FredBloggs
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maybe your asking the wrong questions. either way, my answer is probably more useful to you.
Anybody trading currencies?
- Thread starter reno4nook
- Start date
maybe your asking the wrong questions. either way, my answer is probably more useful to you.
Quote from ArchAngel:
Possibly because that spread is where they're bleeding you for their profits
hmmm - normally the spread is 1.5 pips - but being a newb, i forgot about NYC time as opposed to Pacific time (I'm in Phoenix) on a Friday afternoon - no body is there to trade, hence the spread widens, i'm surmising with a high probability - lol - I'm learning i swear - yet my + 40 profit turned into - 78 loss over the last 4 trading days - till sunday night.....
The big draw to teh retail FX brokers is the small size. In particular Oanda allosw you to trade in a size level that is more appropriate for smaller accounts. At $12.50 a point in futures I woudl need a really large account to keep my risk parameters in check. At Oanda I can trade a small acount and not have to risk it all on 1 trade. So the retail FX shops like Oanda are really a great service to the small trader who cannot afford to trade a full size contract.
Oanda Spread Statistics - scroll down
http://fxtrade.oanda.com/resources/spreadstats/spreadsminmax.shtml
http://fxtrade.oanda.com/resources/spreadstats/spreadsminmax.shtml
Swoop[TR] wrote about FX brokers: "They don't really care that you make money or not, they're just matching bids and asks."
I disagree mightily, based on my first-hand experience trading a large account with Saxo Bank, which is one of the so-called spot FX "brokers." First, Saxo is not a broker, but a dealer.
Saxo is the counterparty, trading against the customer for its own account. It doesn't broker someone else's position or contract to you. It books the bet itself, unless, as was true of my account with it, it does not like the price of the trade and refuses to honor the order. That happened 4 times in one week in the account I traded, each time after the price of my order (a limit order) breached and then exceeded the price streamed to the Saxo platform and shown on the platform chart. Received excuses like "quote misfeeds."
No doubt, even as it refused my limit orders, Saxo stopped out other customers betting the opposite direction of my trades. I say that because, first, the prices charted in my positions were never corrected for the so-called "quote misfeeds," and second, in other trades, Saxo always filled my stops instantly, no excuses or problems. But with the stops, of course, Saxo made money as the counterparty. "Quote misfeeds," etc., only occured when my orders would have caused Saxo to lose.
I disagree mightily, based on my first-hand experience trading a large account with Saxo Bank, which is one of the so-called spot FX "brokers." First, Saxo is not a broker, but a dealer.
Saxo is the counterparty, trading against the customer for its own account. It doesn't broker someone else's position or contract to you. It books the bet itself, unless, as was true of my account with it, it does not like the price of the trade and refuses to honor the order. That happened 4 times in one week in the account I traded, each time after the price of my order (a limit order) breached and then exceeded the price streamed to the Saxo platform and shown on the platform chart. Received excuses like "quote misfeeds."
No doubt, even as it refused my limit orders, Saxo stopped out other customers betting the opposite direction of my trades. I say that because, first, the prices charted in my positions were never corrected for the so-called "quote misfeeds," and second, in other trades, Saxo always filled my stops instantly, no excuses or problems. But with the stops, of course, Saxo made money as the counterparty. "Quote misfeeds," etc., only occured when my orders would have caused Saxo to lose.
What I wonder about is why don't these bucket shops really bucket your orders and hedge against their own positions on the world-wide 24/7 spot market and futures market? Surely some of the largest of those dealers have enough order-flow to accomplish such?
The only valid explaination is that they're simply being good businessmen and that the business they lose from pissing off profitable traders is less than the business they gain from tempting losing traders with a smaller spread. Maybe things will change as the forex crowd gets more sophisticated...
Anyone know how IB IDEAL PRO works in these terms? They appear to be a very serious firm that caters to serious traders, but one never knows until one trades and runs into problems, or one hears from one other with such experience
The only valid explaination is that they're simply being good businessmen and that the business they lose from pissing off profitable traders is less than the business they gain from tempting losing traders with a smaller spread. Maybe things will change as the forex crowd gets more sophisticated...
Anyone know how IB IDEAL PRO works in these terms? They appear to be a very serious firm that caters to serious traders, but one never knows until one trades and runs into problems, or one hears from one other with such experience
I agree.
The advertised smaller spreads, just like the so-called "transparency," "streamed prices," and "instant execution," are come-ons for the unwary.
As a dealer, Saxo simply sells at the highest price it can get from an individual customer, and buys at the cheapest price it can get from an individual customer. A true broker or an exchange, in contrast, tries to bring bids and asks together. Saxo is motivated to push them apart. It is the counterparty in both cases, after all, and makes profit on the distance. The greater the distance, the greater the profit. And if a good limit order doesn't give Saxo the distance it wants, it simply refuses to fill it, as in my case.
The advertised smaller spreads, just like the so-called "transparency," "streamed prices," and "instant execution," are come-ons for the unwary.
As a dealer, Saxo simply sells at the highest price it can get from an individual customer, and buys at the cheapest price it can get from an individual customer. A true broker or an exchange, in contrast, tries to bring bids and asks together. Saxo is motivated to push them apart. It is the counterparty in both cases, after all, and makes profit on the distance. The greater the distance, the greater the profit. And if a good limit order doesn't give Saxo the distance it wants, it simply refuses to fill it, as in my case.
You shouldn't calculate the pip spread you pay that way. Sure you pay a lot, IF you consider you could have make the spread for yourself and getting your bid FILLED EVERYTIME!
You should see forex brokers like when you market buy, hit the bid or offer, cause that's what you do.
I personnaly wasn't a big fan of bid posting and waiting to get filled just to see the price starting to rise with me being out of the move just to try to save a couple of pennies.
Plus pips spread is a size proportionate style of comission. It can be costly to have a strategy where you always add up to your position little by little, paying a fixed 7,50$ everytime. With pips spread it cost less. And when your doing big moves you just don't care too much about it. Sure i coulda made a few bucks more, but i did money anyway.
It depends on your style of trading.
You should see forex brokers like when you market buy, hit the bid or offer, cause that's what you do.
I personnaly wasn't a big fan of bid posting and waiting to get filled just to see the price starting to rise with me being out of the move just to try to save a couple of pennies.
Plus pips spread is a size proportionate style of comission. It can be costly to have a strategy where you always add up to your position little by little, paying a fixed 7,50$ everytime. With pips spread it cost less. And when your doing big moves you just don't care too much about it. Sure i coulda made a few bucks more, but i did money anyway.
It depends on your style of trading.
Quote from nealvan:
I'm thinking of trying out Forex since the Stock market is boring me right now with all the negative news and not no fun sitting on the sideline with all the declining issues... I know nothing about trading currencies...
My intial questions for trading currencies are:
Can I conduct all trades online?
Can I trade all types of currencies from the same account (ie euro, us, jpy)?
Does the price of the trade cost the same as what the
currency is going for (ie how is currency priced)?
Can you trade options on currency as you can do on stocks?
just go to any website for an FX broker, and the above Q's should be answered for you.