A tale of two brokers…+3.1%

It was the best of times. It was the worst of times. (Apologies to the literate amongst us).

Sunday saw my usual short-term and swing trades setting up and I was doing the necessary setup work.  I was also trialling my new brokers platform in an effort to make my Sunday Income trades easier to place and manage. I decided to focus on my new broker (whom we’ll call Broker 1) but decided to back up my trades at a smaller trade size on one of my existing platforms ( whom we’ll not surprisingly call Broker 2).

After the market opened I was looking for trades on EURUSD, EURJPY, AUDUSD & AUDJPY for my Income set-ups.   I went to open the position on Broker 1…and that’s where I started having trouble!  Broker 1 decided it didn’t like EURJPY and rejected my order and the price hung on the platform.  Regardless of my resets Broker 1 did not want to have anything to do with EURJPY. Despite my best efforts I was unable to open any position on EURJPY.  However for reasons only known to themselves Broker 1 decided to open not one but 2 positions in AUSUSD!  Which was nice.  As I was only risking a small amount of equity I was happy to let this play out.

Meanwhile on Broker 2 all my orders were opened without too much hassle.  So I now have 8 positions open across 2 brokers.  Here’s where it start to get interesting.

The reason I was looking for a new broker was because broker 2 uses variable spreads….and boy do they vary!  The spreads can vary from 3- 20 pips which can be atrocious for your trades, as you’re about to find out.

So price pushes towards their targets which are between 15-to- 50 points away.  On Broker 1 all my targets are hit on the Aussie positions. Nice work.  So on Broker 1 I am now 3 trades closed for 100% profit with just my EURUSD position remaining open.

Over on Broker 2 the same positions, opened at the same time with the same targets do not hit their targets!  Why?  Because broker 2 has manipulated the spreads and they’ve strangely just expanded the bid/ask spread from 2-3 pips out to 7-15 pips! So strangely enough,  none of my trades on Broker 2  hit their target.  Price reverses and heads to my stops loss for the aussie trades!  So I’ve  just taken a loss on my AUDUSD and AUDJPY positions on Broker 2 despite them supposedly hitting my targets just before!  Thanks broker 2.

To make matters worse Broker 2 decides to ‘dip’ my euro position by expanding the spreads and taking me out of my 3rd position despite price going nowhere near my stop-loss. To finish the night off my EURUSD trade at broker 1 closes for a few pips positive and my EURJPY trade at Broker 2 hits its full target  on the Monday .

So overall Broker 1 I’m left with 3 full wins and 1 partial win.  Broker 2 leaves me with 2 full losses, 1 partial loss and 1 full win.  Same trades, same time, same entry price (more or less) but very different results! Perhaps now you can see why I’m focussing on using Broker 1  for these trades going forward. To be fair in the past Broker 2 has never performed as poorly as it did this Sunday night but it was vindication if vindication was needed that it was the right decision to move to a different account.

I ended up on broker 1 being up 3.5% of that account and down 1.5% on broker 2s account.  Overall the trade size at Broker 1 was 8-9 times the size of Broker 2 so whilst it looks like overall I was merely up 2% overall the difference means that overall I was up over 3.1% for my nights work.  Nice work…but I could do without the hassle!

So the story is make sure you have the right broker for the right type of trading!  And watch your broker like a hawk. 😉

Trade well,

FXTraderPaul

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About FXTraderPaul

A professional Trader and Coach, FXTraderPaul blogs about his adventures from the front-lines of FX Trading. A Trader and educator who can walk the walk as opposed to merely talk the talk!

View all posts by FXTraderPaul

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2 Comments on “A tale of two brokers…+3.1%”

  1. Fred Says:

    Pure filth, shame on broker 2…..is it owned by a publicly listed corproation? lol

    Like

    Reply

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