Joe Ross / When Not To Trade FX
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Thread: Joe Ross / When Not To Trade FX

  1. #1

    Since so many men and women bombard us with requests about Foreign Exchange, we teach people how to exchange it. Much better to teach them the right way than to allow them commit suicide. But we do not advoe Foreign Exchange trading unless you've got a particular reason as to why you need to trade during the middle of the nighttime, or you have a certain need to exchange in currency pairs that do not demand the U.S. dollar If the U.S. dollar is involved and you're able to exchange during U.S. market hours (7:20am-2:00pm U.S. Central Time) you're better off trading currencies at the Chicago currency futures markets. Here are some reasons :

    • Brokers deceive you about there being no commissions. $30 minimum/round flip (called the spread) is in reality a commission that eats up your capital at an astounding rate. Even traders get rid of money and wind up with negative consequences due to this overhead that is eccentric. You should never be required to pay a broker more than $10/round turn, and usually quite.

    • Guaranteed fills. True but... The only way a broker can assure matches is to your broker to become the buyer or seller of last resort. That means the broker is operating a bucket shop. All Foreign Exchange brokers would be the buyer and seller of last resort.

    • Brokers do not tell the truth regarding quantity. They show the volume for all Foreign Exchange trading, which doesn't even come close to the volume they have at their very own brokerage, which will be where you're trading. Volume in currency futures is considerably higher than the volume traded at any single Foreign Exchange broker, often greater by a factor of ten.

    • Leaning. Brokers say they're currently charging you a 3 pip spread to exchange the popular currency pairs. But a broker may be making as much or over 10 pips on your trades. He does this by skewing prices. Since you are not trading at a market, the broker can feed you some price he wants to feed you. He can buy at the bank for possibly 7 pips less than that he sells for you. Then he charges you 3 pips for your liberty of being ripped off for a total of 10 pips.

    • Unregulated. Forex may sound like an exchange but it isn't. It is completely in cyberspace with each broker and each bank having different prices for any currency. There is little if any regulation for brokers who register with the NFA and the CFTC. Forex brokers do not need to mark to market each day as do futures brokers. If your Foreign Exchange broker files for bankruptcy or absconds you have zero recourse.

    • No guarantee. If a Foreign Exchange broker does go out of business, you could lose all your money. There are no guarantees and no 1 standing behind it. Futures brokers are required to indie to market daily. They need to put up cash to cover every trade that is open . Futures brokers have gone bankrupt, but no futures has lost one cent of the money in his trading account due to a failed broker. Nor have they had to wait for their money. It is immediately available.

    • you are able to get precisely the exact same action from the euro fx futures because you get from the”Euro” forex. Commissions are as low as 1 per round turn based on quantity, through a regulated broker, trading electronically at a market where you understand the true price of the currency.

    • What's the true price? A Foreign Exchange broker can only give you the price of a currency as quoted to him by the bank through which he deals. Banks also have differing prices for a currency. You never know what the true price is because there is not any central exchange by which prices flow. Apart from not knowing the true price in the bank, you can also be duped by”leaning” or even”skewing” of the actual price at your bank. Forex brokers narrow 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 will trade at the middle of the night till they have a unique need. While it is true that total Foreign Exchange volume is greater than in the futures, futures volume at the exchange is greater than the volume at your broker for the currencies. The loion where the liquidity differential matters is in currencies like the Mexican peso, the Brazilian real, and a person's drachma. Those thinly traded currencies may be more liquid in Foreign Exchange. But if you exchange anything but the favorite and couple most liquid currencies, you're likely to be paying 5 pips, and frequently more. Unless you've got a particular commercial need to deal in Polish zlotys, Indian rupees, or some other thinly traded currency, you don't need Foreign Exchange.

    • you're advised by Foreign Exchange brokers that there is little if any cease operating. This is one of their biggest and fabriions. The truth is there is much more stop running in Foreign Exchange than in futures, and possibly as much stop running as in the stock market. I have friends who work in Foreign Exchange as well as many traders who of necessity have to trade Foreign Exchange. One of my students is a market maker in Foreign Exchange. These are but in case you don't want to believe me or them, simple observation of Foreign Exchange trading will reveal the vast amount of stop running that takes place there. Who is? It is your friendly Foreign Exchange broker. The broker has a vested interest in seeing that your orders are satisfied. Quit is nothing more than order filling. The broker sees that everybody's order gets filled.

    • Perhaps you've noticed that if you're winning regularly in Foreign Exchange, you may be prohibited from trading. Is this accurate? Yes it is. The simple fact that it is accurate is just another proof that when you trade Foreign Exchange you are trading at a bucket shop. From the book,”Reminiscences of a Stock Operator,” we're advised that Jesse Livermore was prohibited from trading at particular stock brokers because they couldn't endure him beating the home. The identical thing is true with many Foreign Exchange brokers. Since they're the ones they're in effect the buyer and seller of last resort. The reality is that most Foreign Exchange brokers have precious little liquidity at their firms. In order to give the impression that there is liquidity to you, it is the broker who gives you your fill. It is the broker who does the cease operating that allegedly doesn't exist in Foreign Exchange. But if you're regularly beating the socks off the broker, you will be banned by him from trading.

    You know the facts about Foreign Exchange. I challenge any and all Foreign Exchange brokers to prove that I am wrong I'll change or remove anything known to be untrue in what I mentioned previously.

    Joe Ross

  2. #2
    Yeah and FCUK is a clothing line too. French Connection U K

    Geez if someone is going vow, at least spell it right.


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