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Hi there,
I need some help here getting on the clear what should I expect when I trade the Forex market place via ECN broker like Dukascopy. I have just had a very long chat with one of their support staff and am not satisfied with the explanation.
Here it is.
I just had a trade (offer for 100k, to close a possition) which did not get filled the first time the market hit it. When I say hit it, I mean the offer quoted by Dukascopy was higher than my offer. Not only that their qouted bid got higher by two increments and I still did not get the fill.
In the past I had that but was explained that only orders of 100k or more get routed to the main frame so that they become visible to the other market participants. In other words if Dukascopy are quoting 10bid and 12offer, and I offer 11, then if my size is smaller than 100k, I am invisible and to get the fill I need their bid to become 11 or higher for 2 or more increments before I get the fill.
The rep I was talking to just now explained that if I offer to close an existing possition at a limit price which would make my positon flat, this is not considered bid or offer and no matter how bid the size is you offer would not be visible to the others and would only get executed if Dukascopy's bid is higher than your offer.
I thing this is so wrong. I might be offering 1mil. at let's say 10.1 and Dukascopy's quoting 10bid 12 offer, this means I do not get the fill. Even worst those trading the market place might not want to lift Dukascopy's offer of 12 but might be willing to do so if they see that I am offering 10.1
In my case I had 100k offer to close a possition, the market went higher including their qouted bid higher by 2 increments, i did not get the fill and their rep says it is normal. He says maybe the liqudity was a bit low or the market participants did not want to trade my price. What..., How can Dukascopy's bid get higher than an existing offer and not get even a partial fill. Time lag is not an issue here as the order was in for some time.
I used to trade Dax, Bund and Bobl, and this would never happen. And why would my offer to close a posinton at a limit price, is not considered as an Offer in the Forex market place.
Can anyone throw some light here, as to me it all seems so confusing.
"The only thing to do when a man is wrong is to be right by ceasing to be wrong." - Edwin Lefevre -
I could blather on and on what I learned during my forex research but the short summary is, if you don't have a huge account, best you can get is probably fix api to integral and lmax. you're probably looking at $30k total to get those unless you can negotiate. (also IB/currency futures to mix things up so your trading patterns/profitability won't stand out for the broker so much - strategies have a capacity and obviously if brokers get wind of something that works they'll overload the capacity - this is imo one reason why "social trading platforms" which are plenty in retail forex world are complete non-sense except for ethically questionable purposes)
edit: what I mean is, I wouldn't bother with forex if I couldn't get what I outlined above. With lower-entry retail deals you're looking at unexpected unexplainable execution problems, typically when you start getting profitable - another reason to distribute trades to multiple parties.
Thanks for the replies so far.
Fix API is something that I had known for some time but completely forgot about.
I am really annoyed at the Dukascopy's rep explanation that if their quoted bid jumps above my best offer by more than 2 increments they still do not guarantee execution. He said "Maybe the others were unwilling to trade at your price or liquidity was thin." This is complete bull..., if liquidity was thin then I would have had partial fill. If this is how every Forex broker deals, then why am a looking at their price feed and what expectation should I have to take profitable trades. I really hope this is not how things are and first thing Monday I am speaking to my account manager. I need to know that the quoted price is the price they are willing to take my trades on.
"The only thing to do when a man is wrong is to be right by ceasing to be wrong." - Edwin Lefevre -
It seems you should have gotten a partial fill if any bids were at or above your offer price. What were the size of the bids? And what is the smallest size in units you can put on from your end? You were offering 100K, but I'm curious, what is the smallest size you can enter the market with?
Of course it would never happen on the other products you mention--these are at a regulated exchange (Eurex). Trading with Dukascopy or any other forex broker is like trading person-to-person: the other person can do whatever the hell they want... who is going to stop them, it's OTC trading. Just more forex bullshit, I am so sick of hearing this kind of story from people whose brokers want them to fail because they are trading against them.
From a practical perspective, if this happens again, I hope you just hit the bid and get out of your position that way.
Hi Josh, I do not know their min bid offer size but I know you can put in paper trade like size, like 5k or 10k in. The problem is that they are saying that if you trade less than 100k, your orders would not be seen to other participants in their depth of market view or have a chance of execution unless your offer matches their bid or their bid is 2 increments higher.
Whenever I have a position my usual way to close it is by selecting take profit at a limit price. This way if their price just reach me but do not execute, I just hit close position and, the take profit at a limit price becomes a market order, so I am out. Now they are saying that whenever you have a position and select take profit at a limit price, that particular take profit order is not classes as a bid or offer in the market place and they do not route it to their price feed, so it is invisible and would only get executed if my price to sell is equal to their bid or lower by 2 increments.
If I have a completely separate limit order meant to square my position and the market just gets to me but just miss me, as you say I can always hit their bid or offer, but often I end up with the two positions executed as the time cancelling the other is sometimes not enough.
I would have gladly accepted an explanation, like "Sorry about this, we will look into it and if you are right, we will correct it" but I feel that the support staff I talked to was wrong and I need to find out if this is normal and happens to others or it was just one off fluke system glitch that they are unwilling to accept.
"The only thing to do when a man is wrong is to be right by ceasing to be wrong." - Edwin Lefevre -
Just to check - did the erroneous trade happen on a real, funded account, or on a paper trade account? It might be that the liquidity on their demo platform is far less than a real account, or that the 'demo bot' that determines fills had a problem.
