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Silent Service Method

  • #6,761
  • Jan 18, 2010 9:35pm Jan 18, 2010 9:35pm
Quoting whitegoodman
not to mention the spread is 1 tick on every pair throughout the day unless a news event is coming out within the minute (everyone pulls their orders and the book goes very thin)
When I switched over to Interactive Brokers, it was a real eye-opener on what real spreads really are. It is amazing how much the retail brokers skim on some pairs.

Some are charging 7 to 9 on a pair like AUD/JPY. I am looking at a 2 pip spread, and that's high, it's normally 1.5 pips.
  • #6,762
  • Jan 19, 2010 2:10am Jan 19, 2010 2:10am
Quoting Imphilomath
Thanks Chris !!!!

I am going thru the exercise of marking SR zones and spotting confluence so I will try and attach some images to see if my thought process is correct. Attached is a USDCAD Daily. Looks like we are approaching strong support zone but overall in a downtrend. Should I worry about downtrend ( and hence a possible breakout trade on downside) or should I buy in the support ( based on PA)? I see it will mainly be dependent on PA in the area but wondering if I should have any bias when I approach the area.

cheers
Imphilomath

My opinion on this is: We are not astrologers and shouldnt have any bias until we get to see the evidence. We trade what we see. If there is a break and we see a bearish indication like bearish engulfs, we short, if there is a bounce and a pinbar forms we take a long.
  • #6,763
  • Jan 19, 2010 4:30am Jan 19, 2010 4:30am
Quoting clockwork71
Since I am unable to post anywhere but this thread, I had to put this here - sorry.

http://www.cmegroup.com/trading/fx/f...-e-micros.html

This is our answer if the US brokers can only leverage 10:1, if it even matters to you. The main advantage? It's a real market, there are real trades, and VOLUME. That's a huge advantage.

If this passes, I will simply refer to the Micro FX futures instead. Either way, trading will continue.

I have talked to some people at CME, and they are looking into several more micro...
Well the problem is that those Micro-Futures are not very liquid. Spreads are often 3-4 Ticks and more in EUR/USD for example and depending on market-conditions you get lots more slippage than trading the EuroFX or Spot Fx over an ECN.

Also the commissions you have to pay are ridiculous compared to the contract-size.

So if you want to trade Futures, trade the EuroFX.
  • #6,764
  • Jan 19, 2010 5:13am Jan 19, 2010 5:13am
Quoting vicky_ag
I will get on it from 2morow. GFT offers dealbook as compared to mt4. It looks sleek.

Chris, is timing required too? I mean 2-3 minutes is a bit less for me.
for me, GFT's dealbook platform is a bandwith hog, my 64kbps mobile connection is dead whenever I opened dealbook, MT4 from hymarkets or broco is what I usually use for practicing S/R

the bolded one I'd like to know too, usually when practicing S/R, I'd listen to my music playlist and would plot S/R lines no more than 2 minutes, but when plotting them on my fx charts, I'd take more time to finesse them so I wouldn't miss any highs or lows... and try to find the zones, that took time too.

Thanks.

M.
  • #6,765
  • Jan 19, 2010 6:03am Jan 19, 2010 6:03am
Quoting marcelnyo
for me, GFT's dealbook platform is a bandwith hog, my 64kbps mobile connection is dead whenever I opened dealbook, MT4 from hymarkets or broco is what I usually use for practicing S/R

the bolded one I'd like to know too, usually when practicing S/R, I'd listen to my music playlist and would plot S/R lines no more than 2 minutes, but when plotting them on my fx charts, I'd take more time to finesse them so I wouldn't miss any highs or lows... and try to find the zones, that took time too.

Thanks.

M.
I would be a little more careful with live accounts yes.....but the idea is to pound it into your head through rapid repetition.
  • #6,766
  • Jan 19, 2010 6:05am Jan 19, 2010 6:05am
Quoting Marco
Well the problem is that those Micro-Futures are not very liquid. Spreads are often 3-4 Ticks and more in EUR/USD for example and depending on market-conditions you get lots more slippage than trading the EuroFX or Spot Fx over an ECN.

Also the commissions you have to pay are ridiculous compared to the contract-size.

So if you want to trade Futures, trade the EuroFX.
It all depends on your broker. My commissions aren't bad in my opinion. They also have other sizes, but it all depends on account size of course.
  • #6,767
  • Jan 19, 2010 6:26am Jan 19, 2010 6:26am
Quoting Marco
Well the problem is that those Micro-Futures are not very liquid. Spreads are often 3-4 Ticks and more in EUR/USD for example and depending on market-conditions you get lots more slippage than trading the EuroFX or Spot Fx over an ECN.

Also the commissions you have to pay are ridiculous compared to the contract-size.

So if you want to trade Futures, trade the EuroFX.
Yup, I was going to point out the same thing. Just because the minimum fluctuation (tick/pip) is one thing, doesn't mean that's how the instrument will actually trade. Especially comparing a full size to a mini or micro contract. Any market maker will gravitate towards trading the full sized because their main customers are large commercial players/hedgers/money managers.

Here's a good example...The market in corn, full vs. mini:
Corn: 371 bid (121 contracts) by 371 1/4 offer (10 contracts)
Mini Corn: 371 bid (1 contract) by 371 3/8 offer (1 contract)

So, the market for corn is 2-ticks (minimum fluctuation in corn 1/8) on the main contract and in mini-corn it's 3-ticks. You can buy or sell over 50x the amount of corn in the main contract (judging by number of contracts available at the best bid/offer & the fact that the main contract is 5x larger than the mini...) so people with anything to do in real size will gravitate towards the main contract because they'll get better execution and can do a ton more size.

I hadn't even thought about the relative size of commissions...but that's another issue.

Either way though, it's always good to have more options and if the market can develop the competition with retail forex will certainly be a win-win for traders in terms of transparency and pricing -- Thanks for sharing Chris.
  • #6,768
  • Jan 19, 2010 6:27am Jan 19, 2010 6:27am
Quoting clockwork71
It all depends on your broker. My commissions aren't bad in my opinion. They also have other sizes, but it all depends on account size of course.
Well let's take Interactive Brokers as an example. You pay $5.70 round turn there for the EuroFX ($125000 contract). And $2.70 for the Micro-Contract ($12500 contract). In other words you get 1/10 of the contract size but only pay a bit less than 1/2 of the commissions. That sucks doesn't it?

To get those $2.70 back, plus the spread that is often 3-4 pips, you need each Micro-Contract to go 6-7 ticks in your direction just to breakeven. No thanks.
  • #6,769
  • Jan 19, 2010 9:23am Jan 19, 2010 9:23am
Quoting clockwork71
I would be a little more careful with live accounts yes.....but the idea is to pound it into your head through rapid repetition.
Thanks chris, I've been looking for an answer for this since a long time ago because it's quite hard to look for time for practicing S/R if done very neatly, but when I simply skim through charts and spent only 2-3 minutes per chart, I found that I can finish 50+ in just a short time.

btw, I was stopped out for a loss in my EURAUD long trade, since my SL is below 1.5500, it was an attempt on a touch trade, how did yours go? I think after this I'll look for a breakout+pullback+PA
  • #6,770
  • Jan 19, 2010 10:35am Jan 19, 2010 10:35am
Quoting clockwork71

However, if you are an American, you will find shorting the Hang Seng damn near impossible. (It has something to do with not being able to borrow shares.)

Maybe I should start a Hang Seng thread somewhere......It would probably just be you and I.

Of course, you can always paper trade it for practice.....

Chris
Hi Chris,

Is this true? I trade the Hang Seng index futures for quite some time now from a local brokerage service, I'm thinking about moving to the US in the future, if it's a hassle trading Hang Seng, I might have to think again before learning to trade HangSeng in a lower timeframe, I have a plan about that, although haven't been able to realize it yet, only on demo currently.
  • #6,771
  • Jan 19, 2010 11:28am Jan 19, 2010 11:28am
Quoting marcelnyo
Thanks chris, I've been looking for an answer for this since a long time ago because it's quite hard to look for time for practicing S/R if done very neatly, but when I simply skim through charts and spent only 2-3 minutes per chart, I found that I can finish 50+ in just a short time.

btw, I was stopped out for a loss in my EURAUD long trade, since my SL is below 1.5500, it was an attempt on a touch trade, how did yours go? I think after this I'll look for a breakout+pullback+PA
My stop is below 1.54, so we will see.....not looking good though.
  • #6,772
  • Jan 19, 2010 11:29am Jan 19, 2010 11:29am
Quoting Marco
Well let's take Interactive Brokers as an example. You pay $5.70 round turn there for the EuroFX ($125000 contract). And $2.70 for the Micro-Contract ($12500 contract). In other words you get 1/10 of the contract size but only pay a bit less than 1/2 of the commissions. That sucks doesn't it?

To get those $2.70 back, plus the spread that is often 3-4 pips, you need each Micro-Contract to go 6-7 ticks in your direction just to breakeven. No thanks.
I should quantify that I am not scalping. My trades tend to be of the 100+ tick variety. 6 ticks doesn't matter then. (that much at least)
  • #6,773
  • Jan 19, 2010 11:30am Jan 19, 2010 11:30am
Quoting marcelnyo
Hi Chris,

Is this true? I trade the Hang Seng index futures for quite some time now from a local brokerage service, I'm thinking about moving to the US in the future, if it's a hassle trading Hang Seng, I might have to think again before learning to trade HangSeng in a lower timeframe, I have a plan about that, although haven't been able to realize it yet, only on demo currently.

The index futures you can short - but stocks, it's almost impossible from what I understand.
  • #6,774
  • Jan 19, 2010 12:24pm Jan 19, 2010 12:24pm
Quoting Marco
Well the problem is that those Micro-Futures are not very liquid. Spreads are often 3-4 Ticks and more in EUR/USD for example and depending on market-conditions you get lots more slippage than trading the EuroFX or Spot Fx over an ECN.

Also the commissions you have to pay are ridiculous compared to the contract-size.

So if you want to trade Futures, trade the EuroFX.
Marco,

Do you trade the EuroFX? Who is your broker?
  • #6,775
  • Jan 19, 2010 12:29pm Jan 19, 2010 12:29pm
Quoting clockwork71
The index futures you can short - but stocks, it's almost impossible from what I understand.
I did buy the demand level at 1.5500 last night and I am still alive on this one. I am going to live it alone and let the market take me out either at mt SL or TP. As for now, I still think it's a valid trade. Came close to getting stopped out. Looks like it's trying to pin on the H4.

There is nothing I can do right now, but just let the trade work itself out.
Attached Image (click to enlarge)
Click to Enlarge Name: euro.aud.cad(long-10-19-2010).gif Size: 16 KB
  • #6,776
  • Jan 19, 2010 1:17pm Jan 19, 2010 1:17pm
Quoting ttteee
what would happen to my sl if i'd shorted thi stock?
http://finviz.com/quote.ashx?t=BARE&b=1
This is a little off topic, but just to follow up on this stock you mentioned. Anyone interested, I would HIGHLY recommend this article:

http://howardlindzon.com/?p=4968

If this isn't an eye opener, I don't know what is. The takeaway -- Do your own homework...
  • #6,777
  • Jan 19, 2010 1:34pm Jan 19, 2010 1:34pm
Quoting InfinitySL
This is a little off topic, but just to follow up on this stock you mentioned. Anyone interested, I would HIGHLY recommend this article:

http://howardlindzon.com/?p=4968

If this isn't an eye opener, I don't know what is. The takeaway -- Do your own homework...
Yep, that sort of behavior is well known and widespread and yet it continues to work like a charm.

First question when reading "advice" should always be: and what's in it for the writer if 1 - the advice works, 2 - the advice fails. The answer is seldom "nothing" to both alternatives.

This type of simple critical thinking is paramount.
  • #6,778
  • Jan 19, 2010 4:34pm Jan 19, 2010 4:34pm
Quoting kulu
Marco,

Do you trade the EuroFX? Who is your broker?
Interactive Brokers.
  • #6,779
  • Jan 19, 2010 4:36pm Jan 19, 2010 4:36pm
Quoting clockwork71
I should quantify that I am not scalping. My trades tend to be of the 100+ tick variety. 6 ticks doesn't matter then. (that much at least)
Just be careful. I wouldn't even touch those contracts when trading with 200 ticks stop. The liquidity really is not there. I mean just look at the charts and the volume! Don't waste your money trading such crap. It's even worse than the mini EuroFX...
  • #6,780
  • Jan 19, 2010 6:54pm Jan 19, 2010 6:54pm
Quoting Marco
Just be careful. I wouldn't even touch those contracts when trading with 200 ticks stop. The liquidity really is not there. I mean just look at the charts and the volume! Don't waste your money trading such crap. It's even worse than the mini EuroFX...
Yes, but I can trade the MXN/JPY......it's a matter of zooming out. Volume dictates the size, time frame, and stop size. I hear what you are saying, but there is a way. Sometimes I will post a trade if I get a set up.

Of course, that proposed legislation may not get enacted. lol. (as if.)

But until that time comes - it's neither here nor there.

I know that a lot of UK/Canadian brokers can't be bothered with Americans already, and I can't think of too many countries I would be placing my money in, so if it really comes down to that - I could just as easily trade another market. It's all the same in the end.
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