Chood, I think we've covered much of this ground in the past. Not sure I'm keen to revisit it. Let me say this. Many of us are well aware of and have learned a great deal from your "experience" with Saxobank... However, that doesn't logically lead to broad, negative generalizations concerning all other industry players, and that's where I disagree with you. Let me address your points, in order: 1) the reputable, flexible-sizing dealer (not "bookie") in question doesn't get anywhere near setting the final price (not "score"). That's a deeply flawed analogy, from start to finish, and someone like you should know better than inject such sensational, biased language. As you know, by the very nature of the decentralized currency marketplace, there is no single, agreed-upon price at any given moment. There is only a narrow band of prices, at the bid and at the offer. As long as your dealer is consistently within that narrow band and does not practice any systematic bias based on factors such as your positions and pending orders, there's nothing rigged about that state of affairs. 2) "the bettor must loan the bookie more than 100% of his wager..." What more than 100%? Whether futures or cash, 2% or less of the trade size needs to be on deposit, to be able to put on that trade, thanks to the concept of margin. Second, it's the dealer that effectively lends you up to nearly the entire trade size (depending on your leverage), not the other way around. Sorry, but I have no clue what you're talking about here. 3) I am not urging anything on anyone. If anything, I actively discourage most people from pursuing a pie-in-the-sky dream of trading for a living. But if they absolutely must try their hand at currencies, with limited risk capital (as discussed above), my recommendation is as clear as can be: in most cases, a reputable flexible-sizing cash forex dealer would be a much smarter choice than currency futures, for reasons outlined in my previous post.
The trade size is not the wager, as you well know, which is why your reply is perplexing (and forced, I believe). A $300 mini account with a retailer leverages a high multiple of $300 and, to obtain that leverage, the customer risks most of the $300, leaving some leftover (I assume) so as to prevent an instant margin call that forces him out the trade within moments of opening it. The retailer is lending absolutely nothing, nada, zip: it's simply holding a betting slip -- a tiny wisp of cyberspace -- that converts to an account credit for the customer if the customer's trade bests and survives the retailer's pricing algorithms and bucketing practices. You appear to be saying that the retailer goes out and buys the currency in the customer's trade size, exposing itself to the risk of that position, protected by only the $300 in the mini account. What did I miss?
http://www.gummy-stuff.org/ gummy explains Kelly better than anyone else I've seen, including Ed Thorp. I agree!
no disrespect late apex but... what have we learned really? that so-called 'guaranteed' stops at retail shops might not be honoured where in chood's case the client is nowhere near retail size but goes to a retail shop because it seems one can straddle the news there in size and screw the retail broker big time... who on a huge market gap like NFP aug 2004 notably, won't be able to lay off the order even on CME - or shall i say, particularly on CME - other than at a huge loss... what a surprise really... i read loads of posts advocating common sense here, but i am not observing as much from the same posters (for avoidance of doubt, this is not directed at you late apex)
This view of the "lending" retailer is improbable, especially if you want to believe in the "honest" retailer story. It would require the (mythical) honest retailer to suffer the above-described risk merely for the "spread," meaning a few pips weighed against a possible loss greater than the mini account balance. In reality, and rationally, the retailer fairs better owing those mini-account customers whose trades survive its cyber-pricing than paying the counterparty it supposedly hedges its customers' trades with. What it earns from the losers more than pays for the winners. And all without the risk of actual trade-size with a counterparty. That's why it doesn't hedge. Again, nothing is lent, nothing is bought or sold, and nothing is delivered (certainly not the currency the customer trades). The retailer simply is holding a bet on its forex cyber-prices.
in any event, the ongoing developments and increased eFX volumes on the CME (and EurexUS?) are indeed a good and highly desirable thing, and do contribute to raising the standards even higher in the retail spot fx world... and its true that too many punters can still get scammed on HYIP-related offshore-headquartered swiss-domiciled etc etc recently established fx brokers that i wont mention by name... and should a situation like refco's arise, your monies are indeniably safer in the regulated (FCM) part of the business... however as late apex points out there are obvious advantages for newcomers to fx trading in starting via a number of carefully-chosen and pretty solid spot fx brokers... systematically flaming threads with poorly-informed views to the contrary serves no good purpose...
You mistake me for someone else, it appears. The problems I encountered with a retailer did not occur at or around news. The retailer refused to honor my profitable limit orders -- no more complicated than that. Your post rings familar, however, because, on Moneytec, I have seen ones similar to it justifying retailer stop-hunting. You can decide if Moneytec is more useful on that topic than ET. I've seen posts on ET about stop-hunting after the August 2004 payrolls.
I'm pretty new to FX but I've also found this claim to make little sense in the real world. So I open a position w/a hard stop and I'm supposed to believe that Oanda goes after my stop, specifically? Little ole moi? Seems paranoid. H
maybe i got confused - i seemed to remember an order records snapshot and a $96K claim posted by a chrishood on another forum (moneytec i guess? haven't visited in ages...) round nfp aug04 - but it wldn't be the first time... dunno... cant see the incentive for a broker not to fill yr limit orders when mkt's not gapping but stranger things have happened... anyway, my apologies if its not you... in any case, plse take a second to re-read the posts from lon eagle, late apex, cloudnine, taboni etc etc on this thread/ the board... its not to say that stop-hunting DOESN'T exist at some 2-bit retail shops if you absolutely must be right - except in this time and age no reputable fx broker wld take the pain of hunting retail stops and thats a fact... -, or similarly that other unethical practices have been TOTALLY eradicated at those same 2-bit retail shops, its just... be a bit more balanced in your judgements if thats not too much to ask... peace