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This week, InfinityShares reported that their interbank broker did not allow them to trade the news. The answer they recieved was that the broker can’t guarantee liquidity during news trades. Strange .. because news trading was never a problem at all in the 6 previous months.
Most likely because of Easter and the fact the banks were all closed on friday(NFP), the broker lost a lot of liquidity and decided to disable news trades.
There is also the possibility that IS once again became flagged. But why would an interbank broker bother doing that? IS is still a little fish in the water, and their broker surely has much bigger traders on board. If they flag IS, they may as well flag every trader in profit there.
Interbank brokers earn profit from you through the commissions they get from your trades, no matter if you make a profit or a loss. The only way they could loose money is when you enter a profitable trade but in reality they never manage to fill in your orders thus creating a fake profitable trade.
Now suppose they couldnt fill IS orders in the past and that they indeed made a loss from IS trades. If thats the case its highly unlikely IS are the only traders which orders couldnt be filled. That means the interbank is loosing millions of $ because they cannot fill any orders during news trading from their clients.
Now an interbank supposedly has the biggest liquidity of all brokers in the world, so IF they cannot fill orders anymore during news trading, which broker still can?
If IS indeed got flagged, and the bank permanently cannot execute orders anymore during news trades, then isnt the whole news trading business starting to become a “fake” business where fictive drops and fictive gains of pips are made while in reality the profits are only made because someone else gets flagged or stolen from?
Conclusion : I find it hard to believe that a famous interbank as the one IS is using can no longer execute orders during news trades or that they would flag IS. However if this is the case, I will have a hard time to believe in the forex market still as being a real business. Lets all hope its just something temporarily and that the issue will be resolved in the upcoming weeks.
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Oanda is one of the only forex brokers I deal with. My trader calls all the others “bucketshops” meaning they don’t only buy when someone else is selling and vice versa. They simply say they bought a pair for you and hope you lose, because overtime most people lose money in the forex market. So if they are betting against you and you keep winning they will stop it somehow.
Yes but brokers like oanda and –(private) the broker IS is using are both brokers that do not bet against their traders. So unless they cannot fill your orders in time, there is no reason to stop you from trading the news. The fact –(private) stopped IS last week from trading the news after all, does worry me a little. I guess future will tell if this was just a rare hickup(or not). Most likely the easter holliday had something to do with the latest liquidity problems.
Err what am I saying? I am mixing up different kind of brokers doh. Anyways, oanda and –(private) both dont bet against their traders like some sucky retail brokers do.
Oanda is not an interbank broker. They are marketmakers. In order to have access to the real interbank market you would need quite a large sum, I highly dont that banks are going to take the expense to deal with less than 10 yards. Most brokers will not let you trade during news times because they are all market makers and must hedge themselves in the real interbank market. Marketmakers generally have a vested interest in you losing money. But on the chance that you are a consistant winner you may get flagged because they are losing money on you, but if you are a winner that still loses, which inturn brings theirf cost per trade down, you can still make money because they aren’t losing to much.
You have to realize that we as small timers are playing in a contrived market. All the marketing jargon tries to get you excited about the trillion dollar fx market, but in truth we never even see the market. Do you really think that pnb paribas and deutche bank are taking in mini lot orders.
My point is that it is very foreseeable that their broker wouldn’t let them trade for the simple fact that they are always winning
Do you ‘really’ know that they don’t trade against their clients? Or only heard it from their own statements?
There’s plenty much of money to be made by trading against your own clients. The people which are consistenly profitable will be ‘watched’ and then the broker decide what to do with them: Kick them out (by slippage and other fouls) or trade ‘with’ them.
Interesting thoughts Katzenhai. I am horrified tough by the thought that those that loose on the forex market( 90%) are rewarded by their brokers and that the
very few that win consistently on the market, are kicked out and become person non grata. But isnt that what flagging is all about? Its sad brokers cannot play it fair online and that they have to start cheating their profit-makers. Online brokers act like american casino’s. The more you loose the more benefits you get. You loose your t-shirt they give you a free night at a room.
Well, depends if you are using a retail broker (brokers with fixed spread) or Level II brokers, which direct your orders through the bank feeds. I don’t know what –(private) is. I only know that true Level II brokers let you trade profitable.
For the record : –(private) is in the top 5 of best level II brokers from Europe. So the fact –(private) didnt manage to let IS trade since last wensday is rather disappointing. I thought TOP brokers always had sufficient liquidity to let everyone trade but that doesnt seem to be the case. Hopefully and most likely it is just a temporarily hickup due to the hollidays.
Just curious Maila,
Why is the broker name private.
BTW Most brokers play games during news time including Oanada. I have seen spreads grow from 2pips to 30 pips right before a news release.
Almost guaranteed, any trader who consistently wins trading news with a market maker broker will start seeing a lot of slippage or trades not executing.
Best wishes
Paul
Its not really private, the broker just doesnt like to be exposed. Well thats my major concern these days. Is the forex market one big game or a serious business were money can be made? 90% looses money with forex, the 10% that do win should be left alone, but brokers become to greedy and just want 100% of clients to loose all their money. Those that win will become person non grata. Does that sound fair to you?
Makila,
That’s odd that a broker would not want to be exposed. Brokers make money by getting more clients.
How could they get more clients if no one knows about them.
If I.S. is using a broker that is afraid of exposure, that would be a broker that I would stay away from.
There is no good reason why a broker would not want free advertising or publicity.
It is an extremely competitive environment and brokers will do just about anything get new traders on their platform.
In regards to your comment about Forex being a game - You will find that the traditional markets are little different then the hyip markets. They just are able steal our money legally.
The game is tilted in the direction of the larger players. Fortunately, because the Forex market is so big, a wise and skillful trader can still make some descent money.
There is a lot of hype surrounding Forex trading. Most of your e-books and trading course make it sound really easy to learn.
The fact is, there is a steep learning curve and the average person doesn’t have patience or guts it takes to get good at it.
Fortunately, programs like Freedom Rocks and Forex for Smarties gives the average guy a better than average chance of making money with the forex market. There are also a number of Managed trading account opportunities showing up on the net as well.
But, you will quickly find that you don’t make nearly the returns some of the typical internet programs are advertising.
Best wishes
Paul
Hmm, I havent read all the comments, but I will clarify why it turned into “private”
I asked Makila to change that, because I dont want a public link between this broker and IS. Thats the only reason. If you decide to open a topic thats just only about this broker without mentioning IS, its no problem to me ;).
Regards,
Steven