A great discussion you have going, but first to address your comment:
FXCM would not have suffered more than $200 million dollars in losses during the SNB flash crash had we been taking the other side of client trades – unlike many dealing desk firms in the industry. On NDD forex execution, every order is offset one-for-one with a liquidity provider. The trader has a position with FXCM and FXCM has an offsetting position with the liquidity provider. When the trader went into a debit balance, that meant FXCM also had a debit balance with the liquidity provider that had to be covered.
FX trading is decentralized so prices can vary from broker to broker, but typically not by that much. As Mayzee mentioned, a broker with a deviation from where the majority of liquidity providers are quoting would leave them open to arbitrage. In fact there’s a term for this ‘picking’ which some brokers may close your account over if they find you have been trying to arbitrage latency in their pricing. I’ve also found traders are not hesitant to post screenshots comparing broker pricing
Pricing from broker will typically align closely since many brokers may be using the same liquidity providers (LPs). However, the pricing and liquidity an LP is offering to one broker can differ from that offered to another broker. A lot of this is based on relationships. The more volume you bring to the table for an LP, the better leverage you have for negotiating better spreads and liquidity for traders. You can also think of spreads being inverse to liquidity. If a broker tells an LP it wants a 1 pip spread on EUR/USD then the amount of liquidity offered at a 1 pip spread may be less than the amount of liquidity offered at a 2 pip spread. Offering liquidity at a 1 pip spread is a greater risk than offering liquidity at a 2 pip spread. The optimal goal is to have the best of both since you don’t want a tight spreads only to find out you suffer from greater slippage. So you can see how a broker’s pricing could differ whether they value tighter spreads or greater liquidity.
Speaking for FXCM’s NDD forex execution, each liquidity provider streams through a direct feed of executable buy and sell prices to FXCM. Our NDD Price Engine selects the best buy price and the best sell price, which result in the best available spread. The best available spread is then streamed to the platform. We also offer a Dealing Desk (DD) account option, but traders on DD execution receive a price feed based on the same transparent competitive pricing that our NDD accounts receive.
Regarding slippage, FXCM released updated slippage statistics from January 1, 2017 through May 31, 2017 telling you how many orders experienced negative slippage, no slippage, and positive slippage:
*Certain non‐direct clients are excluded from the data. Limit and limit entry orders only receive negative slippage in error; clients are eligible to receive trade adjustments in the event that these errors occur. Price Improvements are subject to available liquidity.
The type of order used can also impact slippage. The full slippage statistics breaks slippage down by order type which you will find interesting: FXCM_slippage_report_ltd_2017_Jan_May.pdf (131.7 KB)
In my own trading, I can relate to what you are talking about. I look at a chart and think wow the market is going up, time to buy. But by the time market direction becomes obvious and I decide to jump in is often times when the market movement may already be over. It doesn’t happen only in forex trading. Bitcoin and Ethereum also come to mind. Prices climb to crazy levels and everyone starts talking about it which attracts long positions, and the next thing you know prices have dropped 20%.
Such is trading. It involves continuous learning, especially the psychological side of it. Add leverage to the mix and it can become a roller coaster. I hope you find success!
The slippage statistics do not in away way attempt to represent that FXCM maintains a particular capacity or performance level. The figures in this statistics are provided for information purposes only, and are not intended for trading purposes or advice. FXCM is not liable for any information errors, incompleteness, or delays, or for any actions taken in reliance on information contained herein. Past results are not indicative of future performance.