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FXCM and "no-slippage"

  • #21
  • Aug 12, 2004 2:55am Aug 12, 2004 2:55am
For the online brokers that don't actual do your trades it's a bit of a sham using the excuse that the market gapped. It was a shock when I first heard they do this matching. If they are matching off client trades against each other and not putting them in the market then really they can fill your stop if they wanted to. If your entry is imaginary why can't your stop be imaginary as well? It's sort of having your cake and eating it but they would argue they take the risk from your position. Yes it's a business and they are there to make money so you just have to accept it. I use them only for position trades and keep well away from stops during data.
  • #22
  • Aug 12, 2004 3:47am Aug 12, 2004 3:47am
Quoting fxpro
It sounds like the new generation of Forex traders are a tad spoiled. I am from the old age where you didn't have any guarantee on slippage. I am really surprise that any of these online FX brokers even have slippage guarantees. Realistically, how can you fill an order at 1.2200 if the market is at 1.2220? Every time FXCM does that they are taking a 20 pip hit. They can't possibly have the same policy for traders working with million dollar accounts; they would go out of business in a week. Now I don't want to go on and on about how I walked to school in the snow, uphill both ways, but I will tell all of you to be very happy with the way FXCM is conducting their trading because you will not find that in any other market.
If they advertise a guaranteed no-slippage.
If several FXCM reps I spoke with, guaranteed a no-slippage even during gaps.
And then when gaps happen they say, that it's not possible to guarantee the no slippage and that any professional trader should know this.
What would be your reaction?
If they suddenly can't guarantee a no-slippage, then I'm better off trading stocks again.

Speaking about walking to school in snow. I really know what it is.
And I don't want to go on about sleeping with no roof above your head, having nothing to eat for several days, needing to fight in order to protect that little bit of food you were able to grab...
  • #23
  • Aug 13, 2004 5:32am Aug 13, 2004 5:32am
Quoting fxpro
It sounds like the new generation of Forex traders are a tad spoiled. I am from the old age where you didn't have any guarantee on slippage. I am really surprise that any of these online FX brokers even have slippage guarantees. Realistically, how can you fill an order at 1.2200 if the market is at 1.2220? Every time FXCM does that they are taking a 20 pip hit. They can't possibly have the same policy for traders working with million dollar accounts; they would go out of business in a week. Now I don't want to go on and on about how I walked to school in the snow, uphill both ways, but I will tell all of you to be very happy with the way FXCM is conducting their trading because you will not find that in any other market.
I too cut my teeth on gaps and getting caught the wrong side of limit moves but the lack of that is what appealed to me about forex trading. Having the liquidity for mm's to absorb these small inconsistencies on behalf of the under 100 lot traders is one of the great attractions to those who love exceptional risk control. If you consider that for every trader that gets a 20 pip advantage during a gap in price there is a lot of positions on the other side of that move. Also consider when there are weekend moves. If the mm guarantees all the stops and thousands of positions are stopped out with stops ranging from 30 to 100 pips the mm gets the other side of all those trades and has a lot of room to play. Every time the market quickly jumps down and hits a nest of stops the mm is on the other side of those trades. Yes I realize their algorithms are supposedly unloading those trades in a continuous stream keeping them neutral all the time but there is a lot of stuff that goes in their favor and their algorithms are designed to pick up these inefficiencies. So I don't sweat a lot on their behalf when my limit is hit without slippage where there was no true price in the market to reflect it. Somebody was heading the other direction with stops on the other side that put money in the mm's pocket too.

FT
  • #24
  • Edited 6:00pm Aug 13, 2004 5:36pm | Edited 6:00pm
Quoting Cpisani4
Here's my chat with refco tonight:


Refcofx: our dealing policy is that we will allow entry orders
Refcofx: provided you take one side of the market
Refcofx: sure
you: let's say tomorrow morning at 8:29am EST, i have a buy entry for eur/usd @1.2200, and a sell entry for 1.2180, and the market is at 1.2190 @8:29am EST, REFCO will do what to my orders?
Refcofx: one moment
you: assuming theres a PPI report tomorrow morning as well
Refcofx: your orders will be cancelled because we dont allow straddling the market with entry orders
I believe those complaining about this policy have not bothered to THINK about what they are trying to accomplish. Let me preface by stating that I do not trade with either Refco or FXCM. My brokers (CMC and CMS) have no problems with straddle entry orders before economic releases. As a matter of fact, CMS allows you to hedge, i.e. have simultaneous long and short positions in the same currency, with separate stops and limits attached to each.

If I have understood what the Refco rep said, they simply will not allow you to place straddle ENTRY orders around the market prior to important news. But, you can accomplish exactly the same thing with a MARKET order coupled with a stop order (unlike entry fills, I believe that stop orders are guaranteed no-slippage. To quote from website: "with RefcoFX currency trading you get rapid execution and price certainty. On the FX trading station, you trade directly off real-time streaming prices. You will ALWAYS be filled at a price to which you agree regardless of trade size, time of day, or market conditions. This holds true even during volatile times and fast moving markets.").


In the example above, where EUR is at 2190 and you want to go long @ 2200 and short @2180, you simply enter a market order at 2190, with a stop-and-reverse order at your desired entry point. Thus, you could go long 1 lot at 2190, with a stop order for 2 lots at 2180. Or you could go short 1 lot at 2190 with a stop for 2 lots at 2200. If the stops are hit, you are automatically in at the direction of the breakout. On the other hand, if you picked the correct direction to begin with, you are in at a better price. Over the long term, the number of times you have to pay for the stop-and-reverse will most likely be about the same as the number of times you picked the right direction and got a better price, so that would be a wash.
  • #25
  • Aug 13, 2004 6:10pm Aug 13, 2004 6:10pm
Quoting vdeluca
I believe those complaining about this policy have not bothered to THINK about what they are trying to accomplish.
I believe that you're mixing up entry orders,stop orders and stop losses.

Quoting vdeluca
(unlike entry fills, I believe that stop orders are guaranteed no-slippage).
Uhm.. an entry order can be 2 things :
-a stop order
-a limit order

In case of Cpisani4 his straddle, you place 2 entry orders : a stop order above and a stop order below the current mkt price.

In your case you place a mkt order with no stop loss, and use a double stop as an entry order.
Which means your suggestion is even worse, because in this case the slippage is penalized 2 times if you picked the wrong direction.
  • #26
  • Aug 13, 2004 7:29pm Aug 13, 2004 7:29pm
I tried a straddle trade this morning on CMS, worked fine. Looks like I will be switching to CMS VT.

Quoting vdeluca
My brokers (CMC and CMS) have no problems with straddle entry orders before economic releases. As a matter of fact, CMS allows you to hedge, i.e. have simultaneous long and short positions in the same currency, with separate stops and limits attached to each.
  • #27
  • Aug 13, 2004 10:37pm Aug 13, 2004 10:37pm
On one of the CMS forums there was a discussion regarding the fact that when you place an order you cannot also place your stop and limit at the same time. I use CMS demo and it is truly a 3 step process.

The difference is that your have a small amount of time where your order exists without a stop, until you can enter one.

This is unlike FXCM and maybe others where you set up your entry, stop and limit.... you know what I mean.. and they are applied at the same instant.

Something to be aware of...


LOU
  • #28
  • Aug 14, 2004 12:25am Aug 14, 2004 12:25am
Easy solution. Straddle with big spread, place your stops, then adjust your stop-entry. That should work.

Chris

Quoting Lou
On one of the CMS forums there was a discussion regarding the fact that when you place an order you cannot also place your stop and limit at the same time. I use CMS demo and it is truly a 3 step process.

The difference is that your have a small amount of time where your order exists without a stop, until you can enter one.

This is unlike FXCM and maybe others where you set up your entry, stop and limit.... you know what I mean.. and they are applied at the same instant.

Something to be aware of...


LOU
  • #29
  • Aug 14, 2004 2:11am Aug 14, 2004 2:11am
Checked the CMS forum and the moderator said they were working on being able to place a trade with stop and limit in one entry. Several CMS users had been asking for the feature.

LOU
  • #30
  • Edited 12:22pm Aug 14, 2004 11:51am | Edited 12:22pm
Quoting sidekick
I believe that you're mixing up entry orders,stop orders and stop losses.

Uhm.. an entry order can be 2 things :
-a stop order
-a limit order

In case of Cpisani4 his straddle, you place 2 entry orders : a stop order above and a stop order below the current mkt price.

In your case you place a mkt order with no stop loss, and use a double stop as an entry order. Which means your suggestion is even worse, because in this case the slippage is penalized 2 times if you picked the wrong direction.
I believe you are mistaken. If you have an open position in the market, your stop order is a STOP LOSS regardless of whether the amount equals your open position or not. If you set it to double your current position, the stop order performs like a stop-and-reverse. It makes no difference whether the stop is attached to your market entry order at the time you place the market order, or whether you enter it later as a separate stop order. What matters, as the Refco person said, is that you have taken a position in the market. So long as you have an open position in the market, your stop order will be honored without slippage.


I have successfully used this approach with CMC and the stop order was filled at the exact price with NO slippage even though the market blasted right through my stop in less than 2 seconds.
  • #31
  • Aug 15, 2004 4:20am Aug 15, 2004 4:20am
in the classic sense of the straddle trade, you place just two stop orders.

say the price is at 1.2000. you place a buy order at 1.2020, and you place a sell order at 1.1980. if the buy order is filled, the sell order acts like the stop loss, and vica versa. once the trade materializes you would adjust your stop loss according to your strategy.
Relax and be happy.
  • #32
  • Aug 15, 2004 1:28pm Aug 15, 2004 1:28pm
Merlin you are correct as usual. But my suggestion was made simply as a way to get around Refco/FXCM policy of no straddle entry orders allowed prior to major economic releases. As I stated, what you describe is what I have done on CMC and CMS with no problem, since they do not have this silly policy. (Silly, because as I demonstrated, you can accomplish the same objective by manipulation of orders).
  • #33
  • Aug 17, 2004 9:47am Aug 17, 2004 9:47am
Quoting vdeluca
I believe those complaining about this policy have not bothered to THINK about what they are trying to accomplish. Let me preface by stating that I do not trade with either Refco or FXCM. My brokers (CMC and CMS) have no problems with straddle entry orders before economic releases. As a matter of fact, CMS allows you to hedge, i.e. have simultaneous long and short positions in the same currency, with separate stops and limits attached to each.

vdeluca:

Have you ever had a problem with CMS filling your ENTRY ORDERS on straddle trades at the correct price (during the release of major economic data), or is there major slippage? I currently use FXCM but I am thinking about switching brokers. In general, do you like CMS and would you recommend them? Your input would be greatly appreciated.

Regards,

CA1962
  • #34
  • Aug 17, 2004 11:59am Aug 17, 2004 11:59am
I have never experienced any slippage with either one. I think that CMS has the best trading and charting platform (read: FREE to all customers) by far; everything is done visually right on the charts. You can move entries, stops and limits by dragging a line on the chart with your mouse. However they sometimes have server disconnection problems during periods of high activity, such as during economic releases. I avoid problems by getting my orders in 20 minutes before news.

On the flip side, CMC's server stability is as solid as a rock. They can handle whatever volume the market throws at them. Never experienced any crash or disconnect. But, their charting package is very primitive, and their order entry procedure is very cumbersome and unforgiving, in that if you make a mistake, or want to adjust a stop, limit, etc. you cannot simply correct it -- instead you have to cancel the entire order and start all over again.
  • #35
  • Edited 10:21am Aug 19, 2004 9:48am | Edited 10:21am
Hi Guys,

Not satisfied with Refco or FXCM? thinking of changing the broker?

Here is my peace of advice. You can try new brokers but dont close you existing account with Refco or FXCM? why? becuase you will come back. why would you come back? becuase no broker can garantee about zero slippage when market jumps after the news. Some brokers will not accept the orders before News. Some brokers servers will go down few minutes before news.

I want to know how many people had slippage with Refco or FXCM? how many times their server went down before the news. They have rock solid performance, I have never come accross a single incident of slippage. Read what they said 1/10 of 1 % of time they my be unable to fill the orders that is 0.01 % or one trade every 1000 trades. I dont think thats a big problem. If you are forex trading trying to catch 100 or 200 pips in just one or two minutes then be ready to take some risk.

Most important, if any one finds a perfect broker (who guaranties no order skipping or no slippage no matter whatsoever) Please let me know

Mkcky
Lets Make Money!!!
  • #36
  • Aug 19, 2004 2:41pm Aug 19, 2004 2:41pm
Quoting Mkcky
Hi Guys,

Not satisfied with Refco or FXCM? thinking of changing the broker?

Here is my peace of advice. You can try new brokers but dont close you existing account with Refco or FXCM? why? becuase you will come back. why would you come back? becuase no broker can garantee about zero slippage when market jumps after the news. Some brokers will not accept the orders before News. Some brokers servers will go down few minutes before news.

I want to know how many people had slippage with Refco or FXCM? how many times their server went down before the news. They have rock solid performance, I have never come accross a single incident of slippage. Read what they said 1/10 of 1 % of time they my be unable to fill the orders that is 0.01 % or one trade every 1000 trades. I dont think thats a big problem. If you are forex trading trying to catch 100 or 200 pips in just one or two minutes then be ready to take some risk.

Most important, if any one finds a perfect broker (who guaranties no order skipping or no slippage no matter whatsoever) Please let me know

Mkcky
Hope they will keep that way.
Regards, Ido
  • #37
  • Aug 19, 2004 3:03pm Aug 19, 2004 3:03pm
Check out these horror stories from Refco/FXCM customers regarding the NFP on Friday August 6. Evidently, Refco and FXCM CANCELED all profitable trades closed that morning -- 3 hours later! One trader made $94,000 profit and Refco just cancelled his trades and removed the money out of his account! It's unbelievable!




http://www.moneytec.com/forums/showt...?threadid=9592

http://www.moneytec.com/forums/showt...?threadid=9777
  • #38
  • Aug 19, 2004 6:23pm Aug 19, 2004 6:23pm
Quoting vdeluca
Check out these horror stories from Refco/FXCM customers regarding the NFP on Friday August 6. Evidently, Refco and FXCM CANCELED all profitable trades closed that morning -- 3 hours later! One trader made $94,000 profit and Refco just cancelled his trades and removed the money out of his account! It's unbelievable!

http://www.moneytec.com/forums/showt...?threadid=9592

http://www.moneytec.com/forums/showt...?threadid=9777

I hate moneytec. they always remove the threads. I cannot find anything above links are gone.

Mkcky
Lets Make Money!!!
  • #39
  • Aug 19, 2004 7:33pm Aug 19, 2004 7:33pm
The links are still there. I just clicked and linked to it. sometimes you have to hit the refresh button a couple of times. I recommend every Refco or FXCM customer read these threads -- a Cautionary Tale if there ever was one.
  • #40
  • Edited 9:42pm Aug 19, 2004 9:37pm | Edited 9:42pm
Quoting vdeluca
The links are still there. I just clicked and linked to it. sometimes you have to hit the refresh button a couple of times. I recommend every Refco or FXCM customer read these threads -- a Cautionary Tale if there ever was one.
Thank you Vdeluca, I was able to read it, and I AM SHOCKED!!! This is very very bad. They (REFCO/FXCM) litrally took profits away from clients account. That is not at all acceptable. I am seriouly looking for another broker who will not do such fraudalant things.

Mkcky
Lets Make Money!!!
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