Are they a good broker for FOREX? I like their TOS platform.
How are their fees relative to other brokers?
How are their fees relative to other brokers?
TD Ameritrade FOREX
- Thread starter DayTrader10
- Start date
TD offers 2 different pricing plans for forex - no commission and commission with .10/1000 lot and $1 minimum pricing. Not cheap. Commission plan also has tighter spreads (obviously) but not great either.
Also, with TD, your fx trading is cleared and executed thru Penson as TD does not have the infrastructure to take away that last piece of business from Penson. Last week, TD sent an email about Penson's new slippage policy:
Slippage and Re-quoting Policy
Slippage is a term referring to a market situation in which an Order for a particular Currency Pair is filled at a price which is different from the requested price of the Order because the price requested is no longer available. PF applies slippage settings uniformly regardless of the direction in which the market has moved. If PF decides to re-quote prices when the market has moved against it, PF will also re-quote prices when the market has moved in its favor. PF does not apply different slippage settings or re-quoting practices based on the customer. If PF decides to do so, PF will disclose this fact to the client and indicate the guidelines used to determine appropriate settings and practices for that client.
Slippage is possible on all Order types. Stop Orders are activated at the price designated by the client. The Stop Order will be executed at the next price that is available. Buy Stop orders are executed at the next available offer price and Sell Stop orders are executed at the next available bid price. The possibility of slippage increases during fundamental announcements, at illiquid times, and at times of extreme market volatility. The release of fundamental data and extreme world events many times causes increased volatility in the market. When economic data or world events are announced, the market may "gap" in a particular direction. This means that there are no tradable prices between the actual price at which the market was trading prior to a fundamental announcement or world event and the price available after the market has adjusted, following the announcement or event. Prices move very quickly and orders are filled in some cases at prices very far away from the stop price.
Requoting is a sign of a dealing desk that is trying to offset your trade as opposed to an ECN which lets your orders be matched up against other orders directly. Dealing desk brokers have been beaten to death in this forum so take it in to consideration. If scalping, probably not a good fit for you but if swing trader, it might work.
Also, with TD, your fx trading is cleared and executed thru Penson as TD does not have the infrastructure to take away that last piece of business from Penson. Last week, TD sent an email about Penson's new slippage policy:
Slippage and Re-quoting Policy
Slippage is a term referring to a market situation in which an Order for a particular Currency Pair is filled at a price which is different from the requested price of the Order because the price requested is no longer available. PF applies slippage settings uniformly regardless of the direction in which the market has moved. If PF decides to re-quote prices when the market has moved against it, PF will also re-quote prices when the market has moved in its favor. PF does not apply different slippage settings or re-quoting practices based on the customer. If PF decides to do so, PF will disclose this fact to the client and indicate the guidelines used to determine appropriate settings and practices for that client.
Slippage is possible on all Order types. Stop Orders are activated at the price designated by the client. The Stop Order will be executed at the next price that is available. Buy Stop orders are executed at the next available offer price and Sell Stop orders are executed at the next available bid price. The possibility of slippage increases during fundamental announcements, at illiquid times, and at times of extreme market volatility. The release of fundamental data and extreme world events many times causes increased volatility in the market. When economic data or world events are announced, the market may "gap" in a particular direction. This means that there are no tradable prices between the actual price at which the market was trading prior to a fundamental announcement or world event and the price available after the market has adjusted, following the announcement or event. Prices move very quickly and orders are filled in some cases at prices very far away from the stop price.
Requoting is a sign of a dealing desk that is trying to offset your trade as opposed to an ECN which lets your orders be matched up against other orders directly. Dealing desk brokers have been beaten to death in this forum so take it in to consideration. If scalping, probably not a good fit for you but if swing trader, it might work.
So the broker is essentially trading against me?
rmorse
Sponsor
I don't believe that to be true. These brokers, TD and Penson don't have a Prop desk. They have liquidity providers that bid and offer in the system. After the trade is complete, the FCM, in this case Penson, maintains counter party risk to make sure each party receives or pays their profit or loss on each trade, after the trade is unwound.
This is correct.
Though, even with brokers who do take the other side of your trade, it doesn't mean they are trading 'against you' in the "you lose: they win" sense. Quite often, market makers just hedge their exposure in the market the moment you open a position with them. It's just an execution model.
Evil brokers don't need to be a market maker to be evil, and being a market maker doesn't make the broker evil in itself. Evil brokers just have a few more tools to be evil should they be a market maker... if that makes sense.
Take Oanda for instance, they are one of the largest market makers by far, and they are anything but evil (do a BASIC search on them from the NFA site, not a single sanction or action against them by US regulatory bodies.. and yet, if you look up some well known STP brokers, you'll find many have a few claims against them for practices that impacted their clients negatively.)
Just saying. (The whole "all market makers are bad" sentiment some traders have is a bit naive. People don't realize that even their trades over an ECN will most likely hit a market maker of some type... spot is a made market after all.)