Suitable broker for scalping 8 pips on EURUSD per day (40 trades of 1 standard lot)?

Broker Discussion Forex Brokers
1

Hello everyone. Greetings from a newbie.

I am working on a system which MAY, if it passes further stress testing with historical data (it’s doing pretty well at the moment), and if it performs properly in real life, allow me to scalp about 8 pips per day. That would be on 40 trades of 1 standard lot each day. In back-testing I’ve mostly been assuming a spread of 0.3 pips, but with a spread of 0.4 pips the system still pulls in 6 pips per day on paper, so that might just about be worth the effort. With a spread of 0.5 pips it’s predicting 2-3 pips of profit per day, but I don’t think I would be brave (foolhardy) enough to bother if the spread is that big.

I have about GBP20K to assign to this project, and as I said I would be trading single standard lots, perhaps moving up to 2 standard lots if the system is successful.

So my question is this: what broker would people recommend that

  1. Is genuinely ECN.
  2. Is regulated by the British FCA.
  3. Has spreads, fees, commissions, call them what you like, but total charges that would allow the above system to work? For example, something like a 0.2 pip spread and no extra charges would be great. But is that available in my league or is that kind of spread available only to institutions and ultra-high net worth individuals who trade thousands of lots per round trip? I would only be trading 8am-11am EST when liquidity is high, and at least I would be in standard lot territory (albeit only just) rather than mini-lots, so I am hoping that a reputable broker is offering this kind of deal.
  4. Offers a reasonable margin deal - e.g. liquidating if the market moves 15 pips against me, say. (Preferably more than 15.)

I’m hoping the advice isn’t going to be “Don’t be ridiculous! With 40 single trades of 1 standard lot each day, you’d be lucky to get a spread of 2.0 pips, so you can completely forget about the 0.2 pip spread that you want!”

Many thanks for any help with this.
Carr

Edit: I looked at Pepperstone and they seem to be offering an average spread of 0.09 pips, call it 0.1, and taking a round trip commission of USD7 per standard lot, which is equivalent to 0.7 pips, so a de facto spread of 0.1+0.7=0.8 pips, burying my system completely. Hopefully I’ve misunderstood something?!

2

I’ve heard good things about Tickmill. Never used them myself, and have no relationship with them. But the spreads on the pro account are within your requirements, at least on EURUSD. Not sure what else you’re trading.

Plus a whole bunch of registrations with various regulatory entities around the world.

3

Pepperstone and IG also have some low spreads as well.

4

The info at many sites seems to come wrapped in layers of obfuscation, but for a person who is trading EURUSD in single standard lots the bottom line for a firm such as IB seems to be, at high-liquidity times, a de facto spread of about 0.6 pips, made from 0.2p spread and 2 * USD2 commission for a round trip, with a standard lot worth USD10 per pip. In and out in a nanosecond, lose the price of 0.6 pips.

Sadly 0.6p is huge from my system’s POV. I will see if I can improve the system to make it on average 0.4p better per round trip than it currently seems to be. Am not optimistic that’s within reach though.

5

On whose demo trading platform did you backtest the scalping strategy? It would be a good idea to run exactly the same trades on a second or even a third demo account to determine if the results are consistent with each other.

Besides spreads, how are you accounting for slippage?

6

TD365 offers fixed spreads, 0.8 minimum. UK regulated. It would not fit your c.0.2 system requirement. I don’t think you’ll find a better quote.

7

I’ve been backtesting it on 1-minute OHLC data from histdata(dot)com, using first Excel and then moving to Mathematica. Or to be more exact, the system has emerged from an analysis of the data. In order not to hurtle up a garden path, when figures get produced from a calibration for one month I then test them for other months. When it’s been developed a bit more and I’ve sensitivity-tested everything I can think of to sensitivity-test, I’ll post some means and quantiles and standard deviations here.

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