Hi all… here’s a newbie question for you (one that hopefully has a reasonable explanation): I’m doing some paper trading on some demo accounts with Alpari UK. During the day spreads are normal and pretty stable, ie. 1 pip for EURUSD, etc. But come 5 pm EST, the spreads go absolutely crazy… like 16 (sixteen) pips for EURUSD, I think I also saw about a 45 (forty-five) pip spread on GBPCHF also! Then after an hour or so, it returns to normal. Has anyone else also experienced this? Is there some explanation? If you’re already in a good profitable position when this rolls around, you’re going to get stopped out right away. I’m just wondering how anyone can have a snowball’s chance in hell of making any money in the Forex market if this is how it is.
That seems pretty odd. Spreads are known to fluctuate as a function of market action, but 16 pips is pretty damn ridiculous. Are you only seeing these spikes at exactly 5 EST or is it something persistent until the next day?
yeah I know Rob, but to that extent?? How the heck can anyone make any money like that? Not just at 5pm either, during the night and early morning I’ve seen spreads of 25 pips and once even 103 pips! God almighty…
Another consideration is that it could be Aussie news-release-pre-pricing
driving the spreads wider.
Though I thought Alpari had fixed spreads and protected themselves from news-related liquidity shortages through slippage.
I use Oanda, and widening spreads are often a reminder that some news or another is being released in another market, but I trade the dailies and weeklies so temporary 16 pip spreads don’t matter that much.
Honestly, I have no idea what happens every day at 5pm est. I check it throughout the day, but once NY closes, there’s not much to look at til Asia opens.
OK,but is it THAT much less liquidity that spreads should go up to 15 or 16? If a person is in a profitable position from earlier in the day, everything is going to go to hell between 5 pm and 7pm EST. Are you supposed to exit your trades before pm and get back into them at 7:01 pm (and pay the spread again) ??
Nope, not scalping. Using 40-50 pip stops. Worried about scenarios like this:
I enter a short trade earlier in the day (let’s say GBPCHF), it moves against me somewhat and by 5pm EST, it’s about 15 pips from my buy stop, but I’m still alive. Then NY closes and the ask price balloons to like 18 pips greater than the bid - bango, I’m stopped out, aren’t I? And there’s worse - yesterday (between 5pm and 7pm) there was a 103.5 pip spread on the EURAUD at around 9:30 pm EST (that’s during Tokyo hours too). How is anybody supposed to stay in a trade with the likes of that working against them?