Hi guys, I'm new to the forum even though I have known Jim Kane for over six years. I was one of his first students with regards to his mentorship program. I have been trading stock and options for over 13 years and futures for over 8 years and have recently wanted to add forex to my trading and have heard some negative things about brokers and the market place when it comes to these unregulated markets. Jim had told me that years ago brokers were trading agaisnt their own customers and for example hitting stops 30 pips away etc. Now that was a few years ago and I'm sure (hope) that things are cleaner these days. But I wanted to get some feedback from the group and what your current experience is trading spot forex and the pros and cons compare to trading futures for example. I'm glad to be part of this forum now and look forward to sharing thoughts and ideas.

Duane? You trade a lot of FX, right? M? Some of my overseas readers trade FX, I think. Give us your experiences.

It's difficult to give a definite answer to your question as it depends on a timeframe you are going to trade and the broker you choose.
I happen to trade Forex for a few months and can't remember any situation that a trade I made was shaken out, the price moved further away just few pips (or few tens on higher timeframe set-ups) and then moved in the direction indicated by set-up, showing decent reaction. It would rather go to the next PTA or completely ignore the set-up. But I have no experience in cash nor futures markets to compare 'typical' price behaviour.
What I could see reading the forums is that the brokers who started their activity in my country not earlier then 3 or 5 years ago are not accused of stop-loss hunting, unlike the older ones, who earned their reputation earlier. It seems that OTC brokers stopped robbing their clients or at least decreased the scale of it.
In most cases I've heard about, SL hunting concerned scalping and intraday trades. This is logical as such operation on larger timeframes, where stop loss levels are much wider, would require a broker to move their quotations far away from OTC market avarage, which bears too much risk.

Good reply, Marcin, it lines up with my experience. I found that around 30 pips was their limit, further away they'd leave me alone, as it was just pushing it too far, and they'd get called out on it. They knew how to rob people just right and get away with it. But, perhaps that behavior has mostly went away nowadays.

Thanks for your reply Marcin. I'm more of a swing trader myself so I mainly look at daily to 60 min charts for potential trades. Now based on my observations over the past few weeks in studying typical moves in these instruments in my traded time frame, looks like I will be trying to capture moves of at least 150 pips or more risking 50 pips or less for a typical swing trade lasting hours to several days. I have setup my forex account with FXCM and made my first trade today.

Hi. I apologize for not responding sooner. I have never traded Forex. A few years ago, I had a futures trading account with a large broker and that account was "regulated." Forex accounts, however, with that broker, were not "regulated." The brokerage went out of business, I believe they declared bankruptcy and I think it was due to the actions of one of their traders who lost a lot of money and was able to hide his losses, or at least defer their discovery.

I did not lose any money from my "regulated' futures trading account, and I found another broker. If memory serves me correctly, the Forex account holders were not as fortunate as I, and they lost money from their accounts, because the brokerage "went under" and because the Forex accounts were not "regulated."

I am glad that my account was regulated. That saved me some money.

I do not know if Forex accounts nowadays are regulated or not, or whether one could lose money from their account in a manner similar to the above scenario. It would be good to know, in case the scenario discussed above could happen again.

I think if I were going to trade currencies, I might want to trade futures contracts with a "regulated' futures trading account. I hope this helps.

Good Trading and Good Luck,

Al Kamego

Hi fib21,
I too trade the FX markets, cash and futures.
I concentrate most of my efforts on the top, most liquid pairs i.e EUR, JPY, USD, AUD, GBP in any combination. But my most favorite is the EUR/USD pair ,cash and futures, wich reign supreme in FX and trades almost non-stop 24h. My other trades are indexes and bond futures and sometimes the oil futures. The important thing is that any chosen market MUST have liquidity when a setup shows up. It doesn't really matter what you trade as long as you have good enough liquidity for your trades. So sticking to the most active markets day-in day out will go a long way to help your bottom line.
I like FXCM's Marketscope software but their spreads are still too wide, on average, compared to the general industry standards from other brokers. IB seems to be ok too.
And yes it seems that the practice to shoot spikes through your far away stops has decreased in recent years...maybe somebody in high place with good powerful connections has exposed the 'fraud' ? who knows? but I'm glad it has improved. Good broker competition is good for the customers ...
T

Thanks Albert and TonyC, I really appreciate your feedback. TonyC you mentioned you like FXCM's Marketscope so I'm assuming that you are using it mainly for chart work and then are executing trades at another broker is that correct and if so what broker do you recommend?

So far I really like Marketscope as well and my overall experience with FXCM has been good but just like you I think the spreads are a little wide.

After doing more research and going back and forth between a few FX brokers I decided to open an account with OANDA www.oanda.com they seem to be one of the leaders in the industry and they have a FX Manager platform which is important for me as a CTA.

They also let you choose the currency you want balances in which I think it's critical at this point since the dollar is probably headed to zero. They even pay interest on account balances which isn't common for FX brokers to share. Right now for example if balances are in Australian dollar you could get 4.5% in interest.

I have heard a lot about Oanda, and was researching them myself a little while ago when I got distracted on other things.


BTW, fib21, now that you have a score of 100, you can vote people's posts up if you find them useful. That lets everyone know what is worth their time posting, and what doesn't seem to be as useful to the readers.

Hi, fib21, welcome to the forum. Why didn't you join the forum sooner if you don't mind me asking? It sounds like you were actively trading.

Originally posted by fib21

Hi guys, I'm new to the forum even though I have known Jim Kane for over six years. I was one of his first students with regards to his mentorship program.

Hi tx ches. Yes my CTA business and family (married with 6 kids) has kept me busy for sure, but I honestly didn't know about the members area and I have never really had much interest in trading forumns or the like (I'm lone ranger) but I always enjoyed Jim's monthly commentary on his website.

Then recently just thinking about Jim and how much I missed his commentary and also wondering what he might be up to I came across the members area for the first time and asked Jim if I could have access, so here we are.

I know most of you are probably day traders and I'm more of a swing-position trader but it's nice to see like minded individuals coming together thanks to one person that was willing to share his experience, wisdom and thoughts in this crazy thing we call trading and because of that we have all benefited greatly.