Quote:
Originally posted by daentay
Hi everyone,
If the system that I am trading goes for 20 pips every trip, and it can go up to 6-7 times a day, is it considered scalping to the MM?
My backtested data shows that I would generated spread for the dealer as much as my profit e.g. If profit = 200 pips, I would have generated 200 pip spread. How would a MM deal with a situation like this?
|
Very Interesting. Test it on the
demo account first to see your results.
If you take a profit in less than 2 minutes, even 5 min in fast moving markets, you are going to be audited just to make sure your price was at market. IF you were than you are fine, however, to be honest, if you start making money short term like that odds are you found a way to take advantage of the instant execution. To test it otherwise, trade the exact same strategy with the futures contract. Odds are you will not be able to.
FX only has the advantages because the companies are the direct trader, not a central exchange. If it would not work in futures than you'll be put on dealer intervention within 3 months.
Regarding the dealer spread, you will never know what the outcome came of the spread, they check the Rueters prices and interbanks price feed with times and seconds. The spread is realistcally made when internally traded or they offsett NEt aggregate position at a profit.