Spreads/Requotes: 5-Minute Time Frame

Beginner Questions
1

Hi everyone,

I’m happy with my trading plan as regards backtesting and forward testing on the 5-minute timeframe. But while I’m targeting the London and NYC sessions, including their overlap, but I’m still concerned about spreads and requotes. The brokers I’m playing with are AfterPrime, Pepperstone (Razor account) and FXCM.

Next week I’m going to paper trade the new plan to see how it fares specifically with respect to spreads.

But in the meantime, for those who are successfully scalping live at the 5-minute time frame or lower:

Any thoughts on your experience to share with respect to your personal experience with spreads/requotes and precision of entry and exit?

2

I don’t think the timeframe you use will affect spreads or requotes since timeframes are just different ways of viewing the market, but if you’re scalping, I would advise you to take trades where your reward is at least twice the spreads.
Also, avoid trading early when the market isn’t too volatile because during those times, the spreads are highest

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3

hi, your biggest problem is time in case of reqoutes. Do use EA’s? VPS? MT4/5? btw, demo account will not show you reqoutes.

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4

No EA.

I use Tradingview, with the charts set to show the bid and ask lines in addition to the price line.

Directly connected to the broker; trading from Tradingview. Testing the paper trades on AfterPrime, Pepperstone and FXCM.

Noted on the requotes for paper trading, thanks!!

5

ok, how your trading looks like in general:

  1. you are click buy
  2. your pc process this click
  3. your transaction is sending through the internet
  4. you are connecting with some ISP so it is first point ISP servers
  5. your ISP process the request and send it to broker server
  6. broker server process your transaction depends on liquidity.
  7. transaction on the market.

as you can see, there are many tasks before your transaction will be complete. Each task take ms but in scalping each ms is on gold value.

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6

FXCM works with 3 preferred VPS providers.

https://www.fxcm.com/markets/forms/vps/

I’ve never worked with a VPS before and am now examining it, thanks!

Question for you, if I may:

Does a VPS provide a more direct connection to the dealer/broker for manual trading and EA trading, thus decreasing latency even for manual trading?

Or is a VPS only for people who are doing programmatic trading by way of an EA?

To be clear, I like to manually use the long/short position tools in Tradingview to calculate my risk and set the stop loss and take profit at the same time.

7

In manual trading it is not a big difference, if you use EA’s there is a difference, you are connecting trading terminal - broker server directly. Many brokers has servers in big data centers where you can rent a server so your internet connection between your trading terminal and broker server is very fast, I have 2ms.

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8

Many, many thanks; your kind guidance clarified everything perfectly : )

Since I won’t be working with EA, I’ll query my dealers/brokers re their policy on requotes and also account types with respect commissions and raw spreads vs. solely spreads.

In addition, I’ll carefully survey the volume on each exchange, and paper trade each, noting that whatever I see is just a sample and that requotes won’t apply to paper trades.

Lastly, I’ll wade into live risk with tiny amounts to test the entire apparatus. Luckily, my internet connection speed and reliability is pretty good at home, and I’m getting a UPC to cover any power outages.

If you have any additional thoughts, I’d be grateful. Otherwise, thanks so much for taking the time! I love Babypips, and tell everyone about it. It’s a world class resource, compiled by extremely talented and caring educators, including yourself!

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9

Thanks :slight_smile: I can only add that scalping is very profitable method but in the same time is very hard to create and manage, calculate is it worth your effort and cash.

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