Difference Between Trading Futures and FX - Traders Laboratory Forums

pbylina · 04-13-2011, 08:39 PM

When you trade forex, you can risk as little as 1 pip = 1 cent. Can I do this with Currency Futures? How does it work? Thanks

TheNegotiator · 04-14-2011, 08:23 AM

I am no expert on this but here is the contract specs for eur/usd micro future on the cme:-

E-micro EUR/USD

The minimum you can risk is the size of the contract. So in this case it is $1.25 per pip I believe.

pbylina · 04-14-2011, 04:47 PM

Thanks. Can I ask what do most people trade from CME?

pbylina · 04-14-2011, 05:38 PM

Is this right...Euro Future is $12.50/contract? If I only traded 1 contract with a 10 tick stop loss the risk is = 1 x $12.50 x 10 = $125?

So 2 contracts would be: 2 x $12.50 x 10=$ 250 risk?

BlowFish · 04-15-2011, 03:51 AM

Quote:

Originally Posted by pbylina »

Thanks. Can I ask what do most people trade from CME?

Because it is a centralised exchange and it is much better regulated. Most of the FX 'brokers' are bookies (they are the counter party) I guess you could use the term market maker if you are being less emotive. Not only that they are setting the price that you bet on (as there is no centralised exchange and lax reporting requirements there is a degree of flexibility in the price they set).

More recently there are 'real' brokers emerging that give you actual transparent access to the underlying market (or a fair portion of it, remember it is not centralised). Still less regulated but at least in this case the broker is not the counter party. These DMA (direct market access) brokers charge a commission rather than manipulate the price you 'trade' at.

TheNegotiator · 04-15-2011, 03:55 AM

Quote:

Originally Posted by pbylina »

Is this right...Euro Future is $12.50/contract? If I only traded 1 contract with a 10 tick stop loss the risk is = 1 x $12.50 x 10 = $125?

So 2 contracts would be: 2 x $12.50 x 10=$ 250 risk?

Yes that is correct.

pbylina · 04-15-2011, 03:20 PM

Do you think I could trade Euro/Usd Spot Fx by using Euro 6E Future chart/data feed? They move in sync and have proportional swings right?

SIUYA · 04-17-2011, 01:32 AM

Quote:

Originally Posted by pbylina »

Do you think I could trade Euro/Usd Spot Fx by using Euro 6E Future chart/data feed? They move in sync and have proportional swings right?

yes you could - you could also trade gold using an oil chart.....but it would probably not make sense.
Spot FX is not a future....suggest you learn the difference otherwise it might start getting costly.

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The Following User Says Thank You to TheNegotiator For This Useful Post:
pbylina (04-15-2011)

The Following 3 Users Say Thank You to BlowFish For This Useful Post:
clarkg888 (04-19-2011), pathfinder62 (05-08-2011), pbylina (04-15-2011)