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Most suitable broker for news trading

  • #1
  • First Post: Edited 5:07pm Jun 11, 2016 3:16pm | Edited 5:07pm
Hi all. I probably have a feeling that this topic was discussed to death. I've seen some topics about it around here. Anyway, forgive the newbie for creating one more thread like that but I really needed to because I couldn't find the answer I was looking for.

So long story short, I'm looking for a broker that would be suitable for news trading. I know most of the retail brokers are not the best when it comes to news trading but if you are news trader and if you had experience with a handful of brokers, out of all, which would be the best for the news? Or the least terrible?

And here is what I'm looking for a broker. Starting from most important.

1. Smooth platform functioning before and during the news. No freezing, crashing or other crap. This is critical. I consider freezing for couple of secs to 10-15 normal but freezing just before and during the news for couple of minutes is not acceptable. Maybe for extremely volatile and important news like interest rate decision but not for economic indicators like CPI, Retail sales, Trade balance, GDP etc.

2. No or minimum re-quotes.

3. Preferably ECN/STP with deep liquidity. Not shitty in disguise MM. The only exception would be a really good, I mean flawless MM that doesn't play any tricks with re-quoting, constant negative slippage, intentional spread widening etc.

That's it. That's all I need.

Also, I do have my own list of brokers which after doing lots of research, made me think opening account with them. The list would be: Dukascopy, Pepperstone and maybe IC Markets. Although I'm not sure about the last one cause lately I've seen some really bad reviews. There's also LMAX and IB which I heard are quite good but the minimum deposit is like 10k which I cannot afford right now.

Anyway, if you have experience with any of the brokers mentioned above, I'd love to hear your thoughts. And if you have your own recommendation, I'd love to hear that as well.

Thank You.
  • #2
  • Jun 11, 2016 4:44pm Jun 11, 2016 4:44pm
most of the brokers are not allowing to trade news coz it is risky for them. I also would like to have experience of trading news with suitable broker.
If anyone knows such, please, tell us...
  • #3
  • Jun 11, 2016 10:53pm Jun 11, 2016 10:53pm
Quoting Dual
Hi all. I probably have a feeling that this topic was discussed to death. I've seen some topics about it around here. Anyway, forgive the newbie for creating one more thread like that but I really needed to because I couldn't find the answer I was looking for. So long story short, I'm looking for a broker that would be suitable for news trading. I know most of the retail brokers are not the best when it comes to news trading but if you are news trader and if you had experience with a handful of brokers, out of all, which would be the best for the...
If you can't even afford $10K to trade, I would strongly suggest you to stay away from news trading because the possible losses due to the large spread and price swings caused by the news especially the NFP and the central bank rate decisions (just ask all the traders that traded during the SNB crisis last year) could easily wipe out your account and then some for any account size below $10K. And I will tell you for news trading, the best brokers are LMAX and IB; they are the only ones that satisfy all three of your requirements but unfortunately LMAX does not allow news trading so that just leaves IB.
Make your losses in demo. Earn your profits live.
  • #4
  • Edited 6:22am Jun 12, 2016 6:10am | Edited 6:22am
Quoting Forexia
{quote} If you can't even afford $10K to trade, I would strongly suggest you to stay away from news trading because the possible losses due to the large spread and price swings caused by the news especially the NFP and the central bank rate decisions (just ask all the traders that traded during the SNB crisis last year) could easily wipe out your account and then some for any account size below $10K. And I will tell you for news trading, the best brokers are LMAX and IB; they are the only ones that satisfy all three of your requirements but unfortunately...
Thanks for the detailed answer. Just couple of things. What makes you think if one does not have 10k to trade, he/she shouldn't trade the news? I'll be honest. I'm planning to start trading with 1000$. That's the most I can afford right now. Also, I think trading the news is not so much different than regular trading. Yes, the market can be extremely volatile with huge price swigns like you said but..you can manage your risk and position size like you usually do. Not over leverage your position and you'll be fine. Although my strategy allows me to use high leverage because it's nearly impossible to lose with it in the long run. Well, it's possile to lose but since winning positions are at least 5 times bigger than losing ones a.k.a. 1:5 risk/reward ratio, it's a winning strategy in the long run. But for the strategy to work, the broker is critical. Also, spread is not a problem for me. I have a way to circumvent this little bugger. And one more thing. If LMAX is true ECN, then why they don't allow trading the news? As far as I know, true ECN brokers get their fair share from traders through commissions. So they should be interested in trader making money no matter if he's news trader or not. It doesn't make any sense to me.
  • #5
  • Jun 12, 2016 7:45am Jun 12, 2016 7:45am
Because LMAX wants to protect their liquidity. Their LPs are quoting firm liquidity with no last-look, in turn lmax is "policing" the flow for toxicity. If they wouldnt do that, many LPs would probably stop quoting there all together, impacting the bulk of their "normal" clients.

As far as i know that doesnt concern point-and-click traders but colocated HFT clients. On the plus side, they dont cancel and trades or profits, but may ask you to stop trading with them.
  • #6
  • Jun 12, 2016 7:57am Jun 12, 2016 7:57am
What if my trade volume is no more than couple lots per trade? Would they still ask me to stop trading the news? Cause I don't think such volume would do any noticeable difference. Also, how much does LMAX usually give news traders before asking them to stop trading news events?
  • #7
  • Jun 12, 2016 9:00am Jun 12, 2016 9:00am
I dont know, just send them an email and ask.
  • #8
  • Jun 21, 2016 12:42am Jun 21, 2016 12:42am
Quoting Dual
{quote} Thanks for the detailed answer. Just couple of things. What makes you think if one does not have 10k to trade, he/she shouldn't trade the news? I'll be honest. I'm planning to start trading with 1000$. That's the most I can afford right now. Also, I think trading the news is not so much different than regular trading. Yes, the market can be extremely volatile with huge price swigns like you said but..you can manage your risk and position size like you usually do. Not over leverage your position and you'll be fine. Although my strategy allows...
The problem with news trading is that, the normal risk/reward ratio goes out of the door and there is no way to control it because 1) there is no way to predict how much loss can potentially result from an unfavourable news or economic number. You think you can have a 1:5 risk/reward ratio but when it's a really bad number, you could be facing 2:5 or 5:5 or worse 10:5 risk/reward ratio with the last one being the loss completely overwhelming winning and there is no way to predict or forecast that and every single news and economic number is different. 2) It's further complicated by the fact that you also have no control over liquidity which can worsen further an already unfavourable risk/reward ratio because during news trading time. Whatever liquidity you see during normal trading times does NOT apply during news or economic number times. Liquidity can dry up which means any mechanisms that you put in place to control losses is also out of the door. Take the Jan. 15 SNB crisis last year for example, when the explosive news hit, majority of the traders had stop-loss orders in place that if executed would have limited their losses to the risk/reward of their ratio of their choice. But you know what happened? ALL of the liquidity providers, aka those "Big Banks" all decided to shut down their quote system and stopped executing orders altogether for AN HOUR!! And the price just free-falled until when they come back to quote prices, the EUR has dropped against CHF so much that it was well out of the risk/reward ratio of those traders' choice. The spread was several thousand pips!! Some of the traders who were actually on the right side of the market even ended up in losses. Some traders were facing ten's and thousand's dollars of losses. One trader was even facing 100K's of losses and all they had was micro, mini-lot positions because they were all small capital traders just like you with only thousand or several thousand dollars of capital at most in their account. And all of sudden they were facing ten's and thousand's dollars of losses.

This is why I say it's NOT worth it to trade news especially if you are thinly capitalized. When you profit, you are not going to profit much with those micro, mini-lot positions but when you lose, you could be on the hook for HUGE losses even from those tiny positions. And this is the same no matter which broker you go with, whether it's MM or ECN because ultimately they all face the same liquidity providers which control the market. Retail Forex is NOT traded on an exchange where prices are determined by matched transactions but set by negotiations between buyers and sellers in a transactions and in such negotiations, guess who has the bargaining power? Trillion-dollar financial powerhouse like Deutch Bank or $1000-trading capital retail traders like you? At least if you have more trading capital like at least 5 figures, you MIGHT and I can only say MIGHT be better positioned to absorb any losses from those sudden movements but with just $1000, it's very dangerous and all for just small potential profit if you compare to potentially HUGE losses.
Make your losses in demo. Earn your profits live.
  • #9
  • Jun 21, 2016 2:23am Jun 21, 2016 2:23am
Forexia, very well put! I just want to add something else on the top of that.

Do trade AFTER the news. Immediately when the spread cools off. Usually 1-2 mins after the release. Some nice remains are there for the small folks...
Maadik Hugiis. IQ 69.
  • #10
  • Jun 21, 2016 9:05am Jun 21, 2016 9:05am
News trading is strictly no no. Avoid the bad habit. You may make money once but one day it will blow your account.
  • #11
  • Edited 4:54am Aug 11, 2016 4:31am | Edited 4:54am
Looks like Forexia was right. Just recently traded NZD cash rate. The forecast was that rates will be cut from 2.25 to 2.0. So I sold the rumor couple minutes before the release. I also placed pending buy order in case the rates would be left the same and price would go up. So just before the release, the price went down by 30 pips in my favour. Only to find out that it was fake breakout just before the release and then price went up by 100 pips in one minute. My pending buy order of course was never executed and my stop-loss for sell order was also ignored. Tried to manually close the order but it was rejected numerous times untill the losses were 100 pips where it didn't matter anymore. Lost 50% of my account in a matter of seconds. But what infuriated me the most is that the rates were actually cut but the NZD went up like a motherfucker. I'm sorry but where the fuck is logic in all this? Since when the currency goes up when the rates are cut??

Starting to think that trading after the news release would make more sense. Just like MoneyZilla said. But the problem is that I fail to see any patterns and logic behind maket behavior just after the news release. Let's say after huge impulse down, the market will be retracing for couple hours to the initial price just before the news. But sometimes it will keep going down and won't retrace. It's like 50/50. Is there some strategy trading just after the news? Maybe there are some signals from price action that could tell us where the price might go after the news release?

Anyway, any suggestions for the next interest rate decision trade? Lol
  • #12
  • Aug 12, 2016 5:49am Aug 12, 2016 5:49am
dukascopy is a good pick, you can give it a try. The only difficulty is will account opening, since its run by a bank they too much strict compared to other brokers. Goodluck
the bigger the raise the bigger the fall
  • #13
  • Aug 12, 2016 7:08am Aug 12, 2016 7:08am
Quoting Dual
Looks like Forexia was right. Just recently traded NZD cash rate. The forecast was that rates will be cut from 2.25 to 2.0. So I sold the rumor couple minutes before the release. I also placed pending buy order in case the rates would be left the same and price would go up. So just before the release, the price went down by 30 pips in my favour. Only to find out that it was fake breakout just before the release and then price went up by 100 pips in one minute. My pending buy order of course was never executed and my stop-loss for sell order was...
Trading news before release is great way to lose all money, better go to casino, there's more fun If you want to trade news, do it one minute after release, when you can measure risk. Rates cut was expected by market and was already in price, so it's nothing strange that market went up as it was in upper trend. If you trade most important news before release you must expect 100 pips loss...
  • #14
  • Aug 17, 2016 3:28pm Aug 17, 2016 3:28pm
In my opinion there is always a risk of incorrect executive of your bids during trading the news. And also I think it is more safe that as I’ve been told there is an opportunity of some brokers to trade with fixed spreads so you will know your risks in advance and you will stop in time. I think that good chance to test your broker on trading the news was Brexit that’s how you would know should you trust or better go
  • #15
  • Nov 2, 2016 4:18am Nov 2, 2016 4:18am
Hi,

As a new member I can't start a thread so I'm posting this here: Last night I tried trading the NZD Unemployment report and got slippage of approximately 300 pips (NZDUSD pair). I'm new to live trading but I understand 300 pips is completely unacceptable, even for a news event. I had used a Buy Stop order and it didn't get filled until the end of the news event. In fact, according to the chart, price didn't even reach the point where I was filled, the difference being 70 pips. I ended up being stopped out at my original Stop Level for a loss of more than 8 times my intended risk.

So I have a few questions. Can this be a one off kind of thing? Is it because it was a very slow period (beginning of the Asian markets)? Should I give my broker another chance? Should they feel obliged to reimburse me for such poor service? Is there anything I should do in regards to reporting them to someone?

I emailed them last night and am still awaiting a reply.

Cheers
  • #16
  • Nov 2, 2016 5:24am Nov 2, 2016 5:24am
Who is your broker CoalF?
That is outrageous slippage.
  • #17
  • Nov 2, 2016 6:10am Nov 2, 2016 6:10am
I've just received this response:
Quote
Technically, everything went right. Slippage can not be avoided with such a movement.

The stop buy order is triggered and executed at the nearest tradable price.
  • #18
  • Nov 2, 2016 6:44am Nov 2, 2016 6:44am
Quoting CoalF
Hi, As a new member I can't start a thread so I'm posting this here: Last night I tried trading the NZD Unemployment report and got slippage of approximately 300 pips (NZDUSD pair). I'm new to live trading but I understand 300 pips is completely unacceptable, even for a news event. I had used a Buy Stop order and it didn't get filled until the end of the news event. In fact, according to the chart, price didn't even reach the point where I was filled, the difference being 70 pips. I ended up being stopped out at my original Stop Level for a loss...

I can see that you're talking about 30 pips slippage, which is 300 points and it's exactly you should get with this trade, it's very important news for NZD and liquidity is very low due to news and time. At the beginning all trades are made by robots and then your trade can be executed. For this kind of events you should consider 50-100pips loss (500-1000 points). Your buy stop should be executed at 0.7222 plus spread (5-16 pips for good popular brokers as IC Markets, Pepperstone, LMAX, Tickmill), so this trade could be executed even at 0.7238 which it totally normal. Strange fact is that you were stop out... Where did you put stop loss?
  • #19
  • Nov 2, 2016 6:50am Nov 2, 2016 6:50am
Quoting insomniawawa
{quote} I can see that you're talking about 30 pips slippage, which is 300 points and it's exactly you should get with this trade, it's very important news for NZD and liquidity is very low due to news and time. Your buy stop should be executed at 0.7222 plus spread (5-16 pips for good popular brokers as IC Markets, Pepperstone, LMAX, Tickmill), so this trade could be executed even at 0.7238 which it totally normal. Strange fact is that you were stop out... Where did you put stop loss?
I placed a buy stop at 0.71926 and a stop loss at around 0.71856. My order was executed at 0.72276 and I was stopped out at 0.71947, which was above my original buy stop.
  • #20
  • Nov 2, 2016 7:41am Nov 2, 2016 7:41am
If this is exactly what should have happened with this trade, then is news trading not viable? Or did I just choose the wrong event and the wrong time? I've read elsewhere that 30 pips (300 points) is not acceptable for slippage, were they wrong?

Another thing is, this kind of slippage never happened with my demo account, not even close. If it had, I wouldn't have bothered trying it live.

Thanks for your help.
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