Nuances of trading in the modern brokerage companies

Nuances of trading in the modern brokerage companies

In order to fully function in the financial market, a trader must have a trading account with a brokerage company. This is an inalienable rule that has existed for more than a hundred years. Nevertheless, all this time fix api trader is fighting not only with the market, but also with the broker. Eternal marginal requirements, delays in the execution of trading operations and simply the collection of money with subsequent non-payment of profits only force us to be on the alert with the brokerage companies. Today, the situation has not changed much, and in order to profitably trade, it is necessary to take into account all the nuances that become known only after you have placed the capital in the broker’s account (with the probability of the fact that the given capital cannot be withdrawn at all).

To avoid possible surprises when working with the brokerage companies, I prepared a short list of pitfalls, which probably 90% of all the brokerage companies have. If you know them, you will be able to choose a quality trading platform for yourself.

1. Spread. This indicator shows the difference between the cost of buying and selling. Brokerage companies often set mark-ups on their financial instruments and thus, every lost profit of the trader is a profit of a brokerage company. Moreover, the wider the spread, the unfavorable conditions for the trade, because the price can reach the level of take profit and stop loss you set and do not close until you reach the given level taking the spread into account ( ).

2. Slippage. This is a parameter that displays the delay in the execution of the trading order. Thus, at the moment when you open a deal, there is a delay for a fraction of a second, after which the price of the asset changes its value and the transaction opens not at the planned prices. The fix api forex market is very volatile, and even a small fraction of a second determines the result.

3. Prohibition of the algorithmic trading use. Fix api brokerage companies do everything in order to save money on their balance. The development of information technologies allowed the exchange speculators to improve their trading performance due to automation of the trading process. Realizing this, most companies limit the trade with automated systems by adding several items in the contract.

4. Dealing issues. Agree that there were times when the quotes at your broker often do not coincide with those on other sites or even at the suppliers of liquidity. Even the deviation by several points completely changes the understanding of technical indicators, which are built on the price. And if this price is false, then the signals will be false. As a result, the result will deviate from the predicted one. The thing is that globally you can divide two types of transactions: Dealing Desk (DD) and Non Dealing Desk (NDD). At the first kind all transactions will go directly to the broker’s server. Thus, you will trade directly with the broker. The second kind is that the transactions will be delivered to the market, thus the broker acts as an intermediary between the trader and the market. If you are trading in the dealing desk system, your broker will earn on your losses, while the no dealing desk method involves earning only on commission.

I am more than confident that there are still internal specifications, which only brokerage companies know about. It is well known that they use special programs to analyze the client trading in order to limit the brokerage risks. Thus, these programs are aimed at determining the automatic algorithm or very successful traders. Therefore, I recommend using special software that will mask the trading positions committed by the trader ( ).


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