Fx-Chaos (Template) - Page 2

jjk2 · #11 (**permalink**) 08-22-2007, 11:53 PM

Quote:

Originally Posted by 4xtrader

I read this post from other forum, forgot what the forum is.
================================================== ===
I corresponded with Bill Willams in the summer 2006, at that time I have been crazy about Trading Chaos.
And he constantly repeated, that he trades in futures and shares.
And I have always answered him, that I am involved with Forex.

And just now, probably, I understand, why did he dissuade me from Forex trading.
I think, that Bill Williams already knew about Forex controllability.
I would like to share with you this information.
It's quite interesting and instructive.

A material below he has sent me by the separate letter, and he has named it
" Reasons why I do not trade Forex ".

10.07.2006
....reasons
why I do not trade Forex
bill wms

WHEN TO NOT TRADE FOREX
Because so many people bombard us with requests
about forex, we teach people how to trade it.
Better to teach them the right way than to let
them commit financial suicide. Nevertheless, we
do not advocate forex trading unless you have a
particular reason as to why you need to trade
during the middle of the night, or you have a
specific need to trade in currency pairs that
do not involve the U.S. dollar. If the U.S.dollar
is involved and you are able to trade during U.S.
market hours (7:20am-2:00pm U.S.Central Time) you
are much better off trading currencies in the
Chicago currency futures markets. Here is the
reason why:

* Brokers deceive you about there being no com-
missions. $30 minimum/round turn(called spread)
is in reality a commission that eats up your
capital at an astonishing rate. Even winning
traders lose money and end up with negative
results because of this outlandish overhead.
Trading futures, you never have to pay a broker
more than $10/round turn, and usually quite a
bit less than that.

* Guaranteed fills. True but... The only way a
broker can guarantee fills is for the broker to
become the buyer or seller of last resort. That
means the broker is running a bucket shop. All
forex brokers are the buyer and seller of last
resort.

* Brokers do not tell the truth about volume.
They show the volume for all forex trading,
which doesn't even come close to the volume
they truly have at their own brokerage, which
is where you are trading. Volume in currency
futures is considerably higher than the volume
traded at any single forex broker, often great-
er by a factor of ten.

* Leaning. Brokers say they are charging you a
3 pip spread to trade the popular currency
pairs. But in reality a broker may be making
as much or more than 10 pips on your trades.
He does this by skewing prices. Since you are
not trading at an exchange, the broker can
feed you any price he wants to feed you. He
can buy at the bank for perhaps 7 pips less
than he sells to you. He then charges you 3
pips for the privilege of being ripped off for
a total of 10 pips.

* Unregulated. Forex may sound like an exchange
but it isn't. It exists entirely in cyberspace
with every broker and every bank having diff-
erent prices for any particular currency.There
is no regulation,even for brokers who register
with the CFTC and the NFA. Forex brokers do
not have to mark to market each day as do
futures brokers. If your forex broker files
for bankruptcy or absconds with your money you
have zero recourse.

* No guarantee. If a forex broker does go out
of business, you could lose all your money.
There are no guarantees and no one standing
behind it. Futures brokers are required to
mark to market every day. They have to put up
cash to cover every open trade on their books.
Future brokers have gone broke, but no future
customer has ever lost one cent of the money
in his trading account because of a failed
broker. Nor have they had to wait for their
money. It is immediately available.

* You can get exactly the same action in the
euro fx futures as you get in the"Euro" forex.
Commissions are as low as one tenth per round
turn depending on volume, through a regulated
broker, trading electronically at an exchange
where you know the true price of the currency.

* What is the true price? A forex broker can only
give you the price of a currency as quoted to
him by the bank through which he trades. Banks
have diffeing prices for a currency. You never
know what the real price is because there is no
central exchange through which all prices flow.
Besides not knowing the true price from the
bank, you can also be deceived by "leaning" or
"skewing" of the real price at the bank. Forex
brokers comonly lean the prices.

* Forex brokers are not truthful. They lure
people in with hype and false advertising: "No
commissions!" "Guaranteed fills." "24 hour
trading:" Who in their right mind is going to
trade in the middle of the night unless they
have a special need. While it is true that
total forex volume is greater than in the
futures, futures volume at the exchange is
greater than the volume at your broker for the
most popularly traded currencies. The only
place where the liquidity differential matters
is in currencies like the Mexican peso, the
Brazilian real, and somebody's drachma. Those
thinly traded currencies may be more liquid in
forex. But if you trade anything but the few
most liquid and popular currencies, you are
going to be paying at least 5 pips, and often
more. Unless you have a particular comercial
need to deal in Polish ziotys, Indian rupees,
or some other thinly traded currency, you don't
need forex.

* You are told by forex brokers that there is
little or no stop running. This is one of their
biggest and boldest fabrications. The truth is
there is far more stop running in forex than in
futures, and possibly as much stop running as
in the stock market. I have friends who work in
forex as well as many traders who of necessity
have to trade forex. One of my students is a
market maker in forex. These are people who
should know, but in case you don't want to
believe me or them, simple observation of forex
trading will reveal the vast amount of stop
running that takes place there. Who is it that
runs the stop? It's your friendly forex broker,
that's who. The broker has a vested interest in
seeing to it that your orders are filled. Stop
running is nothing more than order filling.
The broker sees to it that everybody's orders
get filled.

* Probably you have heard that if your are win-
ning regularly in forex, you may be barred from
trading. Is this true? Yes it is. The fact that
is true is just another proof that when you
trade forex you are trading at a bucket shop.
In the book, "Reminiscnces of a Stock Operator,
" we are told that Jesse Livermore was banned
from trading a certain stock brokers because
they couldn't stand him beating the housel. The
same thing is true with many forex brokers.
Since they are the ones guaranteeing you a fill
they in effect the buyer and seller of last re-
sort. The truth is that most forex brokers have
precious little liquidity at their firms. In
order to give you the impression that there is
liquidity, it is the broker who gives you your
fill. It is the broker who does the stop run-
ning that supposedly doesn't exist in forex.
But if you are regularly beating the socks off
the broker, he will ban you from trading at his
firm.
Now you know the truth about forex. I challenge
any and all forex brokers to prove that I am
wrong.

=================================================

then trading @ MBTrading forex, and FX Futures are different? are MBT bucketshops as well? but i thought they were "ecn" "nondesk dealer"

is FX futures more expensive to trade? if i started out with 500 dollars, forex would be more ideal wouldn't it ?

P/L on future contracts are made through daily. so if i open a euro future position today, tomorrow i will get margin call, and the day after it will go back up. isn't this dangerous.

Linuxser · #12 (**permalink**) 08-24-2007, 02:16 AM

The elegant way to say " My system can not perform very well in forex market".

CP6 · #13 (**permalink**) 08-26-2007, 02:44 PM

as what im understand, bill willliams talking about broker...he doesnt mention that he didnt trade forex because his method doesnt work.

thnx

iGoR · #14 (**permalink**) 08-26-2007, 11:41 PM

Quote:

Originally Posted by Linuxser

The elegant way to say " My system can not perform very well in forex market".

Hi Linuxser,

Indeed you missed something. He doesn't say that he doesn't trade the curruncy markets. But he takes his positions true the cme currency futures (as I do).
I my room I explained the same things already many times.

But the problem is that many people feel attrackted to the forex (spreadbrokers ) because they can start with 1000$ or as low as a few hundred dollar and the stupid leverages as high as 400:1 wich gives them a feeling that they can turn pennys into millions.
I say also if you get the possibility to feel as a trader and do like a trader then you need to be willing to pay something back for that in the form of spread and now and then getting ripped of in news etc..
If you want honesty and playing the game correct and not getting ripped of then go to cme currency futures.
I take my signals produced by MT4 spread brokers but take my positions true currency futures (but they are equal to "only" a +/-50:1 leverage and one needs severall thousand to start. Not to take in 1 contract but most future brokers ask a minimum only to open an account).

During normall daytime for the 6 majors, I pay for each one of them only 1 pip spread with the cme currency futures.

friendly regards...iGoR

Linuxser · #15 (**permalink**) 08-27-2007, 01:34 AM

Hi iGoR.

As always you got the point.

My phrase was IMHO. That´s what I feel about B Williams methods.

I have all books written by him and his daughter. I consider an excellent introduction to trading and the psychological question.

But the system is not good for me (and here is my only opinion again), it could be work during 90´s.

After read Mandelbrot my conception about fractals it´s completely different and BW fractals (for me) are only swing highs/lows and S&R.

The awesome oscillator it's 5/34/5 or better know as Elliot wave oscillator invented during middle 80´s.

Alligator? three moving averages, just that.

Pin bar?, an historical reversal pattern.

IMHO, he only apply different wide available techniques with a different name.

It looks pretty and powerful, and simple. That´s the beauty.

However, the psychological matter it's really good for the novice trader.

I, as many other, was fascinated with all stuff, but my romance it was short.

About CME and forex. You're completely right friend.
But my trading style does not necessarily needs all advantages you mention. Also, my leverage is 50:1, the low my broker let me choose and I play a lot with edging.
Leverage with currency futures are a little different.

CME it´s thousand miles forward Forex brokers.
Today, with 2.5k you can start to trade mini contracts, intra day margins low as $500 (at least with infinity futures).
With 5k you could take the challenge with less risk.

The spread for ECE7 is low as 6.25 90% of the time, that's 1 pip.

But main problem is to find some MT4 broker offering real quotes for the products.

IE: Euro value on forex is not CME Euro FX (ECE6) value, right?.

How do you do that?

What MT4 broker are you using?

Looking at your posts I see your trades through CME and pictures of MT4 with forex values.
How do you do the conversion?.
Maybe as an experienced trader could do that in mind only. But it's problem for me.

Some days ago I took a trade using data WHC broker data of 6C but it was a pain. When prices goes up on CME, in my platform it goes down.

I was thinking on trade currency futures through CME from some time,

Maybe you could open a thread to help with your experience iGoR.

And some of us can we move to CME using your knowledge.

Regards and thanks.

iGoR · #16 (**permalink**) 08-28-2007, 12:28 PM

Quote:

Originally Posted by Linuxser

Hi iGoR.

As always you got the point.

My phrase was IMHO. That´s what I feel about B Williams methods.

I have all books written by him and his daughter. I consider an excellent introduction to trading and the psychological question.

But the system is not good for me (and here is my only opinion again), it could be work during 90´s.

After read Mandelbrot my conception about fractals it´s completely different and BW fractals (for me) are only swing highs/lows and S&R.

The awesome oscillator it's 5/34/5 or better know as Elliot wave oscillator invented during middle 80´s.

Alligator? three moving averages, just that.

Pin bar?, an historical reversal pattern.

IMHO, he only apply different wide available techniques with a different name.

It looks pretty and powerful, and simple. That´s the beauty.

However, the psychological matter it's really good for the novice trader.

I, as many other, was fascinated with all stuff, but my romance it was short.

About CME and forex. You're completely right friend.
But my trading style does not necessarily needs all advantages you mention. Also, my leverage is 50:1, the low my broker let me choose and I play a lot with edging.
Leverage with currency futures are a little different.

CME it´s thousand miles forward Forex brokers.
Today, with 2.5k you can start to trade mini contracts, intra day margins low as $500 (at least with infinity futures).
With 5k you could take the challenge with less risk.

The spread for ECE7 is low as 6.25 90% of the time, that's 1 pip.

But main problem is to find some MT4 broker offering real quotes for the products.

IE: Euro value on forex is not CME Euro FX (ECE6) value, right?.

How do you do that?

What MT4 broker are you using?

Looking at your posts I see your trades through CME and pictures of MT4 with forex values.
How do you do the conversion?.
Maybe as an experienced trader could do that in mind only. But it's problem for me.

Some days ago I took a trade using data WHC broker data of 6C but it was a pain. When prices goes up on CME, in my platform it goes down.

I was thinking on trade currency futures through CME from some time,

Maybe you could open a thread to help with your experience iGoR.

And some of us can we move to CME using your knowledge.

Regards and thanks.

Hi Linuxser,

It is much simpler then that.
One does not have to do any conversion what so ever. People ask me sometimes: iGoR there is a difference of 20-30pips between for ex. the euro FX and the euro CME...so how do you calculate this difference in your postions?...

I just don't. As I said, when a signal is triggered on the the euro Fx (doesn't matter with what system), at that moment I just take my position on the euro CME. Nothing more nothing less. When my system on the euro FX tells me to get out or turn then I do this on my postion on the euro CME.

Or you are a swing trader (4-5 days with a position and you will see that you profit is the same but a few pips less spread) wich is not that important as a swing trader because of the very few trades that you take.

Or you are an intraday trader (taking in severall positions a day) and there you will see that the difference is hughe.
I proofed already many times in my room that I was capable to scalp on small moves and and get away with 4-5-6-7 pips profit by taking in my positions on cme based on signals that were generated true FX data were if people in my room tryed the very same on the FX market true their spread broker, in some cases they even got away with a small loss. Or that is was absolutly not worth while the effort and stress.

So I even don't look to the symbols that you mensioned but I look to the FX symbols.

The only way that one would be faced with the negative elements of these futures is that you open a position in the beginning of the new contract and hold on this contract till it expires. You would lose +/- 20-30 pips even if theorethicly the price would not have moved.
But that counts also for the FX if you would open a position with a negative swap and hold on to it for 3 months.

About my broker or MT4 broker: I do not use any forex nore spread nore MT4 broker. My broker is whselfinvest.com
It is a broker were I can trade all nescessary futures indexes or markets from one account.
That way I can diversify all lot more.

One of the key elements in trading succesfully is that one trades according a method or strategy or system on different markets.
People who trade FX seem to forget that the majority of the pairs have all the US dollar in the price setting of a certain pair.
A couple of weeks ago it was nice to see that the dollar was getting very weak. That was leading to nearly al pairs sitting against historical lows and highs. Suddenly there was some sort of a correction of the US dollar ( caused by the amercian national bank intervening). If one that moment you trade a system on severall pairs and you have that sudden reversall it is leading to a loss on all these pairs. Wich is causing a hughe drawdown.

In my professional trading (for my privat fund) I trade beside some FX pairs (true currency futures) also the YM, ES, DAXXETRA, european BUND, T-Bond.
This way one will see that the MaxDD's are a lot smaller in sudden market reversals.
Were most of the people concentrate on making as much possible profit I concentrate on having a drawdown as small as possible. The smaller the drawdown the higher leverage one can take in. When I talk about leverage I mean the smaller amount of money that one needs to place to start of in my fund to cover all markets.
But still it takes severall 10.000$ to start. A quick look to the margins learns that a S&P-mini and dow-mini require already 11.000$ ( 5 and 6.000$)
A single daxxfuture is 14.000€.

That is also one of the reasons that I'm convinsed that people with small amount of money have nearly no chance to earn money in a professional way because they can not trade on different markets wich is one of the key elements in surviving and making money. Some spread brokers give them the opportunity to trade other markets or indexes with very small amounts of money and ask very small margins but the trading cost are so high that only the broker is getting richer.

My advice is trade with enough money (severall tens of thousands dollar) and stay away from forex brokers. Or you have only a few thousand dollars but be awere that it will be nearly impossible to make a living out of that over a longer period of time because of the limitations and the trading costs.

friendly regards...iGoR

Linuxser · #17 (**permalink**) 08-28-2007, 05:42 PM

A perfect answer.

Thanks friend. I really appreciate your time to write all answers.

Meanwhile I was reading I remembered some things that don't know what I stopped to research.

It´s so simple in fact.

Now with confirmation if IGoR that prices moves at same way in both markets I could post the following.

From time to time I take a look at some CME feature to see what's going on there

By looking at the picture you (readers of this thread) could see how the price is formed and why there is some difference, but in deep, price between forex and globex it's the same.

(I adjusted by hand the forward points in the first currency.)

About capital, all your comments are the hard and real truth, iGoR.

One of the best problem for new traders is under capitalization.

I like to think I´m a swing trader. I´m not feel comfortably by doing 5 pips and being on the middle of the storm buying or selling and closing some minutes later.
I don't know if I´m too lazy or I prefer to spend the time by focus on charts waiting for stronger moves.

My head wants to think: I´m right, market is wrong, soon or later this will go up/down.

So, this a problem, without stops I can't afford more risk than just 0.5 to 1% of net capital depend on currency traded.

It's common for me being 50/300 pips away. But with the right MM you don't feel any kind of fear.

Another part of my style is that the most important thing is to keep the money with me, by closing a position with loss I´m giving the money to someone else.
Also, with 50:1 or lower leverage, in almost any broker, you also earn interest or pay some insignificant proportion.

Just be sure to have enough money to support when market goes against you.

Coming back to CME.

Same thing with futures margin. With $500 for intraday trading it´s ok, but what if you need to keep position open, you need maybe 1k to 5k plus.

Unless you´ll be only interested in mini euro and mini yen which are the only two mini contracts for currencies. You would be confined to trade only two products.

I think no matter of what trading style do you have CME is the way to go.

Bi.

Gramski · #18 (**permalink**) 08-29-2007, 09:50 PM

This is what ('tunnel') Vegas said on the subject...

"Many of you will be surprised to learn that I don’t trade spot forex when I trade the US dollar currency pairs. I use the futures contracts traded on Globex at the CME. The reasons are as follows: 1) it’s cheaper than spot forex, with a 1 pip market spread most of the time, ample liquidity, and low commissions [$5 - $8 per roundturn per contract]. 2) The interest differentials are calculated into the trade price, so I get a true interest spread instead of getting screwed by the brokerage house on rollovers. 3) The market on Globex never goes down when news hits the wires. Many brokerage houses go dark for 5, 10, or even 15 minutes or more when big news items [like unemployment Friday in the US] are due and then released."

jjk2 · #19 (**permalink**) 09-23-2007, 03:46 AM

how is it cheaper? didn't iGor already mention that to trade futures you need well over 10k?

is there anyway to be trading futures or currency futures for a lesser amount? North Finance ? MBT ?

right now im undecided. should i wait till i get well over 10k. or just try out a forex broker. like Oanda.

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