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Day Trading is Better – But Trouble when Forex Market is Silent

FXLQ made some changes at their end that eliminated some of the trade delay problems.

Even though there were still many “off quotes,” both trade executions and rejections were relatively fast. Whatever FXLQ did seems to have gotten rid of the long delays we were experiencing when orders were being submitted.

Four forex scalping trades were generated – three positive; one breakeven (which should have also been profitable – I’ll explain below). So what’s the problem, you ask?

The biggest problem I noticed today is that a huge number of “off quotes” is generated when exiting trades if the market is not moving much. When you look at the trading log (click here to see it), this will become apparent. Look at the entry in the trading log at 14:12:32. That’s the first time when the order to close the short 25.00 EURUSD position (order #200373) was submitted. The order was rejected 18 straight times with an “off quotes” message even though the price was barely moving. These are the prices at which the trade rejections occurred (in order): 1.3095, 1.3095, 1.3094, 1.3095, 1.3095, 1.3096, 1.3096, 1.3096, 1.3095, 1.3095, 1.3095, 1.3096, 1.3096, 1.3097, 1.3097, 1.3098, 1.3099, and 1.3099. Notice that from one rejection to the next, the price never moved away by more than 1 pip; so the rejections were not because the market was moving fast.

Instead of getting out the first time at 1.3095 with a 4-pip profit, the trade wound up being a breakeven trade.

Currenex Platform Update – Incorrect Handling of Exit Market Orders

During yesterday’s post, I mentioned that we had problems with the execution of an exit stop on the Currenex Trading System (CTS) we had been testing. Today, we found out why the problem occurred.

The CTS platform was supposed to send simple market orders to exit trades after the stop price was reached (limit orders are used for entry orders). For some strange reason, the programmer had designed the platform to send Market + IOC (Immediate or Cancel) orders when the stop was triggered. An IOC order is supposed to execute as much of the specified size as possible at the price when the order was sent and cancel the remaining portion of the order. On Currenex, market orders can’t be cancelled, but IOC orders are cancelled instantly if the price when the order was sent is worse than the market price when the order arrives. This can be problematic in a fast market, causing orders to be cancelled as the price keeps moving away fast.

This problem is what got us out of the market a price that was over 20 pips worse than it should have been. The platform kept trying to execute the exit trade, but the price kept changing. Consequently, the order was cancelled by Currenex several times causing us to get a worse price than we normally would have. I immediately instructed the programmer to change the exit orders from Market + IOC to simply Market. We might try a few scalping trades with this puppy again next week.