{quote} What's the problem for XM taking the opposite side? Market maker can fill most orders internally. How they handle the unmatched flow is the real question.
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I did not say it was a problem. I just wonder how the slippage occurs when market maker like XM (who then is sort of an liquidity provider for the retail traders like us) is on the opposite side of m trade. So this means they can decide when and where they want to fill my order, correct?
I read on your site and on this forum that you offer rollover-free (swap) accounts.
Can anyone open one of these accounts? Could you please give us more detailed information on this type of account?
{quote} I did not say it was a problem. I just wonder how the slippage occurs when market maker like XM (who then is sort of an liquidity provider for the retail traders like us) is on the opposite side of m trade. So this means they can decide when and where they want to fill my order, correct?
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I believe it is up to the order flow. Imagine that at the same time when u send in a buy order, 500 other guys also send in a buy order, what the market maker would do is to raise the ask immediately. That is what a market maker of stock market always do so I think it is the same thing on forex. when the ask jump, u get slippage for a buy order. However, when there is very few buy order, u will not get slipped. u should get filled at the price u asked for.
I love XM but they limit number of demo accounts and I don't seem to find a way to reset demo accounts :-( I need a lot of testing before using EAs. So I need a way to reset demo accounts on XM. Can anyone help?
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Dear OscarT,
You can contact XM live chat to reset your demo account balance at any time.
{quote} I see you offer SWAP free accounts on your site, is this available to ALL customers?
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Dear meyoik,
Swap free - Islamic Accounts are available upon request and discretion of XM only to clients which follow the Islamic faith and maintain Islamic Finance bank accounts.
{quote} I know how slippage works, but on demo account there's usually no slippage at all. Moreover big orders cause slippage by itself. XM allows max 50 lots orders, so I understand that 50 lots order doesn't cause slippage, right? For example: Buy order 500 lots, market depth: 1,20101 20 lots 1,20102 3 lots 1,20103 10 lots 1,20104 7 lots and so on. 1,2013 last order that will be executed to buy 500 lots, order caused 2,9 pip slippage. This is how it works on real market.
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Dear Insomniawawa,
As noted in a previous response to you,
Slippage is something not related to a client trading on a demo or a live account. Slippage can occur on both a demo and live account in the same way.
In order to understand it better you must understand the following:
In a very fast moving market, during times of very important economic releases prices can experience sharp rise or falls.
During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for confirmation.
{quote} Getting Slippage or not depends on market conditions. U don't get slippage when there is no competition and could get a few hundred pips slippage when everyone is going the same direction and on one wants to fill ur order. In other words, no one want to trade against u. Lol U will get slippage even when trade 1 lot with XM. Slippage I experienced with XM is less than what I got from ic market, fxopen, darwinex, global prime etc. It make sense to me
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Dear Demark1,
Your view noted above is not correct or at least the way you present it is not correct.
Slippage does have to do 100% with market conditions but it does NOT have to do with XM wanting or not wanting to fill your order. At XM we operate on market execution as noted many times above so there is a huge misconception by traders thinking that XM is involved in the process of deciding if your order will go through or not.
To make this 101% clear XM does Not interfeer in confirming your order.
Slippage will occur due to a fast moving market: During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for confirmation.
Sorry for my Bold and my underlines but from all the views Im reading above I feel that everyone has his own view and scenario of why slippage could occur which is wrong. The most simple way and easy way to see it is what I have as underlined above.
{quote} I did not say it was a problem. I just wonder how the slippage occurs when market maker like XM (who then is sort of an liquidity provider for the retail traders like us) is on the opposite side of m trade. So this means they can decide when and where they want to fill my order, correct?
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Dear B00bies,
XM does NOT decide where your order is filled.
You see a price on the screen, you click buy or sell, the request travels through a cable to the nearest data center and the server confirms your order and sends back a signal to you that its filled.
Slippage is not created by XM and XM does not decide where they fill your order, the market does that on its own. During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for confirmation.
{quote} Dear Insomniawawa, As noted in a previous response to you, Slippage is something not related to a client trading on a demo or a live account. Slippage can occur on both a demo and live account in the same way. In order to understand it better you must understand the following: In a very fast moving market, during times of very important economic releases prices can experience sharp rise or falls. During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order...
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So again, my order can cause slippage due to lack of liquidity even though you are MM? It's obvious that 0,1 lot will not move market, but 50 lots can (you allow only 50 lots per trade, why?). What is average liquidity on majors at first bid and ask? For example, market is so calm that my trade is executed first. What slippage on average can I expect with 50 lots trade on eurusd and gbpusd?
{quote} So again, my order can cause slippage due to lack of liquidity even though you are MM? It's obvious that 0,1 lot will not move market, but 50 lots can (you allow only 50 lots per trade, why?). What is average liquidity on majors at first bid and ask? For example, market is so calm that my trade is executed first. What slippage on average can I expect with 50 lots trade on eurusd and gbpusd?
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I think both of XM and insomniawawa are talking about are slightly different, this demo of whichever broker is will depend on how they set up their Demo Environment. If they use LP simulator, it's possible to have slippage scenario, but if they B Book, more lightly there will be no slippage.
I used to use Currenex Classic, the brokers I use had the Price and Depth Level (10 Level) for me to view, prices can be as tight as 0.2, but the depth of 0.2 pip is like 100k (1lot), what is the point for people who will be hitting 50 lots? they will get huge slippage due to sweeping down the ladder.
I assumed we are talking about placing Market Order and not Instant Execution or Pending Order.
{quote} So again, my order can cause slippage due to lack of liquidity even though you are MM? It's obvious that 0,1 lot will not move market, but 50 lots can (you allow only 50 lots per trade, why?). What is average liquidity on majors at first bid and ask? For example, market is so calm that my trade is executed first. What slippage on average can I expect with 50 lots trade on eurusd and gbpusd?
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Dear Insomniawawa,
As I have explained so many times above, lack of liquidity is not what creates the slippage, I really feel bad copying and pasting the same response but I cannot think of any other way to explain slippage to you:
During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for confirmation.
To come back to the rest of your questions:
50 lots looks very unlikely to move the market on a major pair. Now to answer your other question which is why we restrict to 50 lots per trade, this is something clearly related to company risk and execution policy which correlates to making sure we have sufficient liquidity to cover our market risk after we have filled in your order. I cannot quantify what slippage you would receive since as I have mentioned this is something related to market conditions.
{quote} Dear Insomniawawa, As I have explained so many times above, lack of liquidity is not what creates the slippage, I really feel bad copying and pasting the same response but I cannot think of any other way to explain slippage to you: During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for...
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XM, i disagree with you saying that, I won't said insomnia is totally wrong, thin liquidity is part of the factor of slippage if you look at supply and demand, if there isn't any sufficient liquidity on the price, wouldn't the system be clearing all the ladder before the next replenishing of liquidity, unless you are saying that XM works differently, that anything below 50 lots, you will B Book the trade, thus there isn't slippage for that instant.
I do understand you are referring to Market Order on the Fast Market Conditional that caused the slippage. Which you are not wrong, but Insomnia was not wrong either for saying 50 lots that will cause a slippage.
Yes 50 lots are nothing in the interbank Market, but the world has changed, in order to be competitive, the interbank Market had break down their 100 mio (Example) on 2 pips spread into:
{quote} XM, i disagree with you saying that, I won't said insomnia is totally wrong, thin liquidity is part of the factor of slippage if you look at supply and demand, if there isn't any sufficient liquidity on the price, wouldn't the system be clearing all the ladder before the next replenishing of liquidity, unless you are saying that XM works differently, that anything below 50 lots, you will B Book the trade, thus there isn't slippage for that instant. I do understand you are referring to Market Order on the Fast Market Conditional that caused...
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Dear Seansalsa,
With XM there is no ladder to clear out.
Regardless if an order is 1 lot or 50 lots he will get filled in at the price the second arrives at the server regardless if that price is better or worse than the price shown those mili-seconds which have elapsed from the time the client clicks buy or sell.
There is no ladder to clear, if we are showing a price on the platform we will honor it up to 50 lots per trade. (which is the upper limit per trade)
In regards to your example above, it is not wrong it's just not how XM operates, this model of filling orders might be applicable at other brokers.
Without having anything to hide my initial underlined reply which I have pointed out on many occasions above is the simple but real way XM operates and how slippage might occur with XM in fast moving markets. To make sure everything is 101% clear I stress once again that order size does not affect slippage at XM.
Swap free - Islamic Accounts are available upon request and discretion of XM only to clients which follow the Islamic faith and maintain Islamic Finance bank accounts. Thank you,
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Is this allowed? Would this not be considered discrimination?
{quote} Dear Insomniawawa, As I have explained so many times above, lack of liquidity is not what creates the slippage, I really feel bad copying and pasting the same response but I cannot think of any other way to explain slippage to you: During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for...
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How can you tell me that big order and lack of liquidity don't create slippage?
As you can see 1M causes 0,1 pip slippage, 10M accordingly 1 pip slippage and 50M more than 2,5 pip slippage. So if I open 1 lot at LMAX I don't have any slippage created by my order, but if I open 500 lots, slippage is bigger than 2,5 pip and top of the book is cleared.
{quote} Dear Seansalsa, With XM there is no ladder to clear out. Regardless if an order is 1 lot or 50 lots he will get filled in at the price the second arrives at the server regardless if that price is better or worse than the price shown those mili-seconds which have elapsed from the time the client clicks buy or sell. There is no ladder to clear, if we are showing a price on the platform we will honor it up to 50 lots per trade. (which is the upper limit per trade)
XM, now we can move to more important question. Let's assume that somebody makes $1000 deposit, trades with high leverage, generates 10 million profit in one month and withdraws all profit. Would you kick out that trader? It can be dangerous loss for you.
{quote} Dear Insomniawawa, As I have explained so many times above, lack of liquidity is not what creates the slippage, I really feel bad copying and pasting the same response but I cannot think of any other way to explain slippage to you: During those milliseconds, which elapse from the time you click buy or sell on your screen until our nearest datacenter (server) confirms the order and fills you at the market price, the price might move, so your order will be filled in at the price showed at the millisecond your order arrives at the server for...
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Lack of liquidity create serious slippage. remember CHF event? what happened when there is no liquidity?
Market conditions are caused by order flows. What if there is no orders on the market? One small sell can drive the price to 0.
Limit orders and stop orders already sit on the server in the datacenter, hours or days before they are triggered. I think less than 10 percent of all orders are sent manually by hand. How much is the latency in your view?
{quote} How can you tell me that big order and lack of liquidity don't create slippage? There are some screenshots from this website http://fxmtf.pl/narzedzia/volume-wei...average-price/ that show top of the book of LMAX (1lot is 10000 notional value, not 100000 as always). As you can see 1M causes 0,1 pip slippage, 10M accordingly 1 pip slippage and 50M more than 2,5 pip slippage. So if I open 1 lot at LMAX I don't have any slippage created by my order, but if I open 500 lots, slippage is bigger than 2,5 pip and top of the book is...
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Not taking any sides in this discussion, but must say....very informative post! I guess we all have our ways of trading, and this angle is very very interesting.
Thanks for posting this, will follow this conversation, hope you get an answer that covers your question.
