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FXCM - No Entry Orders before the...

I noticed that FXCM has implemented an auto trailing stop.. now on their platform since this morning. In chatting to a rep about it I decided to also ask the 'straddle' question. His reply:

you: Now regarding the ever popular straddle question:
you: What times and pip distances will straddle trades be allowed.
FXCM\\: if you wish to trade on news, all conditions will be the same, just understand that during periods of high volatility your stops may not be fillable if the price cannot be offset and you might only get filled at the next available price
you: 'price cannot be offset' .. not sure I follow.
FXCM\\: as with any market there always needs to be someone to do the oposite that you are trying to do in order to fill your positions, so in other words when you sell someone needs to buy, if there is no one on the other side, we cannot offset you or in other words complete a transaction
FXCM\\: because of the market structure
FXCM\\: of forex
FXCM\\: there is liquidity virtually always however during periods of high volatility
FXCM\\: when the market jumps 200 pips in 1 minute, it is much harder to find people that will offset your position
FXCM\\: and thus we cannot guarantee you would be filled at those times at the price you specified but only at the next best available price
you: So why doesnt this happen during a non volatile very, very quiet time?
FXCM\\: well during normal market conditions you always have people who are trading and due to our client base and the thus liquidity we can fill you then
you: Thank you.

"I have nothing to say" -- Oliver Hardy.

LOU
CA1962, Try next time to place entry orders 30 minutes or more before the data release.
Quoting Lou
you: So why doesnt this happen during a non volatile very, very quiet time?
FXCM\\: well during normal market conditions you always have people who are trading and due to our client base and the thus liquidity we can fill you then.
you: Thank you.

"I have nothing to say" -- Oliver Hardy.

LOU
during normal market conditions you always have people who are trading Huh??? a "quiet" time means that very little activity is going on, i.e. very few people are trading because the market is at an equilbrium point. Large price moves happen when a lot of people start trading at once because the market has become out of balance.

Exactly WHAT happens when surprise eco. data is released? Let's take an example where the news is anti USD, and take EURUSD as the instrument. At any instant of time, in the spot market by definition the number of short positions in EURUSD must be equal to the number of long positions. That is, the number of buyers always has to be equal to the number of sellers.

When the news hits, people already holding long positions are sitting pretty, they will hold until their profit target is reached, or add to their long positions; new buyers come into the market and the short position holders go into panic, and start buying to cover as fast as they can. Thus, the activity is driven in the buying direction but at each price along the way up, there must be a long holder willing to sell.. The number of long holders willing to sell increases as the price continues to rise, until all the shorts have covered and new buyers have been satisfied. At that point, the market again reaches an equilibrium point.

Rather than a question of liquidity, the volatility is about the SPEED at which the market reaches its new temporary equilibrium point. With $1.5 TRILLION being traded each and every day, it is just inconceivable that no buyers or sellers willing to buy or sell could be found at each incremental pip level as the price moves to the new equilibrium point. And here I am talking about us small-fry traders who are trading minis or a few lots. Obviously if you are George Soros trying to unload 1 billion euros all at once, you need another George Soros on the other side of the transaction. So, excuse me but I still do not believe this FXCM line about liquidity.
Why dont they just admit that they cant keep up? Everybody knows it.

LOU
Well, it IS concievable that, in a big jump (say a hundred pips) from point A to point B in the space of a few seconds, not many people get the chance to execute orders in between. When something shoots straight up like that last NFP in a few seconds, who reacts fast enough to buy before it hits the top, at which point it's not worth it? Some people will have entry orders, yes. But a lot more people will probably have stop losses in place from some other trade. So while a lot of people can get their stuff filled, there apparently can be an unbalance. Not enough entry orders triggered at your price in the space of two seconds. Therefore, without someone to immediately buy from at your price (to stop out your short position), you have to travel up the market a ways to find the next available buy order.
~Will
I am sorry for my English, I do not really understand how FXCM's reps understands me..

FXCM: what is your question?
you: The thing is after your advertising about entry orders, limits and stoplosses that are guarenteed... well..
you: It was MAJOR thing for me... and thats why I open account at fxcm
FXCM: well the market conditions changed
you: changed how?
FXCM: it is our policy to fioll orders at the price requested but if the market gaps 200pts
FXCM: there si nothing much we can do..
FXCM: we had gaps recently that we did not have in fx for years
you: I can see the problems with entry orders.. but lets say I opend position three days agog
you: ago
you: the market jumps against me... the stoploss will not be honord?
FXCM: normally yes
you: you see. I read a few threads and saw how after three hours you took back 94000$ from one poor guy
FXCM: however if there is a 200pts gap over your stsop we will perhaps slip you on the order
FXCM: this is called dk a trade
FXCM: some people got prices that were computer mistakes
FXCM: our system accounted for trades that did not exist
FXCM: and we had to cancel those trades
FXCM: I understand why the person might be furious
FXCM: but see this mistake as an erroneous deposit in your bank account
FXCM: if the bank puts money by mistake in yoru account
FXCM: they will certainly take it back
FXCM: same rule apply here
FXCM: please remmeber though that we are talking here about extreme cases and this dopes not happen often
you: no no.. the thing is that after I spoke to one of your reps, he told me that you are always clearer yorself at the intrerbank..
FXCM: you also need to remmeber that we handle one million orders a month
FXCM: soime erros will happen form time to time even though our techno;logy is extremnely reliable
FXCM: we do
FXCM: but if the computer gives you a price that does not exist at the interbanlk level, we cannot offset the transaction
FXCM: and we loose money
FXCM: this is an error
you: I need to rememeber it? all I do rememeber is your advertises. anyway... you understand the trading the news is something that many ppl do and it is extremely important. and thats why they choose fxcm
FXCM: I understand
FXCM: but our execution policy has been too generous
FXCM: we do not have the samne comfort at the interbank level
FXCM: if anybody could just straddle the market before news and put tight protective stops
you: too generous? thats why everytime I speak with one of your reps he sais that fxcm have 50000 clients..
FXCM: everyone would be millionaire
FXCM: this is just unrealistic
FXCM: it is poart of it
FXCM: our execution is excpetionally good
FXCM: but there are some limits to everything
you: you say that you are proude that the system contiue to quote aggressivley.. please, do not quote aggressivley if you can not stand behind these quotes.
you: you will not believe how many ppl want to sui fxcm.
FXCM: I understand your point
FXCM: but this is a waste of time for them
FXCM: marlkets are what they are
FXCM: and we try to fill people at best we can
you: thats not the point.. probably they will lose, but you lose many clients.
FXCM: if we read the contract you sign
FXCM: I understand many peoople are upset
FXCM: but if a major catastrophy happens
FXCM: and people are not executed at their prices because the marlet gaps by multiple figures
FXCM: we cannot be held responsible for the marlet's craziness
FXCM: trading is not a game
FXCM: it is a really risk business
FXCM: if people cannot handle the risk they should not be trading
you: I see.
FXCM: banks will take your money and happily give you 2% a year
FXCM: and this is not even guaranteed
FXCM: if the US givernement default on its debt
you: I do not see the conection here
FXCM: you might not even get this 2%
FXCM: my point is that nothing is ever guaranteed 1000% in financial markets
you: ok. but my complaint is about the advertises.
you: thats all.
you: anyway, thats all I want to know
FXCM: Once again I see your point
FXCM: but the only thing guranteed in the ads is the fill
you: I am really scared trading now with fxcm.. to be honest.
FXCM: everything else is a policy
FXCM: that we always followed until NFP 2 weeks ago
FXCM: this is the same thing everywhere
FXCM: we are the biggest marlet nmaker online in fx
you: ok. from now on... it is the same policie?
FXCM: if we cannot do it anymore
FXCM: none can do it
FXCM: it is still the same policy
FXCM: but if there is force majeure market event
FXCM: we jsut want to say that we might not fill you where you want
FXCM: that's all
you: where is the line? 100pts gap? 150pts gap? 40pts gap? what is major?
FXCM: it will not change your execution for 99.99999% of yor trades
FXCM: fxcm has been open for 4 years and we never had this problem before
FXCM: it is whatever we cannot handle... last time was 200pts...
Regards, Ido
Quoting CA1962
idobrickner:

I believe what is being referred to specifically are ENTRY ORDERS, which are also referred to as either STOP ORDERS (and LIMIT ORDERS), and not "stop-losses." If brokers stopped honoring stop-losses, they wouldn't keep a single customer.

Hi CA1962,

REFCO dosnt gurantee anything anymore not even stop loss orders on open positons have a look at chat I had with Refco Rep.



RefcoFX": Welcome to RefcoFX's Live Chat feature. You are now chatting with an RefcoFX representative. How can I help you?
you: Hi i beleive that you have change the policy about guaranteed Entry order recently
RefcoFX": Yes
RefcoFX": Are you trading a live or demo account
You:I am trading live account
you: so refco dosnt gurantie the entry order during volitale time am I correct?
RefcoFX": Correct
you: what is your defination of volatile market condition?
RefcoFX": Under conditions where the market is gapping
you: how ofter does that happen?
RefcoFX": The market will gap when there is a significant news release
RefcoFX": For example, certain events are important fundamentally, and if there is a big suprise to that number it is a possibility the market will gap
RefcoFX": it is during 99.9% of the time that the market is not gapping
RefcoFX": It is .1% of the time where the market is gapping
RefcoFX": So it is not recommended to trade during that .1% of the time
RefcoFX": As we cannot guarantee your orders
you: Ok suppose I still plan to trade during this time what will happen to my entry order you will skip it or fill it for best availible price?
RefcoFX": It depends how the market reacts. We will make every effort to fill you at the best price we can, however if the market gaps, there is no guarantee of what price you will be filled at.
RefcoFX": For that reason, we recommend you do not place entry orders or market orders shortly after the release of these events
RefcoFX": Unless you have a huge risk tolerance.
you: ok if I already have a open position will you honour my stop and limits
RefcoFX": Most times we can, however we still cannot guarantee anything under severe market conditions
RefcoFX": No market maker can.
you: ok if I have a position open like a few days before, you suggest to close the positon before major release becuase you cant guarantee stop losses? is that what you trying to say?
RefcoFX": We cannot make a recommendation one way or another. It is up to you as a trader. Like I said, most times this is not an issue, but we like to make all clients know of the situation as it can happen, and it will be treated the same in this market as in every other financial market.
you: so basically you are saying that you cannot gurrante stop loss on open position if market gaps am I right?
RefcoFX": As you mentioned, it is not guaranteed. It is possible we may fill you at the exact price you specified, however under these conditions we cannot make something 100% guaranteed.
RefcoFX": It is not feasible
RefcoFX": We will make every effort to if we can.
RefcoFX": If it is a price that we cannot attain ourselves, then we cannot offer it to the clients
you: Ok I got it basically you dont gurantee anything..but you will try your best
RefcoFX": Only under that .1% of the market condition
RefcoFX": It is only when a small percentage of our clients are trying to take advantage of our execution
RefcoFX": If you are not trying to trade solely on these events
RefcoFX": Then it is likely not an issue
you: Yes but tipical investor may have open order during news becuase we almost have 2-3 important news events every week.
RefcoFX": Correct. However, think about it from a market makers standpoint.
RefcoFX": If you are expecting a price under a gap that never traded
RefcoFX": You are asking for a price that never existed, and for us to give you a price better than where the market traded
you: I am not talking about entry orders,but I still think my stop loss orders for open position should be honoured.
RefcoFX": In most cases it is, however it is simply not guaranteed. If the market gaps 200 points over your gap.
RefcoFX": We are essentially paying the difference.
You: Ok, Thanks for the Information.

Mkcky
Lets Make Money!!!
Quoting Mkcky
Hi CA1962,

REFCO dosnt gurantee anything anymore not even stop loss orders on open positons have a look at chat I had with Refco Rep.



RefcoFX": Welcome to RefcoFX's Live Chat feature. You are now chatting with an RefcoFX representative. How can I help you?
you: Hi i beleive that you have change the policy about guaranteed Entry order recently
RefcoFX": Yes
RefcoFX": Are you trading a live or demo account
You:I am trading live account
you: so refco dosnt gurantie the entry order during volitale time am I correct?
RefcoFX": Correct
you: what is your defination of volatile market condition?
RefcoFX": Under conditions where the market is gapping
you: how ofter does that happen?
RefcoFX": The market will gap when there is a significant news release
RefcoFX": For example, certain events are important fundamentally, and if there is a big suprise to that number it is a possibility the market will gap
RefcoFX": it is during 99.9% of the time that the market is not gapping
RefcoFX": It is .1% of the time where the market is gapping
RefcoFX": So it is not recommended to trade during that .1% of the time
RefcoFX": As we cannot guarantee your orders
you: Ok suppose I still plan to trade during this time what will happen to my entry order you will skip it or fill it for best availible price?
RefcoFX": It depends how the market reacts. We will make every effort to fill you at the best price we can, however if the market gaps, there is no guarantee of what price you will be filled at.
RefcoFX": For that reason, we recommend you do not place entry orders or market orders shortly after the release of these events
RefcoFX": Unless you have a huge risk tolerance.
you: ok if I already have a open position will you honour my stop and limits
RefcoFX": Most times we can, however we still cannot guarantee anything under severe market conditions
RefcoFX": No market maker can.
you: ok if I have a position open like a few days before, you suggest to close the positon before major release becuase you cant guarantee stop losses? is that what you trying to say?
RefcoFX": We cannot make a recommendation one way or another. It is up to you as a trader. Like I said, most times this is not an issue, but we like to make all clients know of the situation as it can happen, and it will be treated the same in this market as in every other financial market.
you: so basically you are saying that you cannot gurrante stop loss on open position if market gaps am I right?
RefcoFX": As you mentioned, it is not guaranteed. It is possible we may fill you at the exact price you specified, however under these conditions we cannot make something 100% guaranteed.
RefcoFX": It is not feasible
RefcoFX": We will make every effort to if we can.
RefcoFX": If it is a price that we cannot attain ourselves, then we cannot offer it to the clients
you: Ok I got it basically you dont gurantee anything..but you will try your best
RefcoFX": Only under that .1% of the market condition
RefcoFX": It is only when a small percentage of our clients are trying to take advantage of our execution
RefcoFX": If you are not trying to trade solely on these events
RefcoFX": Then it is likely not an issue
you: Yes but tipical investor may have open order during news becuase we almost have 2-3 important news events every week.
RefcoFX": Correct. However, think about it from a market makers standpoint.
RefcoFX": If you are expecting a price under a gap that never traded
RefcoFX": You are asking for a price that never existed, and for us to give you a price better than where the market traded
you: I am not talking about entry orders,but I still think my stop loss orders for open position should be honoured.
RefcoFX": In most cases it is, however it is simply not guaranteed. If the market gaps 200 points over your gap.
RefcoFX": We are essentially paying the difference.
You: Ok, Thanks for the Information.

Mkcky

Mkcky:

I re-read the email they sent out and you're right. At first I thought it was just for entry orders. Any idea if there are any brokers guaranteeing stops? I checked around and so far I've been unable to find one.
Quoting CA1962
Mkcky:

I re-read the email they sent out and you're right. At first I thought it was just for entry orders. Any idea if there are any brokers guaranteeing stops? I checked around and so far I've been unable to find one.
I have been searching vigrously for a broker who guranties stuff but untill now I have not found any. After 6 Aug. incidance none of the broker want to take any risk. The best thing to do is to carry on with existing broker but trade very small lots during news and see how they perfom.

Mkcky
Lets Make Money!!!
Quoting Mkcky
I have been searching vigrously for a broker who guranties stuff but untill now I have not found any. After 6 Aug. incidance none of the broker want to take any risk. The best thing to do is to carry on with existing broker but trade very small lots during news and see how they perfom.

Mkcky
How about trading through the bank ?
I think a lot of people are missing the fact that even partially guarenteeing your stops is a valuable thing. brokers are basically saying that "Hey, if during 99.9% of the time the market skips past your stop, we'll still let you stop there anyway and pay the difference out of our own pocket." There aren't supposed to be any guarentees with a market, but these guys are being nice enough to offer them anyway.

Don't look a gift horse in the mouth.
~Will
Quoting firedave
How about trading through the bank ?
Hi Firedave,

Which bank? how much capital is require to trade through bank

Mkcky
Lets Make Money!!!
Guys:

Here's a broker that claims to guarantee stops, but I've never heard of them. It looks like their Head Office is in California, with branches in Switzerland and France. Funds are held in a Swiss Bank. Anyone have experience with this company?

Here's the link:

Alipes
  • Post #34
  • Quote
  • Edited 7:29pm Aug 23, 2004 6:56pm | Edited 7:29pm
Quoting CA1962
Guys:

Here's a broker that claims to guarantee stops, but I've never heard of them. It looks like their Head Office is in California, with branches in Switzerland and France. Funds are held in a Swiss Bank. Anyone have experience with this company?

Here's the link:

Alipes
Where did you read that? did you confirm that by writing them a email?. Most of the brokers have not updated their websites but from 6th Aug no one is ready to guarantee slippage.


Mkcky
Lets Make Money!!!
  • Post #35
  • Quote
  • Edited 7:30pm Aug 23, 2004 7:23pm | Edited 7:30pm
Quoting CA1962
Guys:

Here's a broker that claims to guarantee stops, but I've never heard of them. It looks like their Head Office is in California, with branches in Switzerland and France. Funds are held in a Swiss Bank. Anyone have experience with this company?

Here's the link:

Alipes
Hi CA1962

I did some Research about Alipes Invesment and found that they are linked to ACM Switzerland, They use ACM Platform. Looks like they are IB to ACM. Now ACM is brought by REFCO about a month back so basically you will be still dealing with Refco and Alpies will defiantly inherit the policies from Mother company (Refco) which is no slippage guarantee. IF you read Moneytec Forum about ACM you will find that they have bad reputation. so think about it buddy.


Mkcky
Lets Make Money!!!
Quoting Mkcky
Where did you read that? did you confirm that by writing them a email?. Most of the brokers have not updated their websites but from 6th Aug no one is ready to guarantee slippage.


Mkcky

Mkcky:

Here's the link to stop-loss/limit guarantee:

Alipes' Guarantee



---------------------------------------------------------------

This is directly from the Alipes' website:

4. Guaranteed stops and limits.

Limit and stop orders are always executed at the specified price. No slippage whatsoever.
Ugh, no guaranteed stop loss from FXCM anymore? That was one of Beau Diamonds main points for recommending them. I realize that news releases account for maybe 1% of the trading time but it seems to account for 60% or more of the significant currency moments.

And that email comes off as this has never happened before, some strange and unnatural thing--the market gapping. I thought this has been accounted for in FXCM's earlier policies already. How long has this forex and FXCM been around?
They still guarentee stop losses, just not during the .1% of the time that the market is gapping. That has actually been their policy all along, it just took an event like this for everyone to realize it. I plan to keep looking into them despite this, because they still seem to have the best customer service and guarentees of any broker I have yet seen.

Quoting SteamTrader
Ugh, no guaranteed stop loss from FXCM anymore? That was one of Beau Diamonds main points for recommending them. I realize that news releases account for maybe 1% of the trading time but it seems to account for 60% or more of the significant currency moments.

And that email comes off as this has never happened before, some strange and unnatural thing--the market gapping. I thought this has been accounted for in FXCM's earlier policies already. How long has this forex and FXCM been around?
~Will
Quoting ultimastrike
They still guarentee stop losses, just not during the .1% of the time that the market is gapping. That has actually been their policy all along, it just took an event like this for everyone to realize it. I plan to keep looking into them despite this, because they still seem to have the best customer service and guarentees of any broker I have yet seen.

It seems like FXCM can create the ".1%" of the time market gapping condition at will. Take for example what happened on 8/17/04 at around 8:30AM EDT. I think we all know the story, FXCM's price dropped well below every other broker feed's prices. How often will they do this and claim "the market gapped"?
I think you are all asking the impossible.
FX brokers do not exist in a vacuum. They have to lay off every order; either internally or inter-bank according to their risk profile.
Gapping means just that : one tick is 100, the next is 300. No asks between the two so no trading. To my mind a guaranteed stop is a commitment to fill on the ask, IF that ask is available on the smallest dealing time-slice.
Trying to hold someone to fantasy contract terms is arguing over semantics. They fluffed up BUT they have every right under their T&C to call an error; I agree it's morally wrong but legally I'm sure they are clear. You wouldn't claim to be able to out-legalese these guys, would you ?
The only thing to change is they no longer claim to hold prices under all conditions.
Now, a bookie CAN offer a guaranteed stop. It's common enough and is called a CRB or Controlled Risk Bet. You pay a fixed pip premium when you open the trade and in return the bookie takes the risk on themselves.
At the end of the day, unless you are directly facing the market, like with Interactive Brokers, you are NOT playing the market you are playing the brokers version of the market and his rules apply. That's the priveledge of not having to maintain a $250k account minimum.
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