Dogshit
Yep, that's how I would describe my broker in the early half of this week. To some extent, this is how I'd describe them still. Before you continue reading, note that this post will be controversial. You have been warned.
This post will touch upon a trade I took on GBPNZD. Having a pretty strong conviction in this setup, I was geared up to hold the position for multiple days. This means I have to plan accordingly for the 5 PM EST rollover that occurs. My plan was simple - widen my stop loss.
Trade #1:
This post will touch upon a trade I took on GBPNZD. Having a pretty strong conviction in this setup, I was geared up to hold the position for multiple days. This means I have to plan accordingly for the 5 PM EST rollover that occurs. My plan was simple - widen my stop loss.
At this point, you probably have a pretty good idea of where I'm going with this. While I'm quite aware of the typical slippage, stop hunting, and price manipulation rants often made by retail traders, I'm about to make my own. And back it up to the best of my ability.
Here's the chart:
 |
| GBPNZD 1-Hour |
Trade #1:
- Sell @ 2.04198
- Stop Loss @ 2.04398
Trade #2:
- Sell @ 2.03842
- Stop Loss @ 2.04398
The stop losses are at the same price level. I would also consider them adjusted stop losses where I moved them to factor in the 5 PM EST rollover. If you take a look at Trade #1, you might think I am bound to get stopped out because it only has a distance of 20 pips. That's correct, except you'll need to factor in the fact that I was also in the money, meaning that I would have to return my profits and have the price go against me by 20 pips.
At the 5 PM EST rollover, I got stopped out of both trades. At exactly this time, the spread on GBPNZD widened to 30 pips. This is where I call bullshit. More specifically, I said that either their platform was dogshit, their liquidity was dogshit, or they're straight up manipulating their quote simply because they can. I think it's the last one.
I captured their 5 PM EST BID x ASK quote at 2.03752 x 2.04052. Since both my trades were short positions, I had to buy to cover. In other words, I had to hit the offer to close out both positions. Since the offer was only 2.04052, that means the broker made a micro-second 34.6 pips spike to hit my stop loss.
So here's where the price challenge comes in. While FX prices can differ from broker to broker, they more or less should be in line with each other. If the quotes are off by a few pips, that's understandable. However, in this case, I believe my particular broker quoted prices that were out of line with their competitors. I captured the 5 PM EST OHLC prices for their key competitors. We'll solely focus on the "H" or the High.
Oanda - 5 PM EST - High: 2.04024Forex.com - 5 PM EST - High: 2.03963FXCM - 5 PM EST - High: 2.03867Global Prime - 5 PM EST - High: 2.03884Saxo - 5 PM EST - High: 2.03970
The only GBPNZD price in the 2.04~ range was quoted by Oanda. Even then, there's still a difference of 37.4 pips.
My email currently remains a pending ticket in their system. I wouldn't be surprised if they're doing their best to delay their response for as long as possible and then cite some technical issue. Of course, I do have a key follow-up question if they attempt to say that their price was correct.
What's the lesson in this post?
Well... as the retail trader in this game, you face every disadvantage possible. Be prepared.