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Dear
Neal
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Forex
is 24 hours -5 days a week in liquid pairs.The market trades on 2 pips for
regular amounts that would be a million on the interbank machines.4 pips is
nothing if you are trading 50k retail amounts.The example you sight would mean
that you are holding a 250k eurusd position for 100 usd.That is is getting
pretty risky for non experienced accounts so put the amount in nominal terms
against your s+p,minis or qqq for a more measured
comparison.
I have
always felt that forex,futures, and commods should not be indiscriminately
offered to mainly equity day traders they are different and one should be
thorough in terms of ones objectives and risk.
UMMM
that was the first mail I've written in Real traders for 18
months.
<FONT face=Arial color=#0000ff
size=2>regards to all
<FONT face=Arial color=#0000ff
size=2>Mark
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<FONT face=Tahoma
size=2>-----Original Message-----From: Neal Hughes
[mailto:traderr@xxxxxxxxxxxxx]Sent: 24 May 2004 21:06To:
realtraders@xxxxxxxxxxxxxxxSubject: [RT] FOREX vs S&P Trading:
not interesting ?Similarly, FOREX does not seem
attractive.. Perhaps I'm mistaken?A 4-pip spread on FOREX amounts to
perhaps 30 to 50 dollars?If you are trading multiple contracts you could
find yourself in the holeto the degree of $100-$200 per trade??Am
I confused? I had another FOREX broker try to pressure me into trading
that stuff thisweek.. He said the cost (spread) is high, but the liquidity
is great and youcan trade 24 hours a day.. Heck I don't have a
liquidity issue in S&P and I don't want to trade 24hours a day. Not at
that cost, for sure.Any comment on the high cost of FOREX? How much is
5 contracts X 4 pips?Is that a smart way to
trade?-Neal.EarlA wrote:
Your gut instincts are correct ... when you see wide spreads, you are
looking at illiquid markets in which the MM's are taking the cream ... RUN
UNLESS YOU ARE A LONG TERM INVESTOR. Look at the SP and NDX emini (ES and
NQ) as these have strong depth and tight spreads, especially ES.
Earl
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