Author [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] [EN] [ZH] [ES] [PT] [IT] [DE] [FR] [NL] [TR] [SR] [AR] [RU] Topic: Any traders in here who actively trade metals or FOREX on traditional exchanges?  (Read 561 times)

Offline bitmarket

  • Sr. Member
  • ****
  • Posts: 362
    • View Profile
    • BitShares TV

I am writing some marketing materials for bitshares, and I was wondering if the cost comparisons on using say an etrade/or other similar account compared to btsx are known?

Any information would help me compare the traditional options vs btsx. Information on fees, slippage and other costs I do not know about would be great on btsx and traditional trading platforms.

A comparison on non-monetray pros and cons would be great too.

Thanks in advance.
Host of BitShares.TV and Author of BitShares 101

Offline lil_jay890

  • Hero Member
  • *****
  • Posts: 1118
    • View Profile
I have been a forex trader for the last 4 years.

For one E-trade doesn't do forex trading unless you buy a currency ETF.  In order to trade forex you need to use a broker like forex.com, oanda, interactive brokers, fxcm, or Citibank.  There are additional options outside the US.

BTSX isn't comparable to forex trading currently because of the lack of liquidity.  Right now the only easy way to trade BTSX is to buy or sell it on the major exchanges.  The wallet trading for bitUSD is servicable for longer term traders, but will never work for day traders or even medium term traders.  This is because you cant short at "market" price.  You have to compete on orders from sellers and it can take days/weeks to fill an order.

BTS needs to have market makers to provide liquidity for it's bitAssets... otherwise it will never be a functional trading instrument or platform.

Offline kisa

  • Sr. Member
  • ****
  • Posts: 240
    • View Profile
perhaps one of the toughest comparisons would be with CFD (contract for difference) trading, available in Europe.

http://www.fxpro.co.uk/
http://www.aktionaersbank.de/ueberall-handeln/cfd-handel/
offers trading for ~10$ per trade. you only have to allocate 5-10% margin of the position you take.

this would be like if you want to bet on EUR/USD falling from 1.25 to lower for the amount of 12500 USD, you only have to deposit 625$ margin and pay 10$ for initiating the trade. If the rate is 1.20 tomorrow, then you made 500$ profit and pay 10$ for closing your position. In addition you pay some 0.1% bid/ask spread on the whole amount, e.g. 0.05% from midmarket price at entry and 0.05% at exit.

So you invested 641.25$ (=625$+10$+6.25$) to earn 483.75$ (=500$-10$-6.25$). In case USD/EUR goes to 1.30 instead, you will be asked to deposit additional margin or otherwise the trade will be closed automatically at a loss. So effectively, CFD allows a trader to mirror 12500$ FX position at a cost of some 32.5$, including bid/ask spread, and allocating only 625$.

The bid/ask spread would be wider, perhaps upto 1% for metals like gold. For FX, there could be multiple price changes within 1 second, 10 seconds are like eternity especially as many high frequency algorythmic traders take part. Imho, BitShares shouldn't target any professional traders at this stage, because professional trading applications evolved over decades with thousands of developers and traders working on / testing / improving them in fast moving markets...
« Last Edit: November 05, 2014, 09:22:37 PM by kisa »

Offline monsterer

In forex, the transaction cost is usually rolled into the spread the broker provides, so bigger transactions cost proportionally more than smaller ones.

Slippage depends on the liquidity the broker can provide, in exactly the same way as on any crypto exchange centralised or distributed.

IMO the real advantage that crypto provides over forex trading is transparency. In forex, depending on the broker, you can be trading against a feed price and have absolutely no influence on the market whatsoever because your orders are never hitting the real order book (on the ECN network) where the feed comes from.

Brokers have to comply with AML and KYC just like all the bitcoin exchanges so the amount of messing around you need to do as a client before you can trade is considerable.
My opinions do not represent those of metaexchange unless explicitly stated.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

Offline lil_jay890

  • Hero Member
  • *****
  • Posts: 1118
    • View Profile


IMO the real advantage that crypto provides over forex trading is transparency. In forex, depending on the broker, you can be trading against a feed price and have absolutely no influence on the market whatsoever because your orders are never hitting the real order book (on the ECN network) where the feed comes from.


If your order is big enough, a dealing desk broker will put that order into the main market.  99% of all currency traders couldn't move the market 2 pips even if they leveraged their entire portfolio 20X

Offline jsidhu

  • Hero Member
  • *****
  • Posts: 1337
    • View Profile
The biggest issue trading forex is you don't know you're enemy. You trade into a dark pool and you don't know who takes the other side of your trade, and unknowingly your spread is adjusted when it suits broker (if broker is a pure market maker)... there are some brokers that offer straight through processing (STP) however I believe there has to be an intermediary as the end bank will not trade without a counter party taking all the risk. Thus there is a straight through to some liquidity provider which hedges before sending the trade to the interbank (if that)... most retail trades don't even make it to the interbank as the liquidity provider/broker acts as a pure market maker and thus has incentive to game your account via spread manipulation or even changing price feed to capture stoploss etc. Thus the positino gets closed on the retail account and broker/liquidity provider pockets the trade with 100% profit. IMO forex trading needs to be shut down for retailers as it is the dirtiest of dirty games... a decentralized economy which would not let a market maker game the system would be pretty cool... spreads cannot be manipulated, price feeds cannot be manipulated, thus EVERYONE is on a level playing-field with a decentralized market.

Thus one of the better indicators is FXCM/Oanda's retail contrarian position indicators which have you go against the retail crowd as they are usually on the wrong end of the deal. This is the result of market-makers/big players fishing stop losses. I suspect this would be the case in any market but it wouldn't be so skewed against the retail trader as it is in forex.

One of the major incentive for market makers in forex is the ability to screw with people's accounts and not have to pay... so some of them are set up in Cypress and other places where regulation is quite thin or non-existent. Although FinCen is cracking down on US brokers I still believe they aren't playing by the rules.. ie: FXCM lawsuits for account/trade manipulation.

Anyone who has traded forex has realized the inevitable... that unless you can trade via the interbank (minimum $1000k USD accounts) it is really fruitless unless you're edge is so great that you profit even in the face of such adverse conditions. I've seen cases where brokers simply "find" reasons to not allow withdrawl... because int he end if a simple claus was not met ie: an automated trading strategy that traded 1 second too frequent would be OK as long as you lose money, but if you  made profit and tried to withdraw your funds would be seized and account closed, surrendering all profits, if any.

With a decentralized market all rules are known upfront and no manipulatino is possible...

1) No rule manipulation possible
2) No spread manipulation possible
3) No price feed manipulation possible

All of these things favor the retailers, and not the market maker... although once the traders start to come to a better system market makers will simply show up because of the opportunity to make money via fees... it should be a snowball effect... which is why we are trying to build one big rocket ship to reach the stratosphere, either it blows through or it crashes... it really is as simple as that.
Hired by blockchain | Developer
delegate: dev.sidhujag

Offline Rune

  • Hero Member
  • *****
  • Posts: 1120
    • View Profile
I have been a forex trader for the last 4 years.

For one E-trade doesn't do forex trading unless you buy a currency ETF.  In order to trade forex you need to use a broker like forex.com, oanda, interactive brokers, fxcm, or Citibank.  There are additional options outside the US.

BTSX isn't comparable to forex trading currently because of the lack of liquidity.  Right now the only easy way to trade BTSX is to buy or sell it on the major exchanges.  The wallet trading for bitUSD is servicable for longer term traders, but will never work for day traders or even medium term traders.  This is because you cant short at "market" price.  You have to compete on orders from sellers and it can take days/weeks to fill an order.

BTS needs to have market makers to provide liquidity for it's bitAssets... otherwise it will never be a functional trading instrument or platform.

I second this. Competetive forex trading on BTS is still at least a couple of years away. User experience, liquidity and market functions simply aren't anywhere close to the minimum requirements yet.

If we begin to market BTS to forex traders now I think we will just end up getting in the same situation as bitcoin currently is where true believers have overhyped features that don't exist yet or are barely functional and still are unable to compete with the traditional systems. An example is probably remittance which has been touted as the holy grail of cryptocurrencies (and probably will be one day), but the current infrastructure and pipelines for bitcoin remittance is still so bad that the public prefer to pay WU fees rather than trying to deal with it, and we've got this negative situation where the average opinion is becoming that bitcoin was simply a dud, that can't actually do all those revolutionary things it claimed.

So, anyway, if we actually managed to convince forex traders to use the BTS client for trading they'd probably use it for about 30 seconds and then conclude that BTS is overhyped vaporware and after this initial bad impression it will be harder to get them to pay attention when the product is actually ready for real commodity/currency trading a couple of years from now.
« Last Edit: November 05, 2014, 09:37:43 PM by Rune »

Offline House

  • Full Member
  • ***
  • Posts: 81
  • CEO BTCOR Group
    • View Profile
    • BTCOR
  • BTS: house-ceo
Contracts for Differences ("CFDs") products were developed to allow customers to enjoy all the benefits of possessing a stock, index, ETF, forex or commodity position without having to physically own the underlying instrument itself. A customer enters into a contract for a CFD at the quoted price. The difference between that price and the price when the position is closed is settled in cash, giving rise to the name "Contract for Difference" or CFD.

Offline jsidhu

  • Hero Member
  • *****
  • Posts: 1337
    • View Profile
Contracts for Differences ("CFDs") products were developed to allow customers to enjoy all the benefits of possessing a stock, index, ETF, forex or commodity position without having to physically own the underlying instrument itself. A customer enters into a contract for a CFD at the quoted price. The difference between that price and the price when the position is closed is settled in cash, giving rise to the name "Contract for Difference" or CFD.

Have you actually read the contracts for one of the brokers which offer CFD as a forex broker? It's mind boggling...

IE: I believe it was ATC brokers... which have a pool of money that all traders accounts get put into... the CFD's are traded backed this pool and if at any point the pool runs out of money, well shit out luck all accounts are seized and bankruptcy would mean some accounts would be paid out while others left to try based on the shortfall of the pool.
Hired by blockchain | Developer
delegate: dev.sidhujag

Offline House

  • Full Member
  • ***
  • Posts: 81
  • CEO BTCOR Group
    • View Profile
    • BTCOR
  • BTS: house-ceo
With CFDs customers can buy ("go long") and close the position later by selling. Alternatively customers can sell ("go short") and close the position later by buying. Selling at a higher/lower price than the purchase price yields a gain/loss accordingly.

CFDs have grown in popularity over the past few years. It is increasingly becoming the preferred way to trade the financial markets.

CFDs work like this: instead of purchasing 1,000 Microsoft shares from a stockbroker, a customer could instead buy a 1,000 CFDs of Microsoft. A $5 per share fall in the price of Microsoft would give the CFD customer a $5,000 loss or a $5 per share rise in the price of Microsoft would give the CFD customer a $5,000 profit , just as if he had purchased the actual shares that are traded on the Exchange.

Any financial entitlements, such as dividends, are adjusted for in cash, directly to a CFD holder's account. However, any voting rights available to the holder of an equity share are not available to the holder of an equivalent CFD.
« Last Edit: November 05, 2014, 09:47:45 PM by House »


Offline House

  • Full Member
  • ***
  • Posts: 81
  • CEO BTCOR Group
    • View Profile
    • BTCOR
  • BTS: house-ceo
Contracts for Differences ("CFDs") products were developed to allow customers to enjoy all the benefits of possessing a stock, index, ETF, forex or commodity position without having to physically own the underlying instrument itself. A customer enters into a contract for a CFD at the quoted price. The difference between that price and the price when the position is closed is settled in cash, giving rise to the name "Contract for Difference" or CFD.

Have you actually read the contracts for one of the brokers which offer CFD as a forex broker? It's mind boggling...

IE: I believe it was ATC brokers... which have a pool of money that all traders accounts get put into... the CFD's are traded backed this pool and if at any point the pool runs out of money, well shit out luck all accounts are seized and bankruptcy would mean some accounts would be paid out while others left to try based on the shortfall of the pool.
Holy Cow, thats pretty harsh. I think each broker (company) would have it's own policies. Really pays to read the fine print  :o

Offline jsidhu

  • Hero Member
  • *****
  • Posts: 1337
    • View Profile
Contracts for Differences ("CFDs") products were developed to allow customers to enjoy all the benefits of possessing a stock, index, ETF, forex or commodity position without having to physically own the underlying instrument itself. A customer enters into a contract for a CFD at the quoted price. The difference between that price and the price when the position is closed is settled in cash, giving rise to the name "Contract for Difference" or CFD.

Have you actually read the contracts for one of the brokers which offer CFD as a forex broker? It's mind boggling...

IE: I believe it was ATC brokers... which have a pool of money that all traders accounts get put into... the CFD's are traded backed this pool and if at any point the pool runs out of money, well shit out luck all accounts are seized and bankruptcy would mean some accounts would be paid out while others left to try based on the shortfall of the pool.
Holy Cow, thats pretty harsh. I think each broker (company) would have it's own policies. Really pays to read the fine print  :o
Yea they were surprised I did and I was surprised noone does. It was purposefully confusing so i asked for clarification until i got the truth out in general terms. Most major banks will not provide  liquidity unless it is risk free.. once hedged now brokers and 2nd tier liquidity has it in their interest to take customers positions.. be it change price feeds or spreads etc etc. As long as on avg they are up..

Ive seen cases where winning traders are refused service once they are shown to be profitable via bogus excuses.

forexpeacearmy.com is a good place to see all that is wrong with forex(and fixed in bitshares type systems)

I will say im glad i spent so many years with forex because I can read charts like recognizing someones face..
« Last Edit: November 06, 2014, 03:10:32 AM by jsidhu »
Hired by blockchain | Developer
delegate: dev.sidhujag

Offline bitmarket

  • Sr. Member
  • ****
  • Posts: 362
    • View Profile
    • BitShares TV
Thanks guys.

I should have pre-empted this in my original post.  My bad.   Better late than never.

If there was liquidity in the bit asset markets would it be a desirable place to for short, medium or long term traders? How would the fees compare?
Host of BitShares.TV and Author of BitShares 101

Offline luckybit

I am writing some marketing materials for bitshares, and I was wondering if the cost comparisons on using say an etrade/or other similar account compared to btsx are known?

Any information would help me compare the traditional options vs btsx. Information on fees, slippage and other costs I do not know about would be great on btsx and traditional trading platforms.

A comparison on non-monetray pros and cons would be great too.

Thanks in advance.

How about the fact that there is no artificial barriers to entry? Anyone can trade because it's completely open.
https://metaexchange.info | Bitcoin<->Altcoin exchange | Instant | Safe | Low spreads

 

Google+