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Originally Posted by Soul-Trader2004
well pete and fxg - heres why i think they hunt stops. I may be wrong but do this yourself and then tell me.
I trade constantly with 3 mt4 brokers and many other platforms. - ibfx, Mig and my institutional feed mt4.
IBFX very often make new lows or highs by as much as 3 pips whilst no-one else does including my spreadbet platforms - if that's not stop hunting i dont know what is. do you have another explaination?
I would suggest you dont take my word for it - download say Mig demo - the demo prices match the real prices almost exactly - try it fr yourself.
at the end of the day all brokers are sharks unless they are an ecn, and if they are an ecn you need to make sure they have liquidity.
Im currently using an ecn on MT4 that i often have zero pip spreads and the norm is 2 - last month i watched it through NFP and the max spread was 3 pips and mostly 2 pips.
so why does it change to 8 or 10 on your broker? - because they are screwing you!!! - they use the lame excuse that 'the banks spread widen' well they don't - I use the same firm that provides liquidity to ibfx so i know this.
Sure, nothing is free, I pay commission on my deals but i get real prices not made up ones - thats what you always get from a market maker like ibfx - whatever they want to quote they quote - it's only indicative of the market it is NOT the actual market. The only reason i see this is because i trade multiple platforms - if you did you would see the same thing.
I think the managing director of ibfx should change his name to Dick Turpin. |
3 pips I wouldn't really call stop-hunting, it's more like variations in data feed or perhaps the way quotes are displayed on their charts or maybe just plain old-fashioned shade. If they're consistent and wide enough they can be traded by an efficient arbitrageur quite profitably at the brokers expense and that is a risk any self-respecting broker is very much aware of.
Stop-hunting by brokers usually consists of inexplicable spikes of maybe 15 or 20 pips off market to take out stops. In fact 'hunting' is a misnomer because they know exactly where their clients stop orders are placed. Stop-hunting in it's real sense is a tactic employed by big players to add momentum to their preferred direction of price and is a regular occurrence. The smart money follows these big players as they manipulate the market.
At one time I used to have 3 or 4 different platforms up as well but once I had managed to move clients to the same broker it was no longer necessary and made my life a lot easier. If you're concerned about price manipulation by your broker then use something like Reuters to compare quotes against, or even a demo from a Currenex broker.
Agreed brokers do play tricks but it's usually less blatant than obvious quote manipulation or inexplicable spikes which can't be traded, Dick Turpin would be in awe!
ECN style brokers are fine until you want a market order filling around NFP or other volatile times, who wants to take the other side of your short dollar trade when the number comes out 100k less than expected? That's where the marketmaker came into his own, he would take allcomers. They've got wise now as more and more day traders scalp news, the astute ones are calling themselves ECN style brokers and the less subtle are just freezing platforms, requoting, or just not filling market orders at all.
Sure, 1 or 2 pip spreads or even choice are nice to look at but commission is usually a pip or two so overhead works out about the same. When you look at someone like Oanda who maintain a 1.5 spread on Eur/Usd except in the most volatile conditions, fill everything you throw at them, and keep price as close to market as I have ever seen it makes you wonder why bother with trying to get in the 'real' market at all.