The Euro against the US dollar (EURUSD) is back above the level at
which there was a collapse on news out of Bloomberg that two unnamed officials
had reported that the possibility of making the overnight deposit rate negative
was under discussion by the European Central Bank (ECB).
It is instructive that, even on its way back, the rate found
resistance at the point where the collapse had started on Feb. 20th,
when the report appeared. Having cleared this level, it is now using it as
support.
It was a remarkable incident. While Bloomberg is an important
entity in market commentary, this story was not picked up anywhere else. Thus,
an isolated news report, based on the comments of nameless individuals, was
able to move the market in the most widely traded currency pair on the planet
in a significant manner. That the move was almost immediately reversed only
adds to the wonder at the whole episode.
Beware the price spike broker
Having made the decision to code the Silver Trigger for the
Metaquotes MT4 trading platform, it was necessary to open an account with an
MT4 broker. So we tried a few, to see which would be best.
The first chart above is from the MT4 platform of one of these
brokers. It shows a spike in gold on Nov 1st that hit the stop loss on the short trade that was current, and
closed it out. The OmiCronFX Silver Trigger routine was attached to the chart
and later, when the spike reversed, it re-entered the position, triggered by
the reversal momentum. However, it entered it $8.26 per Oz. lower than the
price at which the previous trade was stopped out. This would translate into a
loss of nearly 0.5% of equity, or $5k on a million dollar account. The chart
below the MT4 chart is the same instrument in the same time frame on a
Dukascopy JForex platform chart. Here there is no spike.
This is not an isolated incident. There was also a very large spike in NZDUSD on Sept 15th. from the same broker. We were not involved in a trade here at that time but the spike itself is very disturbing. Again, there was no corresponding spike on the Dukascopy chart.
We will not be recommending this particular broker to our clients, and have now moved on to one whose price feed does not exhibit behaviour with the potential to cause devastating damage to account equity. Foreign exchange traders, and indeed all traders, have enough challenges without being obliged to deal with this kind of situation.
This is not an isolated incident. There was also a very large spike in NZDUSD on Sept 15th. from the same broker. We were not involved in a trade here at that time but the spike itself is very disturbing. Again, there was no corresponding spike on the Dukascopy chart.
We will not be recommending this particular broker to our clients, and have now moved on to one whose price feed does not exhibit behaviour with the potential to cause devastating damage to account equity. Foreign exchange traders, and indeed all traders, have enough challenges without being obliged to deal with this kind of situation.
I agree with this article really informative.. I also used to prefer 4hrs time frame for analyses as it helps me to have right decision.
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