chaos, When they widen out the spread, approx. how wide are you talking? Yesterday, for instance: 5, 10...15? I don't give a sh*t about paying up...I just don't want some BS re-quote 30 seconds after I put my order in.
Hi clandestine, Oanda is open for business 24/7. During weekends, when liquidity is low because most other brokers are closed, it widens the spread on the EURUSD, GBPUSD, USDJPY, USDCHF and several other pairs to 10 pips. The spreads begin to widen in the afternoon on Friday and reach 10 pips by 5:00 or so EST. Barring a major event, such as the capture of Saddam, the spreads remain at 10 pips until late Sunday, when they begin to return to normal. If a Saddam happens over the weekend, the spreads will widen further until the markets settle back down. They will also widen during regular spot forex trading hours (Sunday night through Friday at 5:00, nights included) in the event of a Saddam or a highly anticipated news event. I've never seen the EURUSD spread exceed 10 pips during regular hours, but it's possible that it has. Events that would cause the spread to widen like this during regular hours are very rare - they probably occur only a few times a year. Go the the Oanda.com site and you can read about how they calculate spreads. Well, they don't give up the algorithms, but they discuss their strategy. Some nights the EURUSD spread will widen from its normal 2 pips to 3 or 4 pips and the other majors may widen a pip or two as well. The USDJPY is normally 3 pips and may go to 4 or 5 pips. I assume this occurs because Oanda is responding to news somewhere in the world or liquidity has temporarily dropped, necessitating risk-averting action on their part. The way I look at it, spread-widening events are so rare they won't have a meaningful impact on my P&L. I don't need to open a trade at any given time and certainly not if the spread has become too wide for comfort. If something happens leading to wider spreads while I have a trade open, I will have to pay additional to close the trade. But so be it. It's a drop in the bucket. BTW, my style is to swing/position trade for 100-plus pips per trade and I rarely trade the news. Regarding what the spreads were yesterday leading up to and during the Greenspan speech, I'm not sure as I wasn't watching the market. Maybe someone here knows or you could ask on the Oanda forum. Regards, chaos
The FX market is more liquid normally than any other market, but even the actual FX Spot (Interbank) market thins out right before major economic releases and events. No one wants their orders sitting out there during potential 100+ pip moves. So how would these retail FX dealers be covering your orders? They would either have to take the other side, or have enough 'dumb money' retail customer orders that they can cross with yours if your playing major events. I could believe the latter, but I highly doubt they'd be willing to take the other side. I would have to agree with clandestine, paying up 10-20 pips is no problem in some situations, but re-quoting or not giving instant fill reports would be a major issue. Either way, it seems that people feel that Oanda and FXCM are the ones to check out.
OK...well if no more comments, then CONCLUSION: FX brokers = complete sham. Fill when convenient and/or beneficial to trade desk. Get filled if it's going in my ass? "SURE THING, SIR...WE HONOR OUR QUOTES, AND THAT'S THE PRICE YOU CLICKED ON" If not beneficial for desk, then REQUOTE. Challenge me on this. Anyone.
Clandestine, The FX brokers show prices they can't / won't fill many times and it is a joke at times. Wish they would widen the spread a little during volatile times instead. Plus their prices are whatever they want them to be = license to steal. Wonder how many here have tried to trade thru a bank instead of a broker? I will be trying Commerce Bank very shortly.....
I wonder why so many people use these bucketshops when they could be dealing direct with the market with currency futures? Is it because in forex you only need a small account?
roberk, Account size not the issue. Do you trade currency futures? How is the liquidity? Have you compared with a bank? Compared w/ Hotspot? Compared w/ fillintheblank broker?