Mosf of brokers against news trade ?

nlnforever · #1 (**permalink**) 01-21-2007, 04:47 AM

I am new to the forex market. And the 1st thing I do is finding a trusted borker. So I've been researching about FOREX scam.

I found many reports that claim : forex.com , gcitrading.com , even oanda.com, and more well-known brokers out there.

90% of well-known brokers now are claimed SCAM.

So wtf is this ? So I decided to move on, and research on those brokers. And I found that many of them have real office, and substantial finance. So what is the real truth ?

FXCM.com ==> may people claim that IT's A BIG SCAM.
And DBFX.com , it is belong to Deutsche Bank, a very very famouse BANK. But DBFX.com seems that it is WHITE LABEL of FXCM.com to continue scamming !!!

So wtf is all this things ?
So I came back to those scam reports. After spending time reading, I found something:
- Many brokers have been claimed scam 'cause they cause trouble when news released. So people cannot trade effectively when news released, so they report it scam.
- And it seems that those brokers need to control their money in those time, so they wont loose money.
- Despite the news trading, other things ( service, normal trade ) are still fine.

So what do you think about this ?

topchess · #2 (**permalink**) 01-21-2007, 07:12 AM

Those are false claims from immature experiences. We can't call a broker "Scam" because of our inability to trade news with that broker.

We already know the fact that most brokers widen the spreads during major news announcements. So we have to accept it.

In fact if you are a swing trader, you won't have any trouble with any broker. But It really seems some brokers use stops against their clients to trigger stoploss falsely.

A scam in my definition would be a broker that runs away with my money. Oanda is so fine as long as I can trade, and I totally understand that I can't trade news (that does not make it a scam as falsely claimed by many traders).

My funds are safe with a broker like Oanda, I will deposit and withdraw when I want, I will be able to run positions (not aimed for scalping the market), no requoting, and I won't be able to trade news which is not a big issue to position traders (those traders never argue about brokers If you notice.)

Good luck and Good bye!

n_aftab · #3 (**permalink**) 01-21-2007, 11:58 AM

Hi,

I'm hold trades for reasonable periods of time with saxobank, never had a problem with them.

The traders that claim that they have been screwed are the ones that either news trade or trade the news, i've never come across anybody that has bothered to ask their broker why they dont like traders that trade the news, instead theres always slagging off of them instead.

Personally i like to eliminate chance from trading as much as possible that is, but I do think trading the news is more of a gamble, look at the bank of england, 99% thought that interest rates would remain the same.

Another example, the BoJ thought there was an increase on the cards there .. didnt happen. Its more often then not pot luck.

At risk of having my head chewed off, you'd be better off taking your money to a casino, you'd have more fun.

You could on the other hand as a beginner learn to trade babypips school way by going through the school.

Regards

senaka7 · #4 (**permalink**) 02-17-2007, 03:31 AM

Number of new traders have asked me the reason about the brokers un-willingness to fill orders during the volatile news times.
I will explain this in simple terms so all newbie’s can get a clear picture how the system works.
Every time you buy a currency there has to be someone out there to sell it. Every time you sell a currency , there has to be someone to buy it. It’s just like if you are a baker and you want sell bread there has to be someone to buy bread from you and vice versa, If you want to buy bread , there has to be someone to sell the bread. Simple as that!
Therefor immediately after a news release if one currency, say GBP going up 100 miles per hour every trader in the world want to buy GBP, who on earth would want to sell their GBP. There for it’s obvious that your broker cant find a seller for your order and your order wont get filled.
To overcome this situation some brokers freeze their platform to discourage their customers trading news and some brokers fill your order when ever they find a seller, resulting a bad fill.

So,, if you want to survive in forex LONG TERM ... the simple rule is DONT TRADE THE NEWS. The other option is you can spend the rest of your life searching for a broker who would fill you during the news events.

Pipcrawler · #5 (**permalink**) 02-17-2007, 08:01 AM

Quote:

Originally Posted by senaka7

Number of new traders have asked me the reason about the brokers un-willingness to fill orders during the volatile news times.
I will explain this in simple terms so all newbie’s can get a clear picture how the system works.
Every time you buy a currency there has to be someone out there to sell it. Every time you sell a currency , there has to be someone to buy it. It’s just like if you are a baker and you want sell bread there has to be someone to buy bread from you and vice versa, If you want to buy bread , there has to be someone to sell the bread. Simple as that!
Therefor immediately after a news release if one currency, say GBP going up 100 miles per hour every trader in the world want to buy GBP, who on earth would want to sell their GBP. There for it’s obvious that your broker cant find a seller for your order and your order wont get filled.
To overcome this situation some brokers freeze their platform to discourage their customers trading news and some brokers fill your order when ever they find a seller, resulting a bad fill.

So,, if you want to survive in forex LONG TERM ... the simple rule is DONT TRADE THE NEWS. The other option is you can spend the rest of your life searching for a broker who would fill you during the news events.

Great analogy!

cwavefx · #6 (**permalink**) 02-18-2007, 12:41 AM

Wow, then the FCM I deal with must be awesome because I'm able to dive in, snatch 30 pips and come out during news times.

It's very easy to blame other factors, even I at one point was suspicious of my FCM doing stop hunting or quoting bogus prices etc etc etc. The reality of it though, is most people simply don't know how to trade.

Another overlooked factor is your own computer system. When news comes out, and the ticks are going off the chart, it puts a HUGE load on your CPU. I use to complain and whine about why my orders weren't going thru too, that is until I upgraded, then that become a non-issue, again, how silly of me to blame my FCM at that time.

Now? I double to triple my account on a weekly basis. I've learned many strategies, how to trade under different circumstances, and when to stay out, where my take profits should be, and where my stop losses should be. My win percentage is 69.8% average, but with proper money management, you can still be very profitable.

In conclusion, although there may be some small bucketshops that could be potential fly-by-night scams, none of the big name ones are. Those who claim the big companies to be scams, are only scamming themselves thinking they know what they're doing when in reality, they have no idea wtf they're doing.

senaka7 · #7 (**permalink**) 02-18-2007, 05:45 AM

You are absoulutly right cwave. Not having upto date technology also effects your order execution. I have personally experienced what a huge difference between a fast DSL Internet connection and a superfast fiber optic cable connecton could make. I have my DSL as back up and when I use my DSL
(1500/512kb) it gives me atleast 3-10 requotes per week, when my
Cable (17000/512kb) gives me zero requotes with the same broker,same platform.

And also I want to point out one more thing. Often people argue, on a extremly volatile market, how can a price jump 10-30 pips without a price movement trace on the charts. eg- If the current price of GBP/USD is 1.9635 and just after a major news release it jumps to 1.9660 in a split seconed. Any stop/limit orders in between 1.9636 to 1.9659 wont get filled because such a price didnt exist in the market..
Lots of traders think that it's a manupilated price by their broker.
A such a price jump usually occurs when a massive buy/sell order(few billions) hits the market in one go. So the next time when your broker says that price didnt exist, may be he's telling the truth cause technically that price really didnt exist on the market.
This effects for small retail traders who straddle the news with stop and limit orders and their order will never get fillied on the initial spike or first wave even it hits the target.Since the Forex Market is fast becoming the safe and easy heaven for russian and south american black money, dont be surprise to see a steady increase in price jumps like that in the future during news releases.