[AbeSmith]

No surprise this forum is filled with futures cheerleaders. Probably lots of those people earned a good living from those futures exchanges trading their other products, and like a GM or Chrystler employees they are very proud of their company and drive only American made cars when in fact everyone knows it is of lower quality. As for me, I must admit Forex is much better choice than futures. I opened a $300 account with oanda earlier this years. Forex is especially good because you get to control the tick size like grains of sand. YOu can make each tick be very little money with a micro account, or alot of money with the huge leverage that you are offered. This is not so with Futures, which are more like rocks or bricks. In other words, each tick is like a big chunks. That may be ok with some, but for beginner traders who don't want to spend lots of money learning the market, it can be too much. Also, the grains of sand trait of Forex makes it easier to trader longer time frames, which will require smaller position size.

The beauty of Forex is that it goes both ways, it give you very high leverage too, so you can have the big chunks as well.

And Forex is more liquid. It is the most popular market, traded all over the world.

I'm not too concerned with the less regulation in Forex. Forex is becoming more regulated. And Oanada seems to be a trustworthy company and comes highly recommended by traders.

Here is info from oanda site about it's reliability:
Why Trade Forex Online with OANDA? - OANDA FXTrade

oanda has offered online currency exchange information since 1996 and forex trading services since 2001.
oanda is registered with the U.S. Commodity Futures Trading Commission (CFTC) as a Futures Commission Merchant (FCM) and is a member of the National Futures Association (NFA # 0325821).

Financial regulations require oanda to maintain capital reserves at specified levels. oanda’s reserves exceed these levels many times over.
Our investors are industry and technology leaders confident in oanda's technology and its use of that technology to redefine currency trading.
We manage risks with sophisticated hedging algorithms and strict hedging policies. Any net exposure above predefined thresholds is hedged with third-party banks at the current market spread. Hedging mechanisms are real-time, fully automated and always on.
oanda is never exposed to customer losses.The FXTrade platform automatically closes positions with a margin call before a customer’s losses can exceed their balance. Customers will never owe us money (we guarantee it in our customer agreement).
oanda is a trusted partner in the forex market, providing forex rates used by financial institutions and the big four accounting firms. Our FXTrade technology is a proven white label forex platform for financial institutions.

[thalestrader]

Originally Posted by AbeSmith »

No surprise this forum is filled with futures cheerleaders ... As for me, I must admit Forex is much better choice than futures. I opened a $300 account with oanda earlier this years. Forex is especially good because you get to control the tick size like grains of sand. YOu can make each tick be very little money with a micro account, or alot of money with the huge leverage that you are offered. This is not so with Futures, which are more like rocks or bricks. In other words, each tick is like a big chunks. That may be ok with some, but for beginner traders who don't want to spend lots of money learning the market, it can be too much. Also, the grains of sand trait of Forex makes it easier to trader longer time frames, which will require smaller position size. ... [/I]

Hi Abe,

Very good points indeed (and I mean that about your entire post and not just the part I quoted above).

I was answering another poster's question concerning the relationship between futures price and spot price, and I did not intend to come across as a futures cheerleader.

I too think forex offers a great opportunity, especially for the beginner. I have no problem with the bucket shop business model. My daughter is learning to trade using forex microlots. I think folks coming to this forum who are considering trying to learn to trade would be fortunate to stumble across your post and to give a small micro or mini account a try. After all, if you cannot double a $25 microlot account without blowing it up, you will likely not be able to double a $2500 or $25000 futures account without first blowing it up.

Best Wishes,

Thales

[diablo272]

Originally Posted by AbeSmith »

I opened a $300 account with oanda earlier this years. Forex is especially good because you get to control the tick size like grains of sand. YOu can make each tick be very little money with a micro account, or alot of money with the huge leverage that you are offered.

It's much easier emotionally for most people to blow 10 $300 accounts than it is to blow 1 $3000 account, and frankly that is why micro lots exist. I'm not saying micro accounts are bad, I'm just saying that it can also be looked at as a negative. It really depends on the mentality of the trader, just like anything else.

I think that micro accounts are usually advertised as something for inexperienced traders, but really they are better for traders who have at least some experience, because it is still possible to lose the same amount with micro accounts as it is with normal lot size, or futures, but the perceived risk is less (to a newbie). I have read threads on Babypips and other forums where someone claims to have turned a $25 micro account into a $25,000 account, and I don't doubt them, but I think that for every person who has done that, there are 100 or 1000 who have blown up many micro accounts. Of course, this is the same as saying that for every 1 person who is a profitable trader in general, there might be 100 or 1000 who are not profitable. So my point is that, just as Thales said that if you can't be profitable with a micro account you probably can't be profitable with a normal sized account, the opposite is true. If you can't be profitable with a normal sized account, a micro account won't somehow make you a better trader.

And as an aside, to Thales: This post is not directed at you regarding your daughter's forex account. That is none of my business, just to be clear.

[thalestrader]

Hi Friend Diablo272,

Great points!

Originally Posted by diablo272 »

It's much easier emotionally for most people to blow 10 $300 accounts than it is to blow 1 $3000 account.

I would also add that it is easier on the wallet to lose $300 repeatedly over several years than to blow a $3k grubstake inside of a few months.

Originally Posted by diablo272 »

So my point is that, just as Thales said that if you can't be profitable with a micro account you probably can't be profitable with a normal sized account, the opposite is true. If you can't be profitable with a normal sized account, a micro account won't somehow make you a better trader.

While you say, "the opposite is true," I imagine what you mean is that "the opposite is also true." In which case, you and I are in complete agreement. My point was not that a micro account would make you a better trader. My point was that for the new and typically underfunded trader, a small account offers an opportunity to learn your craft using real money (rather than sim or demo trading, which, in my opinion, is useful only to learn how to use a particular platform, and teaches nothing about trading) while risking, say $3.00/trade instead of $300/trade.

Originally Posted by diablo272 »

It really depends on the mentality of the trader

And this, of course, is what will determine whether a particular trader ever becomes consistently profitable or remains consistenly a loser to at best marginally profitable trader.

Best Wishes,

Thales

[diablo272]

Originally Posted by thalestrader »

I would also add that it is easier on the wallet to lose $300 repeatedly over several years than to blow a $3k grubstake inside of a few months.

Good point, I didn't give much consideration to time while writing my previous post.

Originally Posted by thalestrader »

While you say, "the opposite is true," I imagine what you mean is that "the opposite is also true." In which case, you and I are in complete agreement. My point was not that a micro account would make you a better trader. My point was that for the new and typically underfunded trader, a small account offers an opportunity to learn your craft using real money (rather than sim or demo trading, which, in my opinion, is useful only to learn how to use a particular platform, and teaches nothing about trading) while risking, say $3.00/trade instead of $300/trade.

Yes, that is what I meant to say, and I agree with what you're saying here as well.

Have a good weekend!

[BlowFish]

Originally Posted by AbeSmith »

And Forex is more liquid. It is the most popular market, traded all over the world.

AbeSmith I don't disagree with your post I have a couple accounts with FX bucket shops (actually they are spread betting accounts...same thing except no tax). The complete flexibility in position sizing is nice.

It is worth pointing out that most retail traders get no access to the underlying liquidity as you are essentially taking a bet with your bookie. This doesn't bother me (or most other people I imagine) but I do know people that have had difficulties when there size has increased.