AUD/USD spreads on non farm payrolls June 2015

[rtron]

Morning all,

I had a bad time trading the non farm payrolls on the AUD/USD last week but that's forex for you. When I queried the spreads with customer support I got the following list of bids/ask prices:



Yes that's right there's a spread of 350 pips in there!

I'm not going to name the broker as I just want to know if anyone has an MT4 addon that calculates spreads etc or also came across spreads like this. I'm on an ECN account and expected wider spreads during the news but this is a new personal best. Never had any issues with this broker for over a year and still think they offer good service but I'm questioning the authenticity of their ECN account.

 

[CanOz]

Morning all,

I had a bad time trading the non farm payrolls on the AUD/USD last week but that's forex for you. When I queried the spreads with customer support I got the following list of bids/ask prices:

View attachment 62964

Yes that's right there's a spread of 350 pips in there!

I'm not going to name the broker as I just want to know if anyone has an MT4 addon that calculates spreads etc or also came across spreads like this. I'm on an ECN account and expected wider spreads during the news but this is a new personal best. Never had any issues with this broker for over a year and still think they offer good service but I'm questioning the authenticity of their ECN account.

I've seen the bids and offers literally evaporate on the 6A, the equivalent CME futures contract. Thats what makes it so risky to trade these big news events. No one want to take the other side of the trade.

 

[Wysiwyg]

Yes that's right there's a spread of 350 pips in there!

350 pips is 3.5 cents! The spread was 35 pips.

 

[rtron]

350 pips is 3.5 cents! The spread was 35 pips.

My mistake Wysiwyg, but back on topic are you or anyone else able to verify the spreads with an ECN account using any other broker or platform? The spreads on a true ECN account should be the same across all platforms & brokers, especially when liquidity is sourced through multiple banks so I'm just look for someone else to verify if they had a similar situation during the non-farm payrolls last Friday. There should always be enough competition in the market to keep the spreads tight if the liquidity pool used by the broker is deep enough.

 

[sinner]

My mistake Wysiwyg, but back on topic are you or anyone else able to verify the spreads with an ECN account using any other broker or platform? The spreads on a true ECN account should be the same across all platforms & brokers, especially when liquidity is sourced through multiple banks so I'm just look for someone else to verify if they had a similar situation during the non-farm payrolls last Friday. There should always be enough competition in the market to keep the spreads tight if the liquidity pool used by the broker is deep enough.

Most FX brokers advertising themselves as ECN are actually only STP brokers (Straight Through Processing).

The only FX broker in AU I know which offers real ECN accounts is Pepperstone (Razr account type).

If you are not with Pepperstone then you should adjust your expectations of what ECN (i.e. nothing) means accordingly.

Even Pepperstone still has a dealer in place for at market orders, you will only be able to truly participate by placing limit orders. i.e. stop loss orders are stop orders, which means they get executed at market when the bid or ask price (depending on buy or sell stop) crosses your nominated value. There is no guarantee of execution at that price.

35 pips on AUDUSD, during US hours, during NFP sounds about right to me. Just accept your mistake (i.e. trading AUDUSD during NFP with an expectation of good liquidity) and move on. Without any AU markets open during those hours, MM bots will not have good hedge constructs and simply shut down during news events.

AUDUSD liquidity is highest during Sydney, Shanghai and Tokyo trading sessions. After that you should be trading EURUSD or USDJPY until the New York close.

 

[rtron]

Most FX brokers advertising themselves as ECN are actually only STP brokers (Straight Through Processing).

The only FX broker in AU I know which offers real ECN accounts is Pepperstone (Razr account type).

If you are not with Pepperstone then you should adjust your expectations of what ECN (i.e. nothing) means accordingly.

Even Pepperstone still has a dealer in place for at market orders, you will only be able to truly participate by placing limit orders. i.e. stop loss orders are stop orders, which means they get executed at market when the bid or ask price (depending on buy or sell stop) crosses your nominated value. There is no guarantee of execution at that price.

35 pips on AUDUSD, during US hours, during NFP sounds about right to me. Just accept your mistake (i.e. trading AUDUSD during NFP with an expectation of good liquidity) and move on. Without any AU markets open during those hours, MM bots will not have good hedge constructs and simply shut down during news events.

AUDUSD liquidity is highest during Sydney, Shanghai and Tokyo trading sessions. After that you should be trading EURUSD or USDJPY until the New York close.

Thanks for your reply sinner, Yep it's Pepperstone & Yep I've got a Razr account. I've always thought they were very good and will still use them into the future but I was just curious of what spreads other traders got around the same time when the market went and flipped itself. I agree with you on trading the NFP, but I also broke my cardinal rule that afternoon, and that is to never trade on a Friday after lunch!

 

[Jens]

I have a "spread and session indicator". It is copyrighted by Fabturbo.
You should be able to find it somewhere - I did.
It will draw the current spreads on your chart. Very handy if you want to compare spread from different brokers.

 

[ukulele]

I'm a newbie trader, I've been doing ok with trading the news lately. I'm interested in how you handled the trade? I will start a specific "trading the news" thread after work. But what works for me is I usually enter the trade at least 1 minute after the announcement.

On good events, the sentiment can last 40 minutes (i trade 5 minute candles).

I can't comment about AUD/USD, but I got a small profit trading this event using the USD/JPY pair. At 1033pm the spread was 1.6pips.

 

[rtron]

I'm a newbie trader, I've been doing ok with trading the news lately. I'm interested in how you handled the trade? I will start a specific "trading the news" thread after work. But what works for me is I usually enter the trade at least 1 minute after the announcement.

On good events, the sentiment can last 40 minutes (i trade 5 minute candles).

I can't comment about AUD/USD, but I got a small profit trading this event using the USD/JPY pair. At 1033pm the spread was 1.6pips.

I primarily trade the AUD/USD as I haven't got the time to monitor any others and I usually avoid the big US & Chinese announcements for the reasons that prompted me to start this thread, but on this occasion I broke my rule. I already had a short order that was open before the announcement and the spreads were wider than I expected and hit my stop.

Usually I trade 15 minute, 1 hour & 4 hour charts and I don't like to be in the market ten minutes before or after a big event. Sentiment affects existing trends and the market often spikes & retraces several times depending on the length of the news before it sets a new course. If it fits with the price action then I'll be into it but I only trade AUS announcements because it is easier for me to gauge market sentiment beforehand. To me, the news & liquidity can be too unpredictable on the US announcements which often doesn't make it any better than gambling. It's not unusual for a Chinese announcement to be early or late by anything from 15 minutes to a whole day so I just avoid these altogether.

 

[>Apocalypto<]

My mistake Wysiwyg, but back on topic are you or anyone else able to verify the spreads with an ECN account using any other broker or platform? The spreads on a true ECN account should be the same across all platforms & brokers, especially when liquidity is sourced through multiple banks so I'm just look for someone else to verify if they had a similar situation during the non-farm payrolls last Friday. There should always be enough competition in the market to keep the spreads tight if the liquidity pool used by the broker is deep enough.

imo stop the NFP roller-coaster it's not a good idea to look at it as a trading opportunity. for everyone you might nail there's 5+ that will cut you up... then you have brokers spreads and execution times during the release.

each to there own but personally i would totally avoid it.

 

[sinner]

imo stop the NFP roller-coaster it's not a good idea to look at it as a trading opportunity. for everyone you might nail there's 5+ that will cut you up... then you have brokers spreads and execution times during the release.

each to there own but personally i would totally avoid it.

Spot on, IMHO, trading the news on margin is a mugs game. If you haven't been blown on trading the news, you are either very very good, very very lucky, or (most likely) just haven't been in the markets long enough to learn not to put your fingers on the hot stove.

 

[ukulele]

I primarily trade the AUD/USD as I haven't got the time to monitor any others and I usually avoid the big US & Chinese announcements for the reasons that prompted me to start this thread, but on this occasion I broke my rule. I already had a short order that was open before the announcement and the spreads were wider than I expected and hit my stop.

Usually I trade 15 minute, 1 hour & 4 hour charts and I don't like to be in the market ten minutes before or after a big event. Sentiment affects existing trends and the market often spikes & retraces several times depending on the length of the news before it sets a new course. If it fits with the price action then I'll be into it but I only trade AUS announcements because it is easier for me to gauge market sentiment beforehand. To me, the news & liquidity can be too unpredictable on the US announcements which often doesn't make it any better than gambling. It's not unusual for a Chinese announcement to be early or late by anything from 15 minutes to a whole day so I just avoid these altogether.

Hey thanks for replying. I trade a few different strategies and instruments but lately I have been focused on using announcements as a side strategy in itself. The longest I've been in is probably half an hour (on this strategy).

I do agree that AUS announcements are easier to trade as we are immersed in the sentiment from news etc. However I do like trading the EUR GBP and US news because it comes on in the evening when I'm at home. I had a successful trade on the European PMI data last week.

 

[>Apocalypto<]

Spot on, IMHO, trading the news on margin is a mugs game. If you haven't been blown on trading the news, you are either very very good, very very lucky, or (most likely) just haven't been in the markets long enough to learn not to put your fingers on the hot stove.

or you work for the ABS and have a mate lol