Determine the winning brokers surely can not be considered one eye. The success of a trader in maintaining consistent profit depends on performance and transparency of the trading platform of their respective brokers. Well, from the many features and options available, there are two essential factors that we have to note, that spreads as the cost of trading and execution speed when we open or close a position.
Most of the traders are generally dropped options on low spreads, because clearly the cost of trading should be as small as possible so that profits can be earned him profusely. But did you know, if not all brokers with low spreads really transparently inform its clients an extra burden that may be incurred when air-trading?
Beware Of Unexpected Additional Loads.
The leading broker will give the waiter on his client in compliance with bid-bid written on pages subskripsi, either the actual value of which low spreads or accuracy of fast execution. Ideally, all the costs and burdens of trading will be shown by their platform each time the client transmits a request (order buy or sell).
However, in practice, there are a number of factors in which the additional burden will be borne by the client at the time the market in conditions of high volatility is not normal or with limited liquidity. Among other factors is slippage and wider spread (floating spread).
Floating spread and Slippage can occur even though you have selected the winning broker. It will happen especially when the market is experiencing a surge in the price suddenly because market participants react quickly to economic news releases. For example when NFP news releases or GDP, balance between the number of the position of buyers and sellers will soon be transformed into a leaning to one side only.
Slippage
Slippage on the condition the market may overload the client is greater than the number of reference spread. For example, in the following cases:
A trader open buy orders on the pair EURUSD with a price request 1.13050. But due to the condition of the market is experiencing a surge in prices, eventually executed (filled order) at 1.13053. Whereas the time brokers offers low spreads of 0.1 pip. It is clear that the slippage of 0.5 pip has exceeded spread written.
A total of 0.4 pips from the examples above probably feels minor and paltry. However, if you use more than one lot and leverage over the margin of 1% (1:100), value realization of 0.4 pips will be quite undermining your deposit.
Requote will generally be offered brokers when slippage occurs. Depending on the type of your brokerage platform, could have slippage even quite profitable if the price of executed better than the price request.
Floating Spread
The basic concept of the floating spread is a spread value in the above-mentioned volume depends on the position of the seller against buyer. The more skew the dominance of one of the parties then would increasingly wide (large) also spread value.
The leading brokers may offer fixed spread where the value pegged to the value of the low spreads. But it could have been the benchmark of yesteryear could compromise because market conditions were not balanced as an example when market conditions have a major impact news release above.
Well, feature low spreads offered the leading broker You in fact are the lowest spread value at normal market conditions. Generally traders be tempted to open new positions when the market is trending strongly in condition (where one party dominates the direction prices). Remember the potential spread widened nor should you estimate if you do not want to lose a deposit slowly.
How Accurate Is Your Broker Fast Executions?
The accuracy depends on the type of fast execution platform that offered the winning broker. You should first know what a difference Dealing Desk platform and Non-Dealing Desk.
Dealing Desk
Do not be surprised if the bold Dealing Desk platform offers fast execution without requote (fumble his price of request). That is because the dealing desk-keep the Groove position and volume of trading clients exclusively. In other words, you as the client is actually against your own broker as a provider of liquidity.
So, Yes, it's up to Your dealing desk brokers want to adopt set how accurate fast execution on certain trading times or not.
Non-Dealing Desk
How accurate fast execution of platform NDD indeed diverse, obviously because each platform NDD access interbank trading route as a provider of liquidity. The volume of trading at the interbank network is very dense and allow the occurrence of slippage.
The accuracy of fast execution platform NDD, you should test it first. For example, when slippage occurs, consider how far miss the marked price and whether it is better or worse than the price request.
Important (Beware Of Traders)
The bottom line from the above discussion of measuring contrast on how transparent the pre-eminent broker additional burden to inform Your clients in addition to the basic features like low spreads and fast execution.
Estimate return how much actual cost which you will responsibility plus the value of the lowest of low spreads. In addition it also tests the accuracy of a quick execution of your platform, whether suitable or away from the initial offer of broker.
Remember also that the cost of risk will be increasingly magnified in volatile conditions in the market (due to the release of important economic news, etc.). At moments like that, liquidity providers will probably widen the spreads or offer price when requote misses, so potentially adds to the load of client trading.
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