Hi folks. I am very new here and about to open a currenex account with ADM. I plan to do high frequency trading (scalping) with up to 50k funds (* leverage). I am aware of the risks market poses and have no general issues with that but while reading this forum I found several references to potentially fatal problems with the currenex platformt: 1) Huge slippage for @MKT price orders, this is when your order gets filled with +/- 30 pips (some reported it to be up to 130 pips). Is this still happening? How is it called in professional terms? How can a trader protect himself in such case (besides not trading @MKT at all)? 2) Bank reversals. How does this happen? I mean imagine you open a position, close it and then, sometimes later bank reverses one of the trades, leaving you with open position again???? What is if this happens 5 hours later when your newly reopened position lost 400 pips to the market??? Are there other "underwater stones" I should be aware of? Thanks!!
OK, after reading some more I understood that the slippages in orders might actually be normal market mechanisms, although this is still very hard to believe in 200 pips slips as I read in some other forums / threads. Is it more or less safe to assume that under normal market conditions major (10+) slips should not be an issue? And, isn't currenex platform by itself come with "ESP Protection Alert" feature to prevent exactly that scenario? I am still not clear regarding reversals, can bank reverse your position even after it gave you a fill or does the term reversal "just" means not honoring the bid/sell offer placed into the market? Thank you!!!!
Hi, one solution would be to use marketable limit orders instead of a market order. For example, if mkt is as 1.5510/1.5511 and you want to buy - submit a limit buy order at 1.5513 - this order should be executed immediately at 1.5511 - and in case of a fast move it will limit your slippage to 1.5513. So you would either be filled between 11 and 13 or not at all. That way you are not exposed to the risk of unlimited slippage and will still be filled 99% of the time. Unfortunately the currenex frontend is a pile of crp in my opinion, and that way of trading is not really convenient with it. As for the busted trades - no idea how ADM handles it. Judging by the numerous threads about it here, it appears it happens often on currenex - and that brokers rather piss off a trader than one of their liquidity providers.
Thanks Pippi, I think another name for reversals is "last look" (Please correct me if I am wrong people), as far as I understood, we are talking about milliseconds to seconds delay to fill. Even Vcap writes about this in their CAX FX promotion: http://www.caxforex.com/trading.html I requested ADM to give me official stance on this.. Will post it here. But if they really can reverse minutes or hours later, then this is real BS, I can just as well flush my money into toilet. I heard Hotspot FXi does not give banks chance to do reversal, is that true? Is there any broker which would open an FXi account for 25-50k deposit?
Hi, last-look means that if a market order is routed to a bank they can choose to not fill it - and it will be routed to the next bank in line, possibly at a worse price. A 'busted' or 'reversed ' trade means that a fill you already got will be undone at a later point in time - possibly leaving you with an unwanted open position. Every broker has a passage in their agreements ('clearly erroneous fill policy - or something like that). It means that the broker is allowed to correct deals done on an erroneous price. The keywords usually are 'in a timely fashion' and 'at the sole discretion of the broker'. ODL or London Capital Group will let you trade on HotspotFXi with that amount of money - maybe there are others, i don't know. On HS there are only limit orders (no market and no stop orders) - i guess that's one of the reasons they appear to have fewer problems with the aforementioned problems.
Thanks! So 'busted' trades happen on FXi as well? How nice that is. I also BET it happens only if your long forgotten unwanted position puts you in loss. Plus, this is exactly the case where one could end up in really deep debt. And it will not help to scalp in "market direction" ether, because opening position could be a subject to bust as well. Could anyone who saw this happening tell me if it was during news trading (high fluctuation) and how long did it took banks to perform reversal? Minutes? Hours? Days? A scalper opens and closes 10-20 positions daily so statistically he would be in much greater danger then slower trading person. Dang.
I've had busted trades before, and sometimes they happen at different brokers simultaneously. What varies is the length of time it takes for a broker to advise you of the issue. Once when it happened, Currenex advised me of the busted trade in about 15 minutes. I did the same trade at another broker who took several hours to advise me of the problem. From that broker I received compensation because of the unreasonable length of time that it took.
Did that happen during unstable markets and where those trades which got busted executed at some really special prices? How likely is it to get a trade busted if you "ride" the 6-10pip wave of the normal market with 2mil positions?
So you are placing a "MARKET" order and feel you have a right to complain about something you call slippage? IMO, there is no such thing as slippage on a market order. Place one at your own peril. Place one at a news event and your are just plain inexperienced. Especially since you are programatically executing, place a limit order with a price +- n pips from where you want your fill. If you dont, its laziness in your part and if the "true" market has not found itself after a news release, or if the true market is only in smalls and you want a larger amount, then you do not understand the forex market and you deserve the fill you get.
Yep, I already understood that rule (It is pretty new if you come from MM) No @MKT orders. AFAIK Hotspot (At least FXr) does support variable +/- pips spread for @LIM orders. This is much better.