and another thing, if you've just started don't let that double lure you into a false sense of security thinking it's easy...if you could replicate that every week, it'll only take you 10 weeks to turn £1000 into a cool million...virtually impossible!! by the way if it's not too personal...what's your starting balance and stake size your betting?
Hi,
I only opened an account with £10 and have been placing trades of 0.25 each time. My largest qty was .50 once. Anyway on the ECN thing, I had a chat with them tonight and was told that they are not ECN they are MM (Market Makers). I also wanted to clarify something else as a newbie. I wanted to know if there is a massive imbalance on a graph which causes a gap in the chart could it gap past the stop. They confirmed it can, which I'm sure most people are aware of but what is interesting they offer the GSL Guaranteed stop loss feature. They then said that ECN's do not offer this feature. I thought this was quite interesting....could it be that City could offer this because they are able to calculate the monetary risk more easily and predict market turns as they can see everyone's positions?
I could be talking rubbish as I've only been in this game for a couple of weeks.
Food for thought though, don't you think?
Thanks,
Jay
Think of the Guaranteed Stops as a sort of Insurance premium, it costs you a few pips to set one, so in essence you have lots of people paying small amounts as a kind of insurance against a possible bigger loss.
Those large gaps more often occur on individual shares especially so the day after an earnings report. I don't see very large gaps on the indices, but I've known the Dow to gap up or down by upto 100 pips over the weekend. I don't think it'll be necessary to set guaranteed stop losses unless you hold a trade overnight or over the weekend. Large gaps shouldn't occur during normal hours midweek.
By the way, that's a heck of a small account you have, how'd you manage to even open an account, most brokers require a minimum starting balance of at least a few hundred. I don't think you can do this properly with that small amount, unless you're just playing about and aren't too serious about it, you'll probably just lose it all, after a couple losses I would imagine you won't have enough margin to place another trade.
Cityindex is a good broker with sensible stake sizing, but it is not ECN or NDD, or No Requote.
I am now at the point where I make 5%-10% return on account size per month with a high level of consistency. I have had one losing month, and one month with a dizzying (to me anyway) 25% return. Risk management and a clear trading plan you stick to changes EVERYTHING. I have had the occasional, unusually slow execution on some trades, and they aren't within stupidly volatile periods. I am probably getting some trades looked at.
I appreciate what you say about not taking profits fast enough, but if the profits were that small, they probably weren't worth taking. It's all about sensible risk/reward ratios. Where is a rational place to put your stop loss order? Where is a rational place to put your take profit order? Is the take profit order about twice as far away as the stop loss order? If yes, that's a good trade, providing you know where to place those two orders. Scalping isn't necessarily an easy answer, it can be a very painful way to trade if you're used to holding positions.
However, market maker brokers do rely on an fair portion of their clients losing, even with order matching, they do not make money from ultra tight spreads. NDD brokers have wider spreads because they don't decide whether to bet against you or not, or requote.
Decide which is best for you. Tight spreads, or no intervention, or losing money.
P.S - Guaranteed stop losses are a rip off, I've never been gapped out of a market to any real appreciable degree.
I am now at the point where I make 5%-10% return on account size per month with a high level of consistency. I have had one losing month, and one month with a dizzying (to me anyway) 25% return. Risk management and a clear trading plan you stick to changes EVERYTHING. I have had the occasional, unusually slow execution on some trades, and they aren't within stupidly volatile periods. I am probably getting some trades looked at.
I appreciate what you say about not taking profits fast enough, but if the profits were that small, they probably weren't worth taking. It's all about sensible risk/reward ratios. Where is a rational place to put your stop loss order? Where is a rational place to put your take profit order? Is the take profit order about twice as far away as the stop loss order? If yes, that's a good trade, providing you know where to place those two orders. Scalping isn't necessarily an easy answer, it can be a very painful way to trade if you're used to holding positions.
However, market maker brokers do rely on an fair portion of their clients losing, even with order matching, they do not make money from ultra tight spreads. NDD brokers have wider spreads because they don't decide whether to bet against you or not, or requote.
Decide which is best for you. Tight spreads, or no intervention, or losing money.
P.S - Guaranteed stop losses are a rip off, I've never been gapped out of a market to any real appreciable degree.
I love the customer service of City Index and their platform is great I love it. Unfortunately even though I have been in this game 2 weeks the massive apparent conflict of interest is enough to put me off having a MM as a broker.
So I will shortly be switching to a different provider. The rationale behind offering GSL's is exactly as per my previous post in my opinion as I had this confirmed today. It's a money spinner as they know everyone's positions. I was told today that really a MM broker should offer GSLs on every trade for free because you're trading against them as opposed to an active market. Makes sense to me but I fully accept that I'm not an expert....yet!
I was also told today as a guesstimate about 95% of retail traders fail. So as a newbie I need to give myself a fighting chance by at least not going with a broker who knows my every move. Obviously this will become more of an issue as my trades increase in size as currently I only have £10 in my account
I feel pretty lucky that I've learned this relatively early on in my journey.
Thanks for everyone's advice I'm finding this forum incredibly helpful. :clap:
I love the customer service of City Index and their platform is great I love it. Unfortunately even though I have been in this game 2 weeks the massive apparent conflict of interest is enough to put me off having a MM as a broker.
So I will shortly be switching to a different provider. The rationale behind offering GSL's is exactly as per my previous post in my opinion as I had this confirmed today. It's a money spinner as they know everyone's positions. I was told today that really a MM broker should offer GSLs on every trade for free because you're trading against them as opposed to an active market. Makes sense to me but I fully accept that I'm not an expert....yet!
I was also told today as a guesstimate about 95% of retail traders fail. So as a newbie I need to give myself a fighting chance by at least not going with a broker who knows my every move. Obviously this will become more of an issue as my trades increase in size as currently I only have £10 in my account
I feel pretty lucky that I've learned this relatively early on in my journey.
Thanks for everyone's advice I'm finding this forum incredibly helpful. :clap:
The MM trades agaisnt you to balance his risk not to pick off stops. If they was picking off stops then they either have to take risks by 'trying' to move the market or maniuplate their feed, which you would have spikes all over the chart, the chart would then have no resemblance to the underlying market.
I love the customer service of City Index and their platform is great I love it. Unfortunately even though I have been in this game 2 weeks the massive apparent conflict of interest is enough to put me off having a MM as a broker.
So I will shortly be switching to a different provider. The rationale behind offering GSL's is exactly as per my previous post in my opinion as I had this confirmed today. It's a money spinner as they know everyone's positions. I was told today that really a MM broker should offer GSLs on every trade for free because you're trading against them as opposed to an active market. Makes sense to me but I fully accept that I'm not an expert....yet!
I was also told today as a guesstimate about 95% of retail traders fail. So as a newbie I need to give myself a fighting chance by at least not going with a broker who knows my every move. Obviously this will become more of an issue as my trades increase in size as currently I only have £10 in my account
I feel pretty lucky that I've learned this relatively early on in my journey.
Thanks for everyone's advice I'm finding this forum incredibly helpful. :clap:
Don't like the sound of this. I am just starting my SB journey and things seem like they are going to be hard enough anyway. I wonder what sort of other stuff these companies do to get the upper hand. Feeling slightly worried about getting into this.
[/QUOTE] The rationale behind offering GSL's is exactly as per my previous post in my opinion as I had this confirmed today. It's a money spinner as they know everyone's positions. I was told today that really a MM broker should offer GSLs on every trade for free because you're trading against them as opposed to an active market.
I feel pretty lucky that I've learned this relatively early on in my journey.
Thanks for everyone's advice I'm finding this forum incredibly helpful. :clap:[/QUOTE]
Don't like the sound of this. I am just starting my SB journey and things seem like they are going to be hard enough anyway, it makes you wonder what else companies do to get the upper hand. Feeling slightly worried about getting into this. Thanks for making people aware.
I feel pretty lucky that I've learned this relatively early on in my journey.
Thanks for everyone's advice I'm finding this forum incredibly helpful. :clap:[/QUOTE]
Don't like the sound of this. I am just starting my SB journey and things seem like they are going to be hard enough anyway, it makes you wonder what else companies do to get the upper hand. Feeling slightly worried about getting into this. Thanks for making people aware.
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Moving markets isn't cheap. If a market maker wanted to hunt stops, they would have to throw all kinds of money about in the underlying to catch you out, and they certainly don't modify their price feeds by like changing their quoted gold price by from 1320, to 1319 at random. That would get them shut down by the FCA very quickly.
Market makers use 'A' book, 'B' book. This means they automatically trade against their newbies and frequent losers, as statistics say that they will make a net return, even if they let the winning trades win. If you win enough, they will start hedging your positions out to liquidity providers, so that they pocket the spread but don't try trading against you. Market makers also hedge any net exposure that is quite big. If everyone is buying the Dow, they might have a large short position they're not happy with, and so they do some proprietary trading to hedge the risk, and also take their own view on the markets.
There is absolutely nothing wrong with the market maker model where you use a popular, reputable, and FCA regulated broker who isn't slow at execution.
http://www.bloomberg.com/news/2014-...-puke-scammed-gold-price-to-cheat-client.html
This is how you move a market. Firstly you get caught, secondly it costs a lot of money, thirdly the cost of moving the market to take out a couple of retail traders betting positions would be stupid.
Market makers use 'A' book, 'B' book. This means they automatically trade against their newbies and frequent losers, as statistics say that they will make a net return, even if they let the winning trades win. If you win enough, they will start hedging your positions out to liquidity providers, so that they pocket the spread but don't try trading against you. Market makers also hedge any net exposure that is quite big. If everyone is buying the Dow, they might have a large short position they're not happy with, and so they do some proprietary trading to hedge the risk, and also take their own view on the markets.
There is absolutely nothing wrong with the market maker model where you use a popular, reputable, and FCA regulated broker who isn't slow at execution.
http://www.bloomberg.com/news/2014-...-puke-scammed-gold-price-to-cheat-client.html
This is how you move a market. Firstly you get caught, secondly it costs a lot of money, thirdly the cost of moving the market to take out a couple of retail traders betting positions would be stupid.
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