Spot Forex & News

[Cory2679 11]

I currently trade with Oanda. It is well known that Oanda spikes their spreads around news events.

 

I currently trade the EUR/USD from 8:20AM - 3PM Eastern Time. During those hours the spread usually spikes multiple times, resulting in anywhere from 5-10 tick spreads for a few moments.

 

I'm not caught off guard...I monitor 3 separate economic calendars and make sure I'm out of the market for any news labeled "high impact," "market moving," "high importance," etc.

 

However, I do miss out on opportunity due to the fact that several times during the day I can't participate.

 

So, my question is:

 

Is it the same way with ECN spot forex brokers, such as MB Trading? Basically, can you hold through news without worrying about the spread spiking (during normal market hours)?

 

I understand events like FOMC announcements can throw off just about anything, including futures, but I'm talking about the every day "high impact" news events...

 

Thanks for the help,

 

Cory

Edited April 27, 2010 by Cory2679

[daedalus 10]

Not in the least. MB Trading spikes spreads just as much as anyone else.

[fxThunder 10]

I currently trade with Oanda. It is well known that Oanda spikes their spreads around news events.

 

I currently trade the EUR/USD from 8:20AM - 3PM Eastern Time. During those hours the spread usually spikes multiple times, resulting in anywhere from 5-10 tick spreads for a few moments.

 

I'm not caught off guard...I monitor 3 separate economic calendars and make sure I'm out of the market for any news labeled "high impact," "market moving," "high importance," etc.

 

However, I do miss out on opportunity due to the fact that several times during the day I can't participate.

 

So, my question is:

 

Is it the same way with ECN spot forex brokers, such as MB Trading? Basically, can you hold through news without worrying about the spread spiking (during normal market hours)?

 

I understand events like FOMC announcements can throw off just about anything, including futures, but I'm talking about the every day "high impact" news events...

 

Thanks for the help,

 

Cory

 

Hi Cory,

 

Open a demo account with MB trading and do a side by side comparison. I have been very impressed with them in the few days that I have been doing that myself.

 

Cheers,

Fxt

Edited April 27, 2010 by fxThunder
typo

[Cory2679 11]

Also, I used MB Trading as an example but I know there are some others out there, such as Interactive Brokers...

[sicktrader 10]

What sources do you guys use for the news. I use dailfx and forex.com, and verify us news with econoday. Thought that there may be better out there.

[Cory2679 11]

What sources do you guys use for the news. I use dailfx and the forex.com, and verify us news with econoday. Thought that there may be better out there.

 

I use Econoday, DailyFX, and Forex Factory.

 

For a while I was only using Econoday and DailyFX, but there was a spread spike with Oanda that wasn't labeled "market moving" or "high importance" with either of them, and it was with Forex Factory, so now I watch all three.

[Kiwi 16]

With interactive brokers, spread spikes are caused because the participant banks and your fellow speculators have pulled their orders. Such spikes seem to be smaller than with bucket shops (although they are there, and for good reason) and are much shorter in duration.

 

I use forex factory news. Because I care about news outside of the US zone I also check:

Forexnews.com and

Google Translate

[Cory2679 11]

Thanks for the help.

 

I think what I'm going to do is open MB Trading and Interactive Brokers forex demos along side Oanda and watch the spreads during "market moving, etc." news.

 

With the ECN's I guess it's a more legitimate spike, whereas Oanda is broker-induced. I've never traded with an ECN spot forex broker, but I have traded currency futures and I know with futures these news events that I'm talking about have very little effect on the spread, while Oanda has widened it to 10 pips!

 

Tomorrow's an FOMC day so I really won't worry about it tomorrow, but over the next few days I'll watch the EUR/USD spread with MBT, IB, & Oanda during news (since I can't trade then, anyway!).

 

I'll report back next week sometime what I find for anyone who's interested.

 

-Cory

[Cory2679 11]

NOTE: Even bucket shops vary. I was trading a live micro account with FXCM a little while ago before they increased their spreads, and their news spread spike was nothing compared to Oanda...with FXCM I could hold through these every-day news events (with the exception of FOMC, NFP, etc.).

[MidKnight 12]

As kiwi said, with IB the spreads are from the banks. You are gonna get spikes and spread widening in any market Corey around key events, this is inevitable. I know what you are saying about Oanda though, they will widen it some 15-30 seconds before the event and depending on the volatility after the event they will keep it wide for another 1-5 minutes.

 

In comparing Oanda with IB during minor to major scheduled news events, I note than the spread at IB often does widen right at the event but it only lasts for a fraction of a second. If you blinked, you probably missed noticing it. Again, this is no different than any futures or stock market around key events. My feeling is that a ECN model like IB is the fairest you will find in the FX world. View the product details on their site to see exactly which banks are providing liquidity for their offering.

 

With kind regards,

MK

[Cory2679 11]

You are gonna get spikes and spread widening in any market Corey around key events, this is inevitable. I know what you are saying about Oanda though...

 

Yeah, and I just want to add...I can handle a pip or two or maybe even three spike...my stops aren't that close so I could probably stay in my trade...but Oanda regularly spikes the EUR/USD spread to 10 pips, multiple times per day...

[Kiwi 16]

You can't get anything from the IB demo -- it really is just a demo of product (tws) not of the market feed and the data isn't the same as the live or customer sim mode options.

 

I guess we could create a spread chart for IB with 10 second increments (so it would be the max spread over each 10 secs) ... can you do something similar with Oanda so it could be compared?

[Cory2679 11]

You can't get anything from the IB demo -- it really is just a demo of product (tws) not of the market feed and the data isn't the same as the live or customer sim mode options.

 

I guess we could create a spread chart for IB with 10 second increments (so it would be the max spread over each 10 secs) ... can you do something similar with Oanda so it could be compared?

 

Unfortunately, I believe this is the best I can do...

 

 

That's the best that Oanda offers...I can't dial down to 10 second intervals.

 

However, I could attempt to do it manually by watching the spread....or taking screen shots every 10 seconds, etc.

 

Were you talking about doing it manually or does IB offer spread history?

 

-Cory

[Cory2679 11]

Update

 

I moved my account to MB Trading...I just pulled up Oanda next to MBT to watch the spreads during the unemployment claims news....

 

Oanda's EUR/USD spread spiked to 10 pips and remained there 5-10 seconds.

 

Oanda's spread was actually wider than usual leading up to and after the spike (about 3 pips).

 

MB Trading's EUR/USD spread spiked to 2.5 pips and remained there a fraction of a second.

 

MBT's spread quickly reverted back to 0.9 pips (typical spread) and touched as low as 0.2 pips.

 

Needless to say, I'm much happier with MBT than with Oanda!

 

Cory