globalfxllcs program requires that you trade thru fxcm, which is the most crooked,god awful excuse for a desk i have ever seen...yes thats right SEEN, ive been there and know ppl there and know how their desk works.....also, what use is a bloomberg if you cant play numbers? THATS RIGHT! when dealing thru globalfxllc and/or fxcm you can not put in orders within 20 min of number releases!!! hows THAT for a maket maker!!??? this is the only firm in the retail buis that wont let you do that!! how pathetic!!! http://news.findlaw.com/nytimes/doc...ts111903cmp.pdf
http://fxtrade.oanda.com/resources/spreadstats/spreadsminmax.shtml They seem to be very honest about spreads. Coinz was right on this. Unbelievebly many pairs at 2 pips spread, and no advantage for regular size holders over mini lot holders
If fx "brokers" would only facilitate clients' orders (for which they get a fee - the bid and ask spread) and not be in the business of taking their clients' money, then the spread itself, though expensive, would not be an issue. The problem is that these fx "brokers" are market makers, they trade against their clients, making profits as a direct result of their clients' losses. FX market makers execute client orders against advertised prices on a trading platform they own and may not always take the executed orders to the Interbank market (retail size is way too small for this market) but instead act like bucketshops and pool them internally or just take the other side of the trade if the odds are right. And let me tell you, the odds are heavily tilted towards the market makers as they can easily manipulate the rates received from the banks, shift bid-ask spread in the direction the currency pair is moving, put in rates that do not reflect market price thereby triggering (stop-loss) orders etc. After all, they own the trading platform, know their clients' position, and can do whatever they want.
when you estimate it on the dollar amount, not how much you had to put up for the trade it is actually very fair. Here is a good example that should explain things: If you bought 100k worth of a currency pair your net P/L at the time of purchase would be minus 50 bucs on a 5 pip spread as there are no commissions. In equities if you buy 5000 shares of a 20 dollar stock at a penny a share you pay bucs plus ticket charges and sec fees when you sell. But then you have the spread in the 20 dollar stock!!! and if you are marked to market like most equity trading shops you are now showing a loss on the trade AND you paid a commission. In some 20 dollar stocks the spread can be as much as 10 cents...and thats being generous to some! In this instance you would be down 500 and the commission of 50 thats $550!! Its also interesting that no trader on ET mentions that prop houses are not even close to being charged a penny a share by their clearing houses, they pay more around .3 or .4. This means that they make lets just say half or $25 of the commish. And we are being bashed for getting a small rebate which varies but mostly averages .5 to 1 pip or 5 to 10 bucs...COMMON GIVE US A BREAK DO THE MATH. We are not saying the comparrisons are perfect but in this example one must agree that there are alot of advantages to trading FX AND if you know this is part of the business in every market then a 5 or 4 pip spread is not as much as people claim
Which is exactly the reasojn why we use FXCM. With 55,000 traders on their platform, they could care less especially if the order match up. Now that is not to say that they havent had off prices before, especially on big numbers. We have seen spikes that were not "on market" but on balance they are definitely fair and give good prices 99% of the time and this beats the competetion in OUR OPINION. This is not to say that there are not good market makers out there, each have their strong points.
1. When trading the stock market, you do not pay the spread. You could place bids and offers in the order book. 2. In your example you would show a 5% loss in the fx position (on a $1,000 account), while the stock position would show a 0.55% loss.
the math is backwards: the greater the clientele, the more important restrictions on traders become as it becomes more and more expensive to allow honest brokering. notice the restrictions on trading around news, "guaranteed" stops, etc, didn't kick in when the number of traders was small - but when it was large. the restrictions will only tighten going forward, until the SEC gets its act together and puts these bucket shops out of business.