Saturday, April 30, 2011

A major step forward.

Finally I did it : I traded yesterday, for the first time, the euro fx future (6E) instead of the eur/usd cash market. What a difference! A really professional instrument which makes scalping tremendously powerful. Here are the benefits of the migration:

1. Almost all entries/exits were filled with 0 spread, especially on limit orders, instead of the usual 0,5-1 pip on IB cash!
2. Absolutely precise control of the trade on a price ladder.
3. Lower commissions by 35%, 0,4 pips per trade round trip, instead of 0,6 pips.

All that putted together, it means at least 1 whole pip economy per trade. With 1M lot (8 contracts) that means $100 savings per trade!! Multiplying by 10 or 20 trades per day, the savings are in the thousands, every single day..

You may understand how impressed I am. I must be really naive for staying five years in the cash market. Futures are an absolute must for scalpers. I always wanted to make the migration but always postponed it for some reason. A comment of Thomas from Denmark in a previous post made me think about this again. A BIG thank, Thomas. I owe you a big favor!

35 comments:

Soma said...

Wonderful news. From your experience, do you feel that the Futures price behaves the same as it does in Forex?

The forexbird said...

Absolutely. If you compare the 1 min charts of eurusd and 6E, they are IDENTICAL. You may even use your MT4 charts as auxiliary charts for 6E.

Soma said...

Great. Thank you. :)

Soma said...

Oh, one other thing. Is there a way to use one-click trading with IB's platform? I remember hearing that they had disabled it but I don't know if it has returned.

The forexbird said...

No, no 1-click anymore with IB. I use a superb front-end, Zerolinetrader. Perfect for trading and not expensive.

The forexbird said...

correction : perfect for scalping



Btw, if you are with IB, the best way to demo scalp and learn 6E, is via Zerolinetrader, which offers a free month with real-time prices.

Kroz said...

Of course, 6E only offers savings if you're trading over a certain size. What's the math to figure that out? Also, position size/risk is not as flexible with futures contracts.

The forexbird said...

Kroz,

i explained everything in my post above.

Anonymous said...

how does the volume on the price ladder look for 6E? how large of an order can be made through currency futures? do you hit the upper limit pretty quickly?

B

Soma said...

Great news again! heh. Thank you Forexbird.

Kroz said...

...to put it differently: at a position size of $1 per pip, it's cheaper to use Oanda with 0.9 pip spread and no commission (spot fx). Trading $80 per pip is cheaper using IB with commission (6E future). So approximately what position size is in the middle, where cost would be the same with either broker?

The forexbird said...

Krioz,
If you can trade 125k Lot (6E minimum, 1 contract), you are clearly profitable.

Anonymous said...

hi forexbird, how does the leverage work in futures? researching the 6E contract completely boggles my mind.

The forexbird said...

..same way as on spot market, but you dispose better margin with futures.

Ai Shiang ♒ said...

I always have the impression that Future prices and cash prices for EURUSD are different. Am I wrong?

The forexbird said...

future price is shifted a few pips, due to contained interest and dividents.

Anonymous said...

Hi Forexbird.

I am glad I played a little part in convicing you to move into the futures market. I think the futures market it is a lot "cleaner" than forex market because you can see the real depth of market/Level II, not just some spread your broker defines. Besides this, you have the financial benefits of lower commisions and more.

So...welcome! I am sure you will be successfull in this market as well. Please continue to post your trades, it's great learning for me :-), I am not yet consistantly profitable!

Good luck.

Thomas

sahm said...

forexbird, I tried to go to IB to check out their app, but seems they only have a demo, you can't open a test account. Quick question for you... do they have a charting system? I am so used to MT4. How do you deal with the charts? I see you use NT, but is that part of becoming an IB client? Can you shed some light as to how you are setup? Thanks!

The forexbird said...

Sahm,

I use the free NT with IB feed. Much better than mt4 and IB charts.

Sahm said...

Thanks for replying forexbird. So let me see if i get this picture correct. For charting and determining your entries and exits you use NT with IB feed, and then you switch to Zerolinetrader to execute the order? or can it all be done from the chart? seems like it may be time consuming two switch apps? how do you manage it? Also, is NT for free when you have an a/c with IB, or did you purchase the license? I may be looking to switch from mt4, scalping w/ a 2.5p spread is suicide! Thanks!

Sahm said...

sorry... just noticed you said you use the "fee NT".... all the other q's still stand... :) thanks!

Sahm said...

also... last question. how long have you been with IB?
thanks!

The forexbird said...

i have free nt, i pay only for zerolinetrader, $120/y, a perfect tool for scalping. I have them side by side, once in a trade i look most at zlt.

4 years with IB.

Sahm said...

Thanks for your reply forexbird.... So, what's wrong w/ executing straight from the IB application. So you have all of these apps bridged to IB, have you experienced ever any delays or issues because of the bridge? Sorry for all the q's. I am really trying to get myself setup in the most effective way to be able to make some pips... :) Thanks!

The forexbird said...

booktrader, the dom app inside ib, does not accept one-click orders anymore. That is why i use the DOM of zlt.

sahm said...

Thanks! Can't sleep, so i decided to ask you more questions... :) Do you get now in futures, or have you gotten previously in the cash mkt, many requotes using IB? Either with limit/stop orders already setup or with market orders? Do you ever go in at market btw? Thanks!

The forexbird said...

no requotes with IB! This is for the bucket shops!

Sahm said...

:)) ... I have been trying to get info as to the min lot allowed to trade in forex w/ IB, and what are the costs associated with it. you would know? mind sharing? :) Maybe you get back to me before they do! :)

Sahm said...

Hello, me again with questions...
You said you use Free NT for charting and zlt for trading. I have been trying to get a handle of NT, but it seems like historical data is an issue. So there are gaps in my chart, for example, the whole of asia is missing in the mornings. Are you subscribed to their kinetick data service in order to get the range charts complete?
Thanks!

The forexbird said...

Sahm,

You get historical data with 1m charts and up and IB. No hist. data for range charts.

sahm said...

Yes, so they said. but i still have issues filling in the gaps despite many installations and back & fwd w/ support. I suppose one day it'll work out and i can properly test! :) i thought you were trading 3 range bars...? you just leave your session open then in order to get the range structure? otherwise you'd have to subscribe to the data service...

Anonymous said...

Hi Forexbird. Can I ask how does it work that you get filled with 0 spread? Isn't there a 1 pip difference between bid and ask always? Thank you!

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