.
GU spot is still $100k, future is $62.5k. The size for other USD pairs are normally $100k on both spot and future.

In my mind, if you only day trade USD major pairs, I don't see much difference between spot and future, unless you look for the wilder move in EJ or GJ.  $5 commission is nothing for day trade. One tick EU future is worth $12.5.

SAR

Very appreciate!!
Can you directly trade via CME, instead though other online broker such as GlobalFuture, etc.?
Thanks again!

SAR

I feel trading currencies is a way to go as globalizationaccelaration and US Dollar weakening since 9.11.   even succesfully trading US stock market alone could not help ...

ppteam

No, you cannot trade through CME.
CME is an exchange, not a broker. You need to find a broker which allows you trade future.

btw, day trading FX has nothing to do with 'globalizationaccelaration', it's just trading.