Commentary of the successful expert explaining why Oanda and other forex brokers expand the spread during a news story

(Last Updated On: September 24, 2014)

Commentary of the successful expert explaining why Oanda and other forex brokers expand the  spread during a news story

I wonder who I had a chat with over this ? Thanks to the other end

the spreads widenning doesn’t happen by oanda
[12:59:10 PM]  but by the market makers
[12:59:18 PM] Bryan Downing: goog to know
[12:59:22 PM]  plus
[12:59:28 PM]  you cannot trade in these periods
[12:59:30 PM] Bryan Downing: they use citi as i mention for prime broker
[12:59:34 PM]  for many reasons
[12:59:39 PM]  but most important of them
[1:00:00 PM]  unless you have physical FX delivery
[1:00:14 PM]  you couldnt take advantage of the arbitrage during the news

[1:00:42 PM]  plus
[1:00:55 PM]  when you look the data mvements after they have happend
[1:01:01 PM]  everything makes sense
[1:01:05 PM]  BUT till the event
[1:01:13 PM]  no one know what the fuck is happening
[1:01:27 PM]  so this is why we ended up avoiding the news
[1:01:32 PM] Bryan Downing: so they market making (or manipulating) you think?
[1:01:43 PM]  they are not mapipulating
[1:01:59 PM]  the market makers make their estimations about where the price should be
[1:02:09 PM]  it is a pure price discovery process
[1:02:50 PM]  so some believe that something will go up, some believe that it would go down… so spread widens as hell
[1:03:06 PM]  you cannot enter in these trades
[1:03:15 PM]  in the pic that gigi submitted
[1:03:24 PM]  if you go short
[1:03:31 PM]  and no point of that chart you would make money
[1:04:08 PM]  because in the end Unless you have fx physical delivery and have a central clearing house
[1:04:18 PM] Bryan Downing: so no matter what, you would never be able to know about the news spread difference in advance?
[1:04:19 PM]  you couldn’t buy from IB and sell at oanda lets say
[1:04:26 PM]  nope
[1:04:37 PM]  you can do statistical analysis
[1:04:56 PM]  but still it is like flipping a coin

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This came from these charts submitted by Gigi during our webinar pow wow

https://quantlabs.net/blog/2014/09/pow-wow-sep-23-about-python-and-other-advanced-trading-topics-with-chart-comparison-on-forex-brokers/

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