Spread reduction practices | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

Should Trade with Broker offering low spread or wide spread? 12 replies

Variable spread vs FIXED spread & broker comment/feedback 6 replies

ECN, fixed spread or variable spread account? why? 1 reply

Oanda spread versus MB Trading spread 27 replies

1pips spread is showing as 18 spread, anyway to overcome? 1 reply

Spread reduction practices

  • #1
  • First Post: Mar 14, 2014 5:20am Mar 14, 2014 5:20am
Hi,

I'm wondering if anyone has an experience where apparently a spread is only a 0.5-0.6 pip mark up from the raw spread of a 0.3. So a 0.8-0.9 spread on the markets offered by a broker as you trade a higher volume, but then, when you try and execute it, they execute you in 2-3 pips slippage in contrast to what was quoted on the platforms.

A serious broker malpractice for one to trade more you guys reckon?
  • #2
  • Mar 18, 2014 4:33pm Mar 18, 2014 4:33pm
Quoting plotinus82
Hi, I'm wondering if anyone has an experience where apparently a spread is only a 0.5-0.6 pip mark up from the raw spread of a 0.3. So a 0.8-0.9 spread on the markets offered by a broker as you trade a higher volume, but then, when you try and execute it, they execute you in 2-3 pips slippage in contrast to what was quoted on the platforms. A serious broker malpractice for one to trade more you guys reckon?
Yep!! Thats the standard among brokers. They bait you with a nominal low spread than switch!! The price you see in your screen while clicking your mouse is NEVER the price reflected in your trades. They always rip you off on anything from 0.8 to 1.5 pips on top of the spread. Now the brokers wives disguised as posters here on FF will be all over saying it is conspiracy theory!!
So, you think you have rights? LOL
  • #3
  • Mar 19, 2014 7:04pm Mar 19, 2014 7:04pm
Quoting ForexOracle
{quote} Yep!! Thats the standard among brokers. They bait you with a nominal low spread than switch!! The price you see in your screen while clicking your mouse is NEVER the price reflected in your trades. They always rip you off on anything from 0.8 to 1.5 pips on top of the spread. Now the brokers wives disguised as posters here on FF will be all over saying it is conspiracy theory!!
Well, there is a point here. You need to understand how an ECN works first.

The price you see in your terminal is the "Best" price available but not necessarily the price you will be filled at. You can however be filled at exactly that price, or be slipped a little, or even be slipped to your advantage. It depends how the order gets filled.

Let's say you have an order for 5.00 lots at a certain price. If there is a liquidity provider that accepts it in full at that price, you don't get slipped. However if the order is split up between several different liquidity providers all accepting parts of the order at different prices (via aggregation) your resulting price may be different when averaged out which you see as slippage (for or against). This is just one scenario that could play out.
  • #4
  • Mar 19, 2014 10:53pm Mar 19, 2014 10:53pm
Quoting FXOjafar
{quote} Well, there is a point here. You need to understand how an ECN works first. The price you see in your terminal is the "Best" price available but not necessarily the price you will be filled at. You can however be filled at exactly that price, or be slipped a little, or even be slipped to your advantage. It depends how the order gets filled. Let's say you have an order for 5.00 lots at a certain price. If there is a liquidity provider that accepts it in full at that price, you don't get slipped. However if the order is split up between several...
I doubt you'll be slipped 4-6 pips in and our of every trade though.
  • #5
  • Mar 19, 2014 11:05pm Mar 19, 2014 11:05pm
Quoting plotinus82
{quote} I doubt you'll be slipped 4-6 pips in and our of every trade though.
You could be. Especially on an ECN. It should be both for and against you though.
  • #6
  • Edited Mar 20, 2014 5:21am Mar 19, 2014 11:07pm | Edited Mar 20, 2014 5:21am
Quoting FXOjafar
{quote} You could be. Especially on an ECN. It should be both for and against you though.
You could, but very unlikely.There's only 10% probability. And if the broker cannot eliminate slips to that extent, no traders should be trading with them and should file a complaint immediately for poor liquidity and execution. I wasn't dealing on a ECN either, I was just on a STP with 15 + LPs.

4-6 pips in and out against me on every trade. Not with 15 + LPs, unless they are tier 3 banks with no FX prop desks, 4-6 pips isnt very possible.
  • #7
  • Last Post: Mar 19, 2014 11:09pm Mar 19, 2014 11:09pm
Quoting FXOjafar
{quote} You could be. Especially on an ECN. It should be both for and against you though.
Might as well not reduce the spreads and have a VWAP with this broker, but they didn't have a VWAP at all.
0 traders viewing now