Would your rather pay the pip spread or a fee

Quote from whitster:

"As a retail customer you are always buying at the offer and selling at the bid. That's true in stocks, futures, forex, and everything else regardless of how you are trading them. "

patently false. it is true in the cash forex market

it is NOT true in the futures and stock market

i buy the bid and sell the offer all the time

the book does not discriminate, except on account of who gets in first. if you put a bid in at price X, and there are 5 people already there, then when people execute market sell orders (selling on the bid) you will get filled at the BID when 6 total lots go through.

if you don't understand this, then you need to go back to trading 101. this is how trading works.
More...

okay,
2 seconds or 5 seconds is not that difference.
(I not measured it with a milisecond accuracy.)

I am sure there is some additional delay frome network transfer
(connecting from Europe) and the software I use.

Have you tried it ever on different sub-accounts ?
I trade dirrernet startegies on multiple subaccount and it seems changing context from one account to another takes additional time and malkes it even slower.

Anyway, its far away from what you can do at IBs API,
but it I like Oandas flexibility in sizing which makes it possible
to scale in on out of a position.

I know no other broker offering this.

Joerg
 
Quote from whitster:

"As a retail customer you are always buying at the offer and selling at the bid. That's true in stocks, futures, forex, and everything else regardless of how you are trading them. "

patently false. it is true in the cash forex market

it is NOT true in the futures and stock market

i buy the bid and sell the offer all the time

the book does not discriminate, except on account of who gets in first. if you put a bid in at price X, and there are 5 people already there, then when people execute market sell orders (selling on the bid) you will get filled at the BID when 6 total lots go through.
More...

I was referring to market orders. Limit and stop orders are different stories.

My point was that there is ALWAYS a spread of some kind. People who claim there is no spread in this market or that are fooling themselves.
 
Okay, I finally figured it out.
So at IB to figure out the commission take the trade size and multiply it by .00002
And there is a minimum of $2.50 so it can not be less than this.
Now I see why you used $125,000 as an example because the commission does not reach the minimum until that point.
This is the formula that is used for pairs where the USD is the counter currency.
$125,000 x .00002 = $2.50
$500,000 x .00002 = $10.00
$1,000,000 x .00002 = $20.00
So this is what is charged for entry and exit of a trade? So a $500,000 trade will cost $20.00 commission? Plus the spread.
For pairs where the USD is the base currency you need to know what one unit of the counter currency is worth in dollars, or the price per pip for a $10,000 trade.
Right now USD/JPY is 0.88 per pip for a $10,000 trade. If you were to place a trade for $500,000 it would look like this. ($500,000 x .88 = $440,000 x .00002 = $8.80 commission per side.)
Many thanks to JLarsen and Dunbar for setting me straight. My apologies to Blufftrader for posting bad information. Thanks to Xenia for the update on Hotspot.
Also you guys are talking about flexibility with trade size at Oanda, I thought that you could also trade any size you want to at IB after the min. 25K?
 
Marketiva offers unit size increments


Quote from JLarsen:

okay,
2 seconds or 5 seconds is not that difference.
(I not measured it with a milisecond accuracy.)

I am sure there is some additional delay frome network transfer
(connecting from Europe) and the software I use.

Have you tried it ever on different sub-accounts ?
I trade dirrernet startegies on multiple subaccount and it seems changing context from one account to another takes additional time and malkes it even slower.

Anyway, its far away from what you can do at IBs API,
but it I like Oandas flexibility in sizing which makes it possible
to scale in on out of a position.

I know no other broker offering this.

Joerg
More...
 
Electric Savant,
I remember reading a Michael Stumm post (Oandas boss) saying something to the effect that Oanda basically has negotiated a 1 pip spread (give or take .1-.3%) from it's first tier banks (I'm guessing Deutsch bank is in the mix) for the Euro (under normal conditions) and then O tags on another .5% and offers that to its customer base. Hence they make the claim that in nearly all situations their exposures are fully hedged with their first tier banks purely profiting from the spread.

Why doesn't a broker offer whatever the interbank rate is, without an additional spread, but rather a percentage of profits. For example, a second tier broker approaches a Major first tier bank which agrees to offer Forex products at a slight premium on the interbank spread to the second tier broker who in turn adds their own 30-50% markup on top of that and offers it to the customer. Wouldn't it be better for all involved if the second tier broker passes on the same interbank rate to it's customers that it receives from the first tier and then simply deducts a percentage of the profits (they could either be scale fees or a "Flat tax"), on each winning trade made? On loss trades they could deduct a small "Transaction fee" to cover admin./overheads but it would be a lower amount that they would take if the trader makes a winning trade. Just a crazy thought pre NFP.


Re the time delay. Many times on Esignal (amongst other data feeds/platforms) you can see a quick price move that doesn't show up on Oanda for a couple of seconds as they cannot process the spreads etc. at fast enough speeds to their growing customer base it seems (they are a victim of their own success). Hence this is the type of scalping they stop if they find out a client is doing so (going for say 1 pips in a few seconds. If you ask me they need a faster computer.
 
besides thinking about paying the pip spread or paying a commission - you also have to think about the fact that when you trade forex- many times the house is taking the opposite side of the trade (which does not happen in futures) - and if the house is willing to take the opposite sides of your trade ????
 
BNK,

rather informative post...Thanks..

Another kog in the wheel of my understanding Forex. Now if I could find three more wheels at the used wheel store :)

Yeah that temporal imbalance thing could be troublesome to Oanda and I can understand that they would want to search and destroy that activity.

Michael B.
 
Quote from trader_rachel:

besides thinking about paying the pip spread or paying a commission - you also have to think about the fact that when you trade forex- many times the house is taking the opposite side of the trade (which does not happen in futures) - and if the house is willing to take the opposite sides of your trade ????
More...

Alot of these so called "Bucket Shops" work in this way - you can see a list of most of them on fxstreet.com. Avoid like the plague. When I first started I had an account with f****.com and I remember I placed a short trade on the Canadian dollar with a 50 pip stop. It was 12 midday in Asia so the market was not moving. I kid you not, 2 minutes later a "price spike" which took 10 seconds of exactly 50-60 pips knocked out my position - no announcements, no nothing. WTF? I looked at other platforms - and nothing had happened. The price came back down to where it had opened. This was on a mini account btw. I would only trust IB or Oanda and NOBODY else if you have got less then $1 million in your account.
 
Quote from WaveMaster:


Right now USD/JPY is 0.88 per pip for a $10,000 trade. If you were to place a trade for $500,000 it would look like this. ($500,000 x .88 = $440,000 x .00002 = $8.80 commission per side.)
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No, if your trade volume is $500.000 you always have to pay $500000*0.00002 = $10
above the minimum of $2.50 Commisions always increasing liniear with the trade volume with factor 0.0002

Quote from WaveMaster:


Also you guys are talking about flexibility with trade size at Oanda, I thought that you could also trade any size you want to at IB after the min. 25K?
More...

Yes, you can, but at higher relative costs. Optimum is $125.000 as I said where
$125.000 * 0.0002 = $2.50 = minimum Commission.

All calculations are on per trade basis = halfturn.

Joerg
 
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