I am relatively new to Forex and have so far experiences with 3 brokers. One is a major global player (can name it, if doing so is appropriate) that has been discussed in great detail here on this forum as well. The other two are small local ones in an East European country and are providing local service only.
During volatile times, the two local ones have provided better execution, which I find hard to believe really. What I mean is this sort of scenario:
Several times I had positions in major currency pairs which I was holding at times of major economic announcements. Say I have a buy in EUR USD, I bought in at 1.23050 and the most recent trade is 1.23220. I have a profit and I don't want to lose it all if the prices plummet, so I set a stop loss at, say, 1.23120.
In the above described situation, at a local small broker, if the prices plummet, losing like 150 points in half a second, I had the stop loss get executed very close to my stop loss level. But at the large, global broker I can get out of my position at a far worse price only, say at 1.2350 or worse... How come?
I was told that this is because the large broker will not book the trades but matches/routes them (I have a True ECN account) while the small brokers will book the trades and therefore will execute better under the above described circumstances, which never made sense to me. Of course under normal trading conditions the global broker offers far better terms; trading costs (spread + commission) are far less in the global broker. But in volatile times, it is the local guys (I tried two and both beat the global player) that execute better. Can anyone explain the dynamics here?
During volatile times, the two local ones have provided better execution, which I find hard to believe really. What I mean is this sort of scenario:
Several times I had positions in major currency pairs which I was holding at times of major economic announcements. Say I have a buy in EUR USD, I bought in at 1.23050 and the most recent trade is 1.23220. I have a profit and I don't want to lose it all if the prices plummet, so I set a stop loss at, say, 1.23120.
In the above described situation, at a local small broker, if the prices plummet, losing like 150 points in half a second, I had the stop loss get executed very close to my stop loss level. But at the large, global broker I can get out of my position at a far worse price only, say at 1.2350 or worse... How come?
I was told that this is because the large broker will not book the trades but matches/routes them (I have a True ECN account) while the small brokers will book the trades and therefore will execute better under the above described circumstances, which never made sense to me. Of course under normal trading conditions the global broker offers far better terms; trading costs (spread + commission) are far less in the global broker. But in volatile times, it is the local guys (I tried two and both beat the global player) that execute better. Can anyone explain the dynamics here?