[thalestrader]

Originally Posted by Gabe2004 »

I don't understand though, why does a 5 tick bother your daughter if her average win is 50-60 pips as you have mentioned in the past.

She never liked the the 5 tick spread, and she would like it even less now that her trading is limited to the first hour or two of Tokyo becasue she leaves for school soon after the NY session gets underway. While we see some very nice moves in Tokyo from time to time, the range of the NY session is typically of greater extent. If you were to go back to some of the examples I posted of her trades, you will also see that she was trading swings of a higher degree than we find ourselves trading here day to day.

Originally Posted by Gabe2004 »

Also I don't agree with the 6 pip handicap. If oanda has a 3 pip spread than that is my handicap. One cannot include the spread twice.
If bid/ask is 100.00/100.03 than to enter long I would pay 100.03 and if I want to exit immediately I would get 100.00 so the handicap is only the spread once and not twice.

Please correct me if i am wrong.

Suppose you and I are both looking to short the GBPUSD. We each see a low of 1.6586. My broker's spread is 1 pip, so I place a sell stop at 1.6584. Your broker's spread is 3 pips. But since you do not see the handicap, you place your sell stop at 1.6585. Price declines and your broker shows 6585/6588, and you are filled short. I am still flat, because at my broker the GU was 6587/6588. Price then rallies and stops you out.

Now the short opportunity presents itself again, and at the same entry price. This time, you know you have to set your sell stop at 1.6582. This way, you will only get filled if price does trade at 1.6585 in the real world, and not just in the world of your broker's internal electronic trading system. Price declines to 6585/6582. You are short at 82 and I am short at 84.

We both see that there is potential support at 1.6558. I set my PT for 1.6559. You forgot the lesson of the spread, but only partially, so you too set your PT at 1.6559. Price declines. My broker shows 1.6558/59 and I am filled with a +25 tick profit. Your broker shows the bid offer at 1.6557/60. You do not get filled. Price actually showed a lower bid at your broker than at mine, but because of the spread, you do not get your PT order filled. Price then rallies and stops you out at whatever your stop loss is at the time.

Or, perhaps you remembered the lesson of the spread as price decline. You change your PT order to 1.6561, and you do get filled there. I have a +25 tick profit, you also have a +25 tick profit, but you share 4 of those ticks with your broker, and you keep only +21 for yourself.

You think you only pay the spread once? You think it only has an impact if you buy and immediately close the position? You have bought the lie. But do not feel bad. Even experienced traders refuse to believe the edge they are ceding to the market maker. But the spread takes you coming and going. If you do not believe me, then try this: Next time you are going to trade the GBPUSD in your spot account, do the same trade in your futures account trading the 6B. It is much easier to make book trading the single tick spread 6B than it is on trading a three tick spread GBPUSD.

Best Wishes,

Thales

[brownsfan019]

Just to add my

This is the very reason I don't touch forex. You guys are trading the same thing, yet could have different results/charts/prints simply based on the product being traded. IMO trading is hard enough w/o adding in more things going against you which I think is being demonstrated here.

I just like clean, crisp charts with 1 centralized pricing location = futures.

[Gabe2004]

Originally Posted by thalestrader »

She never liked the the 5 tick spread, and she would like it even less now that her trading is limited to the first hour or two of Tokyo becasue she leaves for school soon after the NY session gets underway. While we see some very nice moves in Tokyo from time to time, the range of the NY session is typically of greater extent. If you were to go back to some of the examples I posted of her trades, you will also see that she was trading swings of a higher degree than we find ourselves trading here day to day.



Suppose you and I are both looking to short the GBPUSD. We each see a low of 1.6586. My broker's spread is 1 pip, so I place a sell stop at 1.6584. Your broker's spread is 3 pips. But since you do not see the handicap, you place your sell stop at 1.6585. Price declines and your broker shows 6585/6588, and you are filled short. I am still flat, because at my broker the GU was 6587/6588. Price then rallies and stops you out.

Now the short opportunity presents itself again, and at the same entry price. This time, you know you have to set your sell stop at 1.6582. This way, you will only get filled if price does trade at 1.6585 in the real world, and not just in the world of your broker's internal electronic trading system. Price declines to 6585/6582. You are short at 82 and I am short at 84.

We both see that there is potential support at 1.6558. I set my PT for 1.6559. You forgot the lesson of the spread, but only partially, so you too set your PT at 1.6559. Price declines. My broker shows 1.6558/59 and I am filled with a +25 tick profit. Your broker shows the bid offer at 1.6557/60. You do not get filled. Price actually showed a lower bid at your broker than at mine, but because of the spread, you do not get your PT order filled. Price then rallies and stops you out at whatever your stop loss is at the time.

Or, perhaps you remembered the lesson of the spread as price decline. You change your PT order to 1.6561, and you do get filled there. I have a +25 tick profit, you also have a +25 tick profit, but you share 4 of those ticks with your broker, and you keep only +21 for yourself.

You think you only pay the spread once? You think it only has an impact if you buy and immediately close the position? You have bought the lie. But do not feel bad. Even experienced traders refuse to believe the edge they are ceding to the market maker. But the spread takes you coming and going. If you do not believe me, then try this: Next time you are going to trade the GBPUSD in your spot account, do the same trade in your futures account trading the 6B. It is much easier to make book trading the single tick spread 6B than it is on trading a three tick spread GBPUSD.

Best Wishes,

Thales

If you are short @ 1.6584 and I am short @ 1.6582 then if your broker shows 1.6558/59 and u set your stop to 1.6559 then in this example to be fair you should set my stop to 1.6560 and not 1.6561 which will give you a profit of 1.6584-1.6559=25pips and for me it will be 1.6582-1.6560=22 pips. but we don't really know whether my broker will not print 1.6556/1.6559in which case my profit will be 23 pips.
But even with your example the difference between us will be the spread difference between our brokers +/- 1 pip.

Gabe

[BlowFish]

Originally Posted by Gabe2004 »

I understand and agree with you about the spread.
I don't understand though, why does a 5 tick bother your daughter if her average win is 50-

Giving 10% of your winnings away is bad enough but think of all the 10 point stops that cost you an an extra 50%. If the money itself isn't enough the mental pressure (as I mentioned when we where talking about slippage) are significant too.

The big issue (to me) is you are taking a bet on a price that is being set by the bookie.

All this is surmountable by targeting larger swings .... the smaller the swings you target the bigger the effect of the shenanigans and the more likely a profitable approach is going to fail.

[Gabe2004]

Originally Posted by brownsfan019 »

Just to add my

This is the very reason I don't touch forex. You guys are trading the same thing, yet could have different results/charts/prints simply based on the product being traded. IMO trading is hard enough w/o adding in more things going against you which I think is being demonstrated here.

I just like clean, crisp charts with 1 centralized pricing location = futures.

Since I noticed that some currency pairs move alot during the London open, is there enough liquidity in the futures market during those hours to trade the futures an no the spot?

Gabe

[brownsfan019]

Originally Posted by Gabe2004 »

Since I noticed that some currency pairs move alot during the London open, is there enough liquidity in the futures market during those hours to trade the futures an no the spot?

Gabe

No idea - you'd have to pull up some charts and see.

[Cory2679]

I'm still having a really hard time pulling the trigger on my live account. I considered opening a small forex account to work up to full size, but when I played around on a demo account for a little while, I soon remembered why I trade currency futures rather than spot forex, and would never go back.

I saw an excellent GU trade this morning, only to let it make 25 ticks or so without me...I was afraid because there was what appeared to be a losing trade a short while before it.

I'm watching a setup on the EU (which I didn't take) that would have been a 9 tick loser, which will no doubt keep me out of the next potential winning trade out of fear.

I'm so frustrated with myself. I haven't taken a single trade this week.

I'm currently watching the JPY/USD (6J), possibly looking for a break of 1.1286 for the short...

[BlowFish]

Originally Posted by Gabe2004 »

Since I noticed that some currency pairs move alot during the London open, is there enough liquidity in the futures market during those hours to trade the futures an no the spot?

Gabe

Assuming you are not trading massive size yes.....not sure about the new mini futures ....no experience of those (yet).