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complaining about spreads

  • #1
  • First Post: Dec 9, 2006 2:44pm Dec 9, 2006 2:44pm
At Interbankfx broker spread is :

GBP/USD about 32 pip at NFP , and EUR/USD about 10 pip

In normal news GBP/USD about 13 pip, Eur/USD about 6 pip

In sleeping market GBP/USD 4 pip , Eur/USD 2 pip

did any one see like this spread in any other broker?
  • #2
  • Dec 9, 2006 3:06pm Dec 9, 2006 3:06pm
I think it's pretty much standard. It's their way of discouraging trading during news. And yes, I think pretty much every broker does it.

andersenws
"Youth is the trustee of prosperity." - Benjamin Disraeli
  • #3
  • Dec 9, 2006 4:47pm Dec 9, 2006 4:47pm
even then..32 pips? even oanda doesn't go that high
  • #4
  • Dec 9, 2006 5:09pm Dec 9, 2006 5:09pm
I've never understood why people complain about spreads. If you're a half decent trader you should be able to have profitable trades larger than the spread. The spread is the cost of making money in the forex market and it's a miniscule cost. How can anyone possibly complain that they have to pay a little percentage for the chance to make millions?? Remember the brokers are a business and they have to make money too, it's not like everyone is out to get you, everyone is just trying to make money, same as you are.

If you're trading stratety is so weak that a 10 pip spread ruins it, then you have a terrible strategy.

32 pips is a bit much, but if this is a problem, don't trade the news or get in before they increase the spread! It's that simple.
  • #5
  • Dec 10, 2006 4:53am Dec 10, 2006 4:53am
Quoting khaled22
At Interbankfx broker spread is :

GBP/USD about 32 pip at NFP , and EUR/USD about 10 pip

In normal news GBP/USD about 13 pip, Eur/USD about 6 pip

In sleeping market GBP/USD 4 pip , Eur/USD 2 pip

did any one see like this spread in any other broker?

It's a shame. InterbankFX used to be a really good broker. But when this news trading craze started and most brokers increased the spread at news time, IBFX became the broker with the widest spread in the industry.

Somehow, this will end up costing their business more than any $$$ a trader could have made on news since it will directly affect their reputation.
  • #6
  • Dec 10, 2006 9:16am Dec 10, 2006 9:16am
we are good traders, but for example when you buy GBP 1.9050 and put SL at 1.9020 , you will loss your position while the market is moving up to may 1.92..., but they are change th spread
or you are working with them, can you tell me which broker put spread about 35 pip in GBP/USD....
Quoting aicccia
I've never understood why people complain about spreads. If you're a half decent trader you should be able to have profitable trades larger than the spread. The spread is the cost of making money in the forex market and it's a miniscule cost. How can anyone possibly complain that they have to pay a little percentage for the chance to make millions?? Remember the brokers are a business and they have to make money too, it's not like everyone is out to get you, everyone is just trying to make money, same as you are.

If you're trading stratety is so weak that a 10 pip spread ruins it, then you have a terrible strategy.

32 pips is a bit much, but if this is a problem, don't trade the news or get in before they increase the spread! It's that simple.
  • #7
  • Dec 11, 2006 6:56am Dec 11, 2006 6:56am
they claim that they're non-dealing desk...

if it's so u cant complain much...

it's just the way it is..
  • #8
  • Dec 11, 2006 10:00am Dec 11, 2006 10:00am
Quoting khaled22
we are good traders, but for example when you buy GBP 1.9050 and put SL at 1.9020 , you will loss your position while the market is moving up to may 1.92..., but they are change th spread
or you are working with them, can you tell me which broker put spread about 35 pip in GBP/USD....
a 30 pip stop is too tight for GBP/USD. It's not the brokers fault that your stop is getting hit. Or hve ever head of limit or stop orders..you only pay spread when you place a market order. I use InterbankFX myself.
  • #9
  • Dec 15, 2006 12:28am Dec 15, 2006 12:28am
why you change the name of my Thread
  • #10
  • Dec 15, 2006 1:35am Dec 15, 2006 1:35am
Quoting aicccia
I've never understood why people complain about spreads. If you're a half decent trader you should be able to have profitable trades larger than the spread. The spread is the cost of making money in the forex market and it's a miniscule cost. How can anyone possibly complain that they have to pay a little percentage for the chance to make millions?? Remember the brokers are a business and they have to make money too, it's not like everyone is out to get you, everyone is just trying to make money, same as you are.

If you're trading stratety is so weak that a 10 pip spread ruins it, then you have a terrible strategy.

32 pips is a bit much, but if this is a problem, don't trade the news or get in before they increase the spread! It's that simple.
Making blanket statements such as you have and calling someones trading strategy weak because it isn't what you do is ridiculous. Everyone has to find their own way in the markets. If the spread is enough to overcome or keep you from reaching your profit objective, they aren't miniscule.

Of course brokers are a business and spreads are part of the game. I don't think anyone is arguing that. I don't even think most of the people bitching about spreads are even worried about them around the news (though certainly some are). Around volatile times, this is to be expected. I certainly have no delusions that my broker is out to get me. Where I take issue is the spreads widening for no reason when the market may be barely or normally moving.

I've sat and watched on IBFX the EUR/USD jump up to 8-10 pips for around 10 minutes then normalize. 15 minutes later the same thing on USD/JPY, it widens to 12 then goes back. An hour later, cable follows suit. These were times where there should have been ample liquidity and nothing eventful happened. This seems like manipulation to me.

Actually, the biggest issue I had with IBFX is that they claim to provide multiple liquity providers so that their customers always get the best bid or ask from whichever providers is posting at that time, but then refuse to discuss how many providers they have or who they are. If this were true, it seems pretty strange that the spreads always seem to come back and generally spend most of the time at ranges that are unique to IBFX. If multiple prices were being offered, the spreads would be more dynamic and variable.

To their further discredit, they actually came out and admitted that MT4 can not handle multiple feeds. The director of marketing postulated that their customers were assigned to certain servers and different providers were divvied up among the servers, but that seems unlikely, or not everyone would see the same spreads. That completely destroys everything they tout as good about their business model. They themselves may not be manipulating price feeds or orders, but they are at least not being forthright about their business.

I don't care if you think your strategy is bulletproof, glow-in-the-dark, and
submersible, you should care about spreads. Those few pips here and there can add up quickly or mean the difference between break-even or a small loser and a signifcant loss.

It certainly doesn't warrant your stance of belittling traders because they aren't doing what you do.
  • #11
  • Dec 15, 2006 3:28pm Dec 15, 2006 3:28pm
Quoting Hagbard Celine
I don't care if you think your strategy is bulletproof, glow-in-the-dark, and
submersible, you should care about spreads. Those few pips here and there can add up quickly or mean the difference between break-even or a small loser and a signifcant loss.
If a particualr strategy has profit margins so small that a sudden -10 pips from a spread erases all the profits and makes a strategy unprofitable, then it's a very weak strategy, and it will never stand the test of time. This has nothing to do with my own personal forex trading systems. It's just a fact. The forex market is a wild, unforgiving storm and a flimsy strategy that only works if everything is going your way, won't last.
  • #12
  • Dec 15, 2006 11:05pm Dec 15, 2006 11:05pm
Quoting khaled22
why you change the name of my Thread


tho i think IBFX is one of the best MT4 broker
  • #13
  • Dec 16, 2006 11:46am Dec 16, 2006 11:46am
I agree with your assessment. If a strategy can have your profits wiped out with the spread, then there's something wrong with the strategy.

At the same time, we must take spreads into account, because the higher the spread, the more the pair has to move before we are in profit. I think that's what was meant with the other comments.

A "small" 10 pips increase in the spread means that the pair now has to move another 10 pips to get us back where we were profit-wise.

The original "complaint" about a 35 pip spread is a valid concern.

If that spread was there initially then, as you said, the best thing would be not to trade at that level (really, who would?).

However, if you're already in a trade and the broker increases the spread to that extreme, then that's a serious problem. Any strategy would now have to overcome that addiitional spread just to get back to the same level of profit.

That's completely unacceptable, as far as I'm concerned. I'd definitely be changing brokers.

Quoting aicccia
If a particualr strategy has profit margins so small that a sudden -10 pips from a spread erases all the profits and makes a strategy unprofitable, then it's a very weak strategy, and it will never stand the test of time. This has nothing to do with my own personal forex trading systems. It's just a fact. The forex market is a wild, unforgiving storm and a flimsy strategy that only works if everything is going your way, won't last.
  • #14
  • Dec 16, 2006 2:19pm Dec 16, 2006 2:19pm
Quoting In2Blues
I agree with your assessment. If a strategy can have your profits wiped out with the spread, then there's something wrong with the strategy.
No disrespect meant but that statement is so incredibly naive I wonder how long you've been trading and whether you realise the magnitude of tradable products and the numerous profitable strategies available that absolutely require spreads to be tight.

Futures spread traders can make incredible amounts of money by buying at he bid and selling at the offer on eurodollar, euribor, short sterling etc contracts that around news can often increase to 2 maybe even 3 ticks on the more illiquid far dated contracts.

As far as forex is concerned there are a number of strategies that require as tight a spread as possible to be profitbale and to say that it isnt worth pursuing these stratgies because an increase in spread would make it lose more than profit makes you look like someone who thinksthere is only one valid strategy to trade. It's likethe whole mm vs ecn, or spot vs futures argument.

I for example have as one of my stratgies a simple spot vs futures arb that constnatly generates profit but only due to the fact that I can rely on choice quotes on spot fx and 1 tick spreads on the futures.
  • #15
  • Dec 16, 2006 4:42pm Dec 16, 2006 4:42pm
Your point is well taken.

My comment was not meant to embrace every strategy in every field, but simply addressing the specifics of this thread, which started out mentioning a 32 pip spread with a Forex broker.

I was speaking generally, as most of the strategies that I've read in the forums do not require the narrow spreads that you have mentioned.

Also, I was speaking specifically about Forex (the topic of this thread), not Futures, which I know has different requirements.

Your arbitrage strategy would obviously require tight spreads but, again, that was not the focus of my comments.

Sorry, I should have made it clearer that I was specifically addressing the topic of this thread and aicccia's comment that he didn't understand why people are so concerned about spreads.

Quoting sccz97
No disrespect meant but that statement is so incredibly naive I wonder how long you've been trading and whether you realise the magnitude of tradable products and the numerous profitable strategies available that absolutely require spreads to be tight.

Futures spread traders can make incredible amounts of money by buying at he bid and selling at the offer on eurodollar, euribor, short sterling etc contracts that around news can often increase to 2 maybe even 3 ticks on the more illiquid far dated contracts.

As far as forex is concerned there are a number of strategies that require as tight a spread as possible to be profitbale and to say that it isnt worth pursuing these stratgies because an increase in spread would make it lose more than profit makes you look like someone who thinksthere is only one valid strategy to trade. It's likethe whole mm vs ecn, or spot vs futures argument.

I for example have as one of my stratgies a simple spot vs futures arb that constnatly generates profit but only due to the fact that I can rely on choice quotes on spot fx and 1 tick spreads on the futures.
  • #16
  • Apr 5, 2007 11:14am Apr 5, 2007 11:14am
Quoting sccz97
No disrespect meant but that statement is so incredibly naive I wonder how long you've been trading and whether you realise the magnitude of tradable products and the numerous profitable strategies available that absolutely require spreads to be tight.

Futures spread traders can make incredible amounts of money by buying at he bid and selling at the offer on eurodollar, euribor, short sterling etc contracts that around news can often increase to 2 maybe even 3 ticks on the more illiquid far dated contracts.

As far as forex is concerned there are a number of strategies that require as tight a spread as possible to be profitbale and to say that it isnt worth pursuing these stratgies because an increase in spread would make it lose more than profit makes you look like someone who thinksthere is only one valid strategy to trade. It's likethe whole mm vs ecn, or spot vs futures argument.

I for example have as one of my stratgies a simple spot vs futures arb that constnatly generates profit but only due to the fact that I can rely on choice quotes on spot fx and 1 tick spreads on the futures.
Hi sccz97,

I am exploring the possibility of going the Futures route. Can you help me understand if, during new release times, I would experience requotes, increased spreads, or slippage? Also what brokers have you used? Are there any futures broker you would stay away from? Your input is greatly appreciated.

Thanks in advance,

Jeff
  • #17
  • Apr 5, 2007 4:43pm Apr 5, 2007 4:43pm
I am an IB/money manager through 2 clearingfirms, CMS and AMI. Neither of them change the spreads during news, ever, period. Re-quotes are a different story though, which you will find happen often during a fast-moving market. My suggestion is don't trade the f'in news if this is a problem for you. If you added up all the trades I've done this year, I bet less than 5 have been news-related trades. Sometimes I will get out of the market before big news, like NFP or interest rate stuff, if I am in profit. I don't think trading news is a great strategy, I'm sure it works for some, but I wouldn't center my trading around it at all.

Good luck
Don't trade the news
lol
  • #18
  • Last Post: Apr 5, 2007 5:02pm Apr 5, 2007 5:02pm
Quoting pipple
I am an IB/money manager through 2 clearingfirms, CMS and AMI. Neither of them change the spreads during news, ever, period. Re-quotes are a different story though, which you will find happen often during a fast-moving market. My suggestion is don't trade the f'in news if this is a problem for you. If you added up all the trades I've done this year, I bet less than 5 have been news-related trades. Sometimes I will get out of the market before big news, like NFP or interest rate stuff, if I am in profit. I don't think trading news is a great strategy, I'm sure it works for some, but I wouldn't center my trading around it at all.

Good luck
Don't trade the news
lol
Thank you for the feedback.
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