This is a discussion on Fxcm within the First Steps forums, part of the Reception category; Originally Posted by nunrgguy LOOK I was just about to go long during NFP GBPUSD as they recommend on FPA. ...

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Old Jan 19, 2011, 8:27pm   #16
Jason Rogers's Avatar
Joined Jun 2009
Re: Fxcm

Originally Posted by nunrgguy View Post

I was just about to go long during NFP GBPUSD as they recommend on FPA. As soon as a clicked on the buy button price moved in my favour. Before I knew it those b@stards at FXCM had widened the spread to 6 and price gapped over my 5 pip stop. Price moved so fast down that it wiped out my whole £50 account and left me owing a further $20.
Hi nunrgguy,

NFP is typically one of the most volatile economic events of the month. It's not uncommon to see the market move 10, 20, 30, 40+ pips per tick when the news is released, therefore trading this number can be very risky. Below is an example of the EUR/USD tick chart from the most recent NFP release on January 7th during which time EUR/USD moved up 50 pips within seconds.

Click the image to open in full size.

I can understand the attraction to trading this type of event since the market can move a large distance in a short amount of time; however, the reason it's moving so quickly is because the market is gapping. There is less liquidity in the market which causes more volatile price movements. If you have a market order or stop loss order at a specific price but that price is not available, then the order will be filled at the next best available price. Slippage is the first thing discussed on the execution page of our website http://www.fxcm.co.uk/trading-execution-risks.jsp .

The spreads you see with our NDD forex execution are made up of the best bid/ask price being quoted by the banks streaming prices onto the platform. FXCM is not controlling the spreads, but rather the spread is being determined by the best pricing available. So you see a true reflection of pricing in the market.

While your balance could end up in a deficit if the price closing you out at 0 is not available, it is FXCM's policy to credit accounts to a zero balance when deficit balances occur as a result of trading.

Please let me know if you have any questions.

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Old Jan 19, 2011, 11:33pm   #17
nunrgguy's Avatar
Joined Aug 2004
Re: Fxcm

Entry is the least of your worries

Draw a line, trade it. Price generally above, long, price generally below, short.
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