open discussion with EFX Group president, Mr. Jon Floyd

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michal.kreslik
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Postby michal.kreslik » Wed Jul 12, 2006 5:41 pm

Avery,

if you are using Oanda, you pay $1.5 round trip (the spread only). If you are using average broker, you pay $3 round trip (the spread only). If you are using EFX, you pay $1.28 (commissions) and $1 (the spread, if it's 1 pip) = $2.28 round trip.

In a sense, yes, spread is apples and commission is oranges, but together they make up for the total cost (all the fruits) :D

Anyway, Oanda offers only 50:1 leverage which is a great disadvantage to EFX.

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Postby TheRumpledOne » Wed Jul 12, 2006 6:23 pm

"if you are using Oanda, you pay $1.5 round trip (the spread only). If you are using average broker, you pay $3 round trip (the spread only). If you are using EFX, you pay $1.28 (commissions) and $1 (the spread, if it's 1 pip) = $2.28 round trip. "

Michal, you do not figure the spread on EFX as part of your cost!!!

Once again, if you buy the euro at 1.2700 and sell it at 1.2703, you gross $3.00 and net $1.72 after the $1.28 commission REGARDLESS of the spread at the time of your entry and exit!!

So you do NOT add $1 to the cost of the transaction!!

Once again, you are mixing apples and oranges.

IT IS THAT SIMPLE.
IT'S NOT WHAT YOU TRADE, IT'S HOW YOU TRADE IT!

Please do NOT PM me with trading or coding questions, post them in a thread.

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michal.kreslik
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Postby michal.kreslik » Wed Jul 12, 2006 7:16 pm

TheRumpledOne wrote:if you buy the euro at 1.2700 and sell it at 1.2703, you gross $3.00 and net $1.72 after the $1.28 commission REGARDLESS of the spread at the time of your entry and exit!!


I'm not opposing that in any way :)

I only wanted to compare various brokers' costs, so I included the spread as well as the commission in the equation, otherwise I wouldn't be able to compare them.

If the price makes the 10 points move (1.2700 ask to 1.2710 ask) and there is 3 points spread at the open and close times, one subtracts 3 points with average broker (=$7 net profit), 1.5 points with Oanda (=$8.5 net profit), 2.28 points with EFX (=$7.72 net profit). That's all.

I think it's quite clear what we are both talking about and there's no need to develop the story any further :)

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Postby eudamonia » Wed Jul 12, 2006 8:38 pm

Michal,

Good points, but for those of us who like to trade more than just the EUR (say the GBP), EFX has a tighter spread+commission. So to be fair you would need to average your costs against all of the major pairs for each broker.

I do know for example that the average spread for the GBPUSD with Oanda is close to 4 pips (at least when I trade), whereas the spread with EFX is 1 to 2 pips (typically). Even with commissions EFX wins.

Obviously, this is different across each of the majors. So if you only trade the EUR then sure Oanda is the way to go. Otherwise maybe not.

Edward
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Postby michal.kreslik » Wed Jul 12, 2006 9:01 pm

Ed, for me, EFX is the way to go.

100:1 leverage, working integration with Neo.

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Postby eudamonia » Wed Jul 12, 2006 9:16 pm

Mikal,

Also Oanda charges a $600 upfront fee to use their API and another $600 a month if you don't trade at least $12 million with them.

Yes, I'm down with EFX :) Now I just need to get TS talking with their API.

Edward
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Postby michal.kreslik » Wed Jul 12, 2006 9:25 pm

Ed, you should throw a question regarding TS <> EFX API to the EFX API SDK forum on Yahoo

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Postby jhtumblin » Wed Jul 12, 2006 9:32 pm

So far EFX has allowed me to do everything I could possibly want. I see how commissions can be a downer for you scalpers, but for typical trading hours, EFX's spread seems incredible if it exists at all, and lots of times it doesn't. Definitely at least give the demo account a go to see what you think.

I think that for the majority of your trades, Oanda will have very little advantage over EFX in terms of commissions. Those advantages are absolutely ruled out by the leverage unless of course you are trading hundreds of millions and in my humble opinion if you have that much money you are just being greedy 8)

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Postby eudamonia » Wed Jul 12, 2006 10:08 pm

Michal,

Thanks for throwing that question to the yahoo group. I hadn't thought of that.

jhtumblin,

Of course I'm greedy :). I want it all - no spread, no slippage, no commissions - in short I want to conquer the world. Bwhaahahah. Oh, sorry about that, got a little de-railed.

A number of traders I know who make a good living at trading don't seem to look too closely at their trading costs. Yes, they make tremendous amounts of money, however, I've noticed that their trading costs can be 30% of their total profits. Talk about yikes! For me a difference of as little as 1 pip on average per trade means about $2k per contract per month. You better believe I watch my broker like a hawk. And I also check to make sure that I'm getting the best rates I can.

Edward
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michal.kreslik
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Postby michal.kreslik » Wed Jul 12, 2006 10:25 pm

eudamonia wrote:For me a difference of as little as 1 pip on average per trade means about $2k per contract per month. You better believe I watch my broker like a hawk. And I also check to make sure that I'm getting the best rates I can.


Precisely my point. No matter how much I make, I can make more if I reduce the costs.

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