Trading Transaction Costs
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andyfuller
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What are they Jimrobo? Is slippage where the market gaps?
ok slippage is where you ask to get filled at a price but you actually get filled at a worse price. Since it is not an exchange but a pool of money during volatile periods the price you ask for may be different to the price you get filled.
swap is where you hold a currency position overnight which is different to your account currency and it is basically the net interest lost/gained on that currency relative to the net/gain of the account currency I think?? Its been a while since I even looked at forex though. Swap can be positive though as well as negative.
swap is where you hold a currency position overnight which is different to your account currency and it is basically the net interest lost/gained on that currency relative to the net/gain of the account currency I think?? Its been a while since I even looked at forex though. Swap can be positive though as well as negative.
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andyfuller
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Cheers for the explanations. Have added them in to Forex and also Slippage to Spread Betting as they mention it in one of the IG Index Videos I watched.
no, on betfair if the price is at 3.2 you press 3.0 as a back order it will fill at the best price down to 3.0 and then remain an unmatched order.Ferru123 wrote:Ditto Betfair.jimrobo wrote:forex - slippage
If the Mad Bomber takes out 10 ticks, I don't like your chances of closing out for a 2 tick loss.
Jeff
With forex you place an order at a price and when it reaches that price it fires an order. The price will be filled at the next available price WHATEVER that is. It is a diferent system to betfair. Its because its a pool of orders and the price you see on your screen might not neccessarily be available.
I think we are talking at cross purposes.
My understanding of slippage is as follows. Let's say I'm trading a currency pair. I've entered at 1000 and I've got a stop at 990.
Suddenly, Ben Bernanke decides, out of the blue to announce a trillion dollar round of quantative easing. The price tumbles to 900, and I don't get filled till is drops to 950, as there are few buyers.
That's what I understand by slippage. Surely it's no different to the situation you get on Betfair when a horse starts playing up, and price shoots up due to the backers cancelling their orders and the layers jumping over each other to get a piece of the action, meaning that you might not be able to close your trade right away.
Jeff
My understanding of slippage is as follows. Let's say I'm trading a currency pair. I've entered at 1000 and I've got a stop at 990.
Suddenly, Ben Bernanke decides, out of the blue to announce a trillion dollar round of quantative easing. The price tumbles to 900, and I don't get filled till is drops to 950, as there are few buyers.
That's what I understand by slippage. Surely it's no different to the situation you get on Betfair when a horse starts playing up, and price shoots up due to the backers cancelling their orders and the layers jumping over each other to get a piece of the action, meaning that you might not be able to close your trade right away.
Jeff
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superfrank
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that's pretty much the case with all trading - if you have a stop loss (without an offset) then there is no guarantee you'll get matched/filled at that price (which makes sense).
you can get a guaranteed stop loss with some spread betting firms (IG do it) but you pay for that insurance with an increased spread.
i try not to use stop losses at all - overrated in my view and leaves you open to manipulation (especially in things like spread betting and retail forex where they hunt stops - their spread doesn't have to be tied to the actual underlying price).
you can get a guaranteed stop loss with some spread betting firms (IG do it) but you pay for that insurance with an increased spread.
i try not to use stop losses at all - overrated in my view and leaves you open to manipulation (especially in things like spread betting and retail forex where they hunt stops - their spread doesn't have to be tied to the actual underlying price).
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andyfuller
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I have read in a few places about them hunting stop losses in Spread Betting, do you think this really goes on? If it does would they not be going hunting after the bigger boys, I assume there are some pretty big player like with Betfair.
Stop loss hunting goes on all the time in the financial markets.
This Level II (financial ladder trading) manual talks about it - http://www.nobsdaytrading.com/
Since reading the manual, I've noticed the same patterns of manipulation on Betfair, whereby the big boys push the market one way, and then push it the opposite direction, and profit from the liquidity that results from people exiting their trades.
Jeff
This Level II (financial ladder trading) manual talks about it - http://www.nobsdaytrading.com/
Since reading the manual, I've noticed the same patterns of manipulation on Betfair, whereby the big boys push the market one way, and then push it the opposite direction, and profit from the liquidity that results from people exiting their trades.
Jeff
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andyfuller
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It's one thing it happening on Betfair by other users who don't have inside info but another if the house are doing it. I am sure plenty of users on here have given the Betfair markets a helping nudge one time or another, I remember a video that Sam Wilson or Jack Birkhead did showing them doing it for example.
I think I see what you're getting at - do the brokerage take out their clients' stops?
Given that their prices reflect the underlying market, I'd have thought the only way that they could do so is if they were to widen their spreads. There's no way that they would be able to influence the markets where most of their client trade, as they are just too large. Every fortnight on Forex, a sum of money is traded that's equivalent to the world's GDP!
Jeff
Given that their prices reflect the underlying market, I'd have thought the only way that they could do so is if they were to widen their spreads. There's no way that they would be able to influence the markets where most of their client trade, as they are just too large. Every fortnight on Forex, a sum of money is traded that's equivalent to the world's GDP!
Jeff
Have a look at this video:
http://www.youtube.com/watch?v=A7rqF24Sjsg
Jeff
http://www.youtube.com/watch?v=A7rqF24Sjsg
Jeff
andyfuller wrote:I am sure plenty of users on here have given the Betfair markets a helping nudge one time or another, I remember a video that Sam Wilson or Jack Birkhead did showing them doing it for example.
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andyfuller
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Yeah that was what I am getting at but SF was saying the spread doesn't have to be tied to the market but I would have thought on say the ftse or a ftse stock that it would stick out like a saw thumb that they were up to something, as you say the market makes any spread firm etc look like a drop in the ocean. Can you expand SF?
Always wondered if it was Peter playing the piano in the video btw?
Always wondered if it was Peter playing the piano in the video btw?
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superfrank
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'Beat The Forex Dealer' - 'All About Stops':andyfuller wrote:Yeah that was what I am getting at but SF was saying the spread doesn't have to be tied to the market but I would have thought on say the ftse or a ftse stock that it would stick out like a saw thumb that they were up to something, as you say the market makes any spread firm etc look like a drop in the ocean. Can you expand SF?
http://books.google.co.uk/books?id=gh1V ... &q&f=false
it a good book btw and contains some good stuff (not just related to retail forex).
I once did a market research evening for a spread betting firm with other clients and one of them told me about their stop hunting. He was trading individual share prices but saw whipsaw moves in the price to take out his stops - when he complained to them (about specific examples with proof that the price hadn't been there) they gave him his money back. I'm not sure if their systems are programmed to take out stops or whether they have a manual override where their guys do it.
Last edited by superfrank on Thu Nov 03, 2011 10:31 am, edited 1 time in total.
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enzabella2009
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Hi, JeffFerru123 wrote:Have a look at this video:
http://www.youtube.com/watch?v=A7rqF24Sjsg
Jeff
andyfuller wrote:I am sure plenty of users on here have given the Betfair markets a helping nudge one time or another, I remember a video that Sam Wilson or Jack Birkhead did showing them doing it for example.
my post has nothing to do with this thread but, I would like to give you a tip for little I know about tradings regarding the manipulation video if only you did not notice that yet.
Keep watching from 5.49 minute of the video @ 16H.29M.15S, the manipulator has done a marvelous job for ,more or less, 6 minutes but he left an open window for 45 seconds for everyone to take a nice juicy profit.
andyfuller wrote:Always wondered if it was Peter playing the piano in the video btw?
I doubt that, he probably took the advantage when the manipulator have left the market at minute 5.49 of the video. If he did play the piano he was playing the piano with his feet...