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I have no doubt that I will irritate a legion of aspiring Forex traders by writing this article. First and foremost, I should state that I am an e-mini trader though I have spent a considerable amount of time trading Forex. In theory, Forex ought to be the hottest game in town. The marketplace for Forex is huge and fluid; perfect for day trading and swing trading. But as any experienced Forex trader can tell you, there are a few problems that need to be addressed in the Forex market. First and foremost, they need in exchange. Forex suffers from many of the same problems any loosely regulated market may encounter. Still, without regulation or accountability I am inherently suspicious, with good reason, of the manner in which Forex orders are placed. I suppose transparency is the issue, along with other issues like: • A growing number of store front Forex operations and have surfaced. Without naming names, several very large futures brokerage firms have gone bankrupt. • There is a very low level of transparency in the Forex market.( As we discussed above) Basic information like volume and volume at specific price levels is not available. There is also an even wider range of market data that simply does not exist in the Forex markets. • The spreads can be treacherous and difficult to surmount financially. • It is difficult to ascertain exactly with whom you are trading, and many Forex traders suspect they are trading against their banker or other highly qualified currency expert employed by the bank. You know why you don't see advertisements for $239 robots that promise to churn out hundreds of thousands of dollars associated with futures or stock investments? It's against the law to make the kind of outlandish claims these firms bandy about when discussing stocks or futures contracts. That's for your protection. When equity related business is handled on an exchange there is a high degree of transparency and small e-mini traders are privy to the same information large traders normally utilize. While large traders still enjoy certain advantages, transparency tends to equal the playing field for all of about. The methodology for handling transactions from futures exchanges is well-established and specialized clearinghouses ensure efficient and accurate sorting through the day’s trading activity. Standardized operating procedures to assure that your e-mini trade will be handled in a uniform fashion that ensures “front running” and other backroom shenanigans do not occur. Additionally, you have some specific monetary protections afforded you, the e-mini futures trader, as insurance against mishandling or misappropriation of your futures trading account. The list of advantages of trading exchange traded and Forex products would be a lengthy one. I know many Forex traders who would protest my criticisms; these are experienced Forex traders who are aware of reputable firms and utilize that information to place money with firms of well-known financial strength. Despite the loyal Forex traders protestations, the e-mini's are a better regulated and their exchange traded status gives them a margin of technical safety that the Forex market simply cannot offer. In summary, we have taken some time and looked at some of the systemic problems in Forex trading. I have pointed out that many of these problems would be solved if the Forex market had a centralized exchange. We have taken some time to point out some of the most common fraudulent activities described in law enforcement warnings. Real Live Trading Doesn't Lie. Spend 3 days with me, in my trading room, and see if you are one of the many that can profit from a fresh and unique view on trading e-mini contracts. Sign up for your free trading experience by clicking here.
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