_rdb_The Best Free EA - page 175
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As we consider the issue of finding a suitable broker for this (or any) strategy, we should keep in mind a few facts about retail forex brokers.
First, it's perfectly legitimate for a broker to widen their spreads during periods of low liquidity. These periods can be caused by low market participation (not many people trading) or by high market demand - like one might see during major news events or when a popular EA has many clients requesting identical trades all at the same time. This doesn't mean that some less scrupulous brokers won't abuse the concept of spread manipulation, just that varying spreads are a necessary part of the retail broker business model, and shouldn't automatically be seen as some sort of scamming activity.
Second, many people are looking for a retail broker that doesn't use a 'dealing desk' or that doesn't 'trade against the clients'. These concepts are badly misunderstood. Every retail forex broker has a dealing desk, in the sense that they don't just pass your trade on to a major bank or liquidity provider (the real market). Major banks and liquidity providers would never waste their time with the tiny trades that retail clients make... the only way we can ever buy a mini or micro lot is for a retail broker to accept our trade themselves, which means they MUST take the other side of your trade. They do enough little trades that they can then turn around and make some large trades with the liquidity provider, thus offsetting the position.
Here's an example: Say you want to buy 0.3 lots of USDJPY. The liquidity provider would not accept a trade for less than 10 full lots, so the retail broker accepts your 0.3 lot buy themselves, which means that they are now short 0.3 lots. If they have enough clients buying USDJPY that they end up being short by 10 full lots, they can then buy 10 lots from their liquidity provider, thus offsetting (hedging) the positions they accepted from their clients. Now it doesn't matter to them in the least if you win or lose, or if the USDJPY goes up or down... they will make their money from the spread.
In reality, most of the positions the retail broker takes are offset by other clients' positions, for instance they may buy 3.2 lots of USDCHF from clients (short positions for the clients) and they may sell 3.2 lots of USDCHF to other clients (long positions for those clients). At this point, the combined effect of the clients' positions offset each other, and there's no need to use the liquidity provider at all.
Of course, things never work out as evenly as that.. at any given time the broker will be more short than long (or vice versa) in any given market, and that disparity represents their 'exposure', or risk. If they're heavy on the long side and the market goes up the could make some cash outright, but if it went down instead, they'd lose money. In the big picture, they don't want to be trading in the market at all... their goal is to service as many client trades as they possibly can while keeping all their positions hedged. That way they are isolated from the risk of the open market, and they can make a steady income from collecting spreads. This is the fee they charge for making it possible for you and I to trade. It's a fair fee, considering the opportunity they offer us.
Of course, there are cheaters and scammers.. some brokers will manipulate spreads without just cause, will take your trades then hunt your stops so they can take your money... If you have a real, solid reason for believing that your broker is one of these, close your account. But please don't accuse a broker of foul play just because the spreads widen during off hours, news or periods of high demand. If they can't offset the trades they receive during those times to maintain a neutral overall position (zero exposure) they will be in a position of greater risk, and they will charge more for the trades (via higher spreads) to adjust to this risk.That is the better post i read since....i can t remember
Thx for this post
I put it on my website, i there any problem with this, thx to mail me or MP me, i will delete it.
i trend indicator question
There seems to be an i trend indicator in the template and when you put the one from the indicator folder on the chart you end up with two i trend indicators on the chart. In post #1741 I included the only difference that I can see in the two indicators. I'm just not sure if you use both or if not which one is the correct one.
hi all,sorry to ask...im new in dis EA.
im using fxdd brooker...as i put the ea,smiley wont come out..what i did wrong?
sorry and thx...
hi all,sorry to ask...im new in dis EA.
im using fxdd brooker...as i put the ea,smiley wont come out..what i did wrong?
sorry and thx...Go in TOOLS -> OPTIONS -> EXPERT ADVISORS
and check Allow live trading
hmm im tetsing with strategy tester for oct 2008 but it s 2days not finishing??
hmm im tetsing with strategy tester for oct 2008 but it s 2days not finishing??
data problems. see if in Results you have any trades. If you have, start date should be the date of the first trade. If not, you can wait until first trade appears or you can search another start date by trail and error.
Trading the FX_PRO
Running the same settings I post on page 165
take a look
See Detailed Statement
Statement: 550260 - Lonnieare you trading V2 or V2.b?
This is the backtest for EURGBP M5 data last week wednesday to friday.
I leave other parameters unchanged. Just optimize one parameter. MAXTRADES. The less trades per time, the bigger the profits.
so set the maxtrades=1.
Liquidity providers are the ones who will be losing money when the Broker unloads their exposure. Do you think the Liquidity providers will be happy about losing loads of cash to scalping EA's who scalp during periods of low liquidity. Not real sure what low liquidity means in a Market that trades 24hrs a day. If scalping EAs were affecting liquidity then this would reasonably be expected to show on the charts, right?
I suspect those that are losing money to scalping EAs are doing everything they can to prevent losing money. It's only natural and it is the way a Market works.That is the problem that I have been considering from the very beginning.
It's why I have been asking anyone who is trading this EA live to post, comment, or report any results they have had during their trading. It does not matter what kind of results you get on a demo account.
What I think is that the brokers will at some point say "OK, we have let you beat us out of enough money. So let's stop it."
At this point my belief is if this EA consistently wins and trades larger and larger lots, at some point they will take action to stop you somehow. That could be increased spreads, price spikes, etc. Or if that won't work then they can dig deeper into their bag of dirty tricks.
If you are trading against the broker every time (or the liquidity provider) and they can see every trade you make and how you make it then is it reasonable that they would just continue to let you win? If they can manipulate the data any way they want to, then why would they not use that power to keep you from making any large profit? Especially with no regulation of this "industry" called forex?
Maybe I'm just being paranoid. Maybe I have it all wrong. Maybe I should believe that if you have a way to consistently win then they will just do the right thing and give you the profits you are entitled to. I don't know.
I would welcome some opinions on this.
Thanks,
PD
How are the trades for Monday? It did go wrong direction.