FOREX vs. Futures
In what is a difference between the futures market and FOREX? What it is better to trade? Between the futures market and FOREX it is a lot of distinctions. First, it is extent of trading session. Futures are mostly traded on the limited time interval. Though extent of trading hours also increases, liquidity out of traditional exchange session is insufficient for active trade.
Secondly, in the futures markets in comparison with FOREX are the higher requirements to a margin. Thirdly, at futures trading the broker takes the commission for the transaction and on FOREX it doesn’t practice, if only business doesn’t concern mini contracts. As an original bonus for it the trader if trades futures at a stock exchange they have possibility to see the market price. On FOREX to ordinary investors it is necessary to deal with the unique market-maker who quotes a currency exchange rate.
Question of where it is better to trade: in the futures market or on FOREX is purely rhetorical. If, of course, it is a question exclusively of currencies and other arguments aren’t taken into consideration – we will tell, possibility of trade is considered by a complete spectrum of terminal contracts.
The stop warrant after closing:
In the techniques of the famous trader Williams it is often told about the stop warrant only after closing. What it means? The warrant at the market price bar closings is meant? Bill Williams practices in the urgent market. Therefore his programming trading is guided by use of those warrants which exist at the disposal of the trader in the futures market. In this case it is a question of the warrants performed in immediate proximity from the moment of closing of trading session. Strike price of such warrants is very close to closing price of the auctions. If to use the data for trading session in stock exchange working hours the transaction will occur on closing price. Deviations for real trade will be, insignificant.
Question about trade without risk:
There is a condition for long-term strategy (for example, day scale), providing practically without risk trade: the deposit/margin = 5-10. Whether it is valid so, and at what credit shoulder (1:200 or 1:100) this condition is fair?
Trade without risk doesn’t exist. It is possible to speak only about the limited risk. The risk size depends on used trading strategy and-or a decision making method.
Besides, the great value has how the risk is diversified. For example, whether trade with a wide range of currency exchange rates practices, or operations are led with one-two currencies? Whether trade on reversive system is led, or unsuccessful transactions are closed by in advance exposed stop warrants? How they then are determined?
If to speak about that how many means it is necessary to have to trade with the limited risk in market FOREX then opinions are various. Some really consider that if coefficient the deposit/margin will be from 5 to 10 (for a shoulder 1:100) trade won’t bring losses which won’t become covered further by profitable transactions. However there is an opinion that the given coefficient should constitute not less than 16 or even 20. It seems that the last represents the facts more.
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