Spread betting at FXCM

[Jason Rogers]

Hi Jason Rogers,

I guess that means, thanks to the 1K increments, you can bet in pretty varying sizes per pip now. :clap: It will probably be a boon for anyone who uses tight money management rules, not to mention smaller traders etc.

It's strange that there is no in-depth manual for TSII, as it's far easier to find something in a manual than a click and see strategy (not conducive for good trading either). :cheesy:

By the way, with regard to spread betting indices, I noticed that FXCM (and probably other brokers) are using Equity Index CFD's like GER 30 etc. instead of allowing traders to bet on their actual index counterparts like the DAX in this case. Could you tell me if the Equity Index CFD's used are correlated to their actual index counterparts. Some of the indices, like the GER 30 I mentioned, are hard to find information on, as I think it's always wise to be able corroborate prices/charts etc. with 2nd and possibly 3rd sources.

Thanks,

LBP

That's right, the 1k increments give you much more flexibility to control trade size and money management.

All of the stock indices track their underlying product. In the case of the GER30, it tracks the DAX index of German listed shares. A list of the underlying product each CFD tracks can be found on this page http://www.fxcm.co.uk/cfd-faqs.jsp. For FXCM UK, the index CFD prices are based on the relevant futures price minus a fair value. Fair Value is a calculation that factors various things that tend to affect the price of a stock index futures contract, such as interest and dividends. A Fair Value Rate adjustment is often applied by many media outlets when quoting market index prices based on futures contracts. So while the price may vary from the underlying futures contract, you'll find the pricing tends to move closely together.

Jason

 

[lilbitpipsy]

So while the price may vary from the underlying futures contract, you'll find the pricing tends to move closely together.
Jason

Hi Jason Rogers,

Just out of curiosity, what conditions would cause the pricing to widen between the Indices on FXCM and the underlying Index.

On another note, how much historical data is available for the spread betting instruments (eg. FX, Indices etc.), and what is the quality of this data (i.e. are there gaps, corruption, bad ticks etc.) I'm assuming such data can be imported into TSII somehow, for backtesting and the like?

Thanks.

LBP

 

[Jason Rogers]

Hi Jason Rogers,

Just out of curiosity, what conditions would cause the pricing to widen between the Indices on FXCM and the underlying Index.

On another note, how much historical data is available for the spread betting instruments (eg. FX, Indices etc.), and what is the quality of this data (i.e. are there gaps, corruption, bad ticks etc.) I'm assuming such data can be imported into TSII somehow, for backtesting and the like?

Thanks.

LBP

Hi LBP,

The exchange's trading hours of the underlying product would be the most common determinant of the spread widening. For example, the UK100 and GER30 has a minimum spread of 1 during exchange hours and 2 outside of exchange hours. Spreads can also vary depending on liquidity, and the Christmas holiday period would be the most recent example if my memory serves me correctly.

We have historical 1 minute data going back anywhere from 2001-2008 for the FX and cfd instruments, and it can be downloaded from the DailyFX forum here Free Strategy Trader Historical Data . This data is primarily available for backtesting in the Strategy Trader platform. I haven't heard of any problems with the data in the nearly 2 years it has been available, but if you have any questions about it, the programming services team would be the best place to go to with questions about the data. You can already access all of this data in Trading Station's Marketscope chart by choosing the time periods when creating the Marketshot.

Jason

 

[lilbitpipsy]

Hi LBP,

The exchange's trading hours of the underlying product would be the most common determinant of the spread widening. For example, the UK100 and GER30 has a minimum spread of 1 during exchange hours and 2 outside of exchange hours. Spreads can also vary depending on liquidity, and the Christmas holiday period would be the most recent example if my memory serves me correctly.

We have historical 1 minute data going back anywhere from 2001-2008 for the FX and cfd instruments, and it can be downloaded from the DailyFX forum here Free Strategy Trader Historical Data . This data is primarily available for backtesting in the Strategy Trader platform. I haven't heard of any problems with the data in the nearly 2 years it has been available, but if you have any questions about it, the programming services team would be the best place to go to with questions about the data. You can already access all of this data in Trading Station's Marketscope chart by choosing the time periods when creating the Marketshot.
Jason

Hi Jason Rogers,

Sorry if I wasn't clear about my first question, but I was referring to the conditions that might cause the pricing to widen between the Equity Index CFD and the corresponding underlying Index.

With regard to the historical data. Could you tell me if it can be imported into other platforms apart from TSII.

Thanks.

LBP

 

[hacks]

Hi Jason Rogers,

Sorry if I wasn't clear about my first question, but I was referring to the conditions that might cause the pricing to widen between the Equity Index CFD and the corresponding underlying Index.

With regard to the historical data. Could you tell me if it can be imported into other platforms apart from TSII.

Thanks.

LBP

Yes, you can use this data in other platforms. I use it on Metastock (I wrote my own converter to do this).

 

[Jason Rogers]

Hi Jason Rogers,

Sorry if I wasn't clear about my first question, but I was referring to the conditions that might cause the pricing to widen between the Equity Index CFD and the corresponding underlying Index.

With regard to the historical data. Could you tell me if it can be imported into other platforms apart from TSII.

Thanks.

LBP

No worries. It's understandable that things may get lost in the forum translation sometimes , but I'll get it eventually, hahah.

I'm not familiar with any reasons that may cause this nor have seen instances from my experience as to why our spread would widen without a cause in the underlying market. For the most part, it is very much dependent on liquidity. Again the holiday period comes to mind for a time when we either had to close trading earlier than schedule or spreads increased above typical levels, but this was dependent on liquidity in the underlying.

Jason

 

[lilbitpipsy]

So while the price may vary from the underlying futures contract, you'll find the pricing tends to move closely together.
Jason

Hi Jason Rogers,

Thanks for perservering! :cheesy:

My question was to do with the price of the Equity Index CFD and the underlying Index moving differently, as opposed to the spreads. So for instance if the prices normally move closely together on the two, what would make them move apart. (i.e. The DAX (Index) moving up 50 points but the GER 30 (Equity Index CFD) moving up 100 points, or even down). Does this kind of scenario happen, and if so, what would be the probable causes of the difference in price action.

Thanks.

LBP

 

[Jason Rogers]

Hi Jason Rogers,

Thanks for perservering! :cheesy:

My question was to do with the price of the Equity Index CFD and the underlying Index moving differently, as opposed to the spreads. So for instance if the prices normally move closely together on the two, what would make them move apart. (i.e. The DAX (Index) moving up 50 points but the GER 30 (Equity Index CFD) moving up 100 points, or even down). Does this kind of scenario happen, and if so, what would be the probable causes of the difference in price action.

Thanks.

LBP

Hi LBP,

As mentioned previously, from my experience I haven't seen scenarios where this would occur other than liquidity drying up around holiday hours.

Jason

 

[lilbitpipsy]

Hi Jason Rogers,

Is it possible to scale in AND out of trades in spread betting as you can in Spot FX for example?

Also, can you export data from MarketScope into another software package (spreadsheet, charting software etc.)? If so, what export formats are supported?

On an entirely different note, when FXCM mentions the term "Trade Audit", for instance when a customers thinks they have gotten the wrong price due to a technical problem etc., and contacts customer support; what information would FXCM require to comply with this term? Is it something as simple as a screenshot of the point in question...complete details of the trade...?

Thanks.

LBP

 

[Jason Rogers]

Hi Jason Rogers,

Is it possible to scale in AND out of trades in spread betting as you can in Spot FX for example?

Also, can you export data from MarketScope into another software package (spreadsheet, charting software etc.)? If so, what export formats are supported?

Hi LBP,

Good to hear from you. It is possible to scale and out of positions in the spreadbet account as you would in the regular spot fx/cfd account. Both accounts operate exactly the same same in terms of how the account operates. The difference is in now the spreadbet account itself is classified for UK tax purposes.

For data export through Marketscope, it will be exported as an XML file which you can open in Excel which then gives you access to upload the data into another program. We also have a lot of historical data available in 1 minute intervals here Free Strategy Trader Historical Data .

On an entirely different note, when FXCM mentions the term "Trade Audit", for instance when a customers thinks they have gotten the wrong price due to a technical problem etc., and contacts customer support; what information would FXCM require to comply with this term? Is it something as simple as a screenshot of the point in question...complete details of the trade...?

That's a great question . Anytime you want us to review a trade please provide your account number, ticket number for trade(s) in question, amount disputed (if known), and a brief description of the problem. Either call in by phone to give us the information or send it over by email. As a reminder for account safety, never post your account number, ticket number or identifiable information on the forum.

-Jason

 

[Blaiserboy]

Jason
Can someone open a demo account for spread bet trading....?

daveM

 

[Jason Rogers]

Jason
Can someone open a demo account for spread bet trading....?

daveM

Hi daveM,

You sure can. The spreadbet demo for the Trading Station platform can be found here Spread Betting Demo Account, Practice Spread Betting, Forex Demo | FXCM.

We also have a spreadbetting demo available on MT4. The webpage has not launched live on our website yet, but you can still download the platform here http://download.fxcorporate.com/fxcmspreadbettingMT4setup.exe . The demo can be registered directly through the platform after installation.

-Jason

Note: Spreadbetting is only available for residents of the UK and Ireland

 

[neil324]

Is the MT4 spread betting a new thing, I thought spread betting was only available through Trading Station.

 

[Jason Rogers]

Is the MT4 spread betting a new thing, I thought spread betting was only available through Trading Station.

Hi neil,

Trading Station was the only platform available for spread betting until just recently. We haven't fully announced it yet, so you heard it here first

The application for the live MT4 spreadbet account is available as well https://secure4.fxcorporate.com/fxtr/?ib=FXCMUKSB_MT4 . We're hoping to have more information released on the website within the upcoming weeks.

Jason

 

[neil324]

Hi neil,

Trading Station was the only platform available for spread betting until just recently. We haven't fully announced it yet, so you heard it here first

The application for the live MT4 spreadbet account is available as well https://secure4.fxcorporate.com/fxtr/?ib=FXCMUKSB_MT4 . We're hoping to have more information released on the website within the upcoming weeks.

Jason

Thanks for the heads up, always nice to have competition for the MT4 lovers

 

[lilbitpipsy]

We also have a spreadbetting demo available on MT4.

Hi Jason Rogers,

Am I right in thinking the MT4 spread betting platform will have an extra transactional layer when compared to TSII. (i.e the orders pass through MT servers as well as FXCM's)?

Also, what about the controversial 'virtual dealer plugin'. Does this play a part in the FXCM MT4 spread betting platform or not?

Thanks.

LBP

 

[Ross Spur]

Hi Jason Rogers,

Am I right in thinking the MT4 spread betting platform will have an extra transactional layer when compared to TSII. (i.e the orders pass through MT servers as well as FXCM's)?

Also, what about the controversial 'virtual dealer plugin'. Does this play a part in the FXCM MT4 spread betting platform or not?

Thanks.

LBP

Difficult questions to answer, I should imagine.

 

[Jason Rogers]

Hi Jason Rogers,

Am I right in thinking the MT4 spread betting platform will have an extra transactional layer when compared to TSII. (i.e the orders pass through MT servers as well as FXCM's)?

Also, what about the controversial 'virtual dealer plugin'. Does this play a part in the FXCM MT4 spread betting platform or not?

Thanks.

LBP

Hi LBP,

Nope, our MT4 is now directly integrated with our execution system. Back in December, we announced the launch of the new improved faster MT4 which no longer uses a 3rd party bridge and MT4 server redundancy.

The plugin does not play a part in FXCM's MT4, and it wouldn't make sense to either. With NDD forex execution, our compensation is the pip mark-up added to the spread. FXCM earns the same pip mark-up whether your order is filled at the price you click on or experiences slippage due to liquidity no longer being available at the order price. A dealing desk broker making the market may use the plugin to manage their risk from taking the other side of client positions since a traders profit could be their loss and your loss their profit. We have long discussed the possible conflict of interest that could arise due to this and the resulting practices including re-quotes, order restrictions etc. http://www.fxcm.co.uk/fxcm-forex-execution.jsp .

Jason

 

[Shakone]

Hi LBP,

Nope, our MT4 is now directly integrated with our execution system. Back in December, we announced the launch of the new improved faster MT4 which no longer uses a 3rd party bridge and MT4 server redundancy.

The plugin does not play a part in FXCM's MT4, and it wouldn't make sense to either. With NDD forex execution, our compensation is the pip mark-up added to the spread. FXCM earns the same pip mark-up whether your order is filled at the price you click on or experiences slippage due to liquidity no longer being available at the order price. A dealing desk broker making the market may use the plugin to manage their risk from taking the other side of client positions since a traders profit could be their loss and your loss their profit. We have long discussed the possible conflict of interest that could arise due to this and the resulting practices including re-quotes, order restrictions etc. Forex Trading Execution | Currency Trading | FXCM .

Jason

Why not charge a commission rather than a spread markup? Because the spread mark up is worse for the client than charging an equivalent amount to 1 pip commission isn't it?

 

[lilbitpipsy]

Hi LBP,

Nope, our MT4 is now directly integrated with our execution system. Back in December, we announced the launch of the new improved faster MT4 which no longer uses a 3rd party bridge and MT4 server redundancy.

The plugin does not play a part in FXCM's MT4...
Jason

Hi Jason Rogers,

Thanks for the useful information as always. The reason I asked is because I stopped using MT4 some time ago, specifically for the problems I mentioned. I guess it's once bitten twice shy! Does the fact that the MT4 platform is directly connected mean that a trader won't suffer from the order rejection problem when you used to go through "their" servers. Does this mean TSII is going to play second fiddle to MT4, regarding updates etc., or will both platforms be available side by side for the future? When you have a spread betting account with FXCM, would you be able to use both platforms at the same time? I don't mean simultaneously, but can you chop and change.

Why not charge a commission rather than a spread markup? Because the spread mark up is worse for the client than charging an equivalent amount to 1 pip commission isn't it?

I guess that would make sense if you make a lot of trades (day trading, scalping etc.) Personally, I would rather have better prices for entry/exit, as FXCM's still seem a little wider when compared to competitors (although there is only one DMA spread betting competitor that I'm aware of; I'm referring to the (best price) spread from the broker's liquidity providers as a whole). By the way, I'm talking about live spreads as opposed to theoretical.

Thanks.

LBP