Guaranteed Stops — guaranteed

[Frank_Fibonacci]

The point here is not that forex brokers are all crooks, but that they engage in misleading marketing statements that appear to be intended to lull unsuspecting neophytes into placing high risk orders around fundamental news times.

I have noticed that instead of simply and honestly stating the stop and limit execution policy, most brokers continue to mislead by ADVERTISING how great a company they are because of their "no-slippage" guarantee, whilst they sneakily slip a small print asterisked statement all the way at the bottom of the page that exempts volatile conditions and/or fundamental announcements from the "guarantee." In the case of ACM, their "asterisk" is using the term "valid executions." They have no slippage, and no matter how crazy the market is going they will always honor all VALID executions. Of course, any order that gets executed in a gap cannot be valid, and thus will not be honored.

These guarantees are akin to the electric company "guaranteeing" that the power supply to your home will never be interrupted under any circumstances*

*does not apply to conditions beyond our control, such as extreme weather conditions, labor disputes, wars, etc.

It would be much more honest and forthcoming to state upfront something like "if you think we are going to fill your stop/limit order during a market gap, you are insane."

[Harlequin]

Originally posted by Frank_Fibonacci
the case of ACM, their "asterisk" is using the term "valid executions." They have no slippage, and no matter how crazy the market is going they will always honor all VALID executions. Of course, any order that gets executed in a gap cannot be valid, and thus will not be honored.

These guarantees are akin to the electric company "guaranteeing" that the power supply to your home will never be interrupted under any circumstances*

*does not apply to conditions beyond our control, such as extreme weather conditions, labor disputes, wars, etc.

It would be much more honest and forthcoming to state upfront something like "if you think we are going to fill your stop/limit order during a market gap, you are insane."

So now nobody offers really guaranteed stops (even RJ O'Brien has sent a letter of warning).
Do you think there is always an advantage trading spot instead than exchange-based forex (futures) ?

[elmagd2000]

Harlequin,

IMHO I believe it is still worthing. keep away at major news for a while and trade in regular times.

Hani

[Harlequin]

Originally posted by elmagd2000
Harlequin,

IMHO I believe it is still worthing. keep away at major news for a while and trade in regular times.

Hani, yes, interbank spot forex should be in any case more liquid than futures. And this is the main advantage together with the fact it is not necessary to build continuous contracts for doing analysis (a minor aspect, though).
My only further worry is that in a market without an exchange giving official prices and volumes you've always to rely on what your broker tell you. How can you be certain there was really a illiquid situation ?
For instance, your broker applies to your trade a huge slippage. Looking at chart you don't see a particuar volatile market, nor there were important news. Or if there is volatility and illiquidity how can judge if your brokers slippage is proportionated to effective trading envirement ? You remain always with the doubt your broker has gained pips against you. In a regulated market this problem does not exist, I think

In any case I'll continue with forex using precautions you wisely suggest.

Harlequin

[bobnat]

Originally posted by MickMason
Yeah yeah, all brokers are thieving rogues who should be taken out back and hung from the nearest tree!

So I guess all you victims will be closing your accounts and moving on to trade something else, well I mean you'd have to be crazy to want to stay in spot fx after exposing what a villainous market it is, right?

Mick

Feel better?

Nat

[MickMason]

Originally posted by bobnat


Feel better?

Nat

You still here?

[uppernet]

assuming i am long at 1.27, my stop loss set at 1.2680 ... if rate gaps down 1.2650 ... i am not guranteed to be filled ......

assuming i am long at 1.27, i set my sell limit at 1.2750 ..... if rate gaps up to 1.28 from 1.27 ....... the brokerage will surely get me filled at 1.2750 .... then they keep in the pocket the extra bonus of .0050 ........ that is good business .....

just a thought

[Frank_Fibonacci]

If anybody has ever had a limit exit order gapped UP beyond their target profit, please let us know.