FX Solution raises spread on GBP/USD | Forex Factory

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FX Solution raises spread on GBP/USD

  • #1
  • First Post: Oct 25, 2006 10:50pm Oct 25, 2006 10:50pm
FX Solution raised there spread to 5 pips on the GBP/USD. They said that they raised the spread due to market volitility and liquidity. They said the GBP/USD was not as Liquid as once was thus warranting a pip increase. They due tout that they lowed the GBP/JPY from 10 pips to 9 and the AUD/USD from 5 pips to 4. I think they lost a lot on the GBP/USD during news annoucements. They also said in our chat that they have the most competitive spreads out there.

**cough** BS

I though people should know.

P.S. I am long on the gBP/USD
Fdisk Please I just want a few pips. Is that too much to ask?
  • #2
  • Oct 26, 2006 3:24am Oct 26, 2006 3:24am
Am I the only one not happy with the increase in spread for the GBP/USD?
Fdisk Please I just want a few pips. Is that too much to ask?
  • #3
  • Oct 26, 2006 3:53am Oct 26, 2006 3:53am
Quoting fdisk
Am I the only one not happy with the increase in spread for the GBP/USD?
No. That sucks..

When did it go up??
I traded it last week and I'm sure it was 4 then.
It's definitely 5 now.
Bundy's status today: "Waiting..."
  • #4
  • Oct 26, 2006 4:24am Oct 26, 2006 4:24am
I dont think that there could be more liquidity in AUD/USD than there is in GBP/USD. So their reason for raising the GBP/USD spread is nonsense.
  • #5
  • Oct 26, 2006 4:55am Oct 26, 2006 4:55am
they just want more money...

crap reason
  • #6
  • Oct 26, 2006 10:00am Oct 26, 2006 10:00am
Quoting bundyraider
No. That sucks..

When did it go up??
I traded it last week and I'm sure it was 4 then.
It's definitely 5 now.
They started increasing it last Sunday (10/21/06). I found out on 10/22/06 and I called them and they said the same reason.

I gotta look for a new broker, guys...
"Even the word impossible says that I M possible"
  • #7
  • Oct 26, 2006 10:32am Oct 26, 2006 10:32am
Quoting fdisk
Am I the only one not happy with the increase in spread for the GBP/USD?
I emailed their support 48 hours ago. So far no response.
I only opened my account with them this month. Not really impressed at this stage as they did the changes without any notification.

If anyone gets any feedback on whether its a permanent or only a temporary change I'd like to hear.
  • #8
  • Oct 26, 2006 11:40am Oct 26, 2006 11:40am
Yeah I noticed when I put an order on yesterday and the spread was 5 pips. I was thining that is a little weird. Hmm maybe time for a new broker because I primary trade cable.


Its disappointing because I really hadn't had any problems with FX solutions in the past.
  • #9
  • Oct 26, 2006 12:21pm Oct 26, 2006 12:21pm
Here is a copy of my chat with FX Solutions. I am not impressed

"Please wait for a site operator to respond.
You are now chatting with 'Garrett'
Garrett: Hello this is FX Solutions on line chat. How may I help you today?
Mike: What happened to the GBP/USD the spread is now 5 pips what is going on?
Garrett: FX Solutions has adjusted the “bid/ask” spread on several currency pairs to better reflect market volatility and liquidity.
Garrett: The following changes have been made:
Garrett: The spread on AUD/USD has been reduced by 1 pip
Garrett: The spread on GBP/USD has been increased by 1 pip
Garrett: The spread on GBP/JPY has been reduced by 1 pip
Garrett: FX Solutions continues to offer clients the industry’s most accurate price feed, unparalleled, automated order execution and competitive fixed spreads.
Mike: Why the increase in the spread for the GBP/USD?
Garrett: to better reflect market volatility and liquidity
Mike: to better reflect market volatility and liquidity, What does that mean. As I understand the GBP/USD is a very well traded pair. If I am not mistaken it is 2nd only to the EUR/USD
Garrett: and as you can see our spreads are still very competitive with all other fcm's
Mike: Most other brokers have there spead for the GBP/USD at 3 or 4 pips. Very few have the GBP/USD at 5 pips
Garrett: our spreads are fixed
Garrett: and our execution is second to none
Mike: In my search of 15 different brokers FXCM was the only one that had the GBP/USD at 5 pips
Garrett: we stand by our execution sir
Mike: we stand by our execution? What do you mean, No slippage?
Garrett: i mean we dont widen the spreads to 10 during data
Mike: You mean big news events?
Garrett: correct
Mike: Is there a chance that other popular pairs will have an increase is their spreads also?
Garrett: we constantly monitor the market and adjust accordingly
Mike: Monitor the market for?
Garrett: volatility and liquidity
Garrett: Is there anything else I can help you with today?
Mike: No thank you for your time
Garrett: your welcome
Garrett: have a nice day"
Fdisk Please I just want a few pips. Is that too much to ask?
  • #10
  • Oct 26, 2006 12:28pm Oct 26, 2006 12:28pm
i like fxsol and this doesnt bother me at all...oh well

regards
  • #11
  • Oct 26, 2006 12:49pm Oct 26, 2006 12:49pm
Quoting mbqb11
i like fxsol and this doesnt bother me at all...oh well

regards
One pip increase is a big deal atleast in my view point. I sometimes like to scalpe and the GBP/USD can be good for this at times, But with 5 pips it makes it just that much more of challenge almost makes it not worth the attempt.
Fdisk Please I just want a few pips. Is that too much to ask?
  • #12
  • Oct 26, 2006 1:04pm Oct 26, 2006 1:04pm
Quoting fdisk
One pip increase is a big deal atleast in my view point. I sometimes like to scalpe and the GBP/USD can be good for this at times, But with 5 pips it makes it just that much more of challenge almost makes it not worth the attempt.
This is a big deal, definitely. I don't like it, but it's the rule of the game if you want to play with the GBP/USD at FX Sol now. Like you, I'll probably shift money to other brokers when I need to trade the GBP/USD if I feel like the 1 pip makes a large enough difference to justify the move.

It's a shame because it puts a really big handicap on one of my strategies that specifically used FX Sol and the GBP/USD. This basically knocks off 2% of my profit if I wanted to keep the same outer range motion. Time to regroup.
  • #13
  • Oct 26, 2006 1:07pm Oct 26, 2006 1:07pm
[quote]I'm a newbie and my trades are likely to fail, so perhaps you want to take all my opposite positions

Welcome to the real world I'm sure the old timers all take bets to see how long some of us will last. LOL

There is a lot out there you just need to keep your eyes peeled.

Timing is everything
  • #14
  • Oct 26, 2006 1:25pm Oct 26, 2006 1:25pm
believe me I understand the concerns, with people who scalp and what not. I trade 4 hour at the least, so if they increase by 1 pip but everything runs as smooth as it has, for me this is not a big deal. Hope you all find another broker that suits your needs, so you can continue to have success.

Best of luck
mike

Quoting fdisk
One pip increase is a big deal atleast in my view point. I sometimes like to scalpe and the GBP/USD can be good for this at times, But with 5 pips it makes it just that much more of challenge almost makes it not worth the attempt.
  • #15
  • Oct 26, 2006 2:07pm Oct 26, 2006 2:07pm
Quoting mbqb11
believe me I understand the concerns, with people who scalp and what not. I trade 4 hour at the least, so if they increase by 1 pip but everything runs as smooth as it has, for me this is not a big deal. Hope you all find another broker that suits your needs, so you can continue to have success.

Best of luck
mike
Thanks for you insight. I wanted to comment because while it sounds like it's just a pip and in the grand scheme of longer trades, the pip doesn't seem to make THAT much more of a difference, but depending on HOW long term your shots are, it does have an effect.

If your AVERAGE trade expectancy before was 100 pips the movement now required has increased by almost 2%. That means that a trade trigger now has to risk another 2% to make the same profit before the spread. To look at it another way, if you kept the same running size of the trade (accepting 2 pips less for each trade), if your AVERAGE trade was 100 pips before it is now 98 pips, a 2% difference.

Over the long run, it makes a big difference. I trade mainly the hourly charts for movements of slightly larger than 100 pips over a few hours time-frame, so this has almost instantly reduced my expectancy on my open trades by 1% and my future expectancy by 2%. It's not a lot, I'll agree, but there are other more attractive venues for my trading dollars using this particular method.

SO, the moral of the story is...are you willing to pay that premium for the platform and service?

FX Sol has a good business model, and their platform is really good, but the 2% premium, for me, is a bit high, especially since I feel like it was through no fault of my own that the prices were jacked up.

I will still have other accounts at FX Sol for other tactics, but this particular account will to be moved.
  • #16
  • Oct 26, 2006 2:19pm Oct 26, 2006 2:19pm
I would like to know exactly how they measure volatility and liquidity and then how they apply that to the spread.

Just curious.
  • #17
  • Oct 26, 2006 2:26pm Oct 26, 2006 2:26pm
Did anyone get a courtesy letter or email regarding this change? That's the least they should have done. I didn't find out until a few days ago on this forum.
  • #18
  • Oct 26, 2006 2:32pm Oct 26, 2006 2:32pm
Quoting ePIPhany
Did anyone get a courtesy letter or email regarding this change? That's the least they should have done. I didn't find out until a few days ago on this forum.
No they did not notify anyone of the change. I agree they should have but they did not.
Fdisk Please I just want a few pips. Is that too much to ask?
  • #19
  • Oct 26, 2006 2:33pm Oct 26, 2006 2:33pm
Quoting ePIPhany
Did anyone get a courtesy letter or email regarding this change? That's the least they should have done. I didn't find out until a few days ago on this forum.
Funny that you mention that. When I talked to Garrett at FX Sol, I made mention of the fact that we didn't receive e-mails or anything and he mentioned that they updated their website (which I verified, they did). He seemed a little pass-off-ish about the whole thing mentioning that their actuarials were on top of it and they would constantly monitor volatility in order to price yaddah yaddah yaddah (sleepy eyes) *snoore*.

I did tell him that in the future we'd hope that they'd be a little more proactive about the move as it affected a few traders literally mid-trade. Of course, Garrett is probably not in any position to actually DO anything other than forward the complaints upwards (or to his trash bin). So, all we can say is that HOPEFULLY the next time they adjust spreads, it will be preceded with a nice letter telling us of the effective date and time, but I'm not going to bet my first born on that one.
  • #20
  • Oct 26, 2006 2:36pm Oct 26, 2006 2:36pm
excellent post mikal and you are right. For now I am willing to pay that premium, perhaps I won't in due time.

Thanks again for your insightful posts

Mike

Quoting mrmikal
Thanks for you insight. I wanted to comment because while it sounds like it's just a pip and in the grand scheme of longer trades, the pip doesn't seem to make THAT much more of a difference, but depending on HOW long term your shots are, it does have an effect.

If your AVERAGE trade expectancy before was 100 pips the movement now required has increased by almost 2%. That means that a trade trigger now has to risk another 2% to make the same profit before the spread. To look at it another way, if you kept the same running size of the trade (accepting 2 pips less for each trade), if your AVERAGE trade was 100 pips before it is now 98 pips, a 2% difference.

Over the long run, it makes a big difference. I trade mainly the hourly charts for movements of slightly larger than 100 pips over a few hours time-frame, so this has almost instantly reduced my expectancy on my open trades by 1% and my future expectancy by 2%. It's not a lot, I'll agree, but there are other more attractive venues for my trading dollars using this particular method.

SO, the moral of the story is...are you willing to pay that premium for the platform and service?

FX Sol has a good business model, and their platform is really good, but the 2% premium, for me, is a bit high, especially since I feel like it was through no fault of my own that the prices were jacked up.

I will still have other accounts at FX Sol for other tactics, but this particular account will to be moved.
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