Execution Question - MBTrading Forex

T

trada101

Hello,

I have a mini Forex account with MBtrading and they provide the Navigator software to execute trades.

Today, 3/20/06 @ 6:25am my stop for the short position I had in the GBP/USD was triggered.

My stop was at 1.7579 and I got filled at 1.7578. I looked at the market chart and there were trades at that price. The highest price (both on MBtrading's data feed and Real Tick's datafeed) was the same at 1.7577 on both charts.

When I asked MBTrading why it was triggered they said because on level 2 there was a bid or ask at that price.

I understand that MBtrading isn't a direct access forex broker but how come if I got triggered at 1.7578 it's not reflected in any datafeed? Does this mean they can just take out any stop orders at will, regardless to what the market is doing?

My question is, is this normal? If so, what can I do to "hide" my stop orders?

Thanks in advance for any feedback.
 
I work with someone who had a live account with MBT.

He used to trade at prices that were not even shown on their platform- when he queried it he was told the bid or offer had frozen and so was filled at another price that was never shown on the platform.

Needless to say he closed his account very quickly.

On a more general point you do need to be very careful with stop loss orders on an ECN. If the spread suddenly widens then you could be triggered even though the market was not really there. For this reason I never leave a stop loss with an ECN - for instance if it is an overnight position the ECNs can go quite wide in Asia and I leave any stop loss with a broker. I know they will only fill me if the EBS trades at my price on a one pip spread.
 
I am not familiar with MB, but I have a mini account with FXCM. I checked the chart for 6:30 EST this morning and note their chart reads 1.7575 for GBP/USD.

Now FXCM has a fixed 5 PIP spread on this currency pair and the prices charted are the "sell" side of the market. This means that the buy price (stop on short position) reached 1.7580.

I am not sure how MB charts are set up, but if similiar to FXCM's as noted above... if the sell price hit 1.7577, your stop price would be triggered at 1.7579 in consideration of the spread.

Just some input...not sure if its relevent to your question...

Linus
 
Hi Lon,

an you elaborate on the leaving your order with a broker? How is that different than submitting an order with your trading platform?

Thanks for your feedback.
 
Hi Linus,

thanks for the info. Yes maybe that is the reason.

I just don't like that fact that I have a transaction at 1.7578 and it is not reflected in any chart anywhere.

Aren't charting programs supposed to chart transactions that actually occured?

Just seems strange to me, unless this isn't strange for a retail account.

I have Ameritrade and they are also retail, but they always either give me the current LVL2 bid/ask price or a price that's even better, never worse. Although they maybe a little slow on the execution side. I know they're not Forex but just to use a reail broker example.

Thanks.
 
Quote from trada101:

Hi Lon,

an you elaborate on the leaving your order with a broker? How is that different than submitting an order with your trading platform?

Thanks for your feedback.
More...

If I trade with a broker 9rather than an ECN) I get, for example, 2 pips on euro dollar. They only fill stop losses if the market trades there. If there platform happened to trade the price and I got stopped out, but the EBS never traded the rate, then I am re-instated.
 
Quote from trada101:


Aren't charting programs supposed to chart transactions that actually occured?

[/B]
More...

No, not necessarily.

You have to remember than retail forex has no benchmarks and understand the processes used to arrive at highs and lows.

I don't know if the mbt explanation of prices was correct or useful. I suspect not as these people often know less than you and I.

In the professional forex market, one of the ways that highs and lows ( of each price bar) are determined is through the electronic broking system EBS. This system is owned by 13 banks.

A bank only calls a high or low if enough "volume" is traded at the rate. In most cases, enough volume is $5million but can be more or less at different times. In your mbt case, there could have been small volume at your stop point, making it a valid trade. However, the volume might have been too small for a bank to call it as a high or low. That could be why it does not show on the chart.

This is one of the reasons why many traders are warning that forex platforms are very dangerous. No industry standards means the platform operators always win!

To avoid this, an option is to trade currency futures. In those charts, the highs and lows reflect all trades.

Hope this helps.

United
 
Thanks United, I can see now how it can be very dangerous.

Alright, not to go off topic too much but can anyone recommend a good reputable currency futures broker?

Thanks!
 
Quote from trada101

Alright, not to go off topic too much but can anyone recommend a good reputable currency futures broker?
----------------------------------------------------------------------------------
I opened two accounts a little bit ago one was for forex and the other futures. MY forex platform was IKON direct thru Alaron. I had prior futures experience and I thought I would try Forex. It took me a little while to get acclimated with forex and then the unexpected occurred with my charts. My Meta Stock program was more sensitive to the price fluctuations then my Platform. At times the tick chart was moving but there was no price changes on my platform. Some times the value of the currency difference was 3 to 4 pips different from my chart. Then you add in the 3 to 5 pip spread and that’s when I said no thanks! I know there are better platforms and brokerages with smaller spreads out there. But I’m an old board of trade and Merc kind of guy I ran for Paine Weber back in the day and the American exchanges rule. The unregulated Wild West is not my cup of tea.
So I transferred my cash over to my Alaron futures account and never looked back since.
The pricing is tick for tick with my CQG. The execution is lightning fast. The rates are OK at $17 bucks with fees. MY broker is also a fund manager as well and the service is great.
The commissions are negotiable based on volume. I could switch and get 6$ round tern but I like these guys.

JohnB,
 
Quote from Lon Eagle:



On a more general point you do need to be very careful with stop loss orders on an ECN. If the spread suddenly widens then you could be triggered even though the market was not really there. For this reason I never leave a stop loss with an ECN - for instance if it is an overnight position the ECNs can go quite wide in Asia and I leave any stop loss with a broker. I know they will only fill me if the EBS trades at my price on a one pip spread. [/B]
More...

Lon both ECNs I am familiar with (Hotspot and IB) won't execute a stop until the market goes bid or offered at the target price, so it really doesn't matter if the spread widens during the Asian market.
 
You must log in or register to reply here.
Back
Top