WHAT'S NEW? FXCM has enhanced its No Dealing Desk forex execution by adding price improvements to all orders. Now these orders can receive positive slippage, as all orders fill with FXCM's best available price which includes FXCM's mark-up which may vary based on account type and liquidity provider.*
Learn about Price Improvements
Videos
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Price Improvements: What are they? How do they work?
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Weekend Gaps: Learn how you can receive Price Improvements from weekend gaps.
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News Traders: Learn how you can receive Price Improvements during news releases.
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Scalpers: Find out how FXCM's price improvements can benefit you.
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Times Are Changing
No dealing desk Execution without Price Improvements
A common inconvenience to most No Dealing Desk execution models is that limit and limit entry orders always fill at the limit price—even if the market price gaps or spikes favourably through it. At the same time, stop orders can fill at a worse price.
No dealing desk Execution with Price Improvements
With Price Improvements, limit and limit entry orders can receive positive slippage. This means you can potentially make more money if the market gaps or spikes favourably through your limit price. This is especially true in situations where the market is moving fast (e.g., during weekend gaps or around news events)*.
Open a Free Practice AccountBest Practices
Use Limit and Limit Entry Orders
FXCM recommends that traders use limit entry orders to open positions and limit orders to close positions.
Why? With these order types you can only receive your requested price or better.
VIDEO: Learn valuable forex trading tips. What are limit and limit entry orders? When should I use them?
Trading Strategies
DAILYFX COURSE INSTRUCTORS SHARE THEIR TRADING TIPS
Find out how the DailyFX Course Instructors take advantage of limit and limit entry orders to try and capture extra pips through FXCM Price Improvments.
How to MAXIMIZE POSITIVE SLIPPAGE
USE LIMIT AND LIMIT ENTRY ORDERS
FXCM recommends opening and closing trades using limit and limit entry orders in most cases. The benefit to these order types is that you are guaranteed to receive your requested price or better without receiving negative slippage. Remember, that although limit orders guarantee price they do not guarantee execution making order types an important consideration in any trading decision.
MARKET CONDITIONS
The most likely times to receive positive slippage will be around news releases, during weekend gaps and generally, during fast moving market conditions. Traders who prefer to trade in these market conditions, which are typically more volatile, should consider using limit and limit entry orders. This will ensure that if you enter into trades, you will only receive your requested price or better.*
TRADING STRATEGIES
There are specific trading strategies and market approaches that may increase your chances of receiving positive slippage. The DailyFX course instructors cover a few of these trading strategies and provide a format for you to ask questions at our strategies web page. View Strategies
How to minimize Negative Slippage
USE MARKET RANGE ORDER TYPES
When trading with market orders, FXCM recommends setting the order type to "market range," to avoid potentially receiving negative slippage. A market range order type allows you to control the amount of slippage your order can receive when it executes allowing for price certainty. (see image to the right).
A market range of "X" pips assures that all or part of your order will be filled within a "X" pip range of the current market price ("X" pips above or "X" pips below) if liquidity is available.
Market Range Example: Assume you place a market order to buy five million units of EUR/USD with a market range of five pips. When the order triggers for execution, one of the following three scenarios can occur:
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Scenario 1 :
No liquidity is currently available within a five pip range. The execution halts and the order is automatically canceled.
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Scenario 2 :
Only three million is currently available within the five pip range. Three million of your order executes within the five pip range. The remaining two million is automatically canceled.
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Scenario 3 :
Ten million is currently available within the five pip range. The entire five million executes within the range you have specified.
News Trading
James Stanley, DailyFX Course Instructor
"Trading news events can be exciting. News announcements often create volatility in the market, which can sometime be difficult to harness.
Therefore, it is important for news traders to have a plan of action laid out well before the news event takes place. This allows you to trade more objectively and keep from reacting foolishly to price action that's not always easy to predict. One strategy I enjoy trading is the dual spike breakout found in the DailyFX Plus Trading Course. And with FXCM Price Improvements, I have an even better chance of picking up a few extra pips on my trade if the breakouts turn out to be pretty strong."
Trading Plan
After a news release, price action is often erratic, whipsawing up and down. Usually within a short period of around fifteen minutes, short-term support and resistance levels form. Our goal is to use entry orders outside of these levels to catch a breakout through these levels.
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Step One :
Using a 5 min chart, wait for 3 candles to close after the news is released.
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Step Two :
Note the highest high and the lowest low of these 3 candles.
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Step Three :
Place an entry order to buy above resistance and an entry order to sell below support.
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Step Four :
Place a stop at the opposite price extreme. Set a limit twice the distance of the stop, creating a 1:2 risk to reward ratio.
Weekend Gaps
Thomas Long, DailyFX Course Instructor
"One weekend strategy used in today's financial markets is to take advantage of a strong trending move during the week. The key is to look for a week in which the close on Friday is at or very close to the high of the week or the low of the week. The idea is that since the buying or selling continued right up to the close of the week, that there should be some follow through buying or selling when the market opens up again on Monday. Traders can either wait and see how the market opens on Monday and exit at that time, or they can place their protective stop and limit order to take profits on Friday and not have to be there at the open on Monday. This type of trading can often result in gaps when the market opens up again as traders see the momentum as they see their charts over the weekend. One of the advantages of trading at FXCM is that fact that if the market gaps through your profit target, you will be filled at the opening price of the market rather than at your limit price. This can be a huge advantage if there is a big gap when the market reopens."
TRADING PLAN
Check the weekly chart to find those weeks where the market closed at the high of the week or the low of the week. Enter into the trade in the direction of the strong move just before the close on Friday with the anticipation of follow through buying or selling over the weekend.
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STEP ONE :
Look for candles on a weekly chart that are about to close right near the high or low of the week.
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STEP TWO :
Enter into a trade in the direction of the momentum just before the Friday's close. If you have any doubt about being able to monitor the market at the Monday open, place a protective stop and limit order to take profit before the Friday close. The key here is that the market gaps in your favor; you will be filled at the opening price rather than at your limit price. This is a definite advantage to trading at FXCM rather than other firms that do not offer this feature.
Trading Momentum Breakouts
Jeremy Wagner, DailyFX Lead Course Instructor
"One strategy that I like trade frequently is a momentum breakout.
Breakout strategies can be exciting to trade. A lot of energy is required by the pair to push through defined levels of support and resistance which can lead to powerful breakouts. The momentum required to push through the breakout point can carry prices well beyond their support or resistance levels. Although losing trades are common with this strategy, I enjoy trading it because I enter the trade when a new high or low is created and the trade tends to have strong momentum behind it. FXCM Price Improvements gives me an opportunity to take advantage of this momentum which acts like wind to my back."
TRADING PLAN
Strong trending moves can gap and move quickly in the direction of the trend. Entering at market to open the trade and using limit orders to close the trade gives us the opportunity to take advantage of Price Improvements.
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STEP ONE :
Identify a currency pair with a strong trend on a daily chart. Consider only those pairs in an obvious trend.
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STEP TWO :
If the trend is up, identify resistance levels. If the trend is down, identify support levels.
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STEP THREE :
Enter a long position at market when prices break above the resistance level in an uptrend. In a downtrend, place a market order to sell short at the support level.
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STEP FOUR :
Establish a stop loss level just below the recent swing low in an uptrend or just above the recent swing high in a downtrend. Then, create a limit order to take profits at twice the distance of our stop loss.
*Please note that all price improvements are subject to available liquidity. Price Improvements are not available for market orders when "Market Range" is set to zero.
Any opinions, news, research, analyses, prices, or other information contained on this website is provided as general market commentary, and does not constitute investment advice. FXCM will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.