SB / CFD providers

[Hollin]

Hi,

Please be aware, this is not a rant or a conspiracy into market providers, I just want to hear opinions from other traders out there. I am a profitable trader, but recently I have seen something I haven't seen during my time of trading.

I am trading with a CFD / SB provider. For the past two months I had made 42.5% and 20% on my account. I had made 60ish out of 80ish trades profitable with every other trade or so losing.

I have noticed recently, I have had 14 trades in a row that have lost. I haven't changed my trading tactic but I have had noticed that the markets trigger the order and take my SL fairly swiftly after.

Now I never believed that companies that offer these products would really Stop Hunt / "manipulate" etc. I am not saying they do; but I am curious as I have traded my methods for a year now and they have been profitable in the long run, just after switching to a new provider it seems pretty against me after making a large some in 2 months from SB.

It could be just the way the markets are but I have never experienced 14 trades in a row that had lost consecutively, the most I had recently gone on a losing streak was 6 trades. I have been trading the German 30 - which I have been told that tracks the DAX Cash Index. Is this true? Or is this a made up product that can be manipulated?

Can anyone shed a light on their experiences?

 

[gle101]

Hi,

Please be aware, this is not a rant or a conspiracy into market providers, I just want to hear opinions from other traders out there. I am a profitable trader, but recently I have seen something I haven't seen during my time of trading.

I am trading with a CFD / SB provider. For the past two months I had made 42.5% and 20% on my account. I had made 60ish out of 80ish trades profitable with every other trade or so losing.

I have noticed recently, I have had 14 trades in a row that have lost. I haven't changed my trading tactic but I have had noticed that the markets trigger the order and take my SL fairly swiftly after.

Now I never believed that companies that offer these products would really Stop Hunt / "manipulate" etc. I am not saying they do; but I am curious as I have traded my methods for a year now and they have been profitable in the long run, just after switching to a new provider it seems pretty against me after making a large some in 2 months from SB.

It could be just the way the markets are but I have never experienced 14 trades in a row that had lost consecutively, the most I had recently gone on a losing streak was 6 trades. I have been trading the German 30 - which I have been told that tracks the DAX Cash Index. Is this true? Or is this a made up product that can be manipulated?

Can anyone shed a light on their experiences?

Some SB and CFDs provider will definitely stop you if they think you are "too successful". In other words they will look for certain trade patterns, and if they they think you are too much above the average they might start playing games with you. You don't seem to be an extreme short term trader as you don't have that many trades over a a period of a month, you shouldn't really be a hot candidate for manipulation. They will probably not manipulate the CFDs index itself you are trading but they will manipulate the way they execute the trades, and how you get in and out of trades and upon that comes excessive slippage. I have not experience much of stop loss hunting over the years, but I have experience all the other methods of manipulation.

The DAX CFDs index is usually based on the DAX futures and the DAX cash index as the underlaying asset.

This kind of individual client manipulation is of course illegal according to the EU MiFID financial directive. They are entitled to close you account but not manipulate you by setting up individual back office parameters that will work against you.

 

[mike.]

Hi,

Please be aware, this is not a rant or a conspiracy into market providers, I just want to hear opinions from other traders out there. I am a profitable trader, but recently I have seen something I haven't seen during my time of trading.

I am trading with a CFD / SB provider. For the past two months I had made 42.5% and 20% on my account. I had made 60ish out of 80ish trades profitable with every other trade or so losing.

I have noticed recently, I have had 14 trades in a row that have lost. I haven't changed my trading tactic but I have had noticed that the markets trigger the order and take my SL fairly swiftly after.

Now I never believed that companies that offer these products would really Stop Hunt / "manipulate" etc. I am not saying they do; but I am curious as I have traded my methods for a year now and they have been profitable in the long run, just after switching to a new provider it seems pretty against me after making a large some in 2 months from SB.

It could be just the way the markets are but I have never experienced 14 trades in a row that had lost consecutively, the most I had recently gone on a losing streak was 6 trades. I have been trading the German 30 - which I have been told that tracks the DAX Cash Index. Is this true? Or is this a made up product that can be manipulated?

Can anyone shed a light on their experiences?

A quick suggestion would be to pull up your loosing trades and check the spike/candle that triggered your stop on a third party chart, That will tell you if market price was anywhere near your sb brokers quoted price. SB brokers dont like consistent winners, remember its their money your taking from them just like you would from a bookmaker, Possibly time to go DMA.

 

[leemo]

This is what happens when too much volatility kicks in. Spreads widen. Germany30 is not for the faint hearted this week. Probably not much better DMA

 

[Hollin]

Some SB and CFDs provider will definitely stop you if they think you are "too successful". In other words they will look for certain trade patterns, and if they they think you are too much above the average they might start playing games with you. You don't seem to be an extreme short term trader as you don't have that many trades over a a period of a month, you shouldn't really be a hot candidate for manipulation. They will probably not manipulate the CFDs index itself you are trading but they will manipulate the way they execute the trades, and how you get in and out of trades and upon that comes excessive slippage. I have not experience much of stop loss hunting over the years, but I have experience all the other methods of manipulation.

The DAX CFDs index is usually based on the DAX futures and the DAX cash index as the underlaying asset.

This kind of individual client manipulation is of course illegal according to the EU MiFID financial directive. They are entitled to close you account but not manipulate you by setting up individual back office parameters that will work against you.

Thanks for the response. Well, my methods had been successful on IG and Saxo; this was just a method to prove to a retail trader that companies do not stop hunt or manipulate prices... Guess I'm wrong haha.

The fact my trading has been successful over time doesn't worry me - just I had to query how I had gone so many trades unsuccessfully and to see the exact trade profit moments later... This issue was only highlighted to me after 14 losses in a row which I had never seen in my trading history, that being said it has continued with the interval of some wins.

Do you think it's because I do orders in the markets with my SL and TP? I set all my trades in the morning, so I understand they can see my trades - but surely they can't manipulate the market. I just tested it again, my first order was taken out with in 2 minutes of executing; I just did one without a Stop Loss and just took 40 points in a couple of minutes Entry at 11450 on both trades. (Maybe I'm reading too much into this).

A quick suggestion would be to pull up your loosing trades and check the spike/candle that triggered your stop on a third party chart, That will tell you if market price was anywhere near your sb brokers quoted price. SB brokers dont like consistent winners, remember its their money your taking from them just like you would from a bookmaker, Possibly time to go DMA.

Thanks Mike for the response, I have had a look and noticed very little in prices on the Germany 30 Daily, all the prices seem to be similar. There have had been times where the market is printed on the charts and my TP or SL wasn't triggered, but they said that it is because of the spread there was no bid / offer to trigger the orders.

Do you reckon if I switched to the CFD account, I would be "winning" again with this broker? Is it really THAT bad?

Yea, who provides the best DMA service for Index Trading & FX Majors?

 

[gle101]

Thanks for the response. Well, my methods had been successful on IG and Saxo; this was just a method to prove to a retail trader that companies do not stop hunt or manipulate prices... Guess I'm wrong haha.

The fact my trading has been successful over time doesn't worry me - just I had to query how I had gone so many trades unsuccessfully and to see the exact trade profit moments later... This issue was only highlighted to me after 14 losses in a row which I had never seen in my trading history, that being said it has continued with the interval of some wins.

Do you think it's because I do orders in the markets with my SL and TP? I set all my trades in the morning, so I understand they can see my trades - but surely they can't manipulate the market. I just tested it again, my first order was taken out with in 2 minutes of executing; I just did one without a Stop Loss and just took 40 points in a couple of minutes Entry at 11450 on both trades. (Maybe I'm reading too much into this).



Thanks Mike for the response, I have had a look and noticed very little in prices on the Germany 30 Daily, all the prices seem to be similar. There have had been times where the market is printed on the charts and my TP or SL wasn't triggered, but they said that it is because of the spread there was no bid / offer to trigger the orders.

Do you reckon if I switched to the CFD account, I would be "winning" again with this broker? Is it really THAT bad?

Yea, who provides the best DMA service for Index Trading & FX Majors?

I don't believe they stop loss hunt you, I have not experienced it to be a problem over 10 years of trading SB and CFDs. In your case you must be able to view the real DMA price feed in order to find out what is wrong. As mentioned, the DAX can be quite volatile and maybe you just had a bad run.

What you also could do is trade on another platform. cTrader is supposed to be very hard to manipulate as the broker has no access to back office parameters. I know the Australian broker IC markets offers the DAX CFDs on the cTrader platform, 1 point spread I believe they have, a plus here is that you can trade inside the spread. I have not as of yet traded with them, but are planning to do so in the near future. You can get a demo account and se if you like the platform. Also an Australian company Invast will soon offer indices on their cTrader platform, and with that comes no minimum for signing up for a live account, with IC market you need to deposit $1000 in order to trade live on the cTrader platform. Pepparstone is another Australian broker offering indices on th cTrader platform. Beats me why cTrader platform seems to be very popular among Australian brokers. How well they are regulated in comparasion to UK brokers I don't know at the moment.

 

[Hollin]

I don't believe they stop loss hunt you, I have not experienced it to be a problem over 10 years of trading SB and CFDs. In your case you must be able to view the real DMA price feed in order to find out what is wrong. As mentioned, the DAX can be quite volatile and maybe you just had a bad run.

What you also could do is trade on another platform. cTrader is supposed to be very hard to manipulate as the broker has no access to back office parameters. I know the Australian broker IC markets offers the DAX CFDs on the cTrader platform, 1 point spread I believe they have, a plus here is that you can trade inside the spread. I have not as of yet traded with them, but are planning to do so in the near future. You can get a demo account and se if you like the platform. Also an Australian company Invast will soon offer indices on their cTrader platform, and with that comes no minimum for signing up for a live account, with IC market you need to deposit $1000 in order to trade live on the cTrader platform. Pepparstone is another Australian broker offering indices on th cTrader platform. Beats me why cTrader platform seems to be very popular among Australian brokers. How well they are regulated in comparasion to UK brokers I don't know at the moment.

Gle101, thank you kindly for your reply.I will check them out and do both trades at the same time next time; I think it's my own mistake letting all the negative traders and conspiracy theorists get to me after a longer than usual losing streak and blaming it on the brokers.

I've checked with IG and other platforms that use the Germany 30 Rolling index and the feeds match up just about give a fraction of a point difference. Just for me seeing my entry triggered, 3 minutes later getting stopped out, then the market moving in my initial direction is something that hasn't happened to me since my first few live trades many years ago!

Your probably right, I'm just having a bad run; but I have never hit a run like this in my years of trading.

Out of interest, when you make a profit on the CFD trades - are you taking the money from the markets or the broker? I've never really questioned as such because with Saxo and IG everything seemed okay for me as long as I made money :clap:

 

[gle101]

Gle101, thank you kindly for your reply.I will check them out and do both trades at the same time next time; I think it's my own mistake letting all the negative traders and conspiracy theorists get to me after a longer than usual losing streak and blaming it on the brokers.

I've checked with IG and other platforms that use the Germany 30 Rolling index and the feeds match up just about give a fraction of a point difference. Just for me seeing my entry triggered, 3 minutes later getting stopped out, then the market moving in my initial direction is something that hasn't happened to me since my first few live trades many years ago!

Your probably right, I'm just having a bad run; but I have never hit a run like this in my years of trading.

Out of interest, when you make a profit on the CFD trades - are you taking the money from the markets or the broker? I've never really questioned as such because with Saxo and IG everything seemed okay for me as long as I made money :clap:

Yes these runs against you will surely come, the main thing when they appear is it to have a proper risk and money management in place to act as a parachute in order to have a soft landing. Keep trading safely.

 

[Hollin]

Yes these runs against you will surely come, the main thing when they appear is it to have a proper risk and money management in place to act as a parachute in order to have a soft landing. Keep trading safely.

Cheers Gle101, appreciate the support

 

[mike.]

Do you reckon if I switched to the CFD account, I would be "winning" again with this broker? Is it really THAT bad?

Yea, who provides the best DMA service for Index Trading & FX Majors?

Well, remember that your winnings become earnings with cfd, i.e, taxable.

with regards to dma, lmax exchange is one of the market leaders. (10k min deposit if im correct )

Most likely your just going through a loosing / bad period, doesn't necessarily mean something is broken within your trading plan or strategy.

 

[tomorton]

On stop-hunting -
Sometimes the entire market is taken stop-hunting by enough big players, running a bull or bear squeeze, but the firms we deal with aren't big enough to do that alone.

So can they supply a price to your PC alone that stops you out? In theory yes, though I don't know if such impressive software exists, but the amount of profit / avoided loss makes it not worthwhile. In any case, if their quote to you (or some or all of their customers) is pushed well away from the underlying market, they cannot know you're not going to do a stop and reverse, and make a nice return as price reverts back to the underlying level and direction.

I'm taking your word your entry set-ups have not changed as you've gained experience and confidence, but aere you still placing your stops according to the same rules? Even if you are, volatility of all markets varies unpredeictably.

 

[gle101]

Cheers Gle101, appreciate the support

You are welcome.

 

[kalott]

(In the "real" market like FDAX)

"Predators fighting over prey

Friends of ours who know program trading describe an “algo eat algo” dynamic that now dominates automated trading. For example, some algos hunt for areas where small retail orders (1-25 contracts) are getting printed. Once a cluster of these is filled, the algo will try to stop or “squeeze” them out. Then other algos detect the first group of algos at work and try to front-run their orders. It’s like one predator chasing down another predator to steal its prey.

That predatory action is what causes these wild price swings."

http://finance.yahoo.com/news/stocks-algo-effect-130050357.html

 

[Mercor]

actually you are safer with a spread betting /cfd company as your trades do not impact 'the market' (except if you are very large). This means that there is no info on the exchanges about stops or volumes etc which can attract stop hunters.

If you have had a series of loss making trades then (unfortunately) that is just a factor of trading. If you are using an established method of trading you may find that many others are doing the same thing and this can impact market action.

You have to remember that even a £100 a point trade will just not even register on the SB company's radar. They are taking tens of thousands of trades a day. Even if you are winning tens of thousands you will not influence their trade book.

 

[Aston1st]

The clue is in the phrase German 30, a made up one by CFD\SB companies and not related to the real market.

Contrary to popular belief exchange traded markets are not interested in "rushing stops" of the little people, unless your trading upwards of 5 bars you are simply a scrappy mino not worth a gnats fart.
It is the CFD\SB companies that make up words like German 30 that are interested in Rushing your stops as they pretend to you that you are trading the markets when in reality you are in an OTC arrangement with the House on the opposite side of your trade.

Not sure what size your trading but if you can trade via Eurex direct your better off. If not then with a broker that offers Direct Market Access. Also use a charting packet that gets it's prices directly off the exchanges so you can work out what the real price was vis a vis the price your broker has been showing you. Also comes in handy once you are in a trade, so you know which price representation to believe as ultimately the Brokers price must revert to the real price. They are the real Spoofers around here.

 

[kalott]

The clue is in the phrase German 30, a made up one by CFD\SB companies and not related to the real market.

Contrary to popular belief exchange traded markets are not interested in "rushing stops" of the little people, unless your trading upwards of 5 bars you are simply a scrappy mino not worth a gnats fart.
It is the CFD\SB companies that make up words like German 30 that are interested in Rushing your stops as they pretend to you that you are trading the markets when in reality you are in an OTC arrangement with the House on the opposite side of your trade.

Not sure what size your trading but if you can trade via Eurex direct your better off. If not then with a broker that offers Direct Market Access. Also use a charting packet that gets it's prices directly off the exchanges so you can work out what the real price was vis a vis the price your broker has been showing you. Also comes in handy once you are in a trade, so you know which price representation to believe as ultimately the Brokers price must revert to the real price. They are the real Spoofers around here.

"What I can optically see in the charts when comparing is that the FDAX future chart generates more price bars, more signals and the price seems to be more volatile relative the DAX index.
Any underlying logic for this “behaviour” "


http://www.ninjatrader.com/support/forum/showthread.php?t=74158

 

[capitalspreads]

The futures appear to create more ticks because your chart for the Dax index is not calculated on every single price change. If the system were able to do this then there would be far more ticks on the Dax 30 as it would marginally change every single time one of the 30 component parts moved.

If a Futures price is changing more frequently then this create profitable opportunities as well as loss making ones