Places like FXCM have their spread/commission call it what you will but the prices are in keeping with the overall market, all you have to do is compare demo software on any number of brokers to see their price ranges are all within the same limits. People on here make it sound like they vary by over 50 pips from the inter bank market with no substance to back it up.
FXCM hmmmmmmm.
- Thread starter Girlpower
- Start date
Places like FXCM have their spread/commission call it what you will but the prices are in keeping with the overall market, all you have to do is compare demo software on any number of brokers to see their price ranges are all within the same limits. People on here make it sound like they vary by over 50 pips from the inter bank market with no substance to back it up.
I'm not saying that at all, nor am I saything that the spred bet companies do either. What I am saying is that they have enough price control to be able to skew the prices to suit their 'book' within a margin for error. Obviously If I had 2 accounts with 2 different companies and they were vastly different I could make a sensational living just arbing the 2 against eachother and almost never lose...
So sorry If there was any misunderstanding of what I said.
I just seems that every time I make the comparison between the FX companies and the spreadbet companies over here in the UK, CFD's pop up as well, and they have absolutely nothing to do with it whatsoever. So I end up scratching my head and thinking who mentioned anything about CFD's anyway, aside from which CFD's are a completely different kind of operation.
Best
Natalie
Thanks Natalie.
I've found additional information here.
Their prices quoted would be about the same as the true (?) prices of the underlying market(s), except their spreads may have a small difference.
Spreadbets would have a variable dollar value per price point which is to be decided by individual customers. It can be tax-free for any profits, as gambling.
CFDs would allow a usually highly leveraged (as you mentioned) margin (even 1% of total value). It would be not tax-free for any profits.
Not sure whether the above would be generally applicable to all firms in these fields, due to local regulations.
izeickl - I dont know why are you backing up so much market makers. They can do whatever they want. Sure, they wont do it 50 pips and not even 20 pips. I doubt. And if you read more carefully my posts, I said that this fact should not be something to prevent good trader to be profitoble. But one thing is for sure - if you want to complain - you have no chance to win. here's thread where one trader reported about fxcm 9http://www.moneytec.com/forums/_showthread/_s-/_threadid-3634. Thread is long, even someone from fxcm posted claiming they are ready to review any complains (the thing is price his trade was stopped at was not in interbank rates - not in saxo rates). But here's what he (the trader) posts in the end:
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Regarding contacting FXCM, I did. I called about 2 hours after it happened as I was not at the computer when the trade took place. I was told that eur/usd traded higher for about five seconds and multiple trades took place at that time. I complained about how could the market go 20 pips higher for 5 seconds and then come back down to everybody elses bid/ask. I was told that the prices shown on the dealstation are what FXCM is willing to deal for and that these are independent from anybody else. I knew I could not get anywhere with them as their reason is correct, they can place whatever price they want on the dealstation. So the call ended there.
I assume there were many clients of theirs that had stop orders right at that level, as I cannot believe FXCM would risk running for my stop only. I am sure they know exactly where their customers have orders, and how many orders, and if it would worth the risk to run stops.
I have not had any problems before with FXCM, but I don't have any other explaination for what happened other than running stops. Russell.
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I know this trader (Russel) not only from forum, and I know he's not from some competing firm or something like that.
So, izeickl, are you still claiming they are angels?
Yes, 50 pips maybe not, but I also heard many times about bounces of 20 pips (you see, I dont pay much attention to those things, as I am not day trader - I trade longer terms, but those who stare on rates and trade intraday see this occasionally). Brokers are betting also that most of trades will neuralise each other and they will not have to pay from their own money made on spreds to winning traders. But ones they have disbalance, i.e. too many trades in similar winning direction, they may take nessesary steps and put price that can close part of those trades (fish stops). I mean, as soon as there is a correction against those trades, "their correction" will be much deeper. Or like in this case, Russel took winning position, but the price doesnt usually go same moment to desired direction. So it went a bit up before heading down. All those brokers have analysts and they see that there is good possibility price will go down. They see there are much more short contracts and decide to use this little upmove to put +20 pips on there platform. That way probably most trades were stopped, and they even take all those money - net profit for them. Afterwards price goes down, and those who had larger stops will profit...
Thats the way it works.
best,
Rezo.
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Regarding contacting FXCM, I did. I called about 2 hours after it happened as I was not at the computer when the trade took place. I was told that eur/usd traded higher for about five seconds and multiple trades took place at that time. I complained about how could the market go 20 pips higher for 5 seconds and then come back down to everybody elses bid/ask. I was told that the prices shown on the dealstation are what FXCM is willing to deal for and that these are independent from anybody else. I knew I could not get anywhere with them as their reason is correct, they can place whatever price they want on the dealstation. So the call ended there.
I assume there were many clients of theirs that had stop orders right at that level, as I cannot believe FXCM would risk running for my stop only. I am sure they know exactly where their customers have orders, and how many orders, and if it would worth the risk to run stops.
I have not had any problems before with FXCM, but I don't have any other explaination for what happened other than running stops. Russell.
---------------------------------------------
I know this trader (Russel) not only from forum, and I know he's not from some competing firm or something like that.
So, izeickl, are you still claiming they are angels?
Yes, 50 pips maybe not, but I also heard many times about bounces of 20 pips (you see, I dont pay much attention to those things, as I am not day trader - I trade longer terms, but those who stare on rates and trade intraday see this occasionally). Brokers are betting also that most of trades will neuralise each other and they will not have to pay from their own money made on spreds to winning traders. But ones they have disbalance, i.e. too many trades in similar winning direction, they may take nessesary steps and put price that can close part of those trades (fish stops). I mean, as soon as there is a correction against those trades, "their correction" will be much deeper. Or like in this case, Russel took winning position, but the price doesnt usually go same moment to desired direction. So it went a bit up before heading down. All those brokers have analysts and they see that there is good possibility price will go down. They see there are much more short contracts and decide to use this little upmove to put +20 pips on there platform. That way probably most trades were stopped, and they even take all those money - net profit for them. Afterwards price goes down, and those who had larger stops will profit...
Thats the way it works.
best,
Rezo.
Quote from OddTrader:
Thanks Natalie.
I've found additional information here.
Their prices quoted would be about the same as the true (?) prices of the underlying market(s), except their spreads may have a small difference.
Spreadbets would have a variable dollar value per price point which is to be decided by individual customers. It can be tax-free for any profits, as gambling.
CFDs would allow a usually highly leveraged (as you mentioned) margin (even 1% of total value). It would be not tax-free for any profits.
Not sure whether the above would be generally applicable to all firms in these fields, due to local regulations.
Phew - Now that's settled. The only reson this side topic came up was that I mentioned a similarity in the operation of SB's. Sorry to all for my causing this thread to go off topic. It was not intentional.
Best
Natalie
Quote from rezo_s:
Exactly. Cos this price is for their use only
Yeah! The other nice trick that gets played, is the widening spread just as things get interesting around news time. Suddenly the spread has doubled to 'cushion' their position for a minute or 2...
Best
Natalie
(also makes it easier to butcher a few stops...)
I would say a trader using this kind of platforms should require a more complicate strategy than one in normal trading environment.
I am wondering the trader has to try hard for how much (s)he can understand the programmed/in-built characteristics (designed by individual firm) of the platform in use, in order to fine-tune (re-design) her/his winning trading system/strategy in a conventional trading environment.
I also think using this kind of platforms would be harder to make profits, however the rewards (and/or risks), due to such as high leverage/margin, could be also higher if the redesigned system/strategy is still a winning one.
Quote from OddTrader:
I would say a trader using this kind of platforms should require a more complicate strategy than one in normal trading environment.
I am wondering the trader has to try hard for how much (s)he can understand the programmed/in-built characteristics (designed by individual firm) of the platform in use, in order to fine-tune (re-design) her/his winning trading system/strategy in a conventional trading environment.
I also think using this kind of platforms would be harder to make profits, however the rewards (and/or risks), due to such as high leverage/margin, could be also higher if the redesigned system/strategy is still a winning one.
My guess would be to go up 2 or 3 time frames, with wider targets and stops.
When I did that looking for the first time, my methods from the index futures simply applied in much larger timeframes to FX seem to work just fine. I also discovered that using the shorter timeframes I use in futures would get me very dead very quickly in FX...
Best
Natalie