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| EURNOK Trade |
It annoyed me big time and I was about to call up my broker when I remembered that such things happen very often and there is no way to win the argument against the broker because Spot FX is unregulated and they're protected by written agreements.
As such, all I could do was to simmer down, reflect about it, and come up with two conclusions. First of all, I'm going to switch broker. Let me first shame this broker's name, it is CMC Markets. I checked through many of their charts (particularly the exotic pairs) and was shocked to find that such ridiculous spikes are very common. It is very obvious that the market maker is trying to gun the stops of their clients, they can easily do so because our orders are on their books and they know exactly where the stops are. How timely it is that I already set up a new broker account and had planned to switch to it in June.
Secondly, I'm going to stop trading illiquid/exotic pairs. I gave some thought to it, and asked myself this question: If I had ten million dollars to trade, would I be trading illiquid pairs? The answer is no, simply because of the risk of such black swan broker spike events. When one is managing huge sums of money, risk management is paramount and there is simply no room for such crap at all. I need to think and trade like a huge account trader. The majors and main crosses should provide me with enough opportunities that I do not need to undertake unnecessary risks with illiquid pairs. I guess you could say that it is a blessing in disguise that this happened to me now than in future when I'm trading a larger account.
I've been there brother. When I first started I went through 3 or 4 brokers like that. Having your money somewhere you can trust is crucial. I was surprised that you were trading such exotic pairs in the first place. I was only thinking that they were less liquid. It didn't even occur to me that they would be more open to manipulation but that makes sense.
ReplyDeleteYa man, I guess we never learn until we're bitten. I've never had a problem with exotic pairs, and the seniors of the James16 group trade them too so I figured it'll be ok. Perhaps this problem wouldn't exist with a more reliable broker, but I would prefer to focus more on learning how to scalp now so I'll probably stay away from exotic pairs and will only consider trading them if they present an excellent setup.
DeleteI opened up a small account with Oanda. It isn't my primary so I haven't traded with it yet but I have heard good things about them. I think they are based in Canada.
ReplyDeleteHey what a coincidence! I also just opened an Oanda account, gonna start using it next week. It is one of the few brokers with MT4 platform that have a base in Singapore where I'm in. Their spreads are pretty good and ya they do have a decent reputation, have been using their demo for a while and so far no problem with trade execution.
ReplyDeleteI hope they stay in business. It seems that some of the brokers are selling off or moving away from retail traders. That happened to me in January. I was with one company and then they told me that my account was now with forex.com. After that I opened up the Oanda account as a backup.
ReplyDeleteSince you mentioned MT4, I am fairly new to it. I noticed the indicator you have in the top left of your screen. What is that called? Where can I get it?