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The Captains Chest - Naked Trading & Other Stuff
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Author:  mjws00 [ Mon Aug 26, 2013 9:55 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
The market is unregulated and not centralized. That means the liquidity providers can pull the bid or the ask at any point. As a pass through broker GP is subject to that as any other broker is. The question is were there other LP's still hitting the inside prices during the spike. There may have been on other platforms, but not on Oanda at the time. Pretty unlikely that other players are getting much better liquidity then they are... but whatever floats your boat.

Remember GP's set of Liquidity providers, may be different than, Oanda's, or fxcm, mb, dukas, or whomever you choose. At any instant in time the best bid or ask and the volume there... will be different.

Everyone blames the broker... but they rely on LP's to quote them. There are crooks, and bucket shops, but the big guys don't have to cheat like that imho. Someone did in fact steal the stop, but it wasn't Oanda, just a MM with the balls to hit the liquidity (stops and pendings) that were there in fast ill-liquid market conditions when everyone else pulled out.

I'm not an Oanda fanboy. They work for me because my money is insured in Canada and they are fully regulated here. That becomes important as you scale up. I can fly over and find a human subject to our laws... not an invisible gangster on an island somewhere in the med.

I don't know if GP logs spreads on a per tick basis. If they had a few traders hit near the same price they'd certainly have data. But I'm sure there were no surprises for the institutional guys watching L2... the bids/asks in the center dry up instantly, and the algos hit the stragglers. Standard.

Don't get me wrong. I was PISSED when they tagged me last month. But I just look at the bigger picture and move on.

Mike
Author:  Jemook [ Mon Aug 26, 2013 11:16 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
mjws00 wrote:The market is unregulated and not centralized. That means the liquidity providers can pull the bid or the ask at any point. As a pass through broker GP is subject to that as any other broker is. The question is were there other LP's still hitting the inside prices during the spike. There may have been on other platforms, but not on Oanda at the time. Pretty unlikely that other players are getting much better liquidity then they are... but whatever floats your boat.

Remember GP's set of Liquidity providers, may be different than, Oanda's, or fxcm, mb, dukas, or whomever you choose. At any instant in time the best bid or ask and the volume there... will be different.

Everyone blames the broker... but they rely on LP's to quote them. There are crooks, and bucket shops, but the big guys don't have to cheat like that imho. Someone did in fact steal the stop, but it wasn't Oanda, just a MM with the balls to hit the liquidity (stops and pendings) that were there in fast ill-liquid market conditions when everyone else pulled out.

I'm not an Oanda fanboy. They work for me because my money is insured in Canada and they are fully regulated here. That becomes important as you scale up. I can fly over and find a human subject to our laws... not an invisible gangster on an island somewhere in the med.

I don't know if GP logs spreads on a per tick basis. If they had a few traders hit near the same price they'd certainly have data. But I'm sure there were no surprises for the institutional guys watching L2... the bids/asks in the center dry up instantly, and the algos hit the stragglers. Standard.

Don't get me wrong. I was PISSED when they tagged me last month. But I just look at the bigger picture and move on.

Mike
Mike is on the money about everything he said.

Last night I had open GBPUSD trades which were stopped out on my personal Global Prime account - and the candles don't show price going there. A couple of years ago I would be pissed and calling up our broker going WTF was that! But now I have a much better understanding of how things work.

Here's the two trades that got stopped:
2013-08-27_0848.png
You can see Empty4 candles don't even show the spike that hit my stop. This is because Empty4 candles only show the bid price. So the ask must of blown out at the top by the LPs widening spreads. Steve Mauro talks about spread widening at the HOD / LOD.

Anyway the difference between Global Prime vs other 'ECN Brokers' is that we can provide a trade receipt on any trade taken which shows which LP took the trade thus proving that we don't make the market / manipulate price and are simply providing whatever the LPs offer.

Here's the market snapshot when my trade got stopped:
tradereceipt.png
FIXI picked up the trade with the ask rate of 1.72893. Quite unfortunate considering that GBPUSD tanked 70 pips straight after but that's the nature of the beast.

If you're trading with an ECN broker ask them for a trade receipt or a market snapshot of the spreads / order book at the time you were stopped to put your mind at ease.

Cheers,
J
Author:  Larryk [ Tue Aug 27, 2013 7:36 am ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
mjws00 wrote:Larryk,

It was a spread spike. Not sure if you got hit on Sunday open, or NY open. But momentary spikes are pretty common on exotics during these months. Tagged me not too long ago as well. Oanda doesn't deal against you, so they can only give the liquidity they can access or match internally. It won't show up on your chart or on any others....

This is similar to any ECN or pass through broker. Nature of the beast in my opinion, but tough if you are trying to play tight and disciplined. They try and be transparent on historical spreads etc, and the data is easy to find. http://fxtrade.oanda.com/why/spreads/recent

Only way to avoid the spikes is to trade with a bucket shop who has an interest in taking the other side... which is not a good trade off, imho.

Good luck.

Mike
The time was 8.30am NY time when that spike showed, price did not retrace to my TP so no change to my end result.

Oanda's FXTrade platform apparently shows AVERAGE prices for the candles, whereas Empty4 as we know shows only selling prices.

Serves me right for continuing to try to trade breakouts, our MM 'friends' just love that!

Thanks for the support from everyone.
Author:  kwanann [ Tue Aug 27, 2013 12:33 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Slightly out of topic here, I.m quite interested to find out something about leverage.

This is directed at jemook

From a broker perspective, what is the difference between a 1:500 vs a 1:50 trader?
Author:  Gertje [ Tue Aug 27, 2013 1:11 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
kwanann wrote:Slightly out of topic here, I.m quite interested to find out something about leverage.

This is directed at jemook

From a broker perspective, what is the difference between a 1:500 vs a 1:50 trader?
I would say, risk management.
With 1:50 the stop-out will arrive WAY earlier than with 1:500 when opening the same lots.

1:50
1 lot is $100.000
Margin is $100.000 / 50 = $2.000

1:500
1 lot is $100.000
Margin is $100.000 / 500 = $200

With the 1:500 broker, one can open 10 times the lots with the same margin than with the 1:50 broker.
.
Author:  Gertje [ Tue Aug 27, 2013 1:14 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
I'm having a blast with NT, already added over 30% to the account this week which leeds me to believe I'm overtrading it a little.... ;)

What lotsize per balance do you guys use?
0.01 / $ 100
0.01 / $ 200
0.01 / $ 500
0.01 / $1.000
???

Thanks a lot for the advice.
.
Author:  pips400 [ Tue Aug 27, 2013 2:14 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Gertje wrote:I'm having a blast with NT, already added over 30% to the account this week which leeds me to believe I'm overtrading it a little.... ;)

What lotsize per balance do you guys use?
0.01 / $ 100
0.01 / $ 200
0.01 / $ 500
0.01 / $1.000
???

Thanks a lot for the advice.
.
Great stuff, keep it going Gertje. I'm in the process of crossing to live, so trading both live and demo at the moment. I'm making an average of 10% a day demo, which I am hoping to transfer to live. That's with a 0.1 lot per $1000, that seems high, but I'm trading it tight with either hard or mental SL at just 20 pips, because I get my entries right in the pins. I monitor 14 pairs, which is more than enough to keep me occupied. Every 15 minutes I run through each chart to check for entries, and thats about it. I am trading just the Londom am session, closing everything before NY, then I'm closed down.
Author:  Gertje [ Tue Aug 27, 2013 2:25 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
pips400 wrote:
Gertje wrote:I'm having a blast with NT, already added over 30% to the account this week which leeds me to believe I'm overtrading it a little.... ;)

What lotsize per balance do you guys use?
0.01 / $ 100
0.01 / $ 200
0.01 / $ 500
0.01 / $1.000
???

Thanks a lot for the advice.
.
Great stuff, keep it going Gertje. I'm in the process of crossing to live, so trading both live and demo at the moment. I'm making an average of 10% a day demo, which I am hoping to transfer to live. That's with a 0.1 lot per $1000, that seems high, but I'm trading it tight with either hard or mental SL at just 20 pips, because I get my entries right in the pins. I monitor 14 pairs, which is more than enough to keep me occupied. Every 15 minutes I run through each chart to check for entries, and thats about it. I am trading just the Londom am session, closing everything before NY, then I'm closed down.
That's what I'm using as well...., just microlots since my account isn't over $1.000 [yet].
Great stuff, every 10 pips means 1% to the account. Now learn how to take those 100+ pips setups.

I'm stuck in some DD [I know, SL is needed here] so only traded 3 pairs today and missed the PERFECT setups on de EURUSD. Nice small M at the London open, perfect looong W at the LOD. 60 pips down and 70 pips up if one was watching..... :(
Author:  mjws00 [ Tue Aug 27, 2013 2:26 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Larryk wrote: The time was 8.30am NY time when that spike showed, price did not retrace to my TP so no change to my end result.

Oanda's FXTrade platform apparently shows AVERAGE prices for the candles, whereas Empty4 as we know shows only selling prices.

Serves me right for continuing to try to trade breakouts, our MM 'friends' just love that!

Thanks for the support from everyone.
Larry, You can show both the bid and the ask. Just check the boxes. I always keep both showing, as it instantly shows what the spread is doing. You can actually see them sit on the bid sometimes, or chunk through heavy resistance at times.

You will always get a spread increase around "red" news. It typically lasts less than 5 seconds. On the majors it rarely exceeds 10 pips, and may last only a second.

At least thats what I've seen. I love the 1 click trading, and on chart trading fxtrade has. My fills are always instant and where I expect them. Crushes Empty4 for execution.

Good Luck and Green Pips.

Mike
Author:  mjws00 [ Tue Aug 27, 2013 10:01 pm ]
Post subject:  Re: The Captains Chest - Naked Trading & Other Stuff
Nice call Gertje. Great little quickie there even if the M didn't break down all the way.

This could easily reject and sell in Asia. But a nice spike on with a subsequent sell off would be awesome. Tough taking that earlier M coming into the end of NY when it could just pull back into the range (and did with minor overshoot).

For some reason I've grown to love this pair and GBPAUD, nice movement even during summer, and off peak hours. I'll be watching when they wake this up again.

Mike
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