Hello everyone, I have found that when I place a limit order in forex it doesn't get filled the way I thought. For example, if I send a buy limit order of 0.83276, I see that the order is executed at 0.83276 when the best bid is way below that. That means that I'm still paying the spread, so limit orders in the forex markets are pretty much useless. Is there a way to avoid this? Does this prove that ECN is fake and that at the end of the day it's always the broker the counterpart of your trade? It looks to me that unless someone has millions of dollars and accesses the real interbank market, forex is a scam. There is no way of avoiding the huge conflict of interest of having the broker the counterpart of your trades and having them losing money when you make money. It sucks because trading in real markets, like futures, require way bigger capitals. Please correct me if I'm wrong.
In forex, even with an ECN broker, you still have to deal with the spread... that’s just how the market works Your buy limit gets filled at the ask price, not the bid, so you’re still paying the spread. It doesn’t mean ECN is fake, but yeah, retail traders don’t get direct interbank access like big institutions do. If you want zero spread issues, futures might be better, but they do need more capital.
I see. Well, many people think ECN means you are trading directly with other traders, while you are still trading against your "broker" (which isn't even a broker in the real sense of the word). What's the difference between ECN and STP then?
From what I understand forex is always, as Goldover pointed out, buy on the ask - sell on the bid. ECN's I believe just offer, for a commission fee per trade, much narrower overall spreads. Currency futures on the other hand allows a trader to trade within the spread, account funds safety and oversight regulation.
Careful what you wish for. In retail, your legal counterparty is always the broker (futures excepted) which beats worrying about counterparty risk and having to hedge it off via options. How brokers handle orders differs - true spot such as IB is the polar opposite to a/b booking your trades. Some in the middle offer ECN/STP. ECN supposedly cheaper, and deeper liquidity. In reality, virtually nada and seem to be used interchangeably. Ignore the complaints of it's all a scam. Compare price and execution against inst. feed you'll find the better brokers are marginal in difference except at end of day. It's all in the strategy
Well, these "brokers" have the power of deleting your profits at their discretion, it's written in their terms and conditions; if this is not potentially a scam I don't know how to call it. Sure, if you trade in a way that allows both of you and them to make money you will have no problem, but why would a trader think about this? It's crazy. The conflict of interest is a huge drawback in using those brokers. As for IB, do you know if there is a way to use leverage with real spot? It doesn't allow me. Also, in real spot do we still always buy at the ask and sell at the bid or is it like for futures? If I put a limit order would I be able to save the spread?
I've never seen any T&Cs that disallow anything except usual 'unfair' practices; arbing faster than they can lay off will usually get their goat. re limits, I'm not sure what you're asking - set a limit at the bid and hope it hits, and if it slips it'll only slip in your favour and you don't cross the market. If they're not passing on positive slippage then that's a red flag. FXCM were fined and booted out of US for same. Sounds like you're converting rather than routing through IdealPro. But you sure about spot? You ready to accept delivery of all these foreign currencies and convert them accordingly? Accept flash crash risk with no protection? IB spot is a headache with benefits. They also do CFDs but you need to ask.
If I set a limit at the bid and I get filled only when the price has gone lower than that, that will make me pay the spread just the same way I would pay it with a normal market order, therefore limit order don't really exist in CFD forex. Why would I care? Because I could save a little of commissions by earning the spread. What's the difference between converting and routing through IdealPro?
you can become a liquidity provider. https://www.cmegroup.com/markets/ebs.html https://www.cmegroup.com/trading/ma...s-liquidity-provider-eligibility-criteria.pdf