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Brokers and slippages 14 replies

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Is it possible to “beat” slippages?

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  • First Post: Sep 19, 2015 6:17am Sep 19, 2015 6:17am
Hi everyone. After latest FOMC announcement and high volatility on market I’d like to discuss annoying issue –
slippages. How do everyone trying to reduce it influence on one’s trading?

I have seen a lot of statistics from different brokers in percentages, but haven’t seen any statistics in points (USD):
http://leaprate.com/2015/07/fxpro-sl...44-9-positive/
http://www.fxcm.com/advantages/forex...-improvements/
http://leaprate.com/2015/06/fxprimus...ge-statistics/

Does anyone calculate such statistics for own trading?
To minimise it, use an ECN broker and ctrader. Don't use metatrader.
Quoting mozyrdrew
How do everyone trying to reduce it influence on ones trading?

(i) Don't trade from Metatrader

(ii) Use an ECN broker rather than a counterparty market-maker who trades against you

(iii) Don't trade during or close to scheduled fundamental announcements


Quoting mozyrdrew
Does anyone calculate such statistics for own trading?

Yes - it would certainly be very unwise indeed, to try to run any kind of business without carefully monitoring the everyday costs of actually doing business.
Since I started trading with a real FX broker I'm not caring any more for slippage or spread.
Without an edge MM is useless!
All good points, one's missing though. Pick a broker who's servers are geographically close to you. I always found it unbelievable that people sitting somewhere in or around Europe picking brokers somewhere in Oz or NY (some even Japan). Roundtrip time does matter unless you enter ALL your trades by Limit or Stop order and getting out using SL or TP.
Avoid high latency networks, too (mobile stuff).
Having transacted deals in the seconds profitably (look at my TE) I can say I have some experience with this style of trading. Im going to tell you right now there is no way to avoid it completely. While there is a certain limit where you say TOO MUCH. But crying over +5pips is not worth the time on majors. This is theory based on experience*

Contrary to what you may think trading on a market maker will actually give you better fills than an ECN. Because you not calling into market to search for liquidity through 2 parties, your trade has less time to travel and less latency therefore your fill is instant. Think about it, you probably not trading 100s of lots...
The only catch is, after time certain broker(s) may just switch you over to LP or apply some kind of slippage plugin to your account. The first option more likely. But trading on news, you will never win. Many participants that in the market tat are MUCH faster than you and always will be. Nothing you can about it.

In order for you to fully understand this completely you must learn how market micro structure operates. How dealers work, what participants in the market, and how your brokers do deals.
All posts are my personal opinion
Quoting Xela
{quote} (i) Don't trade from Metatrader (ii) Use an ECN broker rather than a counterparty market-maker who trades against you (iii) Don't trade during or close to scheduled fundamental announcements {quote} Yes - it would certainly be very unwise indeed, to try to run any kind of business without carefully monitoring the everyday costs of actually doing business.
pretty much avoid trading news
practising coitus interruptus
When the spread is wide, use limit orders. When the spread is narrow, use market orders.
Quoting JensG
All good points, one's missing though. Pick a broker who's servers are geographically close to you. I always found it unbelievable that people sitting somewhere in or around Europe picking brokers somewhere in Oz or NY (some even Japan). Roundtrip time does matter unless you enter ALL your trades by Limit or Stop order and getting out using SL or TP. Avoid high latency networks, too (mobile stuff).
That's not true for PaaS platform like ctrader.
Quoting forexleopard
{quote} That's not true for PaaS platform like ctrader.
I know, cTrader uses a proxy network to solve that.
I trade either using market range orders with a setting to 0, which is a condition to only fill order without slippage, or not at all.
or with a resting limit order, which is filled at price or better.
Avoid banks or brokerages with a reputation for slipping a lot. There are a few names out there. And try to use a bank that has a good track record for fills. Sometimes you can find the statistics listed by currency pair. I have been with my bank for almost the past 16 years (16 yrs in Nov). I have very very seldom gotten slipped even on news. They offer guaranteed stop orders but the order has to be a min distance away from the stop. And just recently they are offering ECN trading which makes the situation much better for trading with much tighter spreads.
Guaranteed stop-losses are indeed another solution to this, but for some types of trading, they're quite expensive. For anything approaching scalping, for example, they'd work out prohibitively expensive.

But that is a way of transferring the additional "fast-market-risk" from the trader to the broker. For those willing to pay the premium for that kind of "insurance".

Not entirely the same issue as slippage in general, but a part of it, certainly.
Quoting Netexec
Sometimes you can find the statistics listed by currency pair. I have been with my bank for almost the past 16 years (16 yrs in Nov). I have very very seldom gotten slipped even on news. They offer guaranteed stop orders but the order has to be a min distance away from the stop
thx for reply. could you share such statistics, as I haven't seen it. Only on mql4 signals and zulutrade, but it is not correct.
guaranteed stop-loss is smth very risky for broker.
Quoting mozyrdrew
{quote}guaranteed stop-loss is smth very risky for broker.
Not really I guess. He can probably pass it on to some insurance companies. In the end it depends on the customer mix, something he has somewhat control over.
delays on MT4 side is a known issue.
anyway, the main question, whether someone have ever calculated how much slippages cost to him??
Quoting afhacker
Since I started trading with a real FX broker I'm not caring any more for slippage or spread.

What do you mean by real forex broker? What broker do you use?
Quoting mozyrdrew
guaranteed stop-loss is smth very risky for broker.

That's why they charge so much extra spread for it. They're effectively spreading the cost of the occasional disaster by earning extra from the 99.9% of the time it isn't relevant.

It's similar to having insurance against your house falling down. Paying you out, if it happens, is very expensive for the insurance company, but 99.99% of the time it doesn't happen. Most people pay their insurance premiums and never claim on it.

The brokers who offer this service are doing so because overall it's an additional profit-source for them, even though some specific occasions are expensive.

So, yes: it's "very risky", but they're in the risk business and it's part of their job to work out, statistically, exactly how risky and to allow for that. They employ financial analysts (just like insurance companies employ actuaries, who are also a type of financial/statistical analyst) to do the same thing.


Quoting insomniawawa
{quote} What do you mean by real forex broker?

I know you're asking someone else, rather than me, but I think the three little paragraphs in the middle part of this post answer your question.
But generally it might be only MM brokers. So, fixed SL is a risk, and trader's profit is an additional risk. SO, I don't think that you can be sure that they will pay your profit.
News trading will be prohibited in such cases I suppose.
as it was mentioned in this thread, to avoid slippage - don't trade metatrader.

our team has created a platform, so we will be glad to hear any suggestions and recommendations from your side.

thx in advance
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