Short time frame (5min) Forex trading - What broker to go with?

[lubba]

Hey everyone,
I am looking to open a live account with a forex broker for day trading on short time frame charts using price action methods. How true is it that retail forex brokers (like Oanda, FXCM, etc.) actually manipulate the prices and then stop out customers in trades and take the winning side of the trade? Wouldn't this make scalping and day trading an extremely difficult thing for the forex traders?
Are there brokers that don't do this? I was going to go with Oanda, but after reading some of the reviews about this sort of thing, I'm hesitant. Funny thing is, I'm reading conflicting information about all these brokers. For example, some people say Oanda bets against their customers, while others say Oanda doesn't do that.
Mango

depend only by review would lead into confusion. since most website are not fully honest, most are got 'branded' by spesific brokers company.
regarding scalping method, actually it's just same as any trading strategies. it has a proper money management (i do mean a total money management, not only limited on deciding your lot size ).
first your capital amount, lost size then. second part is your overal active trade at a times, then move to how many order executed daily, monthly etc. 3rd set up your maximum risk tolerance, some traders never anticipated this one and end up risking 100% his money due negative trading, and "accidentally" risking a full maximum risk without any tolerance .
for any trading strategy used, never get over leverage, dont get over trade other wise you have to spend more transaction to paid.
which brokers you should stick with ? it's your sole authorization to decide. my suggestion read throughfully their trading condition, some brokers put 0 spread on their headline website but in real practice they charge commision bigger than the floating spread one.
my account charged 2 usd per 100 000 usd traded, it's on armada markets account, simply is i've got avr 0.8 pips fee per transaction while trade on EURUSD. I' m not instantly open an account with desired deposit, at first i came up with their minimum one, consider as test deposit, and then ask their support in detail of trading condition, payment process, etc, any silly question you need to know better put at the first. i've been use many brokers before, and i keep doing this routine before stick up with their company. and seems most MM broker now getting their head cracked and start to offer ecn trading condition instead their 'vintage' offering .

 

[Jason Rogers]

fair points, and I appreciate your disclosure and mentioning that pricing wise your offer makes sense to those, only, who trade smaller size (I calculated and came up with around 40k USD notional equivalent as breakeven on average). For larger order sizes your offering is not competitive.

Hi Volpunter,

I never said our pricing only makes sense for smaller trade sizes. However, I did highlight how our $2000 account minimum makes our pricing accessible even to those who trade smaller sizes.

Furthermore, when comparing our pricing to other spread+commission brokers, it's not enough to look at commissions alone. Factor in the quality of our raw FX spreads, and you will find our total transaction costs to be competitive even for larger trade sizes: http://www.myfxbook.com/forex-broker-spreads

But out of curiosity, what is the funding minimum and volume tiers to get commissions down to, let's say, below 2 USD per 100k USD notional traded? I am very curious.

Unlike most brokers (including those you listed), we have a very resource and customer service intensive product offering. PCG clients often receive custom setups which include complimentary programming services, co-location, 24-hour API support, custom platforms or features, and even prime of prime setups. For these accounts, there are more factors involved in commission pricing, so standard or structured tiers would be difficult to apply with all the unique setups we accommodate. Our clients consider this an advantage, and I think you could as well. If you still feel like you need some rough numbers as a starting point, an account balance of around 150K, or monthly volume of around 50M, could make you a good candidate for PCG. If the though of having to "hash out a deal" discourages you, I suggest you reach out directly to the head of PCG: James Munkittrick. You can email him at jmunkittrick [AT] fxcm [DOT] com.

In regards to slippage statistics, below are the data from a total of 43,128,901 trades executed through FXCM over a six month period from August 2013 to January 2014. In those 6 months alone, FXCM clients benefited from over $15 million in positive slippage.

• 73% of all orders had no slippage.
• 15% of all orders received positive slippage.
• 12% of all orders received negative slippage.
• Over 60% of all limit and limit entry orders received positive slippage.
• 53.32% of all stop and stop entry orders received negative slippage.

Notice how positive slippage is more common with limit orders, while negative slippage is more common with stop orders. That's due to the momentum of price movement when such order types are triggered. It's worth noting that the Market Range feature on our Trading Station platform and the Enhanced* Maximum Deviation feature on our MT4 platform allow FXCM clients to limit the amount of negative slippage they receive, while still enjoying the full benefits of any positive slippage that's available.


* On the MT4 platforms of some other brokers, the Max Dev feature is unavailable, or if it is available, then it will limit both your negative slippage and your positive slippage equally. By contrast, FXCM enhanced how Max Dev works on our MT4 platform allowing you to limit your negative slippage while still enjoying the full benefits of any positive slippage.

 

[volpunter]

You performed a great marketing campaign, bravo.

But lets get back to the facts:

Economically your current "raw FX spreads" offering makes only sense for someone who trades positions that are smaller than 40,000 USD notional equivalent. You can talk as much about service, features, as you want, fact remains commission and spread and slippage are the MAJOR costs to anyone trading currencies, at least on the retail side (which you target).

And you can claim as much about your slippage statistics as you like, those are unproven and purely originating from your hand or someone inside your company for marketing purposes. None of those are verified figures. And you cannot provide proof that your slippage stats are any better than those at Interactive Brokers, Lmax, or many of the most reputable brokers. So, let us not get into a debate about metrics that nobody can verify.

What I CAN VERIFY is your stated commission costs. Those are way above those of other reputable brokers such as Interactive Brokers or LMAX among others. You charge a MULTIPLE of what other brokers charge.

Example: To trade 100k EUR/CAD you charge 6 USD , Interactive Brokers charges $2.49. The spread at Interactive Brokers is an average 1.3 pips while your spread even in the "raw FX spread" is WAY WIDER. Same applies with the major fx pairs, albeit on a smaller scale.

So, again, even your "raw FX spreads" model is not competitive and charges way more than other competitive brokers.

Hi Volpunter,

I never said our pricing only makes sense for smaller trade sizes. However, I did highlight how our $2000 account minimum makes our pricing accessible even to those who trade smaller sizes.

Furthermore, when comparing our pricing to other spread+commission brokers, it's not enough to look at commissions alone. Factor in the quality of our raw FX spreads, and you will find our total transaction costs to be competitive even for larger trade sizes: http://www.myfxbook.com/forex-broker-spreads



Unlike most brokers (including those you listed), we have a very resource and customer service intensive product offering. PCG clients often receive custom setups which include complimentary programming services, co-location, 24-hour API support, custom platforms or features, and even prime of prime setups. For these accounts, there are more factors involved in commission pricing, so standard or structured tiers would be difficult to apply with all the unique setups we accommodate. Our clients consider this an advantage, and I think you could as well. If you still feel like you need some rough numbers as a starting point, an account balance of around 150K, or monthly volume of around 50M, could make you a good candidate for PCG. If the though of having to "hash out a deal" discourages you, I suggest you reach out directly to the head of PCG: James Munkittrick. You can email him at jmunkittrick [AT] fxcm [DOT] com.

In regards to slippage statistics, below are the data from a total of 43,128,901 trades executed through FXCM over a six month period from August 2013 to January 2014. In those 6 months alone, FXCM clients benefited from over $15 million in positive slippage.

• 73% of all orders had no slippage.
• 15% of all orders received positive slippage.
• 12% of all orders received negative slippage.
• Over 60% of all limit and limit entry orders received positive slippage.
• 53.32% of all stop and stop entry orders received negative slippage.

Notice how positive slippage is more common with limit orders, while negative slippage is more common with stop orders. That's due to the momentum of price movement when such order types are triggered. It's worth noting that the Market Range feature on our Trading Station platform and the Enhanced* Maximum Deviation feature on our MT4 platform allow FXCM clients to limit the amount of negative slippage they receive, while still enjoying the full benefits of any positive slippage that's available.


* On the MT4 platforms of some other brokers, the Max Dev feature is unavailable, or if it is available, then it will limit both your negative slippage and your positive slippage equally. By contrast, FXCM enhanced how Max Dev works on our MT4 platform allowing you to limit your negative slippage while still enjoying the full benefits of any positive slippage.

 

[hyperscalper]

some may still manipulate prices, and others not. FXCM was a champion in ripping off its own customers. Now they state they run an ECN or NDD model, which I never verified because they still rip off clients through their insanely wide spreads.

Take a look at other retail brokers such as Interactive Brokers, DukasCopy, Lmax. If you cannot afford the minimum funding requirements then you should not trade. (I know you wont take this specific advice in case you fall into this category but I nonetheless warned you!).

In any case stay away from brokers that charge >0.5 pip spreads in USDJPY, EURUSD, and FXCM clearly fails this simple filter!!!

<frustrationAlert>
I just ran across this thread, and would like to say that one of the Huge disappointments for me was when FXDD sold its retail operations to FXCM, and FXCM refused to continue the White Label agreement giving U.S. traders access to Dukascopy which they could easily have taken over. But of course it isn't nearly as profitable as FXCM's business model.

Naturally this is some sort of high level "business decision" but I could not stomach losing the cherished Dukascopy access which FXDD had offered, so I and my dozen or so U.S. clients all lost our Dukascopy access forever and we all dropped the FXCM conversion accounts.
</frustrationAlert>

HyperScalper

 

[volpunter]

of course it is a high level business decision. FXCM's head decided long time ago that he wants to be in the shady and grey zone business fishing for beginners and those with too small accounts to join a reputable broker. It always starts at the top. Look at Interactive Brokers. Its CEO understood the importance of striking a balance between a profitable and an ethical business and how important it is to put customers first in a customer focused business environment. IB lives and dies with its reputation. Look at the very few lawsuits it has racked up and compare with the huge amount FXCM's lawer army is dealing with. IB focuses on quality data, quality IT, and quality executions (probably would rate executions top among those three). Now look at FXCM's business model: They can deal with unsatisfied customers, because they are like a graveyard, turnover never stops and new customers are knocking on the door on a daily basis no matter how lousy you are. Look at how much FXCM spends in marketing and how much IB spends. Yet, look at the cumulative account funding of IB's customer base vs FXCM's. Do you see the difference? It all comes down to choice of business model. And that is why I spend the time to post about FXCM, because they dishonest in who they are, they know who they are but paint an entirely different picture.

Look at how I was treated when I asked about detailed information about FXCM's PCG business model. Opaque, secretive, and not upfront and truthful about information at all. They cannot even state their commission schedule or who their liquidity providers are. This is a joke in 2014. Every reputable broker can name all their fx liquidity providers and a clear, concise, and transparent commission schedule. Makes it crystal clear what kind of people FXCM is primarily fishing for.

<frustrationAlert>
I just ran across this thread, and would like to say that one of the Huge disappointments for me was when FXDD sold its retail operations to FXCM, and FXCM refused to continue the White Label agreement giving U.S. traders access to Dukascopy which they could easily have taken over. But of course it isn't nearly as profitable as FXCM's business model.

Naturally this is some sort of high level "business decision" but I could not stomach losing the cherished Dukascopy access which FXDD had offered, so I and my dozen or so U.S. clients all lost our Dukascopy access forever and we all dropped the FXCM conversion accounts.
</frustrationAlert>

HyperScalper