USD weakening all over the shop

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Bernanke very dovish indeed

Author: Eamonn Sheridan

Eamonn Sheridan worked with Bankers Trust Australia for 13 years as a Spot foreign exchange dealer, trading across all major currencies and all time zones. He rose to a Vice President position, running spot operations during the busy European time, leaving the bank just prior to it being sold to concentrate on running his own business in the ‘real world’! The markets, however, had him hooked – he continued to trade equities, CFDs and then on to futures, giving him broad experience across financial markets. He is now active in FX and equity index futures as well as writing for ForexLive™. Eamonn is a graduate of The University of Melbourne in Australia and lives in New South Wales.

11 Comments

  1. how can the spreads from our brokers be like this? aren’t the banks trading this event? liquidity can’t be that thin that speads have doubled??

  2. Ben will leaving on a jet plane to parts unknown before his house of cards comes crashing down.Greenspan has taught him well ??

  3. @sunny Because the brokers you use are bucket shops.
    Spreads on EUR/USD thru today’s announcements have been 0.4-0.8 pip on FX ECNs.
    Stop using retail bucket-shops and get a proper account.

  4. just woke up from slumber and suddenly saw a big white candle on EU and GU……
    peculiar days indeed but I’m happy :D

    not gonna trade until dust clears tis Friday……

  5. will BOJ strike back later? Stay tuned and hold onto your hats!!!

  6. Hi Anon,

    Who would you recommend?
    I use Interactive Brokers.
    They are not that great.
    Thank you

  7. @kash If you’re in the UK you need to use LMAX. Otherwise use an ECN.

  8. IB is not a bucket shop.
    I used them for years until I went with CQG. Never had a problem with IB.
    IB is an ECN broker.

  9. LMAX mostly service other brokers, and my broker is one of them. Spreads widened around the time of Sunny’s post. EUR/USD was less affected, but still wider than at the start of Ben’s speech. I know the spread widened because I pay a transparent commission without any spread markup.
    I’m all for ECNs as a retail solution, but they are also good at generating fanboys as if they’re Apple iForex. They are still retail, they still charge commissions (or mark up spreads), they can still go broke. It’s not like trading on the LSE. Your broker is still your counterparty, even if they run an ECN. All that changes is that trades are directly set off against each other in the order system (ie: the broker is not a market maker), be it with another trader or a liquidity provider, and that the order depth is transparent. It still adds a layer of latency (electronically, it’s one step further from the interbank market), and it still adds retail commissions (or spread mark ups). Only prime brokerage or interbank access gets away *fully* from the problems associated with retail broking.
    Unless we hear otherwise from an interbank trader or a hedgie on a prime brokerage arrangement, the spread widened towards the end of Ben’s speech. Even if we do, remember that these blokes are making their own market or trading with a tenth of the commission of even the lowest cost ECN retail trader. So, that’s not really an option for most people posting here.

  10. @DKC – I never said IB was a bucket shop. However most of the retail brokers/spreadbet firms that 95% of people use are bucket shops (which is a key reason 95% of retail lose money). IB are ok, but for FX, LMAX is better. If you don;t know why then frankly you shouldn’t be trading FX.

  11. @Anon…

    Never said you did, I just made a general comment.
    Sorry, LMAX has only been around since 2009, not enough of a track record for my tastes.
    20 years minimum in order for me to even consider them.
    I’m quite happy with EBS/CQG now.
    Good luck with your trading…

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