I follow a web site that trades the markets live each day. He uses the s and p Emini to watch whether the market is going up or down. The emini is.futures. why wouldnt he use the regular s and p 500 instead od emini? Is there a difference?

Answer
He won't use the S&P 500 Index because you can't trade an index.

Difference? There is always a spread between the futures and the cash index. When the spread drops below fair value or moves above it by a large enough margin (discount or premium), then one of the choices (stocks or futures) will become more attractive than the other, and they will sell one and buy the other by a process of arbitrage.

Sometimes, the futures pit in Chicago and the stocks trading in New York go in opposite directions, or in the same direction, but at different speeds. When that happens, the spread changes. The two prices will always be different until expiration of the futures contract.

Price in the ES can have gaps, giving additional information, whereas the index usually doesn't. A Gap Fill is a popular trade.

The volume on the ES contract is another helpful confirming indicator.

It's a good indicator because it tracks 500 of the largest stocks in America. That's a broad enough sample to give a good "average" without being able to manipulate a select few stocks. Everyone accepts the fact that what the S&P does, so the market goes.

But the emini blows up more traders than any other contract other than Forex. Those huge volumes make it difficult to compete against mega institutions. You won't get a fill unless price moves through your price, while the little guy easily gets picked and whipsawed.

Those .25 ticks on the emini is ridiculous, rather than .10 ticks for everything else.

If you look at the Average Yearly Tick Movement chart across all the major index futures. Lowest rank? The S&P e-mini vs. the Dow, Nasdaq, Russell small and mid-cap.

Try jumping in and trade amongst the big boys in a market that really doesn't have great range, that forces a lot of subjectivity due to the 0.25 ticks, and you have a formula for disaster.

More people should start trading the Russell.

Any idea of transaction fees on interbank forex broker?

Any idea of transaction fees on interbank forex broker, or any other broker . i want to have an idea before I start trading.......

Answer
The transaction fee you mentioned is usually comes in the form of a commission or spread, or both. While rates vary from broker to broker, it is generally charged per trade. A commission is simply a fee, usually based on the size of your trade. The spread is the difference in pips between the bid and the ask price.

If you trade through a retail forex broker, then often times you will be given a commission free trading experience. These brokers will charge you the spread instead. EUR/USD may have a spread of 2 pips. So that means on every trade that you take, you will down by 2 pips from the start.

If you trade through an ECN forex broker, then you will be subject to both the spread and commission per trade. Spreads are typically lower from ECN brokers. But you now have to contend with the commissions.

When you say "interbank," if you are referring to actual trading between (inter) banks, then it is assumed that you are either very well connected with the banks or are trading on behalf of a major financial or government institution. Forex trading at this level will see very little in the way of spreads or commissions.

However, if you were referring to the broker/dealer named Interbank FX, then we are talking about simply another retail broker that charges 0 commissions and a rather high spread.

Hope this helps,
-Shuli