Does your trading app have DOM? Of so you have a general idea of how much size you can do before slippage becomes a concern.
Lot size, slippage and execution speed for non-major forex pairs
- Thread starter alexander1994
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Does your trading app have DOM? Of so you have a general idea of how much size you can do before slippage becomes a concern.
Ah, very interesting. So far, I only traded on demo accounts, webtraders. Do you know whether installing that works on webtraders (MT4) as well?
There's no "DOM" for spot forex. And no volume. The only DOM and volume that exists is the broker's own DOM and volume, and that's garbage.
You don't understand correctly (which is why I'm replying to you in such detail).
You believe what most retail spot forex traders believe: that the "magic" letters "ECN" make the whole situation different, and that if you use an "ECN broker" you won't be trading against them. It isn't necessarily true.
All ECN means is literally what it stands for (electronic communication network) and virtually all brokers have that. They use it to imply that they're passing on all trades in an automated way to their own liquidity providers, to make people in your position think to themselves "Oh well, that's ok, then - they're not really holding the other side of my trades".
The reality is that some do and some don't, and you have no reliable way of knowing which is which. They tell lies.
Another "tricky marketing expression" to beware of is "no dealing desk". It's used for a similar purpose.
There are endless regulators' rulings, internationally, that demonstrate exactly how little it means.
Don't be fooled.
It's a shark-infested marketplace, and you're the prey.
Especially if you deal with "exotics".
I have no experience of them.
The little second-hand information I've heard about them hasn't been bad at all. I've heard a couple of good things, and I've heard no allegations that they're outright scammers or crooks, and that in itself may suggest that they're not too terrible.
More than that I can't say.
I hear you, and you're right.
But you don't have quite enough funds for that, really. Soon, maybe?
The best you can hope to do, for now, is use a "good counterparty" who has little incentive to steal your funds.
There are reasons for that, hello?
I have no idea. I wouldn't touch any of the instruments you're asking about with a barge-pole, sorry.
On EUR/USD I'd want and expect a spread of about 0.9 pips, and on Cable about 1.3 pips, during RTH, from a "no commission, spread only" broker.
LOL! That's the world's financial marketplace in general.
Why do you deem the broker's DoM to be garbage?
I am aware of that, that's why I spent a good deal of time learning about brokers and looking at many of them in greater detail.
Because in the case of spot forex, it's only the depth of their own market, not the "depth of the interbank market" (there's no such thing, really). Don't forget that you're not trading in a real market!
Two more things to say about that:-
1. The two are totally different things, and no conclusions about one can be drawn from looking at the other;
2. If you're seriously going to look at the depth of a spot forex broker's own market, it should be only to tell you about their collective "customer sentiment", and if you're going to to try to use that, it would make more sense in principle to oppose it than to rely on it, given that most of their own customers are losers (I'm not just making a facetious or theoretical point, here: it's actually a real one - opposing the "customer sentiment index" of the customers at a firm like FXCM actually confers a very tiny overall edge, and arguably makes some sense: research has been published on this.)
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It may be for the fact that I haven't had a look at a DoM yet, but I am not too sure whether I understand what that means. Does that mean that if there is a great marekt depth the customer sentiment is high annd vice versa?
It's about the imbalance between "waiting bids and asks", and what that can tell you about the relative levels of buying-pressure and selling-pressure, but it really doesn't apply to spot forex anyway.
[Technically, it's true that you can trade spot forex by subscribing to a (paid) service that gives you the corresponding CME futures' DOM and volume (I've tried it, myself, in the past), and using the information from the front month's future as an aid to trading spot against a different "broker", because the correlation is very, very high and there are a lot of HFT's in the market making sure it stays that way, but (a) not all pairs have a corresponding future in the first place (and the ones you're talking about certainly don't), and (b) if you were going to do that, you'd probably be better off just trading the futures anyway. So this paragraph is really no more than a mostly-irrelevant footnote.]
Sorry - re-reading the preceeding post (now that it's too late to edit it!) I realise that what I said above was potentially misleading. I'd better clarify that in the sentence quoted just above, I was explaining the DOM principle; brokers' "sentiment index" measures their customers' open positions, not pending/hoped-for transactions. Apologies for any confusion, there.
About the CME futures thing: Isn't that information you can find in the COT report that comes out every friday (though with a lag of three days)?