Aby korzystać z czatu, zaloguj się.
Powrót do kontaktów

Do you prefer fixed spreads or dynamic spreads?

TheLastBear
Aug 27 2012 at 07:53
186 postów
Hey guys,

do you prefer fixed spreads or do you prefer dynamic spreads? What does your broker offer you?

Thanks for taking time to respond.

stevewalker
stevewalker
Aug 27 2012 at 09:00
1439 postów
ECN Account
- slippage + Comission + var Spread

it is better to trade with
- 4 digit or 5 digit fix spread NDD broker

variable spread is a big trap for EA s to fail.

better to trade with fix spread. ( 4-5 weeks ago I was on the other side )

walker

malkaby85
Aug 27 2012 at 11:13
10 postów
Moreno Rodrigez (MRodrigez)
Aug 28 2012 at 07:11
168 postów
malkaby85 posted:
fix spread of course 😀


it all depends on the trading strategy you are using

James_Bond
Aug 28 2012 at 14:49
556 postów
TheLastBear posted:
Hey guys,

do you prefer fixed spreads or do you prefer dynamic spreads? What does your broker offer you?

Thanks for taking time to respond.


A great question. I was sure dynamic spreads are best, until I read walker's response.

I do think fixed spreads is the more transparent approach broker's wise, as many traders overlook or don't understand the commission factor. However, with most brokers changing their model from fixed to variable+commission model, the costs per trade went straight down. By my calculations, spreads with a commission model are cheaper than fixed spreads.

For example (please correct me if I'm wrong), if a commission is $2.5 per 1 lot per turn, and the initial spread is 0.5, then openning and closing a trade of 1 lot would cost 0.5pip*2+($2.5*2) = $5*2 + $5 = $15 or 1.5 pips. Divided by 2, this makes a spread of 0.75 only. Anything above that number with a fixed spread is more expensive (fixed spread usually start from 1.5 pips).

stevewalker
stevewalker
Aug 28 2012 at 15:02
1439 postów
one Q
one input

why you divided it by 2 ?
calculate slippage %90 negative and starting from 0.5 to >5 pips sometimes

on the other hand variable spread is a big trap for fail EA s. EA s programmed for doing always the same. when EA work with variable spread broker it has much more fail poss then working with fix spread.

walker


James_Bond posted:
TheLastBear posted:
Hey guys,

do you prefer fixed spreads or do you prefer dynamic spreads? What does your broker offer you?

Thanks for taking time to respond.


A great question. I was sure dynamic spreads are best, until I read walker's response.

I do think fixed spreads is the more transparent approach broker's wise, as many traders overlook or don't understand the commission factor. However, with most brokers changing their model from fixed to variable+commission model, the costs per trade went straight down. By my calculations, spreads with a commission model are cheaper than fixed spreads.

For example (please correct me if I'm wrong), if a commission is $2.5 per 1 lot per turn, and the initial spread is 0.5, then openning and closing a trade of 1 lot would cost 0.5pip*2+($2.5*2) = $5*2 + $5 = $15 or 1.5 pips. Divided by 2, this makes a spread of 0.75 only. Anything above that number with a fixed spread is more expensive (fixed spread usually start from 1.5 pips).

James_Bond
Aug 29 2012 at 12:22
556 postów
stevewalker posted:
one Q
one input

why you divided it by 2 ?


Because a the spread is for one way trade, ie buy. If you wish to close it (ie sell), that is another spread cost. Actually, I could have counted it for one way only, instead of counting round trip and then dividing it 🙄.

As to slippage - I'm assuming it is the same for fixed and variable, or am I wrong here?

TheLastBear
Aug 29 2012 at 12:39
186 postów
I have to agree with Moreno Rodrigez, it all depends on your trading strategy. While EA's may under-perform with dynamic spreads, active traders may not. I am not a fan of EA's so that would not account. I myself have not decided if I would prefer a fixed spread over a dynamic spread.

stevewalker
stevewalker
Aug 29 2012 at 14:08
1439 postów
we are calculating the cost.

according to my calculations, including slippage, fix spread is better then variable spread.
bigger the spread smaller the slippage

also with most of the brokers trader can limit slippage with instant order execution.

with ECN market order execution trade can slip as much as it can sometimes > 30 pips.

also variable spread is another ( name on it ) variable that trader can not control.

every variable out of trader control runs against trader

walker


James_Bond posted:
stevewalker posted:
one Q
one input

why you divided it by 2 ?


Because a the spread is for one way trade, ie buy. If you wish to close it (ie sell), that is another spread cost. Actually, I could have counted it for one way only, instead of counting round trip and then dividing it 🙄.

As to slippage - I'm assuming it is the same for fixed and variable, or am I wrong here?

James_Bond
Aug 29 2012 at 14:47
556 postów
stevewalker posted:
bigger the spread smaller the slippage



I think this is not a plus but a minus - most of the cost is built into the high spread - since the large part of slippage occurs (or should at least) during an economic event and since most of the time there aren't any events, the trader keeps paying a high spread for his trades.

Zaloguj się aby skomentować .