Francesc Riverola,
Hi everyone
About 2 weeks ago some users contacted us complaining about how limit orders were filled on the April 12th opening gap. In particular, many limit orders were filled at a price set in the order, not at the best possible price at the opening.
I was puzzled by the comments so I asked Alberto Muñoz, one of our advisors, so he could shed light on this issue. Alberto was very surprised as he has been trading stocks, futures and currencies for more than 10 years and never heard of something like that, as limit orders are supposed to fill at the specified price or better.
After asking several brokers, we got the same answer: practically all FX firms fill limit orders at the price set in the order, not at the market; the only requirement is that the customer must not get worse than his price.
However, several brokers are working to fix this issue in the next months and give the ability to improve price execution on limit orders; also there are rumors about an NFA rule proposal that will probably pass this year and mandate all FCMs to execute limit orders at the best price possible. This is good news since I can’t understand how limit orders execution differ depending on where the order is entered. That is, if you trade currency futures or are using ECNs limit orders are filled at the best price possible; but this doesn’t happen usually when trading through a Market Maker or a Non Dealing Desk.
The Orders that are closed by a Take Profit will be closed at the Take Profit point NOT the best possible price at the opening too. Letting the market maker make a LOT sometimes…
Hello friends,
Congratulations on the blog and for keeping us informed, Francesc. Since the NFA’s latest regulations, trading FX has become a stage of constant theft. I and the administrator of a web site and an account manager and, practically every day, I suffer slippages in the majority of trades and with different brokers.
I encourage all of you to send your reclamations to the appropriate regulator. During the GAP on the 12th, the majority of brokers (not all of them, but practically all) executed limit orders for non-existent prices (always at the cost of the client) but executed stops at the opening price.
What an disgrace.