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Technical Analysis Fallacy

  • #14,321
  • Apr 14, 2010 3:42am Apr 14, 2010 3:42am
Quoting aiyahmarklah
Had used them since EFX (their ex IB) days, they had gone a long way and finally reduced commish. Good execution and very stable platform never tried their mt4 before though. Spreads wise comparable to currenex retail. I have not used the account much, had always preferred oanda. You may like their order types too.
Just 10 minutes after I saw your comment I got a message that ODL are reducing spreads on various instruments up to 50%, LOL. We should definitely discuss brokers more often here

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TAF of Facebook and Twitter? It should be funny - after all this is getting to look more and more like a community here, why not take it to the next level of social networks
  • #14,322
  • Edited 3:56am Apr 14, 2010 3:42am | Edited 3:56am
Quoting Zoran
I tend to agree except I have noticed some unusual price movement when my mouse is over the buy or sell button. Not sure whether it was just coincidence or intentional.
Hi Zoran,

ok I see.

But let's think your suspect/idea a little further:

If your broker is tracking the mouse moves and depending on its position, your broker is sending you a "special" data stream. That would mean, that the broker has to generate several thousands data feeds for all the customers, that are short before pressing a certain button.

I can imagine, that a broker is operating with 5 or 20 different data streams for "special" situations or customers, that are causing troubles for the brokers book. But for each customer its own data feed?
That is an imense effort and needs a very strong IT.
Hard to believe ....

But we will never know, what tricks they are playing with us ....

Best regards,
MaMood
  • #14,323
  • Apr 14, 2010 3:54am Apr 14, 2010 3:54am
Quoting Setebos
Just 10 minutes after I saw your comment I got a message that ODL are reducing spreads on various instruments up to 50%, LOL. We should definitely discuss brokers more often here

---

TAF of Facebook and Twitter? It should be funny - after all this is getting to look more and more like a community here, why not take it to the next level of social networks
Have you considered BARX ? If I have to own an account in your region, I would go for BARX. Very competitive spreads and and nice platform. Tried their demo before, only thing is max ticket size is 3 mio, which is rather odd.
  • #14,324
  • Apr 14, 2010 3:58am Apr 14, 2010 3:58am
Quoting MaMood
Hi Zoran,

ok I see.

But let's think your suspect/idea a little further:

If your broker is tracking the mouse moves and depending on its position, your broker is sending you a "special" data stream. That would mean, that the broker has to generate several thousands data feeds for all the customers, that are short before pressing a certain button.

I can imagine, that a broker is operating with 5 or 20 different data streams for "special" situations or customers, that are causing troubles for the brokers book. But for each customer its own...
Agree, especially when oanda is fully automated.
  • #14,325
  • Apr 14, 2010 4:08am Apr 14, 2010 4:08am
Quoting aiyahmarklah
Agree, especially when oanda is fully automated.
This conspiracy theory has one major flaw. It takes only 2 different people using the same broker to prove that they receive different data feeds for that broker to have big legal problems.
A broker can delay, slip, requote a profitable trader. A broker can quote a special price to hunt stops and refusing to open other trades as that level. A broker could simulate a breakout of a few pips to open some limit orders and then very fast going in the opposite direction. One can't do much but choosing another broker. But I'd exclude different data feeds.
  • #14,326
  • Apr 14, 2010 4:13am Apr 14, 2010 4:13am

cant handle a non moving market ...
cant judge if u r right , wrong , mistimed ... nothing ...

just wondering , how much minimum capital do u need for interbank trading ?

is the smallest ticket still 1 mio ?
To Live is the rarest thing in the world , Most people exist , that is all
  • #14,327
  • Apr 14, 2010 4:47am Apr 14, 2010 4:47am
Quoting Sauron
This conspiracy theory has one major flaw. It takes only 2 different people using the same broker to prove that they receive different data feeds for that broker to have big legal problems.
A broker can...
Actually what I agree about is that this conspiracy stuff is that it's very unlikely. I said before, there are many price references so they are easily caught, plus new price adjustment rules (not so new) simply means doing this is against the broker's advantage. However, I am sure there is shading of prices at the pipettes level.

PS : generally, if you are not trading super small time frames, this should not be a problem.
  • #14,328
  • Apr 14, 2010 4:53am Apr 14, 2010 4:53am
Quoting maheswara

cant handle a non moving market ...
cant judge if u r right , wrong , mistimed ... nothing ...

just wondering , how much minimum capital do u need for interbank trading ?

is the smallest ticket still 1 mio ?
500K with rabo bank.
  • #14,329
  • Apr 14, 2010 4:56am Apr 14, 2010 4:56am
Quoting aiyahmarklah
PS : generally, if you are not trading super small time frames, this should not be a problem.
Exactly, if you're not a scalper 1 pip less shouldn't make any difference. A trader must always consider that this business has its problems, like any other.
  • #14,330
  • Edited 5:32am Apr 14, 2010 4:57am | Edited 5:32am
Quoting MaMood
Hi Zoran,

But we will never know, what tricks they are playing with us ....

Best regards,
MaMood
I think some of the tricks are quite obvious but others not so.

I have an account with Alpari UK and they have an option of auto-execution instead of going through their dealing desk. I wonder if that is the way to go?
  • #14,331
  • Apr 14, 2010 5:35am Apr 14, 2010 5:35am
Quoting Sauron
This conspiracy theory has one major flaw. It takes only 2 different people using the same broker to prove that they receive different data feeds for that broker to have big legal problems.
I have an account with another broker and when reading through their terms and conditions a few years back, I do remember it stated they can quote whatever price they like. In that case, I can't see how they are breaking the law.
  • #14,332
  • Apr 14, 2010 6:23am Apr 14, 2010 6:23am
My opinion on the broker scam.
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  • #14,333
  • Apr 14, 2010 6:24am Apr 14, 2010 6:24am
Quoting Zoran
I have an account with another broker and when reading through their terms and conditions a few years back, I do remember it stated they can quote whatever price they like. In that case, I can't see how they are breaking the law.
Zoran you are dead right here. Since I opened my real account before about 3 month I can easily remember that part of the contract I signed with my broker. All the brokers I checked had this statement in their contracts. Even some had such statments " You can't use any other brokers quotes, or quotes you see on TV as reference or source of complaint for misquoting." The terms we signed don't allow us take our broker to court for misqouting. If anyone knows broker that doesn't have such statements in their terms, I would like to here it. I might change my broker That would be another reason, after Setebos proved me that my broker has crappy quote feed.
  • #14,334
  • Apr 14, 2010 6:38am Apr 14, 2010 6:38am
I think fti himself or someone else has explained to us, that a MarketMaker (or the corresponding piece of software) is allowed to quote any price he wants to you. It's the risk of the MM himself, because the market (big player) can hurt him very bad, when he is quoting far away from the "average market price".

So from my understanding it is not a matter of laws. But it is a matter of risk and probabilities to give you quotes far away from the market ...

MaMood
  • #14,335
  • Apr 14, 2010 7:12am Apr 14, 2010 7:12am
Sorry, it's me again ;-)

Found the following statement in DarkStars famous thread about MarketStructure.

Nobody is going to make the argument that a broker is a trader’s best friend, but they still provide a valuable service and should be compensated for their efforts. By accepting a broker for what it is and learning how to work within the limitations of the relationship, traders have access to a world of opportunity that they otherwise could never dream of capturing. Let us all remember that simple truth.

You can read the original post here:
http://www.forexfactory.com/showpost...40&postcount=7

CU,
MaMood

p.s.: And to add to the broker discussion and the appearance of ReQuotes:
I have posted a document some month ago, that was very interesting to understand the problems that the brokers have to deal with. Here again a little excerpt regarding ReQuotes:


Re-quotes

Firstly, let us go through why re-quotes occur and how they can be avoided as much as possible. As we have mentioned previously, we are using a Prime Brokerage model by working with 8 liquidity providers including banks and ECN’s. As a result, we receive hundreds of price quotes per second from banks and even thousands from ECN’s.

Below is a small illustration of how many quotes we receive per second from Lava only:

08.04.2009 17:16:13 3890 ticks
08.04.2009 17:16:14 1001 ticks
08.04.2009 17:16:15 1211 ticks
08.04.2009 17:16:16 1368 ticks
08.04.2009 17:16:17 3124 ticks
08.04.2009 17:16:18 1610 ticks
08.04.2009 17:16:19 1297 ticks
08.04.2009 17:16:20 985 ticks
08.04.2009 17:16:21 2751 ticks
08.04.2009 17:16:22 1263 ticks
08.04.2009 17:16:23 1322 ticks
08.04.2009 17:16:24 1175 ticks
08.04.2009 17:16:25 2447 ticks
08.04.2009 17:16:26 1522 ticks
08.04.2009 17:16:27 986 ticks
08.04.2009 17:16:28 1523 ticks
08.04.2009 17:16:29 3243 ticks

The total amount of quotes we receive per second from each bank/ECN can easily reach 6,000-7,000. On average we receive 200-240 quotes per currency pair per second.

If we stream all quotes we receive onto our clients you would see a drastic increase in the amount of traffic, bandwidth required and re-quotes. For this reason we are using so-called ‘market snapshots’ of current market prices several times a second in order to avoid unnecessary allocation of bandwidth and ensure the accuracy of our pricing is maintained.

Now we will look at the causes of re-quotes and how to deal with them if they occur.

Let’s assume the following:
• ‘Market snapshots’ taken every 100 milliseconds (0.1 seconds)
• 2 pip spread
• Client latency is 80 milliseconds (amount of time it takes for client requests to reach our server and vice versa). 80 milliseconds equates to an adequate internet connection.
• We are receiving the following stream of quotes from our liquidity providers (and we pick the best bid/ask prices automatically):
Date | Time Best Bid / Best Ask Retail price Retail price
(4 digits) (5 digits)
10.04.09 13:47:00:000 1.27110 / 1.27119 1.2710/1.2712 1.27105 / 1.27125
10.04.09 13:47:00:100 1.27111 / 1.27115 1.2710/1.2712 1.27103 / 1.27123
10.04.09 13:47:00:200 1.27109 / 1.27114 1.2710/1.2712 1.27102 / 1.27122


Case 1: Currency pair with 4 decimal pricing; Maximum deviation = 0

Let’s assume the first quote of 1.2710/1.2712 encouraged the client to sell. The quote will take 80 milliseconds to reach the client so if we received the quote at 13:47:00:000, the quote will reach the client at 13:47:00:080. The client then presses SELL to sell at 1.2710 and the order goes back to our server.
The earliest possible time we could have received this order is 13:47:00:160. According to our example price feed, the price of 1.2710 is still the current market price so the order is executed at 1.2710 without a re-quote.

Case 2: Currency pair with 5 decimal pricing; Maximum deviation = 0

Let’s assume the first quote of 1.27105/1.27125 encouraged the client to sell. The quote will take 80 milliseconds to reach the client so if we received the quote at 13:47:00:000, the quote will reach the client at 13:47:00:080. The client then presses SELL to sell at 1.27105 and the order goes back to our server.

The earliest possible time we could have received this order is 13:47:00:160. According to our example price feed, the current market price is now 1.27103/1.27123 which is different from the price requested by the client initially. In this case our server is forced to offer the client a re-quote of 1.27103/1.27123 which can be accepted or rejected by the client. If the re-quoted price is accepted by the client, the order is sent back to our server for confirmation. Another re-quote could occur if the re-quoted price has changed within the time it took for the order to reach the client and for the client to accept. This is where some of you have had problems because a rapidly changing market will tend to generate many re-quotes unless maximum deviation is used.

Please note than in this case, a re-quote was necessary because the price had changed so the broker cannot be at fault whatsoever.

Case 3: Currency pair with 5 decimal pricing; Maximum deviation = 5 (0.5 pips)

Let’s assume the first quote of 1.27105/1.27125 encouraged the client to sell. The quote will take 80 milliseconds to reach the client so if we received the quote at 13:47:00:000, the quote will reach the client at 13:47:00:080. The client then presses SELL to sell at 1.27105 and the order goes back to our server.

The earliest possible time we could have received this order is 13:47:00:160. According to our example price feed, the current market price is now 1.27103/1.27123 which is different from the price requested by the client initially. However, due to maximum deviation being set to 5 a re-quote is not required because the trading platform has accepted the new quote on the client’s behalf; the trade is executed at 1.27103.

As you can see, the vast majority of re-quotes are due to rapid changes in market prices combined with maximum deviation being set to zero (asking the platform to ONLY execute at the price requested with no alternative) and not because of a desire to prevent a trade from being opened/closed.

Taking the above examples into account we can deduce the following solutions:

1. To reduce the amount of re-quotes by increasing the time gap between snapshots. This increase cannot be excessive because that would give the opportunity for clients with excellent connections to trade at old prices, thus giving them an unfair advantage.

2. The client can set maximum deviation to something other than zero which would reduce re-quotes drastically.

3. The client can obtain a professional internet connection that reduces client latency to <10 milliseconds (this is very expensive and unlikely to be a realistic solution).

4. Return to the 4 decimal pricing system. In this case the client would have sold at 1.2710 whereas under the 5 decimal system (with maximum deviation set), the client could have sold at 1.27103 which is a better price. With this solution, Alpari (UK) may face problems in hedging its clients’ exposure as explained earlier.



You can find the full document in this posting of mine:
http://www.forexfactory.com/showpost...ostcount=13486
  • #14,336
  • Apr 14, 2010 7:14am Apr 14, 2010 7:14am
Quoting Zoran
I have an account with another broker and when reading through their terms and conditions a few years back, I do remember it stated they can quote whatever price they like. In that case, I can't see how they are breaking the law.
Of course they can quote any price they like, it shouldn't even be in the contract!!!
But the same broker can't quote different prices for different traders in the same time, i.e. your chart has a spike which hunted your stop and your friend with the same broker has no spike. Even the fake data must be consistent.
  • #14,337
  • Apr 14, 2010 7:34am Apr 14, 2010 7:34am
Quoting Sauron
Of course they can quote any price they like, it shouldn't even be in the contract!!!
But the same broker can't quote different prices for different traders in the same time, i.e. your chart has a spike which hunted your stop and your friend with the same broker has no spike. Even the fake data must be consistent.
Yes, I agree, a broker must keep prices consistent and that's why I have my doubts about tracking mouse movements, but I have seen unusual market action based on mouse position. I might have to do some network analysis one day if I get the time.
  • #14,338
  • Apr 14, 2010 7:57am Apr 14, 2010 7:57am
Interesting discussion on brokers going on here. I am now watching the E/$ and GBP/$ for long opportunity, so a quick post here while I wait.

I have very few re-quote problems with my broker, because I have a +/- 2 pip range for entry. My experience has been that about 1/2 better and 1/2 worse than the actual quote, so no big deal. Rarely will the price differ by more than a .5-1 pip. I understand why my broker does this and it is ok with me. After all, they are running a business and I am interested in them doing smart things for themselve to stay in business.

As for trading in a fast market, there are clear dangers in this and you should be aware of them before attempting to enter or exit a trade when the market is going wild. I make it a habbit to never enter during a fast market, and when I am exiting a trade in a fast market, I try to wait for the market to slow a bit before exit. Very few problems, and I do not take any of it personally. The broker is not after me (I am too small), rather I am after them!
  • #14,339
  • Apr 14, 2010 7:59am Apr 14, 2010 7:59am
Quoting Zoran
Yes, I agree, a broker must keep prices consistent and that's why I have my doubts about tracking mouse movements, but I have seen unusual market action based on mouse position. I might have to do some network analysis one day if I get the time.
Hi all
My pictures shows difference on an hourly chart and five-minute chart, one broker (50pips!).
Verdikt broker "annulment of the contested period (profit and loss).
It is also an "elegant way" how to cancel profit and keep the loss ... and insoluble.

Regards
  • #14,340
  • Apr 14, 2010 8:07am Apr 14, 2010 8:07am
Quoting Zoran
Yes, I agree, a broker must keep prices consistent and that's why I have my doubts about tracking mouse movements, but I have seen unusual market action based on mouse position. I might have to do some network analysis one day if I get the time.
Some quick pips off the news and time for more coffee.........

What I noticed, call me crazy, I'd click, opening a buy or sell box in opposition to my book and just about the time I'd click the submit button price would jerk against me, after a while I'd feint a transaction and get the same response. Coincidence? maybe..... but I know brokers tract individual positions, had a buddy once start moving his orders and stops (large) all over the board one night, in and out of range, for a long period of time, until his phone rang, dealing desk wanted to know what he was doing.

I'm not a computer expert, but it would not seem hard for a person in the know to have a trade program shade your move by jerking price in the average time it takes to move the mouse and click the next button, a pip or two even if it catches 50% of movement makes alot of money over time and would not be seen in the history of the charts as your talking less that a second in time.

Tis a nuisance if correct, same like shading and other price manipulations, part of the game, but when your size gets big enough these start cutting into your overall profitability, and it's time to move into the big leagues.

fwiw,
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