Trading on forex news, Interactive Brokers / IDEALPRO, and slippage
In my experience thanks to algorithmic trading the variation of the spread and the range of trading straight after a major data release will be as random as possible, since we live in an age that if some pattern existed at these times HFT firms would take out any opportunity within nanoseconds. Remember that some firms write algorithms to predict other algorithms, and it is at times like those that this strategy would be most effective. With regards to my own trading experience I have seen orders fill almost €400 per contract outside of the quoted range, but this is only in the most volatile market conditions. Generally speaking, event investing around numbers like these are only for top wall street firms that can use co-location servers and get a ping time to the exchange of less than 5ms. Also, after a data release the market can surge/plummet in either direction, only to recover almost instantly and take out any stops that were in its path. So generally, I would say that slippage is extremely unpredictable in these cases( because it is an advantage to HFT firms to make it so ) and stop-loss orders will only provide limited protection. There is stop-limit orders( which allow you to specify a price limit that is acceptable ) on some markets and as far as I know InteractiveBrokers provide a guaranteed stop-loss fill( For a price of course ) that could be worth looking at, personally I dont use IB.  I hope this answer provides some helpful information, and generally speaking, super-short term investing is for algorithms. Slippage is tied to volatility, so when volatility increases the spread will also increase. There is no perfect formula to figure out slippage but from observations, it might make sense to look at the bar size in relation to previous bars to determine slippage (assuming fixed periods). This is because when there is a sudden spike in price, it's usually due to stop order triggering or a news event and those will increase the volatility dramatically in seconds.
Simply because forex brokers earn money from the spread that they offer you. Spread is the difference between buyers and sellers. If the buy price is at 1.1000 and the sell price is at 1.1002 then the spread is 2 pips. Now think that this broker is getting spread from its liquidity cheaper (for example 1 pip spread). As you can understand this broker makes a profit of 1 pip for each trade you place... Now multiply 1 pip X huge volume, and then you will understand why most forex brokers don't charge commissions. Disclosure: I am working for an aggregation startup business called Brokerchooser, that is matching the needs of clients to the right online broker. FxPro and similar brokers are rather CFD/FX brokers. If you want to trade stocks you have to find a broker who is registered member of an exchange like LSE. Long list: http://www.londonstockexchange.com/exchange/traders-and-brokers/membership/member-firm-directory/member-firm-directory-search.html From the brokers we have tested at Brokerchooser.com I would suggest: You have two problems, money exchange commissions and currency risk. Commissions are always exorbitant. First you must find the cheapest way to get your money converted to the foreign currency and into your brokerage account. The absolute cheapest way may involve some research and financial institution maneuvering. Also I'd forget about anything other than USD for the foreseeable future. Any other foreign currency will probably have higher commissions and a weaker market. Once you have that down, you must avoid needlessly exchanging currencies. Keep a balance in the foreign currency, keep all dividends and capital gains there, and only take local money out of your brokerage account right before using it.  That means of course that you need to keep enough local currency to pay taxes on any gains, etc. As for currency risk, there are two solutions. One solution is to buy your risk away using forex. You sell an amount of USD/AED lots that is mostly equivalent to your current investments and then just make sure you don't get margin calls. I'm not sure just how cheap your rates would be in the UAE, but, on average, your investments should still have positive returns. The other solution is to just stop seeing exchange rate fluctuations as losses. If you had USD 100k and now you have USD 115k how are you losing money? Exchange rates can go the other way just fine, you know, and holding USD is a good way to hedge against your country going south. "Yes, Interactive Brokers is a good source for live data feeds and they have an API which is used to programmatically access the feeds, you will have to pay for data feeds from the individual data sources though.  The stock exchanges have a very high price for their data and this has stifled innovation in the financial sector for several decades in the united states. But at the same time, it has inflated the value and mystique of ""quants"" doing simple algorithms ""that execute within milliseconds"" for banks and funds.  Also RIZM has live feeds, it is a younger service than other exchanges but helps people tap into any online broker's feeds and let you trade your custom algorithms that way, that is their goal." I work for a fund management company and we get our news through two different service providers Bloomberg and Thomson One. They don't actually source the news though they just feed news from other providers Professional solutions (costs ranging from $300-1500+ USD/month/user) Bloomberg is available as a windows install or via Bloomberg Anywhere which offers bimometric access via browser. Bloomberg is superb and their customer support is excellent but they aren't cheap. If you're looking for a free amateur solution for stock news I'd take a look at There are dozens of other tools people can use for day trading that usually provide news and real time prices at a cost but I don't have any direct experience with them "Not arguing w that at all, and you can't colo w IB afaik. Their API over WAN, VPN or CTCI on direct line only. If you colo at Nasdaq and clear through Lightspeed you're talking microseconds (which is where my actual low latency strats are). But yes, I suppose for IB I should have mentioned ""low-ish"" latency rather than actual low latency. So I'll add a caveat to the newbs - don't try to do ECN arb (or any other super-low-latency strat) or market-make (their cancel fees will kill you) the entire equity universe through IB. It won't work. They're not suitable for that.  My 50-100 reference was for WAN IB clearing for these guys probably using their API through IB gateway or TWS, which is how most would likely start. Doubt they're diving head first into ECN arb day one - they probably wouldn't be doing lowest latency stuff, most peeps start w some sort of trend following strat in my exp and you can work on those timescales w those. Trying to give advice for people starting out, not for other already pro algo traders.  But yes, finprogger is correct, IB would not be a suitable broker to use for a competitive ultra low-latency strat. They are too slow." There's a whole industry devoted to this.  Professionals use Bloomberg terminals. High Frequency Traders have computers read news feeds for them. Amateurs use trading consoles (like Thinkorswim) to get headlines quickly on stocks. I have been trading Forex and Futures as an independant Trader for almost 3 Years now, and unfortunately i have to agree with pizzlepaps statement that if you have to ask you probably should not be doing it at all.  There is a bunch of information out there on futures trading but then again im wondering which futures exactly you want to trade? Are we talking about ES contracts? Dax Contracts? Dow Contracts? Crude Contracts?  I mean im going to be honest here i really would like to be of help here but quite frankly i dont know how based on your question, so for now stay away from the futures market until you have done some heavy reading and defined your goals. Tell your broker.  You can usually opt to have certain positions be FIFO and others LIFO.  Definitely possible with Interactive Brokers. That's not 100% correct, as some leveraged vehicles choose to re-balance on a monthly basis making them less risky (but still risky).  If I'm not mistaken the former oil ETN 'DXO' was a monthly re-balance before it was shut down by the 'man' Monthly leveraged vehicles will still suffer slippage, not saying they won't.  But instead of re-balancing 250 times per year, they do it 12 times.   In my book less iterations equals less decay. Basically you'll bleed, just not as much.  I'd only swing trade something like this in a retirement account where I'd be prohibited from trading options. Seems like you can get higher leverage with less risk trading options, plus if you traded LEAPS, you could choose to re-balance only once per year. "Here's the slippage I was talking about - - - this is when I was trading DXO or around that time.  the ultra shares----interesting read at least.  ""Based on data from October 22, 2008 to January 26, 2009, the S&amp;P 500 had a daily standard deviation of 3.62%.  If you were to invest in SDS, an UltraShort ETF which has the S&amp;P 500 as its underlying index, and were to hold it for a year, you should expect to lose between 34% and 74% of your money, if the S&amp;P 500 is flat for that period.  This assumes that there are no transaction costs, and that the expense ratio is 0% (in fact, it's 0.91%.)  My experiment also assumed that daily stock market returns follow a normal distribution.  In fact, the the distribution of daily stock market returns is leptokurtotic (it has fat tails.)  According to my mathematical intuition (the Ph.D. is in math, in case you were curious,) if I had performed the experiment with a leptokurtotic distribution, the losses would have been larger.  Obviously, this could be checked, but the results are bad enough as it is.""   http://www.altenergystocks.com/archives/2009/02/ultrapromises_fall_short.html" &gt; Turns out inside updates via the SIP are received faster than the prop market data feed, and faster than updates received over an order entry connection. Under these circumstances the street knows a trade occurred before the participants in the trade.  You're saying if IEX is the inside quote you see it disappear on a sip feed before you see it disappear from iex's MD feed? AND if it's your quote, even before you receive the trade report? Forex trading contracts are generally fairly short dated as you mention.  Months to weeks.  Professional forex traders often extend the length of their bet by rolling monthly or quarterly contracts.  Closing a contract out a few days before it would expire and reopening a new contract for the next quarter/month.  This process can be rather expensive and time consuming for a retail investor however. A more practical (but also not great) method would be to look into currency ETFs.  The ETFs generally do the above process for you and are significantly more convenient.  However, depending on the broker these may not be available and when available can be illiquid and/or expensive even in major currency pairs.  It's worth a bunch of research before you buy. Note, in both cases you are in a practical sense doubling your NOK exposure as your home currency is NOK as well.  This may be riskier than many people would care to be with their retirement money.  An adverse move would, at the same time you would lose money, make it much to buy foreign goods, which frankly is most goods in a small open country like Norway. The most simple solution would be to overweight local NOK stocks or if you believe stocks are overvalued as you mention NOK denominated bonds.  With this you keep your NOK exposure (a currency you believe will appreciate) without doubling it as well as add expected returns above inflation from the stock growth/dividends or bond real interest rates. If I knew a surefire way to make money in FOREX (or any market for that matter) I would not be sharing it with you.  If you find an indicator that makes sense to you and you think you can make money, use it.  For what it's worth, I think technical analysis is nonsense. If you're just now wading in to the FOREX markets because of the Brexit vote I suggest you set up a play-money account first.  The contracts and trades can be complicated, losses can be very large and you can lose big -- quickly. I suspect FOREX brokers have been laughing to the bank the last couple weeks with all the guppies jumping in to play with the sharks. This forex training video illustrates the proper use of the stop run reversal forex trading strategy. The stop run strategy effectively spots banking manipulation in the forex market, thus allowing us as retail traders to take the same trades as the mega banks. Learn how to trade forex with the banks using this forex training video.