Spread and demo account Forex with IG

• 12/16/2022 at 1:09 PM #205887
  PeterSt

  Here’s a Live example of what I meant. Spread is 2 points at this moment. This is about Shorts.

  The first screenshot shows that the order (the bottom one) has not been filled, although the price went higher than the set Limit. You will trust me that the price was rising and next dropping.
  The second screenshot shows that the order has been filled, precisely at the set price (Limit). See the small red triangle. But this happened only when the price broke to the set Limit + 2 points.
  If the order would exit at 11.224,5 then the Gain would be exactly zero. This is your point, @ZeroCafeine. The thing people usually don’t see, is that the order was filled at the price level of 11.226,5. Later you cannot see this anymore, but when you watch the screen when it happens, you will.
  Of course this becomes prominent when the spread is 5 – and with that, easy to see (when the spread is 5, all is logically mighty slow and you are waiting and waiting for the order to be filled).

  

  PeterSt

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  12/16/2022 at 1:16 PM #205890
  GraHal

  If you add the Indicator – Bid Ask Bar – to Charts then you can see the bid ask being respected for Stops and Limit orders.

  I guess it’s not so easy to follow on Forex where the bid ask ‘flash widens’ for a fraction of a second?

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  GraHal

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  12/16/2022 at 2:27 PM #205902
  PeterSt

  Yes, great in itself. But IMHO quite useless when the price is exactly in the middle at all times, and the spread – which is still 2 here, is half under and half above the price (total is alway 2).

  Would you claim that at Entry the one half is taken (which is what you suggested) and at Exit the other half, then you could indeed use this band to visualize what happens. But in practice I see the spread taken at Entry in full (like the example in the previous post where the order really was not filled at 1 point above but at 2), which can be seen in the program code (look at the current profit and graph that alongside a Live or Demo-Live trade).

  Knowing about this resemblance is very useful because you can see in Backtest the impact of spread. It may be hard to interpret, but the 3rd screenshot is the order from the previous post, now in backtest (see how the yellow triangle is quite at the same position as the red triangle) and see in the 4th screenshot the Gain of -2,31 which right at the exit of its first bar is thus still higher than a spread of 1 would be (1 would be 1 x 1.78 (positions) = 1.78, 2 would be 2x 1.78 = 3.56). The Ruler tool tells me that there is 0.6 points difference between the entry price and the exit of the bar, which is 0.6 * 1.78 = 1.068. 3.56 – 1.068 = 2.492 which is almost what my graph is telling me (2.31). Main point : the spread is here ~2 and not 1.
  And thus also : my graph sees the spread quite alright.

  Not sure whether we drifted off, but would one think that the spread taken at the entry is 1 (hence half) while it is 2 (hence full), then all base for further thinking is moot.
  I think this is seriously not-so-easy matter.

  

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  12/29/2022 at 5:18 PM #206470
  ZeroCafeine

  PeterSt wrote:

  GraHal wrote:

  So IG take half the spread on entry and half the spread on exit.

  I would be careful with that, unless you can -somehow- prove that this is true. Notice the importance, because *or* you see your (spread-)money gone right after the order has been filled, *or* you see half of it gone, *or* you see nothing of it gone (yet).

  The importance of the correctness shows when your autotrading program compares the current profit with what the system thinks of it (the system = PRT and PRT does not count the spread within your program). Read : when you don’t have this right, you may not have a profitable trade, while you(r program) thinks it has and exits.

  Anyway … the process at work is quite different from what most of us think and this relates to how Limit orders work. I am observing the practice of this continuously and I am still not able to definitely tell how it works. But … I am on the track of IG taking the spread sometimes twice via very sneaky means. A better and more nice expression would be : If you ask me, I’d say for this moment that the program code from IG herself is buggy. Of course this is way complex to begin with (at least that is what I envision) but I see thinks happening which IMHO can’t bear the daylight. And CFD’s eh … you know …

  Disclaimer (kind of) : With Limit orders we can never know WHO grabs our position which can be e.g. you, or can be IG herself. IG needs to hedge everything (this is related to CFD as far as my understanding goes) and they may utilize my position for a hedge elsewhere. This also means that I may initially gain on the entry (a Long is taken for a too low price) which I then somewhere along the lines must lose again. This should be at the Exit, where the other way around happens (may happen). I would observe this as spread taken, but this is not how it shows physically. Physically my order goes out without the price ever being touched (which can happen in reality in very normal fashion). Net it should balance out to “the spread”.

  I should make a video of the both ticklists you see below, where the left hand one is IB, the right hand IG. IB is the truth, IG is CFD. The CFD list is continuously moving and I think I can tell you that IG does not pass much more orders than IB. But IG deals (figurative and literally) with herself much more, for example when they “need me”.

  Sorry but I had a hitch, I’m rereading the whole post, and I totally agree with you

  

  ZeroCafeine

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  04/14/2023 at 12:38 PM #213287
  ZeroCafeine

  @GraHal
  I still haven’t finished reading this post,

  but I have a small question: do you know how to get the value of the spread in automatic trading or with a solution like the “Bid Ask Bar” indicator?
  what is the name of this indicator in French ?

  

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  04/14/2023 at 12:49 PM #213289
  GraHal

  There is no way, I enter a figure in backtest which is a bit more than spread ever is, e.g. on DJI spread is never more than 4.8 so I always enter 5 iin backtest.

  ON FOREX spread gets flash widened so not so easy … you can see the Flash widending using bid ask band.

  To get Bad-Ask-Band just go … Add Indicator and enter the French for Bid and it should show up, then select >  add to Chart.

   

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  GraHal

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  04/14/2023 at 12:53 PM #213290
  JC_Bywan

  @zerocafeine in your french platform you will find it in the indicators list named as “zone d’achat/vente”, not available for custom coding (or hopefully not yet as I am sure I am not the only one who requested it, albeit long ago, but no sign of it being part of next major update).

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