Catastrophic event

[tar]

Hi Dash.

Some of what you are saying is not really applicable to spot forex because it's not exchange-traded, but otherwise you are right on.

Thats why I said in my comments that it was market specific to spot forex because that's what I am currently trading. The idea rather than the specifics are what counts.

Peter

BTW , even with spot FX i can suffer a sudden loss and a huge slippage , there is no guarantee your broker will honor your stop unless it is a GSL , check this link he suffered 120 pips slippage on cable and it was on BOE decision which was scheduled on time , how if there was a sudden "big news" in the UK ...

http://www.trade2win.com/boards/spread-betting/70236-ig-index-huge-gbpusd-slippage.html

 

[wackypete2]

BTW , even with spot FX i can suffer a sudden loss and a huge slippage , there is no guarantee your broker will honor your stop unless it is a GSL , check this link he suffered 120 pips slippage on cable and it was on BOE decision which was scheduled on time , how if there was a sudden "big news" in the UK ...

http://www.trade2win.com/boards/spread-betting/70236-ig-index-huge-gbpusd-slippage.html

We are talking about Thursday's market right after the BoE announcement not Friday's NFP spike.

True there are no guarantees, but, The BOE rate decision or NFP announcement is a known event with built in risk and 100% avoidable. The broker knew ahead if time what they would be doing during that event. If you trade through known news events you are creating your own problems. I do feel bad for the trader. What happened isn't right, but that's a completely different issue. Also, dodgy SB firms and brokers should be avoided. Finally, if I were to consider that a cat event, then 120 pips is within my acceptable limits as I outlined. :smart:

Peter

 

[tar]

True there are no guarantees, but, The BOE rate decision or NFP announcement is a known event with built in risk and 100% avoidable. The broker knew ahead if time what they would be doing during that event. If you trade through known news events you are creating your own problems. I do feel bad for the trader. What happened isn't right, but that's a completely different issue. Also, dodgy SB firms and brokers should be avoided. Finally, if I were to consider that a cat event, then 120 pips is within my acceptable limits as I outlined. :smart:

Peter

this is not a cat event , i want to say even in FX there could be strange movements where your stop will not be honored , this is a normal BOE decision and cable plunged how if it is breaking news about something bigger , i can say cable could gap down sharply , anyway "C'est la vie"

 

[brettus]

BTW , even with spot FX i can suffer a sudden loss and a huge slippage , there is no guarantee your broker will honor your stop unless it is a GSL , check this link he suffered 120 pips slippage on cable and it was on BOE decision which was scheduled on time , how if there was a sudden "big news" in the UK ...

http://www.trade2win.com/boards/spread-betting/70236-ig-index-huge-gbpusd-slippage.html

It's funny that. I left limit orders at 1.5860 and 1.5840 over UK GDP, against an underlying position, and those prices seemed to trade. Where's my slippage on them? Why doesn't this work both ways? IG are a bunch of c**ts, but there's nothing you can do unless you're a big client. As soon as i become a big client, i'm not staying with IG. I'll get currenex with LCG or GFT and get them to convert it into a spreadbet.

 

[DashRiprock]

It's funny that. I left limit orders at 1.5860 and 1.5840 over UK GDP, against an underlying position, and those prices seemed to trade. Where's my slippage on them? Why doesn't this work both ways? IG are a bunch of c**ts, but there's nothing you can do unless you're a big client. As soon as i become a big client, i'm not staying with IG. I'll get currenex with LCG or GFT and get them to convert it into a spreadbet.

hi

sorry but if your spreadbetting you cant really tell whats "traded" unless you can there blotter. you have to be careful about the order you put in, so a limit order might not get triggered if it gaps from below to above your order might never get filled or maybe on the pullback but the broker did the right thing in that case. like what if itr was a stop market and the gap through your trade meant you got filled 20 pips away from your price? thats not the broker being nasty but just the prices in the market!

so watch out to see if your orders are limits, stop limits, stop markets, ans as well if they are triggered by prints or quotes.

watching a graph go from 56/40 to /80 doesnt mean that 41, 42, 43, ..., 79, 80 traded.

 

[eminiglobex]

1% of capital for scalping isnt conservative because you could easily make 1% a day off that and 250% a year is a ridiculous return. I wouldn't risk 1% scalping myself. I risk about 0.3-0.5% on any day trade max.

1% conservative, relative to what i know many others scalp with %wise.

i'm not sure i understand your comment "1% of capital for scalping isnt conservative because you could easily make 1% a day off that" if you could easily make 1% a day off that why would you only trade 0.3%-0.5%?

 

[eminiglobex]

I'm fine so long as exchange (or my connection to it) doesn't get taken out in the catastrophic event.

Otherwise, potentially, I'm wiped out (Or I make an absolute **** load of money). Or more accurately my trading accounts are, they're limited liability. And if they weren't, the LTD and LLP all my trading is done through both are (you can't really trade as an individual tax effectively). I won't be going bankrupt or anything.

Something I live with, and am well aware of, basically. Not cost effective to protect against. My trades can be worth billions, notionally. Oh well.

But it IS something I worry about. Certainly.

Couldn’t you could get access to a different exchange that trades a correlated instrument and hedge risk there in such an event?

 

[arabianights]

Couldn’t you could get access to a different exchange that trades a correlated instrument and hedge risk there in such an event?

To an extent, yes, but the correlation ain't gonna necessarily be great... it may even be inverse (let's say I'm long gilts and suddenly something happens and I can't get through to liffe... now if someone has blown up the other half of london I probably want to go *long* bunds... if I hedge by selling em I've compounded my error )

 

[donaldduke]

If u r scalping , do u protect yourself from catastrophic events ? ie : If daytrading indices then trade shorts only , buy deep OTM puts , or u dont have any protection at all ?

I suppose the risk if scalping near big news is if the Exchange goes down and then big unexpected numbers come out or something.

You planned to be flat just before the number but you are stuck with a position and didnt have time to get out.



Thanksfully exchanges dont have many outages anymore.

 

[brettus]

1% conservative, relative to what i know many others scalp with %wise.

i'm not sure i understand your comment "1% of capital for scalping isnt conservative because you could easily make 1% a day off that" if you could easily make 1% a day off that why would you only trade 0.3%-0.5%?

Realistically not many people make 250% a year. Those who try normally get burnt very quickly. You can easily lose 20% scalping on your account, risking 1% everytime. This psychologically can be very damaging. I prefer to risk 10% drawdowns every year to make 30-50%. That's why i'll probably be trading for a long time where as someone risking 40%+ drawdowns probably won't.

 

[brettus]

hi

sorry but if your spreadbetting you cant really tell whats "traded" unless you can there blotter. you have to be careful about the order you put in, so a limit order might not get triggered if it gaps from below to above your order might never get filled or maybe on the pullback but the broker did the right thing in that case. like what if itr was a stop market and the gap through your trade meant you got filled 20 pips away from your price? thats not the broker being nasty but just the prices in the market!

so watch out to see if your orders are limits, stop limits, stop markets, ans as well if they are triggered by prints or quotes.

watching a graph go from 56/40 to /80 doesnt mean that 41, 42, 43, ..., 79, 80 traded.

I mean if the price gaps 80 ticks down and my limit is half way between this gap. I get filled at my limit level instead of the first trade price after the gap. Realistically if the price gaps 40 through my limit i should be filled at a better price. To put it nice and simple.

If i left a stop at 1.5860 and the price gaps to 1.5820. I get filled at 1.5820.
If i left a limit at 1.5860 and the price gaps to 1.5820. I get filled at 1.5860

 

[wackypete2]

I mean if the price gaps 80 ticks down and my limit is half way between this gap. I get filled at my limit level instead of the first trade price after the gap. Realistically if the price gaps 40 through my limit i should be filled at a better price. To put it nice and simple.

If i left a stop at 1.5860 and the price gaps to 1.5820. I get filled at 1.5820.
If i left a limit at 1.5860 and the price gaps to 1.5820. I get filled at 1.5860

This is one of the pitfalls of trading on non-exchange markets. You are subject to your broker's pricing methods. Currently I believe FXCM is just about the only broker that will fill your limit correctly at 1.5820. Might be worth a look for you. Look up the FXCM thread. There's a rep there who might be more assistance.

Peter

 

[DashRiprock]

I mean if the price gaps 80 ticks down and my limit is half way between this gap. I get filled at my limit level instead of the first trade price after the gap. Realistically if the price gaps 40 through my limit i should be filled at a better price. To put it nice and simple.

If i left a stop at 1.5860 and the price gaps to 1.5820. I get filled at 1.5820.
If i left a limit at 1.5860 and the price gaps to 1.5820. I get filled at 1.5860

so cable is 1.5880 last and you are flat, right?

i dont see whats wierd about your two examples at the bottom?

 

[DashRiprock]

This is one of the pitfalls of trading on non-exchange markets. You are subject to your broker's pricing methods. Currently I believe FXCM is just about the only broker that will fill your limit correctly at 1.5820. Might be worth a look for you. Look up the FXCM thread. There's a rep there who might be more assistance.

Peter

assuming its a milit buy order working in the book (a limit sell @ /60 would immediately be filled @ /80), a fill at /60 is the correct price, and you should be long @ /60 with 1.5820 last.

 

[wackypete2]

Dash, if you don't mind my asking, what markets do you normally trade?

Peter

 

[DashRiprock]

Dash, if you don't mind my asking, what markets do you normally trade?

Peter

hi mate

US bond futures mostly

 

[wackypete2]

hi mate

US bond futures mostly

Cool Thanks.
The reason I ask is it appears that some of us aren't on the same page. I believe he's talking about spot forex which doesn't work the same way as futures markets and that's why the 3 of us don't seem to be agreeing on how the orders work. tar originally asked about indices, so while everyone is giving good answers we aren't all on the same page!!

If I'm wrong then someone just slap me, please

Peter

 

[DashRiprock]

Cool Thanks.
The reason I ask is it appears that some of us aren't on the same page. I believe he's talking about spot forex which doesn't work the same way as futures markets and that's why the 3 of us don't seem to be agreeing on how the orders work. tar originally asked about indices, so while everyone is giving good answers we aren't all on the same page!!

If I'm wrong then someone just slap me, please

Peter

spot forex doesn't work the same as the futures market?

:-0

:?:
their all double auctions
i dont see what the asset class or instrument has to do with it
both those examples seem fine to me, doesnt matter what the product was.

 

[wackypete2]

spot forex doesn't work the same as the futures market?

No, it doesn't. Spot forex doesn't trade on an exchange, there's no standardized pricing and DOM is either non existent or at best a dog and pony show. Think of spot forex as more "Broker specific" where price, execution, and liquidity are concerned.

Peter

 

[DashRiprock]

No, it doesn't. Spot forex doesn't trade on an exchange, there's no standardized pricing and DOM is either non existent or at best a dog and pony show. Think of spot forex as more "Broker specific" where price, execution, and liquidity are concerned.

Peter

ive traded sport forex in the past tho... yes theres an orderbook with quotes and size and things. there are just different ecns.