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Be aware that there are also forex futures traded on the cme that have all
the volatility and long hours of the of the forex spot markets, but with
far tighter spreads (at least as are visible in the electronically traded
versions). Of course, you can't do George-Soros-sized trades, but I don't
have that size problem.
Also, take a look at the article (TA of S&C June, 2004, pg 52) "Forex
Trading Platforms And the Real World." You might find it interesting to see
how retail forex brokers skin a retail trade. That's where the wide spread
comes from. It's the brokers' juice for his "commision-free trade."
red beans
At 12:06 PM 5/24/2004, you wrote:
>Similarly, FOREX does not seem attractive.. Perhaps I'm mistaken?
>
>A 4-pip spread on FOREX amounts to perhaps 30 to 50 dollars?
>If you are trading multiple contracts you could find yourself in the hole
>to the degree of $100-$200 per trade??
>
>Am I confused?
>
>I had another FOREX broker try to pressure me into trading that stuff this
>week.. He said the cost (spread) is high, but the liquidity is great and you
>can trade 24 hours a day..
>
>Heck I don't have a liquidity issue in S&P and I don't want to trade 24
>hours a day. Not at that cost, for sure.
>
>Any comment on the high cost of FOREX? How much is 5 contracts X 4 pips?
>Is that a smart way to trade?
>
>-Neal.
>
>EarlA wrote:
>>Your gut instincts are correct ... when you see wide spreads, you are
>>looking at illiquid markets in which the MM's are taking the cream ...
>>RUN UNLESS YOU ARE A LONG TERM INVESTOR. Look at the SP and NDX emini (ES
>>and NQ) as these have strong depth and tight spreads, especially ES.
>>
>>Earl
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