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Broker Price Manipulation?

  • Post #21
  • Quote
  • Edited 9:33pm Aug 17, 2004 8:53pm | Edited 9:33pm
Quoting CA1962
Just wondering if anyone who trades with FXCM believes this could be a problem?

Thanks.
CA1961

Refco and FXCM was not at bad as you guys think. I use Refco. Today I have entry order Sell GBP 1.8323 SL 1.8353. This order got executed and in a minute went reverse and hit stop loss of 30 pips. On Oanda and Metatrader charts price did not go below 1.8338. I checked a chart with data source from refco and found that there was a big spike down to 1.8315. I immeadetly had a chat with refco guys and disputed about the spike which only appeared in their charts and non of others brokers. I also gave him the ticket number of my order. Support guys told me that they would look into the problem and call me back. After an hour I got a call from Refco telling me they had reverse the order and put the money back in my account. That was pretty neat. I have found out that whenever they screw up they fix it.

I dont know why they had a spike but If you find something is not right with your order, have a chat with support and ask for explanation. You can even request for official price quote for a particular time in the past.

Regarding the straddle statergy, I have got diffrent answers from diffrent support guys. They normally discourage you from straddling but they dont stop you from doing it.

Mkcky
Lets Make Money!!!
Quoting Mkcky
Refco and FXCM was not at bad as you guys think. I use Refco. Today I have entry order Sell GBP 1.8323 SL 1.8353. This order got executed and in a minute went reverse and hit stop loss of 30 pips. On Oanda and Metatrader charts price did not go below 1.8338. I checked a chart with data source from refco and found that there was a big spike down to 1.8315. I immeadetly had a chat with refco guys and disputed about the spike which only appeared in their charts and non of others brokers. I also gave him the ticket number of my order. Support guys told me that they would look into the problem and call me back. After an hour I got a call from Refco telling me they had reverse the order and put the money back in my account. That was pretty neat. I have found out that whenever they screw up they fix it.

I dont know why they had a spike but If you find something is not right with your order, have a chat with support and ask for explanation. You can even request for official price quote for a particular time in the past.

Regarding the straddle statergy, I have got diffrent answers from diffrent support guys. They normally discourage you from straddling but they dont stop you from doing it.

Mkcky
They may not stop you from straddling, but they beat your confidence on this strategy. Next time maybe they won't refund you as you wish and you will make a huge loss. Are you sure you can get your money back if they refuse to? You have to consider this risk, if you are playing serious money.

I noticed what happened in FXCM on yesterday's 'misquote' or 'manipulate', whatever it was. I trade at CMS. CMS enlarges the distance of stop loss order or stop entry order, from formerly 5 pips to present 25 pips, before news. For example, if you buy cable at 1.8370, you have to place stop order below 1.8345, or the current price is 1.8280, then you have to place stop entry buy order above 1.8305. That is one of their way to discourage traders to straddle. Another way of CMS is its server will routinely get down around news. Yesterday I bought cable at 1.8371. When the price rushed to 1.8430+, I was kicked out by CMS' server. I couldn't log in until the price fell back to 1.8390-.
Quoting pipbooker
at 8:25 I placed 2 orders
buy at 1.8414 SL 1.8396
sell at 1.8761 SL 1.8376
wow, assume you mean 1.8361 ?
[quote=Hayek]Another way of CMS is its server will routinely get down around news. QUOTE]
Only if it's bad news, surely ?
Sorry.
  • Post #25
  • Quote
  • Edited 5:42am Aug 18, 2004 5:22am | Edited 5:42am
Maybe this is the way forward.
What I can't understand is the 1) the claim that FXCM have many institutions as their clients and 2) they are regulated by the FSA in the UK.
Can't square these with recent facts. Surely if they are stop hunting their quotes so aggressively then they can't be labelled 'brokers' and should instead be called the 'bookies' that they are. In which case the regulation is vastly different. Anyone know how, on the face of it, they differ from , say CMC ?
If they are FSA regulated then surely , horror of horrors, that means any broker can quote whatever price they please and reductio ad absurdum you may as well hand over your account now to save time.
I always thought that price quoting using inside knowledge, ie your clients positions and how you'd benefit from certain movements, would be illegal ? I feel like tabling a question to the FSA.
Here's a dump of the CMC ( deal4free ) spread-bet prices for the GBPUSD cash for that period.
Not much better, it seems.
Attached Image (click to enlarge)
Click to Enlarge Name: 5.jpg Size: 39 KB
I always have my cmc forex account handy and they didn't have that spike seconds before or after the news. It just zoomed up straight away then fell a minute later like everyone else.
  • Post #28
  • Quote
  • Edited 6:08am Aug 18, 2004 6:04am | Edited 6:08am
forex or betting ?
Don't they actually do two seperate accounts ?
You can understand the betting quote going nuts in volatile conditions, just as in-running bets on the footy go wildly up and down. That's the nature of betting.
But not 'proper' FX ... my argument is FXCM seem to want it both ways : bookie and broker but we get neither benefit.
I actually can't dissuade myself from using the bookie for moderate position trading; excepting announcements and other extraordinary events you aren't concerned with quotes varying +- 10 outside the spread ( which is the worst I've seen, normally 2 or 3 and the spreads themselves are competitive, better in many cases ).
The key factor is it's tax-free. So you have to make 40% better on underlying FX before you're even. FORTY % !!
Just remember to be out of trend positions during announcements to avoide daft stops.
Assuming you don't plan to come out down for the tax year, of course
CMC do OCO stop/limits as well now so even the platform is improving.
I don't use stops OCO or anything like that. I buy and sell manually at least then I control my own fate. I don't miss out on news because I use the options system for that. This leaves me free hands to try to grab what I can manually during news. CMC forex are is the hardest to make money in. I doubled my account elsewhere in a few months but can't get away from break even in CMC. That speaks for itself. I tried buying/selling spikes in FXCM but you never get given them so yeah it must be for the benefit of stop clearing. You can't really blame them in a way as they are there to make money since they take all of the risk. How can they put a 10000 trade into the market? Sure when you talk about a million then you have a case but if you trade that big then join a bank. That's my aim, but until I do I will tread very carefully and trade manually only.
Quoting CA1962
Vdeluca:


Good find.

Very interesting. I just called them and talked to the rep. They've been open to the public for about 1 year. Quotes are directly from the banks. Spreads are 1-2 pips (and according to the rep, sometimes there is no spread - bid and ask prices are the same). They make their money by charging a "round turn" commission of $20 per lot (equal to 2 pips).

According to the rep, "brokers" absolutely do manipulate their prices. I'm not saying any particular broker does this, but according to the COEfx rep, there is no doubt that this happens. Since COESfx is not a market maker and does not have a trading desk, there is no matching or manipulation. The price you get is the price quoted by the banks. Standard accounts take a minimum of $10,000 to open (no minis). They have no problem whatsoever with entry orders (straddles) around data release times. I plan on trying one of their demos.

If anyone has had any direct dealings with this company, please let us know.

CA1962
I had the same problem with GBP this week using OANDA. I have had similar problems in the past with OANDA. I am agressively looking for an alternative and have just started looking at COESfx - need to try their demo for a while. Interested to know if there are any other systems out there worth reviewing.
I heard back from FXCM last night. Even though they admitted a "misquote," the best they would do is set my reset my P/L to zero. Even though my Entry Order to sell GBP/USD should NEVER have been executed @ 8:31 AM by this "phantom" price dip (and then subsequently stopped out for a loss on the move back up), and even though they agreed that my order should not have been executed until 8:41 AM on the move back down (in which case I would still be in this trade and up over 100 pips per lot), they said that they could not give me any profit at all since they had no way of knowing when I would have exited the trade. When I pointed out the fact that the price moved straight down from my entry by about 90 pips, SETTLED there, and never moved back up, no volitility, no whipsaws, and asked if it was reasonable to conclude that I would have at least taken SOME profit, he didn't have an answer. The best they could do was erase the original loss and basically pretend the trade never happened. Pathetic. I am really pissed off, and my search for another broker will start today.

I have no problem with brokers who who not allow enrty orders (straddles) before major news announcements, as long as they make this clear and say so upfront. What I do have a problem with are "phantom" price moves that are done with the obvious intent of running stops and discouraging straddle trades.
FXCM fixed my earlier stopout from the GBP phantom 08:35 spike. As suggested, I called and told them what happened and later when I got in at midnight, they had already properly adjusted the amount on my account.

Thanks
I've started to look into CMS. I've heard some good things about it. I'll post some reviews after I play with it a bit.
~Will
FXCM fixed my earlier stopout from the GBP phantom 08:35 spike. As suggested, I called and told them what happened and later when I got in at midnight, they had already properly adjusted the amount on my account.

Thanks
Yes CA i have seen this plenty of times with FXCM and have resorted to use an independant charting package like metastock... its the only way your going to weed out the price fixing. Even though FXCM promise not to make market they still to.... if you get caught again you need to ring then pronto to let them know that your charts never traded there and demand a refund.. they are usually pretty good about it if you catch them out.



Quoting CA1962
Just wondering if anyone who trades with FXCM believes this could be a problem? I have recently begun placing straddle trades with them using entry orders and I have had no problem getting my orders filled correctly.

This morning, I placed a straddle trade with ENTRY ORDERS in the GBP/USD. I used FXTrek II Charts for this (these are the charts supplied by FXCM and have a direct feed from FXCM). I also have 2 other sets of charts, one from MetaTrader and another from CFG. According to my FXCM trading platform and FXTrek II charts, at about 08:31 (EDT) the market dipped about 47 pips to 1.8313 triggering my SELL order. Within about 30 seconds, it then spiked up nearly 100 pips, stopping out my SELL ORDER and triggering my BUY ORDER. According to my MetaTrader and CFG Charts, the initial dip to 1.8313 never happened, so my SELL ORDER should never have been triggered. This really bothers me. It makes me think that FXCM is manipulating the prices and deliberately running stops. Is there anyone else here that trades with FXCM, and in particular, traded a straddle this morning or in the past, who has had this problem? Any feedback would be greatly appreciated. Even if you trade with another broker other than FXCM, I would like to get your input also.

Thanks.

CA1961
  • Post #36
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  • Last Post: Oct 12, 2011 6:32pm Oct 12, 2011 6:32pm
is there and client review?
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