Forex broker

Discussion in 'Retail Brokers' started by clarodina, Jul 14, 2008.

  1. Why do most forex platform does not allow putting limit order on current ask or bid price? Most of them require limit order to be place a variable pips (more than 10 pips) away from the current ask or bid price. Is this a rule which vary in each broker? Does anyone one know forex broker which accept limit on current ask price (trade like equities). If ask price is 1.9912 than possible to put in a limit order like 1.9911.

    Any broker which has following features:

    0.5 - 1 pip spread
    api for datafeed and order
    support third party software order rerouting from tradestation or multichart, ninja
    bracket orders
    free or minimum wire transfer fees
  2. Nagelis


    Because the vast majority of FX brokers are pathetic little bucket shops who make absolutely sure they will not run any risk to lose money on any single trade... They need to make a spread!

    I use Saxo and IB. No problem at all there to leave limit orders there close to or even inside bid-ask!!

    If you trade a lot (like I do) leaving orders close to the market, Buttontrader as a front is by far the best/easiest/ most efficient solution... BT however only connects to IB.
  3. Hi whats your experience with saxo bank on eurusd spread? They charge commission on if trading below some volumes right ... do they offer api? Ib also charge commission. Fxcm has spread ard 3 for eurusd...
  4. Nagelis


    For FX, I think for retail users like ourselves, Saxo is by far the best choice. They are in fact a bank now, with proper oversight by the regulators in Europe. They have a reputation to defend and are here for the long term.

    Their platform is first class for fx: single click trading, with a proper and easy to use facility to leave conditional orders (if done, oco, etc). However, I don't think offer api (at least not that I am aware of). If you are a heavy user with decent turnover, they look after you and make sure you are happy in terms of spreads.

    As for the latter: default eur/usd spread is about 2-3 pips and you pay no commision (unless you trade in less than 50,000 USD or something like that). If your turnover is high, you will get a better spread. My turnover is about 50 Mln USD per day, and that means I do get a considerable better spread. My guess is you would already qualify for better spread if you turn over 10 M bucks per day on average...

    I do like IB a lot as well, but their fx platform is less efficient for scalping and high frequency trading (+ fx option trading is not offered which is a minus). This is solved by using ButtonTrader which is a fab tool. IB has much tighter spreads, but they charge you a hefty commission (depending on your turnover: for 1 BN usd turnover per month, you will pay about $ 20,000 commission, i.e. 0.2 pip in eur/usd per million eur)...

    good luck

  5. Nagelis


    And by the way Clarodina. I am a discretionary trader (20 years already), but now looking very much in detail to implement some autotrading models in FX alongside my discretionary trading activity.

    I got the models and rules all ready, I am just still in the process of selecting a good, trustworty, reliable backtesting and front end tool to implement my systematic trading... which can connect to IB. If you have some advice, I'd be interested to know.

    I have read several threads here as to what may be the best tool, such as Wealthbuilder/ Openquant / etc. However, I have absolutely no C++ programming skills and frankly not interested to spend a lot of time into learnign to program, as my bread and butter is to trade all day long... The tool needs to have a good library with most if not all chart studies...

  6. Multichart connect to IB. However u need to convert your rules into easylanguage. Have not try wealthbuilder or open quant. Strategy runner or ninja possible to connect to IB too...

    Btw whats your usual profit target? Cos wonder how high frequency trading capture profit? Have some system that has good equity curve. But when factoring slipage like 0.0001 for eurusd spread (Ask/Bid) the curve just opposite 45 slope down. If factoring commission like $2.5 per trade, a trader is for sure losing... High frequent trading average profit (for eur) for $100 profittarget and stoploss, the average profit is so small and is not possible to cover simple slipage like system give a sell at 1.9911 the filled price is 1.9910. Have u trade your frequent system real? how is the result?

    Btw there is another issue.. do u use chart base on ask or bid price or trade price cos the fill is different...
  7. does saxobank has disconnection from their server frequently? IB tws has this issue and this make auto trading highly impossible unless there is unlimited money.
  8. Nagelis


    The answer is not that straightforward.

    Momentum trading used to work very well in FX, but these days are definitely over. Right now I use a fading strategy purely on the back of short term charts and this works well in the present climate, depending also on the currency pairs you look at (I don't trade eur/usd anymore as it is imho not possible to have a consistent strategy in that pair).

    When fading, I use a standard amount and take profit after 15 -20 pips utmost. If the price doesnt go my way in a short time, I either stop and re-enter at a better rate OR I scale in the fade trade via a martingaling technique (depending on the level of confidence).

    Now here's the point which may interest you: I find IB much much better for this fading / hight frequency trading and very short term scalping strategies, as their prices are much more "honest" and true than Saxo's prices: Saxo tends not only to quote much larger spreads but also skews the prices to their own interest, which is not always a true representation of the real market (if you scalp for 10 pips and they quote 4 pips wide + on top of that skew the price against you, you will not easily make the 10 pips as the market almost needs to go 15-20 pips your way before you are in a position to make the 10 pips profit..., the latter seriously lowers your probability and indeed your equity curve). So some strategies won't work, depending on what broker you work with. This may be what you refer to as the fill on chart base or not.

    Bottom line: everything is a trade off: IB: better spreads, correct market pricing, possibility to connect with API, but more cumbersome platform for fx, no fx options and connectivity problems. Saxo: no connectivity problems and nice trading platform/front end/order system, but at times very bad and inconsistent pricing which can be very frustrating. It is for me absolutely certain that a complete autotrading tool will miss a lot of signals on Saxo, given the skew and larger spreads.