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Getting Around your broker

  • #21
  • Aug 27, 2006 5:27pm Aug 27, 2006 5:27pm
Quoting Turveyd
alpignolo

Question, where you taking advantage of the FXCM Delay at news time ?? on the News ??

Cause I'm making a killing there, bet they'll put me to Manual to some day soon

Seems to confirm FXCM make money from us losing, so not good long term if your profitable then, so all this hassle and finally profitable ish might be broker less
Don't be naive! If you're not yet on manual execution it only means that you didn't profit enough to be seen as a menace. If you keep taking advantage of their quote delay during news events you will soon be seing a window saying "waiting for dealer's answer". From that point on it will take 10 seconds or more before your orders get accepted. I remember waiting at least 2 minutes during the last GBP rate hike for my order to get accepted.

One of my friends opened an account with them in July and deposited $5.000. The only thing he ever traded was the NFP in Augsut. He made about 250% profit and walked away after that because he was immediately put on manual execution. Once you make a big profit or when they see you profit regulary from news events they will try to prevent you from doing so in the future by putting you on manual execution!

Quoting BurgerKing
Here is something to laugh at:
Doesn't that banner link to the Propfx platform which is also from FXCM? If the ad is really for FXCM then indeed we should laugh out loud.
  • #22
  • Aug 27, 2006 7:37pm Aug 27, 2006 7:37pm
Hi Zed, can you explain how the 250% was achieved from the August 4th NFP trade? which currency pair and how many lots? I ask because I was looking at FXCM site and it says 200:1 is the leverage... and I cannot figure out how an account could have been more than tripled at that leverage. thanks.

Quoting ZedHashPip
One of my friends opened an account with them in July and deposited $5.000. The only thing he ever traded was the NFP in Augsut. He made about 250% profit and walked away after that because he was immediately put on manual execution. Once you make a big profit or when they see you profit regulary from news events they will try to prevent you from doing so in the future by putting you on manual execution!
  • #23
  • Aug 27, 2006 8:21pm Aug 27, 2006 8:21pm
Quoting ycomp
Hi Zed, can you explain how the 250% was achieved from the August 4th NFP trade? which currency pair and how many lots? I ask because I was looking at FXCM site and it says 200:1 is the leverage... and I cannot figure out how an account could have been more than tripled at that leverage. thanks.
I know it sounds impossible.

He went long on the GBP/USD and used 9 lots. He entered just before the market moved. He made close to 90 pip in the trade.

$90 x about 90 pip = about $8.100

At the end of the day he had about $13.100 on his account. He may not have tripled his account, but he almost did.

EDIT:

My bad it should have been about 150% in my first post...
  • #24
  • Aug 27, 2006 8:59pm Aug 27, 2006 8:59pm
Zed, thanks for the explanation..

but I still can't figure out how he can place 9 lots on GBPUSD with only $5000 at 200:1 (0.5%) leverage. With 400:1 I can see... but I can't find on the FXCM page that it offers 400:1.

For 9 lots I think that would require more than $8000 margin at 200:1 for GBP (if I'm doing my calculations correctly)
  • #25
  • Aug 27, 2006 9:13pm Aug 27, 2006 9:13pm
Cant get around this broker so easily. They use MT4 and i get reqoutes alot during Eco Releases...even with the maximum deviation number set
  • #26
  • Aug 27, 2006 9:22pm Aug 27, 2006 9:22pm
Quoting ycomp
Zed, thanks for the explanation..

but I still can't figure out how he can place 9 lots on GBPUSD with only $5000 at 200:1 (0.5%) leverage. With 400:1 I can see... but I can't find on the FXCM page that it offers 400:1.

For 9 lots I think that would require more than $8000 margin at 200:1 for GBP (if I'm doing my calculations correctly)
if MY calculations are right:
900,000/200 = $4500.....

5000-4500 = $500 free margin. Req margin= $5,000 *.02 = $100

so it is quite posible
  • #27
  • Aug 27, 2006 9:35pm Aug 27, 2006 9:35pm
I see... I knew I was missing something.. I am just reading now that it is $50 per Lot margin... that is weird... I thought margin for GBP, EUR, etc. is usually based on price. Is it just FXCM that does this "fixed price margin per lot" thing or are there a lot of brokers that do this?

Quoting don perry
if MY calculations are right:
900,000/200 = $4500.....

5000-4500 = $500 free margin. Req margin= $5,000 *.02 = $100

so it is quite posible
  • #28
  • Aug 27, 2006 10:12pm Aug 27, 2006 10:12pm
I'm not sure. I know pip values are calculated based on the cross currency value to the USD.
  • #29
  • Aug 28, 2006 2:06am Aug 28, 2006 2:06am
Quoting ycomp
I see... I knew I was missing something.. I am just reading now that it is $50 per Lot margin... that is weird... I thought margin for GBP, EUR, etc. is usually based on price. Is it just FXCM that does this "fixed price margin per lot" thing or are there a lot of brokers that do this?


Over at FXCM, lots have fix dollar value $10K for the mini and $100K for the standard - then divide that by the leverage to get the amount needed to open the position.

There is also another company NorthFinance that does this and have 500:1 leverage to boot too.

I'd rather not recommend FXCM for news traders - unless you want to donate some money to them.
  • #30
  • Aug 28, 2006 2:27am Aug 28, 2006 2:27am
Quoting CURRENCYANALYST
I use fxsolutions thru an IB called proedgefx I have no problem trading anytime.. My backup is with a clearing firm here in florida called afxi they charge a commission and have a low spread but I can trade anytime without a shut-out or dynamic spread shock..
http://afxi.com/
http://afxi.com/faq-home.htm
http://www.elitetrader.com/vb/showth...threadid=75653

Can you give a review on your trading through AFXI?

Thanks
  • #31
  • Aug 29, 2006 11:39am Aug 29, 2006 11:39am
Quoting mrmikal
There are plenty of reasons to go with an ECN...one of the being (and I think probably THE most important thing) is being able to trade inside the spread.

So what if the spread widens? Just place your order inside the spread and be your own market maker. You may not get a fill, but in all honesty...you probably will...so why harp about the spread widening?

If your "ECN" doesn't let you trade inside the spread, then they are obviously not an ECN...
Hello mrmikal,

Question:
If you knew what direction you were going before the news, why bother waiting for the spreads to widen??? Once the news is out you really get filled on a stop limit below a merket price that is spiking up???
Profit is where readiness meets Opportunity
  • #32
  • Aug 29, 2006 12:33pm Aug 29, 2006 12:33pm
Quoting ycomp
Zed, thanks for the explanation..

but I still can't figure out how he can place 9 lots on GBPUSD with only $5000 at 200:1 (0.5%) leverage. With 400:1 I can see... but I can't find on the FXCM page that it offers 400:1.

For 9 lots I think that would require more than $8000 margin at 200:1 for GBP (if I'm doing my calculations correctly)
ycomp,

No, you're not crazy! You're calculations on margin are absolutely correct - except that FXCM must do it differently. In effect, it seems that you can get triple or more leverage with FXCM because of how they calculate margin. However, I'm sure there's something in their fineprint somewhere that mitigates this.

For other newbies out there, margin is calculated based on the BASE currency. In the case of GBPUSD, here's the formula:

Number of Lots * Lot Value * Leverage

OR

9 * 100,000 * (1/200) = 4500

BUT, we're not done. This is the margin in the base currency, which is Pounds. We now need to convert this to USD, if we hold our account in USD. So we need to do some more multiplication:

Base Margin * Currency Rate

OR

4500 * 1.89XX = $8,505.

stockwet
  • #33
  • Aug 29, 2006 12:40pm Aug 29, 2006 12:40pm
thanks Stock, yeah I figured it out eventually... I just didn't realize that some brokers had flat margin.. irrespective of price. It really caught me offguard since I'm used to MetaTrader.
  • #34
  • Aug 29, 2006 12:45pm Aug 29, 2006 12:45pm
Quoting FXopportunist
Hello mrmikal,

Question:
If you knew what direction you were going before the news, why bother waiting for the spreads to widen??? Once the news is out you really get filled on a stop limit below a merket price that is spiking up???
There is a difference between expectation, mood and actual numbers. What I was referring to is the expected reaction based on actual numbers. If the feeling is that generally positive numbers will result in a certain type of reaction, then that's worth trading...however, if you don't know the actual numbers, then you put yourself at risk of being severely wrong in case the actuals don't match up.

The goal of news trading is to determine how numbers will affect the spikes.

In all honesty, I actually do get in a trade 15-30 minutes before the actuals come out. I typically purchase a hedged pair (1 short and 1 long) and then all I have to do is close the losing position when the numbers come out. This costs more in the spread, but it prevents me from not being able to get into a trade. Getting out is easy...getting in is where it gets fuzzy.
  • #35
  • Aug 29, 2006 12:52pm Aug 29, 2006 12:52pm
Quoting mrmikal
There is a difference between expectation, mood and actual numbers. What I was referring to is the expected reaction based on actual numbers. If the feeling is that generally positive numbers will result in a certain type of reaction, then that's worth trading...however, if you don't know the actual numbers, then you put yourself at risk of being severely wrong in case the actuals don't match up.

The goal of news trading is to determine how numbers will affect the spikes.

In all honesty, I actually do get in a trade 15-30 minutes before the actuals come out. I typically purchase a hedged pair (1 short and 1 long) and then all I have to do is close the losing position when the numbers come out. This costs more in the spread, but it prevents me from not being able to get into a trade. Getting out is easy...getting in is where it gets fuzzy.
A few of us were talking about the hedge strategy today. How much slippage are you getting?? are you using stops to exit the losers or market orders?
Profit is where readiness meets Opportunity
  • #36
  • Aug 31, 2006 8:57pm Aug 31, 2006 8:57pm
mrmikal


What type of stop loss do you use when you get in before an event. Fixed or trailing, % or S&R or something else.
  • #37
  • Aug 31, 2006 9:22pm Aug 31, 2006 9:22pm
Quoting mrmikal
In all honesty, I actually do get in a trade 15-30 minutes before the actuals come out. I typically purchase a hedged pair (1 short and 1 long) and then all I have to do is close the losing position when the numbers come out. This costs more in the spread, but it prevents me from not being able to get into a trade. Getting out is easy...getting in is where it gets fuzzy.
This is a good way to enter the trade for brokers who does not allow you to trade during news such as FXCM. However, dont do this for brokers that shuts down their servers for several minutes after the news as you wont be able to close the losing hedge position.

Though it cost more in spreads, however, if one were to consider the slippage, hedging is the better option to go.
  • #38
  • Aug 31, 2006 9:30pm Aug 31, 2006 9:30pm
Quoting bapxyz
mrmikal


What type of stop loss do you use when you get in before an event. Fixed or trailing, % or S&R or something else.
None...that's what the hedge is for...I don't lose anything as the price moves. As soon as I can determine the direction, I go ahead and drop the losing position.

As far as slippage goes, yeah, sometimes I do experience slippage. Sometimes it works in my favor.

This system doesn't work all the time...there are some cases where the price will stall and reverse...that's what makes it hard.
  • #39
  • Sep 1, 2006 2:49pm Sep 1, 2006 2:49pm
HMMMMMM!

That might have worked well for me this morning on the NFP.
Actually I would have been just fine except I thought that a 20point trailng stop would be fine for the first ten minutes or so. That will teach me to think. I was able to get back in and save about 1/3 of my pips.

I still feel stupid.

Thanks for the info I plan on back testing this weekend to see if I can make it work for me.
  • #40
  • Sep 2, 2006 5:29pm Sep 2, 2006 5:29pm
Bapxyz, wasn't a normal NFP, news got leaked 30seconds earlier, then people thought it was a fake move and went Long, then everyone else got the news and down it went.

I got on it short at the bottom, in and it stalled, then flipped long and made back my points but 3, so all thats for -3pips LOL

Then I was too untrusting / freaked to get back in, sadly as it performed perfectly with my system
Nothing to it, but to do it!!! Stick to the plan FOOL!!!!
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