Is this slippage or what!

[Businessman]

Quote from cscott:

Bit, this thread is not about which is better to trade. I am trying to figure out why Stops execute so far away. I hope IB jumps back in and answers my previous post about what they meant when they stated that it is not their fault or the bank's, but "it's just a function of the market".

In the FX market the banks have inside knowledge of large orders.

The banks will lower their bids when they know the market
is going to fall sharply. In fact they will sell ahead of the order
themselves and buy back after the order has taken the market
down.

This is perfectly legal as insider trading is legal in FX.

 

[Bitstream]

Quote from cscott:

This sounds right to me. I cannot wait until we either get guaranteed stops or regulation in forex, but I do not expect it to be any time soon.

they exist already and implemented by many spreadbetttin' and cfds dealers but on news can only be placed 50pips away and u gotta pay a premium spread of up to 10pips. frankly i doubt a fair insurance facility will ever be introduced by anyone who run a bucketshop.

 

[sccz97]

Quote from Bitstream:

have u already checked and made sure it was a news event or not...that would sure alleviate some responsability on part of the banks but it stil is outright theft, anyone sayin' it aint needs to look at other mkts and how they behave durin' news announcements and ultimately a huge reality check.

Take a look at the fxfutures market around news. If you're trading anything other than 6E you'll find it worse than the shittest fx retail broker. 6B will without fail have spread in excess of 10 pips with probably 10-20 contracts either side. Or ... look at nokia when they annoucne their earnings, the same thing is going to happen if you havea stop order, majot slippage but you'll never hear equities ppl complaining. Why? Because most of them understnad how their market works where retail fx traders unfortunately do not.

 

[cscott]

Quote from Bitstream:

have u already checked and made sure it was a news event or not...that would sure alleviate some responsability on part of the banks but it stil is outright theft, anyone sayin' it aint needs to look at other mkts and how they behave durin' news announcements and ultimately a huge reality check.

Just checked. Yes, it was during UK CPI data time.

 

[sccz97]

Quote from Businessman:

In the FX market the banks have inside knowledge of large orders.

The banks will lower their bids when they know the market
is going to fall sharply. In fact they will sell ahead of the order
themselves and buy back after the order has taken the market
down.

This is perfectly legal as insider trading is legal in FX.

I woudln't consider it insider trading. If you're a sales trader in a bank and vodafone wants to buy 3 yards sterling there's only one way sterling can move (ignoring extreme events). Admittedly there are supposed to be chinese walls so that ppl on the prop desks can't get hold of this info but who are we kidding. IF you knew the boe woudl raise rates earlier this month when the market wasn't expecting it (why they weren't expecting it I'll never know) surely you'd have acted on that info before t was made public? I know I would have

 

[Bitstream]

Quote from sccz97:

Take a look at the fxfutures market around news. If you're trading anything other than 6E you'll find it worse than the shittest fx retail broker. 6B will without fail have spread in excess of 10 pips with probably 10-20 contracts either side. Or ... look at nokia when they annoucne their earnings, the same thing is going to happen if you havea stop order, majot slippage but you'll never hear equities ppl complaining. Why? Because most of them understnad how their market works where retail fx traders unfortunately do not.

earnings is what i have been tradin' for years and i am specialized in almost every security traded on every time frame. spread is very wide only durin' afterhours or premkt release on not particulary liquid securities: hpq on release had a very tight spread that hanged around 2-3ticks [1 or 0ticks at times] for the whole ascent; nokia is not liquid at all even durin' rth therefore spreads are atrocious. still, u can ALWAYS get inside the mkt and often can buy the bid/sell the ask since u are makin' the mkt yourself on extended hours; the chances u'll be able to do that in fx are slim and none, with slim just leavin' the buildin'. of course stops are more or less useless durin' a major news announcement but man 24pips is HUGE considerin' fx dailiy ranges...it's like a 2%move on a fairly volatile stock and fx aint exaclty an illiquid mkt innnit.

 

[Bitstream]

Quote from cscott:

Just checked. Yes, it was during UK CPI data time.

again, in defence of the banks fx is extremely sensitive to cpi numbers.

 

[Businessman]

Quote from sccz97:

I woudln't consider it insider trading. If you're a sales trader in a bank and vodafone wants to buy 3 yards sterling there's only one way sterling can move (ignoring extreme events). Admittedly there are supposed to be chinese walls so that ppl on the prop desks can't get hold of this info but who are we kidding. IF you knew the boe woudl raise rates earlier this month when the market wasn't expecting it (why they weren't expecting it I'll never know) surely you'd have acted on that info before t was made public? I know I would have

There are no chinese walls in FX, its a free for all.

The banks have more information than you in the FX markets
than compared to the stock markets.

This will inevitably lead to higher slippage in the FX markets
compared to stock indexes.

This is not to say you cant still make money in FX, only you
have to expect this to happen. Personally i trade stock index
futures, if i make a $25K intraday bet, in the FX that could turn
into a $50K loss due to slippage, in stock futures its much less likley.

 

[martin brown]

Quote from Bitstream:

gimme one good reason to trade fx instead than currecies futs durin' news realeases...i just cannot see any, maybe am blind, lend us a hand here...

wed - US CPI.

British Pound globex futures spikes low before reversing.

This was not the case in the interbank spot market, which just spiked up on the news.

I've checked this annomoly with several sources that all show the same thing.

Not sure what to make of it (other than market abuse), but imo interbank spot has more liquidity than futures during news events.

 

[Bitstream]

Quote from martin brown:

wed - US CPI.

British Pound globex futures spikes low before reversing.

This was not the case in the interbank spot market, which just spiked up on the news.

I've checked this annomoly with several sources that all show the same thing.

Not sure what to make of it (other than market abuse), but imo interbank spot has more liquidity than futures during news events.

uh? interbank spot? more liquidity?

if u are tradin' trough ubs or any other major interbank dealer, then u get access to the enormous liquidity avialable in the real fx spot mkt, if it is otherwise and your broker is a retail outfit modelled to sound as if it has access to the trillion dollar mkt u are only tradin' against a dealin' desk: fake liquidity.