Rigged MarketMaker CFDs

[Trembling Hand]

LOL guys!!!

Yeah they rig it, its impossible to trade profitably because they take out all your good trades.


OR
A CFD chart is a bid or ask chart not a price chart that could be 4 to 5 points away from the actual trade price + the spread

 

[Cartman]

LOL guys!!!

Yeah they rig it, its impossible to trade profitably because they take out all your good trades.


OR
A CFD chart is a bid or ask chart not a price chart that could be 4 to 5 points away from the actual trade price + the spread

GO charts work off the bid --- IG are middle of the spread --- 2 points oz daytime City Index are middle of the spread 2 points oz daytime Dont know about GFT

ps Have you had a crack at GO yet TH ?? we are all interested

 

[Trembling Hand]

Yes but that is my point. A futs chart is never going to be the same as a CFD chart.

Especially when you look at a thin order book like the SPI

 

[Duffenator]

They do, hence why no CGT on CFD profits.

Do a search for the topic

Not going to go into this too much - but my understanding (and previous tax assessments) is that it is only gambling if it is random and not your main source of income. Otherwise, taxed as a business. (But i'm sure this can change depending on your circumstances.)

Yeah they rig it, its impossible to trade profitably because they take out all your good trades.

This is why I have posted an instance where I was not actually in the market, to try and avoid this thought process.

OR
A CFD chart is a bid or ask chart not a price chart that could be 4 to 5 points away from the actual trade price + the spread[/QUOTE]

This is what I was waiting for - the cfd chart I have is a bid chart. And if these are based on the SPI, shouldn't the bids roughly follow the bids on the SPI? Where as in this instance, the bids on my CFD chart show movement above and beyond any executed trade on the SPI?

Apart from being rigged, the only thing I can think of is this happened:
1. The CFD chart is a bid chart. (which it is).
2. The CFD chart is based on the Ask price of the SPI rather than the bid price of the SPI (like I assumed)
3. At the point in time I am referring to, the ask price on the SPI was significantly above the traded price on the SPI. As a result the bid price on my CFD chart (based on the ask price of the SPI rather than the traded price or the bid price), moved well above the the equivalent traded price on the SPI chart.

 

[Duffenator]

Yes but that is my point. A futs chart is never going to be the same as a CFD chart.

Especially when you look at a thin order book like the SPI

...but the cfd chart did follow the pattern of the SPI until that point...then it went its own way...for a few minutes

p.s. sorry about the big "OR" above...not sure how it got there lol.

 

[Trembling Hand]

3. At the point in time I am referring to, the ask price on the SPI was significantly above the traded price on the SPI. As a result the bid price on my CFD chart (based on the ask price of the SPI rather than the traded price or the bid price), moved well above the the equivalent traded price on the SPI chart.

Thats it

 

[Duffenator]

Thats it

crap - that's no fun then!

 

[Duffenator]

3. At the point in time I am referring to, the ask price on the SPI was significantly above the traded price on the SPI. As a result the bid price on my CFD chart (based on the ask price of the SPI rather than the traded price or the bid price), moved well above the the equivalent traded price on the SPI chart.

Unfortunately, that is not it!

Rigged is not the correct word - I think I should be saying "adjusted". I have been watching this closely since I started this topic. Everyday, around 11am, the prices of the AUS200 cfd, begin to move differently to the SPI. Large moves in the SPI appear generally dulled down. Although occasionally there are random spikes.

GFT tell me what I am actually trading is "fair price" of the SPI. When I asked for them to tell me how they calculate "fair price" and provide me with the formula this is the response I got.

"In response to your conversation with one of our representatives regarding the AUD200 Cash and the subsequent request for the formula: Firstly, the Cash price is priced by the Underlyning Future contract and the fair value is the diffrenece between the two prices.

This calculation, is not simply one formula or exact formula, it takes a number of factors into consideration, which in turn calculates the fair value (Such indicators include future interest rates, divdend payments..). We can not give you a formula as it is far more complex than this.

I hope this solves any issues you have with the calculation. If you have any further problems do not hesitate to give us an email/call, and we will be more than happy to resolve this issue. "

I wrote back and told them that it is bulls#@t that it is more complex than a formula and the only way it can be more complex is if it is adjusted at the whim of their employees.

This was the next response:

"Thank you for your query regarding our pricing model for the .AUS200 cash index. As you are aware, we generate our cash price from the most liquid futures contract [typically the front month] basis fair value.

Take the following hypothetical example ...

Suppose the AUS200Z8 index is trading at 3556/60, and the fair value is 60. What we do is take the mid-point [3558.0] and factor for fair value, yielding a cash index mid-point price of 3552.0. Then we purely add an index point either side to generate the 2 point spread resulting in a .AUS200 price of 3551.0/3553.0"

a bit more useful...but still not explaining exactly how "fair" is created!

 

[amy997]

I traded with Ig for a year before moving to IB. I used charts of the spi to select trades and never looked at the graphs provided by ig.

What i found happened regularly was around 10.10-10.30 the price offered by ig would move away from the spi by around 5-10 points, quite regularly i would be in a trade and say the spi was moving down, ig would also be moving down but then it would "readjust" itself and suddely half your profit was gone even though the spi was still moving down. I put down the "readjustment" to ig adjusting for the differences in the premium as the contract moved closer to expiry.
I never noticed it happening at other times of the day, usually it was sometime not too long after the open, i don't believe they are targeting stops i think it is some kind of adjustment process to bring their price in line with where they thought it should be in relation to the spi.
This happened to me 2-3 times a week and is one of the main reasons i stopped using them.

 

[amy997]

A good example of the above happened this morning.

I brought the spi at 3505 which corresponded to 3505 on ig's aussie200, i exited at 3522, and brought it again when it came back down to 3505 but instead this time ig's corresponding price was 3516, somewhere around 10.30 this morning they adjusted their aussie200 index by 10 points upwards

 

[James Austin]

when i experience this type of thing, i'd love to blame my provider.

but its not really proof is it?!

green arrow = long trade stop

red arrow = short trade stop

 

[nuking]

That happens because the spread at night are crazy .I seen up to 80 points at one stage.
Dont using stop loses at night on MM, try to exit at market.

 

[James Austin]

That happens because the spread at night are crazy .I seen up to 80 points at one stage.
Dont using stop loses at night on MM, try to exit at market.

its not night

 

[acedrum]

How about these spikes yesterday morning??

 

[Duffenator]

when i experience this type of thing, i'd love to blame my provider.

but its not really proof is it?!

Being stopped out isn't proof - but I deviations in the price trends between a MM and the underlying SPI show, without a doubt, adjustment of the CFD by the marketmaker (see figures in first post).

My provider will claim it is a "fair value" adjustment, but will not tell me how it is calculated. So, basically they have the ability to do what they want...if they consider it "fair". Fair could very well mean, if they lost a lot of money on an obvious trade, traded by the masses...but this is just speculation.

 

[chops_a_must]

But you aren't trading the SPI are you? So get used to it...

 

[nuking]

Being stopped out isn't proof - but I deviations in the price trends between a MM and the underlying SPI show, without a doubt, adjustment of the CFD by the marketmaker (see figures in first post).

My provider will claim it is a "fair value" adjustment, but will not tell me how it is calculated. So, basically they have the ability to do what they want...if they consider it "fair". Fair could very well mean, if they lost a lot of money on an obvious trade, traded by the masses...but this is just speculation.

then You've got to try to use them to your own advantage.
Believe it or not I made more money on MM than the real SPI.
Inspired by TH.

 

[>Apocalypto<]

Maybe he scalps to beat them at their own game.

I have no doubt stops are hunted but for the life of me can never understand why little `ol me.

The most blatant was when I moved my take profit stop away 3 times and it kept coming.After third move I stayed and market went over by one pip (got records to show) and dropped over 800 pips over weeks after that.I just had to be squeezed out and THAT my friends is what I have experienced.

Bucket shops are for newbie suckers (like me) before they wisen up to better service providers and methods of trading.



Answer ...



Try an ECN ...

Ha ha ha

ECN wont help u. In the FOREX you're playing with the big boys and they do flush out stops. It's well known that funds, banks and all other major players (the true market makers) in the FX market hunt obvious stop areas.

Learn to place better or don't trade FX :

cheers

 

[>Apocalypto<]

I traded with Ig for a year before moving to IB. I used charts of the spi to select trades and never looked at the graphs provided by ig.

What i found happened regularly was around 10.10-10.30 the price offered by ig would move away from the spi by around 5-10 points, quite regularly i would be in a trade and say the spi was moving down, ig would also be moving down but then it would "readjust" itself and suddely half your profit was gone even though the spi was still moving down. I put down the "readjustment" to ig adjusting for the differences in the premium as the contract moved closer to expiry.
I never noticed it happening at other times of the day, usually it was sometime not too long after the open, i don't believe they are targeting stops i think it is some kind of adjustment process to bring their price in line with where they thought it should be in relation to the spi.
This happened to me 2-3 times a week and is one of the main reasons i stopped using them.

why not learn to take advantage of it if you could

 

[>Apocalypto<]

look at all these tails o my GOD my broker is trying to get me, this is a ECN.
O what shall I do they're all out to get us.

This is trading people get used to it Jeeezzzzzzzzzz