About ECN trading

What is ECN/STP trading?

It is a broker's business model (which, generally, makes the difference between brokers and "market makers"), in which clients' orders are sent directly to one or several liquidity providers to be executed on their end. There may be an unlimited number of liquidity providers (that is, banks, aggregators, other financial institutions). The more liquidity providers a broker has, the better the execution for its clients (more liquidity available, less slippage). What makes a true STP broker is that it doesn't internalize the orders, but sends them to liquidity providers, acting as an intermediary between the client and the real market.

Can I scalp? Do you allow news trading?

Yes, you can. Unlike the majority of brokers out there who either directly prohibit scalping or indirectly prevent scalpers from trading, we welcome scalpers. By this point you are certainly wondering why. Dealing desk brokers hold the other side of your trades. That is, they expect the market to go in the opposite direction and you lose. Scalpers use very short orders, which means they stay in the market for a very short period of time, during which the market doesn't change its course.

The other problem for a dealing desk is that scalpers generate a huge number or requests at the same time (let's say during important news releases) which makes it hard for a dealing desk to handle them.

OlympusFx passes all the trades to its liquidity provider and just receives its commission. Therefore we are interested in high volumes (the higher the volume — the higher is our commission we get), which are usually generated by scalpers.

How does OlympusFx make money? OlympusFx needs profitable traders? WHY?

OlympusFx receives a certain commission from its liquidity providers for each transaction. We add it as a markup to spreads you see in the charts (note that the markup is already included, no matter if you gain or lose).

We receive our liquidity from a wide range of liquidity providers around the world. Our system is designed to offer the best prices available at each moment to the clients. When you open a new order, you get the best available bid (or ask) price directly from liquidity providers with our commission already included. Therefore we are interested in you trading more. And the best way to do so is to gain, not lose. This means we are interested in ensuring that your trading is as profitable as possible.

The chart went through my limit, but my order wasn't opened. What's going on?

It is a possible situation and it usually happens due to lack of liquidity at a certain period of time. Let's say a number of clients put sell limit orders prior to important news release with total volume of 1000 lots. When the news is released, it makes the market go up 50+ pips. So the chart hits the price of all these orders and it is requested to open a number of orders worth 1000 lots in total. It may happen that only 200 lots are available at the time from the liquidity providers at this price at this given time. In this case the first 200 lots out of 1000 will be filled, while the rest 800 will not be filled (no available liquidity) and will remain waiting until the price hits their level again.

Which spread is better, fixed or variable?

Variable is better because it is real. In the interbank market there is no such thing as fixed spread. Whenever a bank or any other financial institution wants to buy or sell currency, it sets the required bid or ask. That is, the price they want at the moment. In the real world the difference between Bid and Ask simply can't be fixed.

What is slippage and why does it happen?

Slippage is a slight order opening price movement which is a result of lack of liquidity (when it's already taken by other traders' orders). It may also happen during market gaps.

It is important to understand that we do not guarantee that your order will be filled exactly at the requested price; our system is setup to fill it with the next best price from another liquidity provider.

So during these news times it's possible that there will be no liquidity available at the price you requested. Let's say you want to open a 5 lot Buy order, EUR/USD, price is 1.30000. Now, in this case we can see the following liquidity available:

Provider 1: price is 1.30010, 20 lots available

Provider 2: price is 1.30005, 5 lots available

Provider 3: price is 1.30000, 1 lot available

In this case your order will be offset with Provider 2, since he has the best price and enough liquidity to fill your order. And the open price will be 1.30050, which is 0.5. pips away from the price you requested. But, again, your order will not be requoted, since we are more interested in your profitable trading.