FIXED SPREAD BANDITS

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TheRumpledOne
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FIXED SPREAD BANDITS

Postby TheRumpledOne » Thu Jun 14, 2007 9:39 pm

FIXED SPREAD BANDITS

Gain charges you rollover no matter which way you trade eurusd and gbpud:




Compare to EFX Group:


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Postby roko » Sun May 11, 2008 12:55 am

Hi TRO.

I am using Oanda like my broker and I think it has a very competitive spreads (variables) but some that I do not like of them is that when I use Market Orders they have slippage, but this problem can fix with Limit Orders.

They usually have the follow spreads:
EURUSD 0.9 pips
USDJPY 1.6 pips
AUDUSD 1.8 pips

Anyway, I am posting it because I would like your opinion about Oanda, May be you had have some interaction with Oanda... What do you think about them?

Thanks.

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Postby TheRumpledOne » Sun May 11, 2008 1:44 pm

I have not used Oanda. I use www.efxgroup.com

For the 100th time, there is no fixed spread in Forex.
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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Postby roko » Sun May 11, 2008 4:04 pm

TRO.

I understand your point about the spreads in forex.

I read some topics of Kreslik about Oanda:
http://kreslik.com/forums/viewtopic.php ... ight=oanda
http://kreslik.com/forums/viewtopic.php ... ight=oanda

I thought that you could have some experience with Oanda, that was the reason of my question. But this point was clarified...

Thanks anyway.


roko

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Postby TheRumpledOne » Sat May 17, 2008 11:14 pm

I trade with www.efxgroup.com

They are an ECN. THERE IS NO FIXED SPREAD IN FOREX. Tell them THE RUMPLED ONE sent you.

You can google and find out what I really think about "FIXED SPREAD BANDITS".

I'll leave it at that so I don't get banned.

How do I avoid the spread?

I explained this to someone yesterday in an IM.

With EFX you pay a commission rather than having a "FIXED SPREAD".

It's "apples and oranges" so don't try to compare. "THE MATRIX HAS YOU" and you need to "FREE YOUR MIND" to understand what I am about to explain.

Let's say the current bid/ask is 1.5010 x 1.5015

The current spread is 5 pips.

You want to SHORT.

You SHORT at 1.5010.

You set a TP at 1.5005.

Bid/Ask becomes 1.5005 x 1.5009 and the current spread is 4 pips.

At EFX, you will get filled if the bid is 1.5005 and someone TAKES your offer.

Bid/Ask is now 1.5004 x 1.5009 and YOU HAVE YOUR PROFIT.

Note: the ASK never reached 1.5005. THIS IS IMPORTANT!

If you entered this order at a FIXED SPREAD BANDIT, whoops I mean broker, your order is STILL OPEN!!

The bid/ask must become 1.5000 x 1.5005 and your order HITS the Ask.

DO YOU GET IT?

If not, then read this over and over and over again until the LIGHT BULB goes off!!

The day I found out about EFX is the day I opened an account there and stopped trading with FIXED SPREAD BROKERS.

The simplest thing to do is to load up a demo account at EFX Group and see it with your own eyes.

When you place your TP Bid offer at 1.5005, your bid is displayed on Level II.

The point is with EFX your offer gets hit.

With FIXED SPREAD BROKERS you have to wait to hit their offer.

Maybe this might help:

First:

1.5010 x 1.5015

and price drops...

1.5009 x 1.5014

1.5008 x 1.5013

1.5007 x 1.5013

1.5006 x 1.5012

1.5006 x 1.5011

1.5005 x 1.5011 You may get hit

1.5005 x 1.5010 You may get hit

1.5004 x 1.5009 YOU COVERED 5 PIP GROSS PROFIT

AND LET'S CONTINUE

1.5003 x 1.5008

1.5002 x 1.5007

1.5001 x 1.5006

1.5000 x 1.5005 YOUR FIXED SPREAD BROKER FILLS YOUR ORDER.

Does that make it clearer??

What about the commission cost?

The commission varies depending on the pair trading.

It is $.50 per 10k minilot on USDJPY. So if I gross 2 pips, I am making money.

From the EFX site:


Commission Rates

Fixed spreads are a way for FCMs to markup or markdown the best bid or offer. FCMs do this to hide their fee into the price of the currency pair instead of displaying their best quote. Common sense tells you that no one works for free, so when you see an FCM claim they have ?no commission?, that should be a red flag. So how are they getting paid? Its simple: they are making money with the built-in markup/markdown in the spread.

Our FCM, MB Trading Futures, has nothing to hide. They offer tighter spreads with no markups/markdowns and openly display a low commission rate.

Commissions are based on total dollar amount traded: $5 per $100,000 traded.



Remember, tell EFX that THE RUMPLED ONE sent you
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.

Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.

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Postby pitboss » Sun May 18, 2008 2:35 am

Anyone using any fx broker other than an ecn such as mbtrading or efx is giving their money away!

If they continue to use 'spread bandits' they really need to examine their sincere interest in making money in the forex.

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Postby roko » Tue May 20, 2008 4:44 am

TheRumpledOne wrote:I trade with www.efxgroup.com

They are an ECN. THERE IS NO FIXED SPREAD IN FOREX. Tell them THE RUMPLED ONE sent you.

You can google and find out what I really think about "FIXED SPREAD BANDITS".

I'll leave it at that so I don't get banned.

How do I avoid the spread?

I explained this to someone yesterday in an IM.

With EFX you pay a commission rather than having a "FIXED SPREAD".

It's "apples and oranges" so don't try to compare. "THE MATRIX HAS YOU" and you need to "FREE YOUR MIND" to understand what I am about to explain.

Let's say the current bid/ask is 1.5010 x 1.5015

The current spread is 5 pips.

You want to SHORT.

You SHORT at 1.5010.

You set a TP at 1.5005.

Bid/Ask becomes 1.5005 x 1.5009 and the current spread is 4 pips.

At EFX, you will get filled if the bid is 1.5005 and someone TAKES your offer.

Bid/Ask is now 1.5004 x 1.5009 and YOU HAVE YOUR PROFIT.

Note: the ASK never reached 1.5005. THIS IS IMPORTANT!

If you entered this order at a FIXED SPREAD BANDIT, whoops I mean broker, your order is STILL OPEN!!

The bid/ask must become 1.5000 x 1.5005 and your order HITS the Ask.

DO YOU GET IT?

If not, then read this over and over and over again until the LIGHT BULB goes off!!

The day I found out about EFX is the day I opened an account there and stopped trading with FIXED SPREAD BROKERS.

The simplest thing to do is to load up a demo account at EFX Group and see it with your own eyes.

When you place your TP Bid offer at 1.5005, your bid is displayed on Level II.

The point is with EFX your offer gets hit.

With FIXED SPREAD BROKERS you have to wait to hit their offer.

Maybe this might help:

First:

1.5010 x 1.5015

and price drops...

1.5009 x 1.5014

1.5008 x 1.5013

1.5007 x 1.5013

1.5006 x 1.5012

1.5006 x 1.5011

1.5005 x 1.5011 You may get hit

1.5005 x 1.5010 You may get hit

1.5004 x 1.5009 YOU COVERED 5 PIP GROSS PROFIT

AND LET'S CONTINUE

1.5003 x 1.5008

1.5002 x 1.5007

1.5001 x 1.5006

1.5000 x 1.5005 YOUR FIXED SPREAD BROKER FILLS YOUR ORDER.

Does that make it clearer??

What about the commission cost?

The commission varies depending on the pair trading.

It is $.50 per 10k minilot on USDJPY. So if I gross 2 pips, I am making money.

From the EFX site:


Commission Rates

Fixed spreads are a way for FCMs to markup or markdown the best bid or offer. FCMs do this to hide their fee into the price of the currency pair instead of displaying their best quote. Common sense tells you that no one works for free, so when you see an FCM claim they have ?no commission?, that should be a red flag. So how are they getting paid? Its simple: they are making money with the built-in markup/markdown in the spread.

Our FCM, MB Trading Futures, has nothing to hide. They offer tighter spreads with no markups/markdowns and openly display a low commission rate.

Commissions are based on total dollar amount traded: $5 per $100,000 traded.



Remember, tell EFX that THE RUMPLED ONE sent you



TRO.

Are you sure about your example?

The rules are the same for all the brokers, with fixed spreads or variable spreads:

If we want to buy, we use the ask quote.
If we want to sell, we use the bid quote.

The spreads in EFX exists, variable spreads, but there are spreads. It can be zero or x number.

Then, in your example, if you enter short at 1.5010 you are selling with the bid quote and when you have to exit you have to buy at the ask quote. If there are a 1 pip of spread, then, it spread is added to the cost of the commission. If we want to pay just the commission using EFX, the spread must be zero at the moment

I checked it with EFX and they told me that they use the same rules that I mentioned above.

roko

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Postby yurcek » Tue May 20, 2008 7:12 pm

If I understand corectly. He told us that with fixed spread bandits you have to wait that BID offer reaches the 1.5005 level.
With ECN broker you have possibility to buy or sell between those spreads. So if you have ASK 1.5004 and BID 1.5009 (official spread) and your take profit is at 1.5005, someone could buy at 1.5005, because they offer multiple quotes from different banks and all banks don't have the same BID and ASK. I hope that I understand corectlly. Which also means that you could buy or sell between those spreads ????
Did I understand correctly or ???? Don't know if the level II is only for watching or you could also buy and sell on level II.

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Postby roko » Tue May 20, 2008 7:56 pm

Hi yurcek.

Thanks for your comments.

I think you are right about it. The post of TRO refers to sell or buy between spreads. My confusion come from the line "At EFX, you will get filled if the bid is 1.5005 and someone TAKES your offer." If the example begin with a bid, then the trade exit with an ask. But if we change the word bid for ask in that line, then all is OK.

I will review in demo (of EFX) the commented by TRO...

Thanks again. :smt023

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Postby TheRumpledOne » Wed May 21, 2008 2:49 pm

On an ECN, you order stays there until either someone else on the ECN hits your order OR a bank hits your order.

You do NOT always have to wait for the bid/ask to move to your price to be filled.
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.

Please add www.kreslik.com to your ad blocker white list.
Thank you for your support.


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