The unfortunate response from Hugo’s Way (excerpt):
we do indeed insert a mark up of the spread (+ 0.11% of the value of BTC per side) that we obtain form Bitfinex which is the reason behind the decreasing of the spread to a certain degree in relation to the value of the Cryptocurrency.
I understand that the higher spread on the MT4 might be discouraging however we do offer additional benefits primarily in the form of leverage. When trading cryptocurrencies with our brokerage we provide a maximum leverage of 1:100 opposed that of Bitfinex of 1:3 which allows clients to not only trade with less funds but increases the potential yield of a trade.
As a business in its own right, Hugo’s Way is required to generate a form of profit in order to remain functional and offer the services that we do. In conjunction with the business model of our company being a broker, this is done in part via the mark up of spreads.
So there it is. Hugo’s Way is marking up their spreads. Nothing that I have found indicates that this should happen. His argument regarding the benefits of higher leverage is rendered moot if the spreads are so bad, and can actually make things worse.
Additionally, the argument regarding broker profitability is very poor considering the fact that they are already charging commissions to trade.
In order for traders to make informed decisions when choosing a broker, these things need to be laid out very clearly. That does not appear to have happened here. This is bad business practice, in my opinion. I did ask if similar adjustments are also being made for their FX markets, but I’ve yet to receive a response on that.
@_METHOS Appreciate your effort…That saved me from wasting time that i was going to put on them for research…Hugo’s Way is not a viable option for me with the information presented above.
Yeah, I noticed that the spreads were not that great to begin with, but just assumed that it was only temporary. Knowing that these gaps are permanent makes the decision easy for me. HW support has stated their reasoning, using the added argument that the live spreads are published on their website.
However, I feel that it is important to note, that, as a trader, this kind of information should be clearly laid out. It is important for traders to be able to make informed decisions when choosing a broker. It is also important to establish a level of trust, given the nature of the service that they are providing. By not clearly disclosing something like this, traders may feel deceived. In my case, knowing this beforehand, would have saved me a great deal of time.
To be honest, I am not overly bothered by the lack of transparency. I am just bummed that I will not be able to trade crypto with them. Oh well, maybe it is time to make the jump to FX.
This was a very solid response honestly. I wish brokers would be more transparent. We are the paying customers and shouldn’t have to jump through hoops to figure out information that should be easily found on their respective websites. Especially when it comes to spread they know as traders we are looking for the lowest spread possible. The fact that you had to jump through loops just to figure out that portion is definitely discerning. Always making sure due diligence is exercised with ANY broker is recommended. I don’t care how long they’ve been in the game it just takes one bad move to mess you up.
Yes Exactly…I would not trade on a 22% + Commission Markup…It is just not at all logical or advisable for any profitable trading if ANY…Hugo’s way are a No-No at these high Markups
When I was your age, we didn’t have any fancy Cryptocurrencies!!!
No, we had clay tablets scribed by the high priests at the temple!!!
We had to walk from Kish to Ur to trade clay tablets carrying all currencies on our backs.
Talk about high leverage!!!
It was uphill, in the snow, both directions and we liked it just fine that way!!
Pairs included
Kish/Ur
Goat/Kish
Ox/Ur
Couldn’t resist an attempt at some comic relief here…
I trade both Forex and Crypto. I find that I get stopped out less in Forex than in Crypto. Some of the price swing spikes I see in Crypto are pretty intense.
My trading system relies on a lot of historical data and calculation which I keep managed via spreadsheets and feed into my EA daily. Each broker is going to have different tick data, meaning different bar sizes, meaning different spreadsheets and calculations for each. I’ve contacted my programmer to see what can be done but I don’t see how I’ll get around having to maintain a duplicate number of spreadsheets for each extra broker. This would be a daunting proposition.
Umm… at least in Forex we don’t see enough variation to
really get concerned about it. And I do scalping… Surely
you’re exaggerating the precision you’ll be needing, and
the significance of any pricing variations?.. or not?
[EDIT] I mean any significant pricing variations give rise to
arbitrage, which I’d think would reduce variability; that’s at
least what happens in mainstream Forex pairs.
Yeah, switching your IP address does generally remove many
of the geolocation restrictions. However, then there is the
escalation of the new Google reCaptcha; as it recognizes
you’re using a VPN (through sophisticated algos only Google
would typically have) or accessing a given service from many
different IP’s (obviously a factor in cyber crime)…
I’ve even had Credit Cards declined in the payment for
server hosting, with the hosting service detecting that I
am using a VPN (I use NordVPN) and not telling me
why the charges are being declined. When asking, they
suggested “don’t try to pay while using a VPN”; again,
because they are having issues of cyber fraud…
And I’m only doing what an increasing number of security
conscious internet users are doing; which is to encrypt via
a VPN so that my ISP can’t “scrape” data about my usage
and sell it off like every other entity on the net tries to do !!!
[EDIT] But with regard to blocking U.S. persons; I think it ultimately
comes down to “not soliciting” U.S. persons, especially via public
websites. Rather, I believe many of these brokers accept
"unsolicited" business from us; but do not want to make it
appear that they are “soliciting” our business !! HECK, I know
a U.S. guy who gets Australian mainstream brokers to accept
him, and it comes down to personal negotiation often, as opposed
to purely website contact …
It’s an off the shelf trade copier called Auto Trade Copier… it offers several different options to copy… scaled by position size ratio, balance, multiplier or static lot size specific to each slave account
My TP/SL are pretty huge in crypto (i really only need 5:1) so i didn’t notice a difference in spreads other than BTC starting last week.
To be honest, I really don’t have a problem with their response. They actually confirmed to you what is happening. We have no idea what other brokers are doing with the raw aggregated feeds from their LPs since we have no access to them to make comparisons.
One of the main uses of the mt4 plugins on the broker side was to pad spreads.
Ultimately every trader will make a decision on what is best for their personal situation. For me personally, I could trade crypto @ 3:1 with tighter spreads or trade elsewhere with higher leverage but with wider spreads and make more money.
I might be exaggerating but I trade mostly exotics. How would you arbitrage spot prices between two Forex brokers?
I have noticed quite a difference between FxChoice and Finpro’s historical prices at times. I am trading higher time frames so maybe at the 1min level you wouldn’t see as much variation.
Indeed…the same thing can be said about crypto exchanges that are concerned about ‘the appearance of compliance’. It also does not hurt them to know that they can use it as justification for taking full control of your funds and terminating your account at the drop of a hat if they need to, as it typically violates terms of use and would likely void any agreements.
I did not really have a problem with their response, but with the circumstances that lead to arriving at that response. I think that being open and upfront is not the same as an admission of guilt after evidence has been provided. Many traders would likely agree that the details regarding their heavy spread markups is something that should be disclosed upfront. They advertise their low commission fees, but make no mention of their adjusted spreads. If you trade cryptocurrency through them, using max leverage, you are automatically giving them 22% of your profits. At that point, the cost of the commission is meaningless by comparison. It is understood that some brokers charge a commission, some pad spreads and some do both – but that kind of information should be clearly laid out, upfront. Just my opinion.
I have given my thoughts on the matter in my other posts, but overall, I am personally more bummed that I will not be able to trade crypto through them. I prefer to keep my account balances low when trading through a crypto exchange or via an unregulated broker, so I require higher leverage as a result. There are other brokers, fortunately, so I will not lose any sleep over it.
