What Spread do you pay on Aud/Nzd?

Rossini

Rossini

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Trade station are quoting 'as low as 2' on the website, others I have looked at are from 8 pips and upwards.
 
The reason for my question is that I would like to start scalping this pair as I like the ranges it often moves in. However I do need a tight spread and so far the best I can find is a fixed 8 spread. This is from a company that I have never heard of and I wouldn't like to give them my money.

Any help would be appreciated.
 
Thanks Jtrader, Has anyone dealt with forex.com capital gain group? They have a spread of around 4 which is great for me, but I would want a recomendation before I put my money with them.
 
8-10 is roughly where it legs out if you use 2 in aussie and 3 in kiwi if memory serves. But Kiwi erally is unpredictable spread / liquidity wise. It's 6 points wide right now on my D-3, which would obviously equate to far wider in the cross.

2 points in the cross is just stupid. You're gonna end up paying for that somewhere else cos there's no way that's not a loss making trade for the provider, whoever they are....
 
Your right GJ, Aud Nzd is 10 wide now. Aud usd is 1.8 and Nzd usd is 4.1

But obviously there is execution risk when trading the 2 pairs plus for me 2 lots of commission.
 
Wasn't suggesting you leg into it mate, merely stating why the 'normal' sb firm spread is where it is. Because audnzd is derived from audusd and nzdusd.

When pricing, as a spot market maker, to 'sophisticated' customers, you would be expected to tighten it a tad vs where the raw price is through the legs (as aud and nzd are reasonably correlated and you're stripping out the dollar event risk, same as if you're quoting noksek for example), but of course that nuance is completely thrown out the window for retail pricing. And to be honest, streaming support pricing in general (even on wholesale ecns). It's only when you're making prices direct that that kinda thing really seems to apply in audnzd (because as a manual price maker you're a bit more in control of the process).

These sorts of little subtle things are the difference in terms of knowledge etc that act to reduce the retail trader's edge somewhat, particularly when stepping off the eurusd usdjpy gbpusd well beaten track. And so they're the sorts of things I usually try and shed a bit of light on.

Hope it helps - feel free to PM if you want to talk further

GJ
 
I don't get this Rossini, but please more experienced guys shoot me if I'm way off...IMHO you're best sticking to spreads that are tighter, whatever the pair. If we accept that once you have; the MM, discipline, TA and the emotions under control then probability is v. important. That probability will (roughly) stay the same using the same edge on whatever currency pair, therefore the bigger spread will lessen your winnings.

Also the lower the spread surely the bigger the liquidity pool that (hopefully) the SB boys are on the 'other side' of hedging, this should equal less unpredictability; less requotes, less delays....etc..

From my own personal experience I don't trade GBP/JPY for the simple reason that the spread on IG is 8-9 pips. If I had/have a stop its 10/11 pips before I'm into profit, not gonna play it despite how it behaves which TBH is much the same on most pairs (again shoot me down guys if I'm way off here).

When I (if I) move from IG it'll be for one reason only, a max 2 pips spread from any co. I completely trust/that won't go belly up over the next year and IMHO some of them must be on respirator now, particularly amongst the white label guys...


P.S. started thinking of this reply before I had time to read Gamma's excellent explanation
 
Black Swan said:
I don't get this Rossini, but please more experienced guys shoot me if I'm way off...IMHO you're best sticking to spreads that are tighter, whatever the pair. If we accept that once you have; the MM, discipline, TA and the emotions under control then probability is v. important. That probability will (roughly) stay the same using the same edge on whatever currency pair, therefore the bigger spread will lessen your winnings.

Also the lower the spread surely the bigger the liquidity pool that (hopefully) the SB boys are on the 'other side' of hedging, this should equal less unpredictability; less requotes, less delays....etc..



From my own personal experience I don't trade GBP/JPY for the simple reason that the spread on IG is 8-9 pips. If I had/have a stop its 10/11 pips before I'm into profit, not gonna play it despite how it behaves which TBH is much the same on most pairs (again shoot me down guys if I'm way off here).

When I (if I) move from IG it'll be for one reason only, a max 2 pips spread from any co. I completely trust/that won't go belly up over the next year and IMHO some of them must be on respirator now, particularly amongst the white label guys...


P.S. started thinking of this reply before I had time to read Gamma's excellent explanation
Click to expand...


I don't use SBing for day trades/scalps, I trade using FXCM active trader so the prices are not manipulated.



In my opinion, different pairs act in different ways and all have their own 'personality'. So take a more range bound pair like the Aud Nzd and using mean revision etc can be a more effective way of trading.



Using mean revision on a pair that is trending heavily and the odds are significantly reduced, even if the spread is smaller.
 
Rossini said:
I don't use SBing for day trades/scalps, I trade using FXCM active trader so the prices are not manipulated.



In my opinion, different pairs act in different ways and all have their own 'personality'. So take a more range bound pair like the Aud Nzd and using mean revision etc can be a more effective way of trading.



Using mean revision on a pair that is trending heavily and the odds are significantly reduced, even if the spread is smaller.
Click to expand...

Got ya, do you really believe they trade/trend in different ways? TBH I can overlap my set up on just about anything and I have the same level of expectation..
 
The otehr thing to bear in mind is that it helps to move away from talking about 'pips' all the time. Look at spreads in percentage terms for a start (i.e compare to the big figure). Then you're comparing like for like. Then, look at daily or even intraday REALISED (i.e. not implied) volatility. Once you do this, work our which pair has the best % spread per unit of realised volatility. THAT is the actual tightest spread fwiw. Just saying 3 pips in cable is better than 5 pips in gbpjpy is massively oversimplifying the real dynamics of the trade.

Make sense?

GJ
 
GammaJammer said:
The otehr thing to bear in mind is that it helps to move away from talking about 'pips' all the time. Look at spreads in percentage terms for a start (i.e compare to the big figure). Then you're comparing like for like. Then, look at daily or even intraday REALISED (i.e. not implied) volatility. Once you do this, work our which pair has the best % spread per unit of realised volatility. THAT is the actual tightest spread fwiw. Just saying 3 pips in cable is better than 5 pips in gbpjpy is massively oversimplifying the real dynamics of the trade.

Make sense?

GJ
Click to expand...

yep.:)
 
GammaJammer said:
Try doing it for the majors some time, ony your chosen platform. It's an eye opener at times.
Click to expand...
For the stupid and mathematically impotent such as myself, what would be a simple back of an envelope way of working out volatility on a pair so that I can do the calculation you mention.

I'm not being lazy, I tried to research this but came up with lots of stuff on options pricing and black/scholes which is more than I think I need to know!
 
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