This doesn’t matter, the majority of retail traders are in the same situation. It’s not necessarily a disadvantage either, as long as you’re using a trusted broker.
This is where the problem perhaps stems from, because there is no actual market regarding spot FX - in the sense of wanting a centralised market place with price transparency. It would be nice if it did go that way, but it’s never going to happen - just imagine how much price manipulation would be reduced if every broker (retail and central) had the same price feed [just like options I suppose, on a centralised exchange].
There absolutely is correlation, as you mentioned, between the derivative markets that many retail brokers offer. Over time and because of increased competition the level of deviation between the derivative market offered by retail brokers and the ‘underlying market’ has reduced - hence, making arbitrage trading obsolete.
Big differences between two brokers price feeds within the same currency pair just don’t exist anymore, at least not enough for normal retail traders to take advantage of.
So this is where we need to see the subtle difference between stops being hunted by the retail broker and stops being hunted by the ‘big players’ (which of course does happen, but it’s not influenced by retail traders who use retail brokers who don’t pass on to market - which is almost all retail brokers)
It goes without saying that this is a rather complicated area of discussion which is also shrouded in doubt as it’s rarely discussed by brokers to any length of detail - it’s also the first ‘excuse’ that losing retail traders turn to…“oh the broker hunted my stops” [No, they probably didn’t - it also certainly was not the ‘Big Players’]
Feel free for others to add to this - now is a good time to make this a Wiki post I suppose - [edit as you see fit ]
PFG ProTrader - STP, Commission per trade, same prices and timing shown as Benchmark. .1 - .5 pip spread
E - Signal, using the combined Data, not just specific providers. Same general direction, could be as high as 5 - 8 pips difference in pricing. Or Spot on with benchmark. Timing slightly behind.
NeoTicker - MBT feed, Commission based, timing spot on with Benchmark, pricing within .5 Pip.
FXCM, don’t ask
IBFX - Timing behind benchmark, and although they were supposedly STP at the time, spreads between .5 - .8 higher than Benchmark.
Interactive Brokers - With NeoTicker, honestly when I tested their data for spot currency through Neo, it was horrible, missing data galore, and very glitchy as far as pricing. Maybe its better now.
Error 404 - Not STP, but the pricing was close to the benchmark, and the timing of the data was the same, with the exception of the spread
OANDA - Not STP, and that rollover and news/announcement auto spread always disturbed me. But outside of that the prices were generally in line with the benchmark and so was the timing.
So anyway, even though you might not be Swinging Large, it’s my view if you use a broker in the US that is licensed and regulated, or in the UK and Canada, you really should not have to be concerned. STP on the EUR/USD is still .0 to .7, if you add the brokers bit of spread to this you are still in the ballpark of what is going on with the PB’s. With the exception for RFQ and RFT which is another story all together.
OK, so we now take for granted that a large (ie: huge) percentage of Brokers are not passing retail trades directly to the market (ie: ECN) and are matching trades in house, effectively giving them the opportunity to trade directly against their clients if required. This was considered blasphemy ~18 months ago as no one would touch a non-ECN (fantasy) broker for fear of the very scenario of their Broker placing trades against them. The Brokers are now safe in the knowledge that they have made FX so accessible to the gambling fraternity that they no longer need to hide the truth that they are potentially the other side of your bet…
Search back through older threads here on BP and you will find a great many posts by Brokers and the BP Elite arguing that Brokers don’t play inhouse, it’s all a conspiracy theory… turned out to be the fact… The usual Bullsheet all along.
Hello T, if I may. I think you are confusing ECN and STP. This happens a lot around here. ECN is Electronic Communications Network, it’s basically just the platform that allows you to communicate with the “market”, instead of picking up the phone, or being on the floor. STP is how the trade is processed, Straight Through Processing. So nothing touches or modifies the order in anyway.
Now back in the day, STP was a big deal, but it really wasn’t. If a trader executed 1k units at x price and x product, if there was no small liquidity, the Broker filled the order with “Inventory” they had on hand, so the matching engine would match size and price to liquidity that the broker had on hand. Even in STP processing, no PB would pick up that size (1k). Now sometimes if there were enough trades, well they got lumped together, and a PB would pick them up, but in general, even though it may have been STP, no spread added, you still would more that likely be executing against the Broker liquidity.
As far as “trading against you” those “offsetting” transactions are performed on a Liquidity Hub far far away and not even connected with the “retail” Hub. The brokers have to be able to do this, if not they would literally cease to exist. If one has 80-100k and can get on a Currenex white label platform, well then you execute against the big boys.
Anyway, ask some questions, I have been behind the curtain enough times to know the ropes, and yes there can be some ugly and nefarious stuff, but for the most part it is not a big conspiracy, ok, now let me take off this foil hat.
Hey Viper, thanks for clearing that up. Most Broker Website are flashing around ECN as if that is the STP account reference. Brokers like IC Markets (Obvious MM) spuiking on their homepage that they offer true ECN (Spreads) on amounts down to 0.01 lots. Aren’t Dealing Desk, Market Maker effectively the same thing???
“IC Markets True ECN trading environment allows you to trade online on institutional grade liquidity from the worlds leading investment banks and dark pool liquidity execution venues, allowing you to trade on spreads from 0.0 pips. You can now trade along side the worlds biggest banks and institutions with your order flowing straight into our true ECN environment.Trade in a true ECN environment with no dealing desk or price manipulation. IC Markets is the online forex broker of choice for high volume traders, scalpers and robots.”
• True ECN spreads from -0.0 pips
• Leverage of up to 500:1
• Micro Lot trading, 0.01 lot size
• $200 USD account opening minimum
• Commission of $3.00 per 100k traded
False advertising or an attempt to mislead newbie traders…Environment, Spreads not Account…
I think stop loss should be adjusted every time according to market conditions.
For example,
If i think volatility will increase in the next Time Zone session due to certain high impact news, i will move my stop loss level further away and vice versa.
If i think my position direction is wrong due to unexpected news appearing just before the next Time Zone session. I close out my position immediately.
If i’m unable to monitor the market and feeling sick, i will also consider closing my position immediately as well.
" Where there’s life, there’s hope " Capital Preservation.
Like today, i was initially short on GBPUSD but close out immediately when i got wind of North Korea missile firing. Spoilt my plan totally.
I’m expecting risk aversion to manifest breviloquently. USD may crash.
Absolutely agree with you here - it is false advertising in the sense that you are not trading through a true ECN account, but rather a fabricated ECN ‘style’ account.
I’ve pushed this comment around BP for years now, trying to let others understand the difference. It taken a long time, but as you said I think others are now understanding the difference [not all, but a lot more than a few years ago. You’ll always get the odd one who wants to argue - but you can’t argue with stupid] As TradeViper said above, there is no way in hell you would get ECN [rather STP] for 0.01 lots - it’s a fantasy.
The model for retail brokers taking the other side of your trade, or rather providing in house settlement in order to provide a fictitious supply of liquidity is in a way a sound theory. It’s just a way to match orders and keep transaction costs down. I agree that without this intervention retail brokers would not exist, and the same would happen to the retail market - unless of course you have deep pockets and can entertain a Currenex account.
I think this deserves a new thread - a great discussion.
I have never fixed a number of my pips, I am just suggesting the idea of Stop Loss that how you should think about it. It is not my actual calculation about Stop Loss.
Yes I do. I have strategy which closes profitable trades using trailing stop loss.
IMHO it is pretty easy to understand but to be sure I am posting image
So what exactly would you like to know?
In the account I have used 15 pips trailing stop loss
We can call it scalping
It is just for demonstration to noobs here that you can acquire profit by using tsl
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