Am I done with FXEngines?
July 9, 2006 by Trader Rich
I've received a lot of great comments from you about automated trading through FXEngines.
Duncan summed it up pretty well by saying that, "Big news items don't work at FXEngines. Small news items don't move enough. Only mid news items seem to be successful."
I feel the whole point of trading the news would be to capture the big news reports. The CEO places the ability of the platform to capture these large pip moves above everything else and it is just not happening. It may not be anyone's fault but their clearing broker. I spoke to Scott (CEO) about this on the phone on Friday and basically all FXCM has to do is put their orders on manual and you can pretty much kiss goodbye any potential profit you could have made. For example, if 100 people put market orders in at a particular time, instead of these orders being cleared electronically, they would go into a queue. FXCM will take each order one at a time from the queue and manually execute it. This probably requires a human to pull up a list of orders, click it on, and process it. In between the time they pull it up and process it, they can take 2-3 sips of their coffee, take a trip to the bathroom, or do whatever they want while you sit on the other end hoping your order will be closed in time for you to make a profit.
Craig's comment, "Is not trading the news like having a Tiger by the tail? spreads
increase & orders are not filled. Most advise I have read (all of
course to be taken with a grain of salt) recommends staying out of the
market during the news. I qualify this as an observation, I have never attempted to trade the news or use FX Engines."
I've heard this before and Craig may very well be right. It may just be more wise to stay out of the market during the news and try to get the follow through 15-30 minutes afterwards.
Mike states, "In summary, the FxEngines platform is a great concept, but WAY too loose
around the edges to make it work during volatile markets."
Yes this is true and if it wasn't for 1 economic news release, Initial Claims, I would be losing money using this platform. This goes back to Duncan's comment about mid news items being successful. The Initial Claims is a mid news item and these types of news events seem to work.
So what am I going to do about all of this? I'm not sure yet. I'm up 50 pips in 5 weeks but is it worth it. Will I ever be willing to put big money into this? I don't think so.
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Honetly, I think a lot of blam is at FXCM’s feet on this. Other brokers handle news releases better. However, FXCM is one of the fe brokers tht offer a freely available API.
I wish FXEngines would diversify out - maybe even look at Oanda which, from wht I hear, has decent trade fills during news releases AND has an API (abeit an expensive one).
Sorry you’ve been having a tough time with the news trades - as I posted before, I jumped into them quite optimistically last month and ended up disappointed. I’m still a big fan of FX Engines as a platform, but so far I’ve had the best luck developing my own signals and then integrating them into an engine. I had very good results with this recently by studying peak hours of activity and creating engines that are triggered by trends that emerge at those times. Sort of like news trades, but instead of trying to trade the news event itself, these signals look at the aftermath an hour later and place a trade for the rest of the day on that basis. This avoids all the crazy volatility, execution lags and other weirdness you can get by trading immediately after the news. I think there’s too much emphasis placed on the event itself, when personally I like to have a little more breathing room. Good luck with your trading, I had a really nasty June so I know what it feels like…but focus on strategies with a good track record, trade consistently and you’ll bounce back
Well, I can say that I am up 20% since my deposit on 6/26 using fxengines alone. And I even missed one positive trade.
So, it is not all that bad.
Duncan, that’s not bad. Keep pluggin away. I am still up as well with fxengines though I did not have any automated trades trigger this week.
One more rule - never trade fxengines when two events are at the same time. Those, so far, have all ended up with losses (including today).