Hello everyone!
Does babypips’ motto mean that an experienced trader will never get more profits than losses per day for, ‘There was never a winner, who wasn’t a beginner’ or what does it mean?
Please suggest me true ECN brokers or how to find them.
Can a market maker influence the currency prices like making them go down or up the market maker like such as the market maker become as sellers to make the price go down and become as buyers to make the price go up to trade against me?
Thank you.
Hello!
First of all it is important to understand that according to the structure of the retail forex trading, your broker is your counterpart as it is an OTC market (you can find it in the “Terms and conditions” on your broker`s website). That is why it is necessary to distinguish the worldwide market for banks and a platform provided by the broker for the retail clients. In fact, the marketmakers could influence the price as they have to provide liquidity to execute the orders of the large institutional clients, but they have no idea about what the retail traders are doing, so it is nothing to worry about.
I trade exclusively through spreadbetting, which old hands at trading will say is the most manipulated means of access to the markets. All spreadbetting prices are market maker prices, there is no such thing as “ECN SB”. However, I have been informed with authority that the differences even the SB firms show between their quotes and the underlying markets are so small they wouldn’t even be noticeable. Nobody has ever been able to show a real difference in a live situation.
I suspect ECN is a solution to a problem which isn’t a problem.
(Obviously, I wouldn’t even try SB-ing tiny currency pairs like PLN/TRY if there’s such a thing.)
Why wouldn’t you even try SB-ing tiny currency pairs like PLN/TRY and what do you mean by if there’s such a thing?
Can someone also answer my 1st question?: Does babypips’ motto mean that an experienced trader will never get more profits than losses per day for, ‘There was never a winner, who wasn’t a beginner’ or what does it mean? Thanks.
@Tina8, IC Markets (Australia) are supposedly true ECN… Because they say so…??
Yes… Retail Forex is an OTC Market place… (Over The Counter), meaning that the Market Makers, your Broker, can set whatever price they want…The EURUSD (ALL Pairs) has no set value anywhere in the world, it will vary slightly across the 6 major exchanges at any given time. It’s not like Apple’s share price which is set in stone on the NASDAQ @ ~197.00
You Broker sets the price, usually as close as possible to the other exchanges to stop Arbitrage Trading against it’s set price. The continually widening and closing the spread value instigated by your Broker also has an effect on price action levels which will also vary from Broker to Broker.
The Only way to see this is open up two Demo accounts (preferably on different continents) ie: IC Market in Australia and say FXPro in the UK and watch the price delta and spread variation on the same pair in the same timeframe.
Cutting to the chase… your Broker IS trading against you… just not as aggressively as you believe…
Hope this answers your question and is of help…
I wouldn’t use SB to trade something exotic like PLN/TRY just in case the “experts” are wrong and the SB firms DO set prices unfairly for their clients, prices which are not closely related to the underlying market.
As for being able to trade PLN/TRY at all, although I am sure that PLN currency can be exchanged for TRY currency at a bank or bureau de change, hardly any forex broker or SB firm offers traders a market in every pair that can be imagined. It would be very hard I think to find a broker offering a market in PLN/TRY.
You are right. OANDA spread is 13 pips but pepperstone spread is only 2 pips away for AUD/USD. OANDA spread is 17 pips but pepperstone is only 4 pips for NZD/USD. I found out that IC Markets & Pepperstone are not true ECN brokers because they have swap free account and spread can be from 0 pips which are signs of false ECN brokers. So how?
Do you mean that trading stocks in a market maker trading platform is profitable since market maker can’t trade against me? But I thought they have insiders working in the stock company that can influence the movement of stock prices? Thanks.
The live spot in the Forex is usually pretty elastic because the volume is massive yet the prices continue to fluctuate constantly in two directions at a time, this means market makers (possibly the ones inside your broker) can easily move the price 0.2% against your trade for a brief period of time (10 seconds to a couple of minutes) because it only takes $20-MLN or so in trades to move the ask up or bid down, usually.
This is a very interesting thread Re: MMs and ECNs.
I am a U.S. longer term trader, days, weeks. I was looking at opening a small offshore account (1K US) for higher broker leverage and tighter spreads but it seems the funding and withdrawl can be a challenge. So I was looking at Oanda U.S., a MM. The spreads seem reasonable during the london/US markets and deposits/withdrawls would be a “snap”.
As a longer term trader what is the general concensus on ECN vs. MM if we compare them at 50x max broker leverage. Big deal or not. I’m leaning to the “not” side of things but am open to what others think.
Tx,
KC
Forex market is the largest market in the whole world with daily trades on several billion dollars. How much money you need in order to make significant move on this market? I don’t think that it would be possible for any single broker which plays today on this market
Of course it can because basically they possess vast of the power to be able to move prices in the direction they want. But still they risk to play against the crowd during adverse events where fast reaction should be combined with prudent policy to make the market and let traders to react meaningfully to the event. In such cases market makers often sustain losses but during calm times their function in the market is more than rewarding.
The brokers that we deal with as private retail traders don’t have the money to move a major currency pair.
They could of course manipulate their own prices which they offer to their clients to shake them out of positions but that’s both risky and usually illegal (at least, it is in the UK). So what’s the point?
The prices may vary (sometimes considerably) during the day, depending on a number of influences. Market Makers make money from buying shares at a lower price to which they sell them. This is the bid/offer spread. The more actively a share is traded the more money a Market Maker makes.
Others may take some of the exposure onto their own book. But here’s the key part: generally, they do not make their own prices as a true market maker would. For any particular currency, a retail FX firm might offer an aggregate price. … If you place a trade, the ECN will match you against the very best price available.
I don’t think that a market maker can really influence currency prices. Forex market is so huge and powerful that no single person has the power to affect it in any direction. Yes, they may have some influence on the spread between bid and ask prices but affecting currency prices itself is not possible as far as my opinion is concerned.