The top chart belongs to Broker A whom I'm so tempted to shame, the below chart belongs to Broker B. Ironically Broker A is one of the most reputable spot FX brokers, which is why I'm shocked at the blatantly obvious stop hunting that is going on. Now I have many MT4 platforms, and it only takes a couple of minutes to verify across a number of brokers that the problem indeed lies with Broker A. No other broker has those ridiculous spikes. And mind you this is not a rare occurrence, 10 in one screen and on a major pair on a relatively high time frame is a very serious matter! I've been observing this broker's charts and know that this is a very common occurrence. I don't see how it even manages to keep its clients.
So in conclusion, it is very important to select a good spot FX broker. Sure low spreads are important, but factors like execution speed, integrity of charts, ease of funding, technical stability are equally important. I used to neglect that until I experienced platforms that keep disconnecting, or orders that hang and refused to be processed so you cancel them and reenter a new order, only to end up with a duplicate position. In spot FX we have the luxury to try out demo platforms for free, take full advantage of it and at least trial a platform for a week or two before committing to the broker.
Hi Myst1z!
ReplyDeleteHere’s a friendly shout-out from a fellow trader from the little red dot! *waves*
First off, thanks for the generous sharing of your knowledge and resources!
This post got me curious, so I opened up my charts from 4 different brokers and did a comparison.
Does broker A starts with ‘O’? Lol.
I looked up some of your points of interests and they happened at times when there were considerable widening of spreads.
For example, the first and last rectangle corresponded to the start and the end of the trading week.
The 3rd from the right happened during FOMC Meeting Minutes.
Broker ‘O’ which strongly resembles your broker A is known to widen their spreads during periods of low liquidity. NZDUSD’s weekend spread now stands at 20.4pips.
Perhaps that explains the supposed stop hunting?
Look forward to more of your posts!
Cheers!
Hi fellow Singaporean!! I was wondering if anyone would ask! And ehm there is only one spot FX broker which starts with "O" :P Lets just say you've done your research well ;) Yep I've no doubt that these spikes occur during news or low liquidity periods, but when one broker exceptionally stands out like this, its pretty unacceptable.
ReplyDeleteJust curious which broker are you using? And I always find it interesting when people chance upon my blog because I don't advertise it at all. How did you manage to find it? :)
Lol. In that case, I shall spell it out.
ReplyDeleteI started with Oanda. Apart from the good reputation, I chose it mainly because it was the easiest to deposit funds then. There were no fees involved via local bank transfer.
To be fair, I experienced very minimal hiccups with Oanda. No major complains really.
I knew about the spread widening and accepted it as part of Oanda. Besides, I would not take a trade during those times. So it was not an issue to me.
But over time, Oanda's weekend candles start to irritate. I would also prefer my H4 candle to close at NY close. And I want to try an ECN broker instead of a MM. So I started looking around again.
I went through Pepperstone, IC Markets, AxiTrader, AvaFX, Armada Markets before deciding on FX Open AU (Not FX Open based in NZ). FX Open AU ticks most of the boxes in my checklist.
Once I'm fully comfortable, I will close my Oanda account.
What about yourself?
As to how I stumbled upon your blog? Hmmm... It must be either from FF, RTM or AG, but I really cannot remember.
Trading can get lonely and/or boring sometimes. Luckily there's Google. But as you said, there are tonnes of trash out there. So I'm always grateful when I chance upon something new and useful.
Better yet when it's local! ;-)
Wow we're pretty similar. I do have an Oanda live account for similar reasons - good reputation, Singapore base, ease of funding. However after doing some cost calculation and comparison, I decided to seek other brokers. My main considerations were Armada and IC Markets. I decided on IC for a couple of reasons - SGD account, no cost for deposits, only standard TT charges for withdrawal, client management site (something Armada doesn't have), variety of instruments like Oil and indices which Armada doesn't provide, and able to select RTM as IB to receive their analysis (though they haven't replied me yet). Spread wise its a tough call though I believe Armada is ever so slightly better. Reputation wise I think IC is better. I will check out FX Open :)
ReplyDeleteAre u a S/D trader too? Indeed trading can get boring, would be nice to hook up with fellow Singaporean S/D traders!
I actually opened a live account with IC Markets with HFT group as IB (I also opened a live account with Pepperstone). But in the end I decided to fund FX Open AU.
ReplyDeleteFXO also has SGD account and eWallet. Withdrawal charge is S$40 on top of TT charges,.
FXO does not have oil and indices. There are slightly fewer forex pairs as well.
There's no B-book for FXO, so the smallest trading size is 0.1 lot.
Spread wise, I think FXO may be marginally better.
With HFT group IB, I would be paying USD$5.50 per lot for IC Markets. FXO operates on a base currency variable commission structure. On their VIP ECN rates, I'm paying less than USD$5.50 except for GBP pairs.
Reputation wise, FX Open NZ seemingly has a bad past. But FX Open AU apparently is a separate entity. Regulated by ASIC like IC Markets.
IC Markets has a much more impressive pool of liquidity providers. But in the end the savings in commission sealed the deal for me.
Hope this is helpful.
S/D is not the only thing in my toolbox, so I guess I cannot call myself a S/D trader. But S/D forms a big part in my analysis. Still learning and making things my own.
It is really shocking. For what reason you guys want to open an account with MM?.
ReplyDeleteHave you tried Dukascopy or MB trading?.
Currently i am going to open my live account with one of them.
Will - Thanks a lot for that detailed info, its really helpful and I'll certainly look into FXO, will probably download their MT4 to trial it.
ReplyDeleteRishi - I guess there is really no reason to open an account with MM, I just didn't do sufficient research when I was first broker sourcing. :P However even for ECNs one has to be careful, as there are true ECN brokers and B Book ECN brokers. This article explains it well: http://tgblogsite.com/annuity55/learn-the-dirty-tricks-of-b-book-forex-brokers/
I can't comment on Duka or MB as I haven't done research on them, perhaps Will might be able to chip in as it is apparent he has done a lot of homework on this.
Anyway guys, I'm always keen to network with other S/D traders, so if you guys fancy a chat or setups discussion do add me on Skype: myst1z.
Have a profitable week ahead, and hope the debt ceiling issue doesn't screw the markets up! (Might want to be wary of holding too many Dollar correlated positions).
Hi Myst,
ReplyDeleteSent request already. I am also resident of Singapore . Hope to chat with you guys on SD trading. Currently LMAx, MBtrading, Dukscopy are on my list. It could be better if Will know anything about them
Hi Myst1z and Rishi!
ReplyDeleteHappy holiday in advance! And selamat hari raya haji if you are celebrating!
Well, if I was more informed then, I would not have chosen Oanda. But I was new, and Oanda has an office in Singapore! Lol.
My knowledge on brokers is probably about the same as you guys. I have heard great things about Dukascopy but their main platform is JForex. I do not wish to use a third party bridge for MT4. And after investing so much effort in MT4, I do not wish to migrate to another platform, even though MT4 is arguably inferior. I would rather spend my time to brush up my trading skills than to learn and build something from scratch again.
And then there's the cost factor. For me, I want to minimize my operating cost. And in that aspect, FXO's spread and commission (VIP ECN rates) are hard to beat.
I'm sure everyone will do their due diligence when it comes to selecting a broker. It's our money at stake after all. Everyone has different criteria, so choose the best fit for your needs.
I do not use skype. Perhaps I should sign up for one?
Hi Will,
ReplyDeleteHappy hariraya!. Jforex is a simple platform easy to learn. One thing i need to highlight about Jforex is stop loss can be set based on the Bid price or ask price (Cool ryt). Spread widening may not be an issue for us if you use this function. I dint trade them live . Cant confirm anything for now.
Haha ya Will go get Skype man, easier to chit chat and discuss trading stuff there. :) And Happy Hari Raya to both of you!
ReplyDeleteExperienced my first outage with FXO last night after london close. Significant enough to cause a gap between two H1 candles. Just sharing.
ReplyDeleteWow thats fierce, hope you weren't caught on the wrong side! Will can I just ask you, is it possible for you to briefly describe your current trading strategy? Like do you trade PA bars at S/R S/D levels, touch trade, use Fibs, trend lines for confluence etc. I'm very curious to know because besides you and Rishi the other Singaporeans I know who use S/D are mainly OTA grads. That said my circle is very small.
ReplyDeleteHi Myst1z!
ReplyDeleteI had no open trades so it was no issue to me. But it's always unsettling when outages occur.
I'm a intraday trader, so I do D1/H1/M5. I select my pairs based on D1, and know my exceptions on W1 and MN. For example, I will only look for shorts on NZDUSD and CHFJPY now regardless of how they look on D1.
When I hit my areas of interest on H1 (SD, TL, Fibo, prevHL etc), I will drill down to M5 and look for signals (PA, divergence, volume etc).
I will go through my do-not-trade conditions (market open/close, news, daily range, currency strength, SL limit, TP target etc) to decide if I should enter a trade.
Pretty much standard fare eh?
What about yourself?
Hey Will thanks for sharing, sounds like a very logical system indeed!
ReplyDeletePersonally I watch MN, WK, and D1 for important zones, S/Rs, trend, and use H4 and H1 as my entry time frame. If u're familiar with engulfs, I mainly trade retraces to the source of engulf. It would be good if my zone of interest has confluence with S/R, TL, Fibs, round numbers, div etc.
I noticed you mentioned vol and prevHL. Do you study VSA? And regarding prevHL, do you personally find it effective? I always had this concern whereby prevHL will vary depending on broker, as different brokers open and close at different times. This applies to pivot levels too.
And yes I hear you regarding NZDUSD and CHFJPY. In fact I tried to short CHFJPY based on the nice H1/H4 supply at 108.1. Tried to run it by not taking partial profits, it went around 2R before stopping me out for BE. Grrrr.... As for Kiwi, this bugger has been compressing up and refusing to die. I also can't wait to short it, now that it is deeper into WK/MN supply perhaps we will get a chance? :P
I studied VSA for a short while on FF and babypips. I don't actively apply it but I do use it for trade confirmations on top of other stuff I mentioned. PrevHL serves mainly as reference points, like pull-back levels for momentum trades. Ultimately, I still make my decisions based on PA at those areas.
ReplyDeleteBtw, you mentioned OTA. Are you a OTA grad yourself?
Ic, I used to study VSA/Wyckoff too but never did get consistent on it. Admittedly I was just trying to do it myself after reading the Tom William and Wyckoff books. It should have been more effective to be active on the VSA threads, PeteFader, Malcolm etc. Really do see the potential of VSA with S/D, somehow think they should fit together. Like if there is a selling climax into a demand zone followed by Spring, No Supply etc, it should be a high probability setup. Just some random thoughts, not sure if that is the case.
ReplyDeleteAnd no I'm not an OTA grad, too costly (around 18k for the entire course?) and I've heard that most of the course material is already covered in the free Seiden webinars (much to the displeasure of some OTA grads).
I agree the OTA course is rather overpriced. From your posts, I suppose you took up the PA trading course on traders guild?
ReplyDelete