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Price Adjustment Rule --- put all our accts at risk?

  • #21
  • May 23, 2009 4:25am May 23, 2009 4:25am
Spikes are frequent especially with any NZD pair.
  • #22
  • May 23, 2009 5:54am May 23, 2009 5:54am
Quoting pipmutt
Slippage and erroneous quotes aren't 'failures', they're perfectly normal unavoidable occurrences.
If you say so. I prefer my broker not to slip my quotes.
  • #23
  • May 23, 2009 7:24am May 23, 2009 7:24am
Quoting blazespinnaker
If you say so. I prefer my broker not to slip my quotes.
lol, it's not a case of 'if you say so', that's just the way things are. He's not 'slipping your quotes', he's doing exactly what you asked and filling your order at his current market price.

I can never follow why some people rather argue about something and want to be right instead of trying to understand the issue and learn.

If you understood what was happening then next time your broker fills your order with slippage you'll be able to calmly say to yourself 'ah, I see what just happened', instead of getting angry and shouting and screaming at your screen calling your broker all the names under the sun, then coming on here telling everyone your broker is a thief and no-one should trade with them, like this guy is doing!

Your choice obviously, as they say 'you can only lead a horse to water.....'
  • #24
  • May 23, 2009 7:50am May 23, 2009 7:50am
Yes, calmly accepting slippage from your broker. That sounds like a highly profitable trading strategy.

A broker wouldn't slip a quote against you on purpose. If anything, he'd only slip the quote in your favor!

How silly of me.

You know what? You have me convinced. I don't think I'll ever set allowable slippage to 0 ever again.
  • #25
  • May 23, 2009 7:59am May 23, 2009 7:59am
Anyways, even if we lived in a dream world where bucketshops never slipped orders in order to earn another pip or so on a spread, or they slipped orders in your favor as much as they do against you, there is still the issue of liquidity.

The fact is, some brokers have better liquidity than others, and slippage is a symptom of that. It would be nice to see what kind of liquidity we're getting from our brokers. More transparency on that would be nice, rather than silly rules. It would also be nice to get some transparency on the market makers that are providing the liquidity.
  • #26
  • May 23, 2009 9:41am May 23, 2009 9:41am
Quoting blazespinnaker
Yes, calmly accepting slippage from your broker. That sounds like a highly profitable trading strategy.
I have absolutely no idea what you're talking about and it's quite obvious that you don't either. Your post is unamusingly sarcastic and totally senseless.

I don't mind helping people but I'm not going to waste my time and energy helping someone who thinks he's being smart and cocky when in reality it's blatantly obvious he's being incredibly stupid and lacks some very basic knowledge, and even worse he doesn't have the common sense to want to learn.

I don't quite know how you ever expect to profit from a business which you blatantly know so little about but I have no doubt you will try!

I would say good luck but it's going to take a lot more than luck to save you from losses. This market doesn't suffer fools gladly, it will chew you up and spit you out without a second thought!
  • #27
  • May 23, 2009 9:46am May 23, 2009 9:46am
My loss I guess
  • #28
  • May 23, 2009 10:56am May 23, 2009 10:56am
Quoting blazespinnaker
Anyways, even if we lived in a dream world where bucketshops never slipped orders in order to earn another pip or so on a spread, or they slipped orders in your favor as much as they do against you, there is still the issue of liquidity.

The fact is, some brokers have better liquidity than others, and slippage is a symptom of that....
Move to a broker with level 2 then?

As for slippage and erroneous quotes, I don't think pipmutt was talking about purposeful slippage (which I'm sure he agrees is bad), but that slippage and erroneous quotes are a part of the market. They are a part of every market. They happen on the equities exchanges, you can see a $3 trade on a $30 stock. They send out same-day (usually) erroneous trade rulings where the trades are struck down. Mistakes happen, it's just the way it is.
  • #29
  • May 23, 2009 1:09pm May 23, 2009 1:09pm
Quoting smittens4212
As for slippage and erroneous quotes, I don't think pipmutt was talking about purposeful slippage (which I'm sure he agrees is bad)
Absolutely! I agree it would be bad but I'm not so sure any of the mainstream bucketshops use those kinds of obvious tricks any more do they, I mean they have an arsenal of more subtle ways to disadvantage the trader if they wanted to (hopefully slightly fewer now NFA are on the case!)

When I first started out in online forex trading I traded with a notorious shop called Deal4Free (CMC Markets old name in UK), they robbed me blind! It was only afterwards that I found out they were branded 'Steal4Free' by pretty much everyone in the City! Hey I didn't know, I was green and probably deserved to be robbed, I bet any time I logged on to the platform they saw pound signs and free money, lol. Things have changed considerably since then, I think a lot of customer complaints nowadays probably arise more out of (being diplomatic) 'user error' and misunderstandings than blatant broker's tricks.

Anyway, a long weekend and I'm bored already, roll on Tuesday
  • #30
  • May 23, 2009 10:06pm May 23, 2009 10:06pm
Quoting smittens4212
Move to a broker with level 2 then?

As for slippage and erroneous quotes, I don't think pipmutt was talking about purposeful slippage (which I'm sure he agrees is bad), but that slippage and erroneous quotes are a part of the market. They are a part of every market. They happen on the equities exchanges, you can see a $3 trade on a $30 stock. They send out same-day (usually) erroneous trade rulings where the trades are struck down. Mistakes happen, it's just the way it is.
"Non purposeful" slippage is an execution risk caused by a combination of poor execution, poor liquidity, and high volatility and frequently occurs during a news event. By the time a market order gets to your bucketshop or other marketmaker, the market has moved quickly, and there isn't enough liquidity to fulfill the queue of orders between the price you were quoted and the price you are executed at. You can generally control slippage by saying what you'll allow, but this will decrease your probability of getting filled.

"Purposeful slippage" is a technique used by bucketshops to reduce risk during market moves. If your pricing system, the one that you use to trade against all of your clients, tells you that the trader your are dealing with is a profitable trader and is scalping, then there is significant incentive to slip them (alter priority in trade queue / delay order execution and pick the more profitable price to execute at) in order to mitigate the risk that they might profiting from a superior pricing feed.

The other type of purposeful slippage occurs simply when you get the order late and you compare prices (current market and market price at time of order). All the system has to do is say - if price new price better for us, execute at new price, otherwise execute at market price at time of order.

Now, I certainly do not believe that all brokers and bucketshops - every single one - do not have risk management systems which do not take advantage of purposeful slippage. Others can happily imagine this, that they are all working in our best interest, but I find that not only ludicrous but probably stupid on the part of the bucketshop. Well armed scalpers can make mincemeat of a bucketshop, especially during news.

Which ones should you watch out for? Bucketshops which have low spreads during news. Those are the ones that are probably kidding you. Oanda at least is honest and upfront about its risk management, it just widens the spread instead of slipping you (though I still suspect them - only the paranoid survive). Others, and there are many others, have more 'innovative' approaches.

If the NFA could create more transparency around this, I think it would be in everyones favor. I don't want the NFA to tell the bucketshops how to execute orders. That is just dumb. I want the NFA to force the bucketshops to tell us how they are executing our orders, and let the market decide.

One way is stats on slippage. Another way is to actually let the brokers simply say whether they use price at time of market order as a factor in deciding the price to execute at.

Or a combination of the two. Stats on slippage could be useful in that we could find out whether or not the stp/bucketshop has poor execution. Maybe they're frequently not getting the order through fast enough and the market has moved because their systems constantly get bogged down.
  • #31
  • May 24, 2009 2:42am May 24, 2009 2:42am
Quoting blazespinnaker
"Non purposeful" slippage is an execution risk caused by a combination of poor execution, poor liquidity, and high volatility and frequently occurs during a news event. By the time a market order gets to your bucketshop or other marketmaker.....
Well at least you had the common sense to go and read up about the subject before arguing any further! Repeating some of what you've read verbatim doesn't necessarily mean you actually understand it but it's a step in the right direction anyway!

Quoting blazespinnaker
Now, I certainly do not believe that all brokers and bucketshops - every single one - do not have risk management systems which do not take advantage of purposeful slippage. Others can happily imagine this, that they are all working in our best interest, but I find that not only ludicrous but probably stupid on the part of the bucketshop. Well armed scalpers can make mincemeat of a bucketshop, especially during news.
lol, exactly the point I was trying to make you understand in reply to your example here, where you thought brokers leave themselves exposed to all sorts of risk! You still seem to think there's a conspiracy going on and that brokers are out to get you though. When it comes to most mainstream reputable brokers that's not only incorrect it's probably not a very healthy opinion to have when it comes to trading as it can lead to a feeling of conflict and ultimately revenge trading if you suspect your broker is stiffing you.

Brokers are there to facilitate our trading activities and that is what they attempt to do, while at the same time understandibly protecting themselves (and 'normal' traders) from people who try to take unfair advantage of platform anomalies. It's in everyone's best interest that our broker remains solvent and we should be happy that he's taking steps to ensure that, similarly it's in his best interest that we remain solvent because without us he doesn't have a business. If you treat your broker fairly it will be reciprocated. Try and screw him and he'll hang you out to dry!

The ideal for most brokers and traders is to have a mutually beneficial arrangement where everyone makes money, it's not a case of them against us or vice-versa.

Quoting blazespinnaker
Which ones should you watch out for? Bucketshops which have low spreads during news. Those are the ones that are probably kidding you. Oanda at least is honest and upfront about its risk management, it just widens the spread instead of slipping you.....
Not completely accurate, most reputable fixed-spread bucketshops will requote (which is a fairer option to slippage or artificially widening spreads in my opinion). Shops like Oanda who artificially widen spreads by up to 30 pips or more, and sometimes for up to 15 minutes across data, cause obvious problems for a trader. The ones to actually watch out for are the ones who accept your market order, lock the ticket, and literally fill you where and when they want. You can't cancel the unfilled market order and you don't get the option of accepting/declining a requote, you just get filled wherever the broker decides and that could be minutes later and at the extreme of a spike.


Quoting blazespinnaker
If the NFA could create more transparency around this, I think it would be in everyones favor....I want the NFA to force the bucketshops to tell us how they are executing our orders
That's an impractical suggestion, you're asking brokers to reveal their particular business and risk management models to traders and to competitors, both of whom may use that information to gain an (unfair) advantage. At the end of the day is it really that important to know how they're executing our orders just as long as they're executed in a timely fashion and at an acceptable price?
  • #32
  • May 24, 2009 2:54am May 24, 2009 2:54am
Quote
When it comes to most mainstream reputable brokers that's not only incorrect it's probably not a very healthy opinion to have when it comes to trading as it can lead to a feeling of conflict and ultimately revenge trading if you suspect your broker is stiffing you.

lol

Quote
The ones to actually watch out for are the ones who accept your market order, lock the ticket, and literally fill you where and when they want. You can't cancel the unfilled market order and you don't get the option of accepting/declining a requote, you just get filled wherever the broker decides and that could be minutes later and at the extreme of a spike.

Gee ... you mean, a broker might do this on purpose??? lol.
  • #33
  • May 24, 2009 3:13am May 24, 2009 3:13am
Quoting blazespinnaker

Gee ... you mean, a broker might do this on purpose??? lol.
Ah forever the conspiracy theorist, 'them' and 'us' isn't a healthy approach you know!

If you read my post you'll see I didn't suggest they do it 'on purpose' to disadvantage or screw the trader in some way, that may simply be their business model and the way they execute orders.


......horse to water
  • #34
  • May 24, 2009 3:43am May 24, 2009 3:43am
Quote
that may simply be their business model and the way they execute orders.

Laugh Out Loud.
  • #35
  • May 24, 2009 4:21am May 24, 2009 4:21am
Quoting blazespinnaker
Laugh Out Loud.
A laugh at yourself no doubt, to mask your embarrasing inability to sustain a sensible debate because you lack the necessary knowledge and skill to defend your irrational opinions and arguments with reason and logic.

No problem, as long as you're happy that's all that matters
  • #36
  • May 24, 2009 6:30pm May 24, 2009 6:30pm
Pipmutt, you've merely repeated back everything I've already said on this thread.

I can't argue with you, because you're just saying the same thing I am.
  • #37
  • Last Post: May 25, 2009 3:11am May 25, 2009 3:11am
Quoting blazespinnaker
Pipmutt, you've merely repeated back everything I've already said on this thread.

I can't argue with you, because you're just saying the same thing I am.

lol, well if you honestly think we're saying the same thing then you obviously have some sort of comprehension issue (which goes some way to explaining your posts!) for example.....


blazespinnaker "We need stats on brokers which shows their failure rate."

Pipmutt "Slippage and erroneous quotes aren't 'failures'"

or

blazespinnaker "I want the NFA to force the bucketshops to tell us how they are executing our orders"

Pipmutt "That's an impractical suggestion, you're asking brokers to reveal their particular business and risk management models to traders and to competitors"


There are dozens more examples but if you're simply unable to understand the differences then what can I say
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