Retail Fx

[cigarno]

Since there is NO centralized market for FX and no regulations whatsoever, it seems to me that retail FX trading is just numbers moving around. What stops a retail broker from adding 5 pips on the offer rate and subtracting 5 pips from bid he gets from the so called market maker or ECNs such as hotspot hence making money on every buy/sell order?! after all he controls what you see on your screen. :idea:

 

[xtf]

Since there is NO centralized market for FX and no regulations whatsoever, it seems to me that retail FX trading is just numbers moving around. What stops a retail broker from adding 5 pips on the offer rate and subtracting 5 pips from bid he gets from the so called market maker or ECNs such as hotspot hence making money on every buy/sell order?! after all he controls what you see on your screen. :idea:

They quote a spread and generally stick to it. No one is out to get you!

 

[wackypete2]

Since there is NO centralized market for FX and no regulations whatsoever, it seems to me that retail FX trading is just numbers moving around. What stops a retail broker from adding 5 pips on the offer rate and subtracting 5 pips from bid he gets from the so called market maker or ECNs such as hotspot hence making money on every buy/sell order?! after all he controls what you see on your screen. :idea:

First, there are some regulations in the US so if you live here get to know what they are.

2nd, such broker would only make money from the ill-informed traders who trade with a spread thats about 8 pips wider than everyone else.

With free demo platforms available at virtually every fx broker, try a few and compare spreads.

Peter

 

[cigarno]

They quote a spread and generally stick to it. No one is out to get you!

What about re-quotes? when FX broker add/subtract pips hey are not juts out there to get me, per se... They are out there to get everyone that trades on their platform and NOT just me!!!

 

[cigarno]

First, there are some regulations in the US so if you live here get to know what they are.

2nd, such broker would only make money from the ill-informed traders who trade with a spread thats about 8 pips wider than everyone else.

With free demo platforms available at virtually every fx broker, try a few and compare spreads.

Peter

(1)- Regu. in the US are inane plus there is no one to enforce them.
(2)- large spreads is just one way to manipulate the mrkt among many others. here is another one for you to think about. let us say for example that Trader X has 100 contracts Eur/Us$ with 100 contract stop that is thirty pips away from the market at 1.2370, spot 1.2400. Seeing this, your broker will then do two things. First, they will place an order to buy 101 contracts at 1.2370. Here is where it gets interesting. Using an “off exchange” sale, your broker will then fill its own order for 1 contract at 1.2370. When the price hits the market, the other 100 contracts are cleared at 1.2370. The next order your broker will fill is back at 1.2400. This is where it will sell the 100 contracts it just bought at 1.2370. What you say to that?!:whistling

 

[xtf]

What about re-quotes? when FX broker add/subtract pips hey are not juts out there to get me, per se... They are out there to get everyone that trades on their platform and NOT just me!!!

I agree requotes on spreadbetting platforms are annoying. Oanda seem OK but they do increase spreads over the news. In the futures market you can see the bids and offers often disappear prior to a news announcement anyway so this seems understandable.

 

[wackypete2]

What you say to that?!

Simple answer: Get another broker
Your example is way more complex than it has to be. You broker can simply widen the spread 30 pips, stop you out, then narrow spread back to normal.
If this happens to you once and you get no relief from your broker and you continue trading with that broker, then WTF? Get another broker.

(1)- Regu. in the US are inane plus there is no one to enforce them

Wrong. One example: leverage is capped in US at 100:1 max. Currently there are no brokers operating in the US that allow better than that, hence, that reg is being enforced pretty well.
I can go on...what's your point to all this?

Peter

 

[Blaiserboy]

I have used one broker for several years.... I have no reason to assume that they are out to get me....

Most important is a trading plan with strict rules and a good comprehension of the markets you are trading.....

There are many groups that discuss brokers..... bad news travels quickly... brokers , I am sure, do their best to keep business on their books as it is so very expensive to get new clients.

 

[wackypete2]

Agree. Most brokers are not out to get you but there are enough bad apples that they give the industry a bad reputation. Brokers are entitled to make money though and some slippage here and there will help their bottom line. You have to understand what you are getting into when trading forex. If you stumble on a scam broker, move on to another one.

Peter

 

[cigarno]

The point is that the FX market at the retail level is way too fragmented, so when you register with a broker you are not competing in the WHOLE market you are just competing with other customers that registered with that specific broker. Hence price movements on the wholesale level are not reflected on the retail level among all brokers equally.

the euro/$ could drop by 20 pips on the wholesale level and it will drop on your broker screen by only 10 pips and on another broker by 14 pips

 

[Blaiserboy]

The point is that the FX market at the retail level is way too fragmented, so when you register with a broker you are not competing in the WHOLE market you are just competing with other customers that registered with that specific broker. Hence price movements on the wholesale level are not reflected on the retail level among all brokers equally.

the euro/$ could drop by 20 pips on the wholesale level and it will drop on your broker screen by only 10 pips and on another broker by 14 pips

We can trade the futures and they are traded in Chicago, CME, I believe.

 

[wackypete2]

The point is that the FX market at the retail level is way too fragmented, so when you register with a broker you are not competing in the WHOLE market you are just competing with other customers that registered with that specific broker. Hence price movements on the wholesale level are not reflected on the retail level among all brokers equally.

the euro/$ could drop by 20 pips on the wholesale level and it will drop on your broker screen by only 10 pips and on another broker by 14 pips

This is true. But think about this for a moment. Let's assume your broker is NOT out to scam you but his price feeds differ from the actual market. You should still be able to make money. You will still have patterns, pin bars, support/resistance levels, or whatever you use. It really doesn't matter WHERE the price feed is, only what it is currently doing (up/down/sideways).

Of course if your broker is a scam broker nothing you do will matter.

Peter

 

[wackypete2]

We can trade the futures and they are traded in Chicago, CME, I believe.

Agreed!
You can also trade the spread between the futures and spot price, OR suppose your spot broker prices lag the futures by 1 minute...wow this could be a goldmine!

There are multitudes of ways to win at this game for anyone who has the right mindset and the will to find their edge.

Peter

 

[Blaiserboy]

the key words are 'your edge'... the research and discipline to find what works for you and to make it happen.

 

[cigarno]

"OR suppose your spot broker prices lag the futures by 1 minute...wow this could be a goldmine!"
who says that FX futures contracts and spot have 100% pstive coorelation in the short term? OR that they have to coverage....Have you not heard of contango!!!!!

 

[Blaiserboy]

"OR suppose your spot broker prices lag the futures by 1 minute...wow this could be a goldmine!"
who says that FX futures contracts and spot have 100% pstive coorelation in the short term? OR that they have to coverage....Have you not heard of contango!!!!!

Paranoia and trading are not good partners......

 

[wackypete2]

Paranoia and trading are not good partners......

yeah, looks like we have a real winner here...

Peter

 

[meanreversion]

"OR suppose your spot broker prices lag the futures by 1 minute...wow this could be a goldmine!"
who says that FX futures contracts and spot have 100% pstive coorelation in the short term? OR that they have to coverage....Have you not heard of contango!!!!!

Have you had bad experiences with brokers?

FX is the most liquid market in the world, daily turnover in spot is $3trio a day. The spreads are ridiculously tight and liquidity superb, which is why retail traders flock to it.

Your broker doesn't want you to blow up, he makes money by you continuing to trade. I think you're far too paranoid here. Open an account with Interactive and trade futures, they have been around 30 years, they're unlikely to scam you. And if they do, then try another broker.

 

[Blaiserboy]

IB is used by many many many....

I use Oanda..... I have been to their office in Toronto several times..... it is reassuring to be able to walk into the broker's office and see the employees.

There are many other brokers, I am fortunate to have been able to choose one that is local to me.

 

[cigarno]

Paranoia?!

I hope you can tackle the facts..........

Mr. wackypete2 says "You can also trade the spread between the futures and spot price, OR suppose your spot broker prices lag the futures by 1 minute...wow this could be a goldmine!"
I say not true