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Hi Rick
----------
> From: Bando57@xxxxxxx
> To: jdfo@xxxxxxxxx; RealTraders@xxxxxxxxxxxx
> Subject: Re: Forex Trading`
> Date: Tuesday, August 03, 1999 9:50 AM
>
> I read the Forbes article.....made for very interesting reading....
>
> i just finished attending a seminar hosted by Global Forex and they were
> quite definitive about charging $16 round turn on commissions and that
they
> dont try to make money on the spreads......they claim slippage is kept to
a
> complete minimum....
>
> am i being naive?....
I find it hard to believe that a broker will not make money on the
spread - you can check this easily - in a normal mkt (not fast)
any spread in excess of 3 pips, the broker is making money. At 3,
maybe.
So far as stops are concerned - that depends when your stop is
hit and what currency. My bank e.g. will elect not to trigger my
stop if they have large orders on the other side. For this I am willing to
accept up to 3 points slippage on the majors and up to 5 points
for the others.
For small traders, you can count on slippage of up to 3 - 5 ticks
in normal markets.
> its interesting to note that Global Forex were mentioned in the article
as
> using MONEYGARDEN for clearing trades. I cant see how GF can keep
slippage to
> a minimum if they are using a spread market maker like MG.
>
> Here's some more naivety on my part:
> I thought because the Forex is such a huge market (1.5 trillion dollars)
that
> finding your fill price wasnt a problem. Anyone have any remarks to
debate
> this point.
FX is a huge market and most size can be accommodated.
On the other hand that does not mean you won't get slippage. This
will be a function of the speed of the mkt, whether or not the broker
makes money on your fills as well as the depth of the market.
But as I said to John - unless you are a trader for a bank, you are
unlikely to make money day trading, especially if you are looking
to make less than 150 pips. Think of the banks as the floor traders
of FX and the game they play is to job the mkt. They have access
to EBS which shows actual traded prices rather than indications
of where banks will trade, they can hit prices electronically for
instant fills, they are paying probably no more than 3 pips, and
probably 2 etc etc
On the other hand, there is no doubt a trader can make money
position trading. Here the spreads, slippage count for much less.
regards
ray
R Barros
101/25 Market Street
Sydney NSW 2000
Australia
Voice: 61 2 92673470
Fax: 61 2 92673478
E-Mail: rbarros@xxxxxxxxxxxxxxxxxx
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