FOREX ---A sure thing, YES the holy grail?

Discussion in 'Forex' started by austin spare, Sep 17, 2005.

  1. mirtex


    Just go on, make few demo accounts at several dealers, open their platforms in few windows, sort them on the screen and wait for news to be released. Then watch quotes from each dealer moving. That may answer you if that will or will not work.

    Personal experience is what counts.
    #11     Sep 17, 2005
  2. i personally do not arb the news but several people i know have told me that in the past year "the edge" you speak of has been greatly diminished if not totally eliminated. like the previous poster stated test it yourself instead of relying upon others advice.
    #12     Sep 17, 2005
  3. Thanks ! I was wondering why this guy who supposedly made several million with this method was so anxious to share it with me. I guess you answered my question.... it worked once but no longer does.

    #13     Sep 17, 2005
  4. But he still has the house and the car....

    Good trading to you Austin Spare :)

    #14     Sep 17, 2005
  5. skepticaltrader

    skepticaltrader Guest

    I think its entirely possible since I've been able to do it on occasion. I trade with FXCM and they sometimes lag some of the other dealers quotes.

    If you use e-signal (like I do) for you Forex data. You are getting data from over 100 banks. FXCM only uses something around 14 or so.

    If you watch the data from e-signal real carefully. You can observe that when a fundamental announcement, (such as Payrolls) is read, there will usually be some banks jumping on the news first and FXCM will lag behind these.

    The hard part about this technique is, (at least in my account) is that I usually get an error message window stating that the market price has moved against me, even though I am just placing a market order. My execution should be placed immediately, but there is always some hesistation due to the fact that FXCM doesn't want me to get the best possible price. I normally have to go back and try to enter again and by the time I try and enter a position again is that the price has moved another 40 pips or so against me.

    The bottom line is that you have to have quick reflexes and for your brokerage account to allow you to jump into a position qucickly after the payroll numbers are read.
    #15     Sep 17, 2005
  6. Most Forex dealers are not happy providing a service to traders and making the spread.

    The various things they do, like explained here, is just one example.

    My dealer simply widens the spreads, before the news event making it unattractive.

    Remember, that your Retail Spot Forex dealer, provides you HIS quotes, HIS executions and decides YOUR world without regulation in the secondary market he is representing or creating.

    These issues usually chase away most traders who have learned to live with standardized quotes and trade through execution reliability.

    When you start cutting into your Forex Dealers unfair world he is presenting to you, by beating him at his own game...your out!

    There is soooo much money to be made in Forex, while keeping your dealer happy, why bother with methods that are not beneficial to your future. I find that Retail Spot Forex is a longer term play and is a balancing act that any trader can learn...There simply is just an incredible amount of money to be taken, its just how efficient you choose to be, for further refinement.

    As you grow in dollars traded, the issues being discussed may face the trader sooner than later...where in equities usually size and liquidity become the issues first.

    The bottom line is that you have to have quick reflexes and for your brokerage account to allow you to jump into a position qucickly after the payroll numbers are read.
    #16     Sep 17, 2005
  7. ES basically said it in a nutshell, I don't see how anyone could get away with this for long with an fx broker, they will implement all they can to cover their asses on days like those. I'd be damned afraid of submitting market orders with any platform on employment fridays, much less with a bucketshop trying to take my money. "Arbitrage not allowed." -- wtf is that? :)
    #17     Sep 17, 2005
  8. 9th Gate

    9th Gate

    With FX brokers like FXCM there is no way to be quick enough. Let me explain my trade results from 4/1/05 (Friday) in the EUR/USD.

    Prices moved so quickly that the charts reached prices that were never even displayed on their trading platform. I would love to see time&sales from their platform, but it does not matter when the prices reached are quotes and not actual prices where buyers and sellers matched I guess.

    The chart I included is on 5min bars. My original plan to attack this market was to go long without a tight stop and use a loose stop with a profit target. I later revised my stop loss to a tight stop loss. Well the down wick of that red bar before the huge up green bar caught my stop loss, I then tried to enter the market after the high was broken of the red bar. From the time I saw the high broken by say 3 pips to the time I entered the order through the platform the price had risen drastically. I didn't get the price that was showing on the platform at the time. Guess what price I got ? Just off the high of the green bar & the stop entered with that order was hit almost immediately.

    Good news is that the losses of that day caused me to rethink and change my trade plan to avoid these situations, however I just wanted to show you guys an example of what you may encounter.
    #18     Sep 18, 2005
  9. 9th Gate

    9th Gate

    #19     Sep 18, 2005
  10. firedave


    Well, I think this on is called The Pay Roll trading system and it's available on Ebay. The basic idea is to use Oanda as the fast chart and give the hunch where the price will go, then use 2 RefcoFX accounts to execute the trade, one account to use if the price go up at the Oanda chart mean buy, and the other account to use if the price go down at the Oanda chart mean sell. Open all three trading platform together, so the trade could be execute as fast as possible. I never try this strategy, so can't tell if Oanda chart is faster than RefcoFX price quote. Anybody like to try ? :D
    #20     Sep 18, 2005