IB liquidity providers will screw you

[Hayek]

Quote from Lon Eagle:

Thanks.

So if say Euro dollar is 50/53 just before a figure is announced and you want to trade the figure is this strategy sensible......

Have a sell limit order ready at 42 and a buy limit at 60. If you want to go short when the figure is announced you hit the sell at 42 order and you will be filled between 42 and 50 if you are quick enough to trade before it goes through 42? If you are too slow then nothing will be done? If you hit sell at 42 when it is still 50 bid then you are filled at 50?

Sorry if this sounds thick but not used IB for fx before.

1. Your buy limit order will also be executed between 53 and 60. Do you forget it?

2. Let's get rid of the buy limit order first then continue discussion. Your sell limit order will most likely be executed between 42 and 50, otherwise it will just reside @42, as you said "If you are too slow then nothing will be done".

 

[Lon Eagle]

Thanks. The Buy order at 60 would not have been triggered becuase loking at their software you can have the orders sitting on the platform but aren't live until you hit 'T'. Therefore once the figure came out I would hit the T for the sell order and leave the Buy limit untouched.

So say it is 50 bid am I better off putting a sell limit in at say 10 and then press T once I have seen the figure. By doiing this I will hit the first best bid above 10 and be in no danger of missing it? Obviously if someone goes 10/50 on the figure and noone else has a bid in (and the real market is say 40/42 then I would be immediately 32 ticks offside.

 

[Hayek]

Quote from Lon Eagle:

Thanks. The Buy order at 60 would not have been triggered becuase loking at their software you can have the orders sitting on the platform but aren't live until you hit 'T'. Therefore once the figure came out I would hit the T for the sell order and leave the Buy limit untouched.

Good.

Quote from Lon Eagle:
So say it is 50 bid am I better off putting a sell limit in at say 10 and then press T once I have seen the figure. By doiing this I will hit the first best bid above 10 and be in no danger of missing it? Obviously if someone goes 10/50 on the figure and noone else has a bid in (and the real market is say 40/42 then I would be immediately 32 ticks offside.

The quote tends to move very fast right after eco figure release. To reduce the risk to buy at the top or sell at the bottom when trading figures, you may carefully select those figures which can move the market not just in the first minute. There suppose to be a lot of traders will press the "T" just like what you are going to do, and some of them for sure can read the figure before you do. By the way, what news provider are you using? Thank you.

 

[MR.NBBO]

IBsoft has posted in the past:
"The FX dealers we have connections to often take 3 seconds to execute."

 

[Lon Eagle]

Quote from Hayek:

Good.



The quote tends to move very fast right after eco figure release. To reduce the risk to buy at the top or sell at the bottom when trading figures, you may carefully select those figures which can move the market not just in the first minute. There suppose to be a lot of traders will press the "T" just like what you are going to do, and some of them for sure can read the figure before you do. By the way, what news provider are you using? Thank you.

I use market news and have a Bloomberg terminal.

I appreciate your comments. I know the rates move fast after the numbers but have been trading fx for 15 years and do most of my trading when it is at its most volatile.

For instance I dealt today as soon as the CPI numbers were released and also as soon as the TIC data came out.

I am always looking at new platforms and recently the size has increased on IB and hence I am now considering trading fx on it.

 

[Lon Eagle]

Quote from MR.NBBO:

IBsoft has posted in the past:
"The FX dealers we have connections to often take 3 seconds to execute."

Is this true? It can take 3 seconds for a trade to be confirmed? Is it not autoamatic but requires a dealer to manually accept the trade?

 

[Hayek]

Quote from Lon Eagle:

I use market news and have a Bloomberg terminal.

I appreciate your comments. I know the rates move fast after the numbers but have been trading fx for 15 years and do most of my trading when it is at its most volatile.

For instance I dealt today as soon as the CPI numbers were released and also as soon as the TIC data came out.

I am always looking at new platforms and recently the size has increased on IB and hence I am now considering trading fx on it.

Bloomberg terminal costs $1,500/month? Yes, you really have your edge to trade figures. I think few members here are so lucky as you to afford a Bloomberg terminal.

Do you use Bloomberg API which I heard can be applied to transfer eco figure to a proprietary trading platform? The actual eco figure can be compared automatically with the consensus inputed in advance in the platform and then automatically send proper order to your broker. That may save a few more seconds.

 

[Lon Eagle]

30 pips (not a big post number move I am sure you will agree) on £5m or Eur5m is $15k.

If you traded 1/2m you would need to make 30 pips on one figure a month to pay for the cost of the terminal. The rest of the month it is free.

I can not understand anyone who trades not paying for a proper news service or charts. All I look for ina trading platform is speed of execution and an honest counterparty. I don't care about the add-ons!

 

[JayS]

I think he is more suprised at you lack of knowledge of how basic types of orders work yet have a bloomberg terminal. But I don't want to put words in anyone's mouth or anything......

Quote from Lon Eagle:

Euro dollar is currently 87/88.

If you put a sell limit order in at 82 would you be filled at 82 or at 87?

Quote from Lon Eagle:

30 pips (not a big post number move I am sure you will agree) on £5m or Eur5m is $15k.

If you traded 1/2m you would need to make 30 pips on one figure a month to pay for the cost of the terminal. The rest of the month it is free.

I can not understand anyone who trades not paying for a proper news service or charts. All I look for ina trading platform is speed of execution and an honest counterparty. I don't care about the add-ons!

 

[Lon Eagle]

Why?

I rarely trade futures and have never traded fx on IB. So please tell me why I would have knowledge of these order types?

On spot fx all I do is either hit a bid or offer or leave a stop loss or stop entry. I am a simple being.

I apologise for not having a greater knowledge but thought a message board where a representative of IB answers questions might be a useful place to check a few things.

I would also add that today I was speaking to a guy who traded on LIFFE for many years and has just started experimenting with fx. Today he got short of the euro at 42 (he shorted it just after the empire state was released but before the CPI came out a few seconds later). He felt he should have been filled higher and was unsure himself how the system worked (especially as the IB feed when he checked seemed to indicate this was below the market at the time . )

Thanks for your helpful response though.