FXCM hmmmmmmm.

saschabr,

Can they play this dirty trick ? For example, if I had a stop loss on a long position. Can they drop the bid and trigger my stop loss and then move the bid back up since they have such a wide spread ? Or are there safeguard regulations in place so they can't do that ?

 

WinSum - we meet here as well .
I would recommend you to read the thread I linked to earlier. I mentioned about how broket can "shave" your stop - and whats even more important - why trader shouldnt be botheres with this fact. Its all there.
Good Luck.

 

That's because Refco owns 25% in FXCM.

 

These two have same platform - if you have accounts with both - all you do is change login and pass - and you're there. Refco and FXCM are the same. Except for refco has much bigger capitalzation. The rest - no difference - same chatring, same live customer support, same quotes - like twins.

 

refco is a monster, that is one of the reasons i feel very safe with FXCM.

best,

surfer

 

Of course they can do it. It is their exclusive order flow,
they see every order. They know, you have
not the chance of closing your pos elsewhere.
Due to the high spread they have
always 2 or 3, sometimes 4 pips "room" for mistreating
you. The FX market is totally unregulated, so you will have
no chance of getting justice. The only alternative is an
open market, like FX futures.
When you try hit the bid with 30 contracts, on some
platforms you will often get a so called "timeout", in
your next quote request, the bid is 3 pips lower, of course,
what else did you expect ?

IMPORTANT: I DO NOT ADDRESS FXCM OR ANY SPECIFIC FX
FIRM.

 

I've worked out that on a 5 point spread they actually have 8 without ever moving outside the underlying, because of price skew. So the effective cost of placing an order for 1 lot ($100,000 USD) is $80 instead of the $50 spread.

I've been down this road before dealing with spreadbet firms, and they can be very deadly. The only way to beat them is to play the game in such a way that they can't hurt you too much and that means swing trading against them. They will still skew their prices against their customers anyway, and take money out of them, but if you are sitting on a 50-100+ pip profit they can only do so much damage...

Nitro asked the question in the chat log do they ever take the other side against their customers and the answer was an emphatic NO!, which I'm sorry, but I fail to believe that to be the case. I find it very hard to believe that they offset all orders into the markets, but rather more likely take the other side and offset some as necessary, on the basis that their traders are pretty clued up and know plenty of tricks that I will never know. (i.e. manage their risk better than I could...).

The more I look, the more I think I am looking at a total racket. Hmmmmm:eek:

Natalie

 

I've traded stocks (mostly), futures, and demo'd currencies off and on for a while.

Does a market exist where the market makers don't gun stops or trade against their customers in some fashion?

I doubt it.

 

In currency futures this cannot be done since no one knows
your position and your stops.

 

I would agree that market makers do this (and pit traders), but the claim here is that these guys are brokers, and not making a market...

Best

Natalie