Closing trades on NZD/USD for autotrading on ConservProfit were carried out for those trading with GAIN (more than) 3 minutes later than accounts on IB or FXCM. Hoe is that possible?
The NZD/USD order was submitted quickly but it took almost 3 minutes to fill at GAIN.
Does GAIN have a worse access to FOREX market than Interactive Brokers or FXCM? They were able to keep the trade time much lower, although the volumes seem to be comparable.
That “latency” was only on the 5th leg - and Gain got better fills than either FXCM or IB. So don’t look a gift horse in the mouth
Francis, I see you are head of auto-trading. The slippage at GAIN as compared to IB (not to mention the disgraced FXCM) is brutal. I am losing hundreds of dollars per trade. Do you know why? Is there anything we can do about it?
I’m pretty sure it’s not due to C2 or even GAIN, but rather the massive volume following the Forex strategies. Although Forex strategies are liquid, I’ve seen over 10-20m traded instantly per lot, which undoubtedly has an effect on slippage. If anything, blame the popularity of the systems. Then you take 3-4+ multi-lot unwinds into account that happen within the span of 30 seconds or less, and you can see why the slippage becomes terrible. Not C2’s fault and just so happens IB can handle the massive volume a bit better than GAIN.
Usual forex strategies that are open for the puplic have very small profit targets like 10-30 Pips which frequently translates into expectancy of 2-5 pips/trade. ConservProfit is apparently not that much different so the slippage due to high volume should erase the edge of the strategy rather soon. There is no free lunch and always a downside.
Actually it´s strange that the strategy still shows no sign of slowed performance despite the slippage you mention. It should though because the performance chart shows the effect of the volume weighted average fill prices… Weird!
It’s definitely feeling the effects. Just take a look at the monthly performance: March has been very slow compared to previous months.
The R/R is definitely changing out of favor of the strategy when gains per trade are miniscule in comparison to potential stop loss at massive leverage.
Too bad C2 can’t implement a prioritization system for low-volume orders ahead of high-volume orders because I notice a few huge whales taking up massive volume – easily 40-50x the average sized lot. The rich get richer until they run the system into the ground.
If there is excessive slippage on ConservProfit because there are too many followers, then some of the obvious (partial) solutions might be:
(1) A subscriber could stop Autotrading and enter the trade signals manually after the prices rebound–assuming they do rebound.
(2) The Leader could limit the number of subscribers, and reduce that number with attrition.
(3) The Leader could raise his/her subscription price to many times the current rate.
(4) Subscribers who are experiencing the most slippage could unsubscribe, eventually leading to a sort of equilibrium of costs and benefits.
(5) Subscribers could switch their accounts to quicker brokerage houses.
Perhaps the simplest remedy would be the least popular here: raising the subscription price many-fold.
Another thing we will do soon is to limit the scaling factor Autotraders can set per account.
That won’t solve it. The number of extremely high volume whales are quite vast if you take a look at the trading logs. They easily make thousands per month and would gladly pay several hundred or more. Removing 50% of the followers might only cut the volume down by 25% at most.
Manual trading won’t work because often times the signals come from an EA (trading algo) or at random times in the night that makes manual trading untenable.
The only thing that will solve the problem is a prioritization system that lets low volume orders go first. Then hopefully the whales die off from slippage and go do something else with their money.
That’s not legal in the US–we can’t prioritize like that.
Right. The scaling limiter is a good step, though.
Francis, that isn’t my question and that isn’t the main issue! Check the average fills of Gain as compared to the average fills of IB/FXCM. There is some middleman, or some middleware or whatever, taking a huge chunk out of the Gain performance. It’s as clear as night and day. Can you speak with them and find out what’s going on? C2 is providing a lot of new business for them, so they should be receptive to fessing up and/or finding a solution. This isn’t about slippage from greater and greater numbers of subscribers. The volume of these Forex instruments is HUGE and can withstand 10X the amount of volume sent by ConservProfit.
This isn’t about March slowdown or whales. The performance is slipping because Gain AWFUL fills is now being averaged with IB and FXCM (still a few traders from there, don’t know why, thought they had closed down). IB whales get the same fills as little traders with $5000 accounts.
Elemental, thanks for the comments. You raise even more issues with some of these partial solutions than I was thinking of.
But the prioritizing can’t work either.
If that’s the case, why is there so much more slippage on 4+ lot exits than 1-2 lot exits? There’s a reason why IB offers a large size trading facility above 7m USD per order. That amount is exceeded with even one lot orders given the number of followers the strategy has.
I don’t know why one broker would have better fills than another–how they process orders is opaque to us. One thing to consider is GAIN has its commissions included in the spread, while IB charges commissions separately, so fills can be better at IB but that does not reflect the total cost.
Trade leaders interested to make it easy for US subscribers to trade their forex systems can solve it by trading forex futures instead of cash/spot forex.