When investing in Forex, we often see words like "contract power", "contract rate" and "contract speed." So, what does "contract" mean?
Contract refers to the establishment of trade in foreign currency transactions. In Forex, it refers to establishing trade between people who want to sell foreign currency and those who want to buy. Although it is important to compare the contract rate of Forex companies in Forex trading, that means to compare the probability of dealing at "price" or "timing" intended by individual investors.
By using a Forex company that has a fixed price or a high contract rate, the order is easy to establish at the intended price in many time zones, Aiming for profit is very important for traders. Conversely, if you use a Forex company with a low contract rate, you cannot trade at the intended timing, so it has the possibility of so-called "slippage", sometimes a refusal to make a promise or re-entry.
Although it may seem that it is natural to make a contract with the price ordered by a trader, in Forex, the contract is rejected due to various factors such as market conditions, system environment, trader's environment, etc. It is a world where the contract could be established in a price that is unfavorable (sometimes favorable) than the price you ordered. Because it is a market moving in unit of seconds, something like the above may occur to some extent, but there are also rumors that there are Forex companies that can only provide an environment prone to this, and sometimes intentionally let them happen. I don’t know the truth of the rumor, but it is natural that traders want to trade at Forex companies that can establish stable orders.
For Forex traders, keywords such as "contract power", "contract rate", "contract speed", "slippage", "contract refusal" and "requote" have considerable significance in actually making a trade when selecting a Forex company. Isn’t it particularly important to a trader with repeated trading style in a short period of time?
At this time, GEMFOREX tried to compare the contract power (contract rate) and contract speed of the overseas Forex companies independently, solely to help in a way those traders who have such thoughts. If you would like to know about contracts established by overseas Forex companies, please refer to this page.
The slippage in Forex investment is due to fluctuations in foreign exchange rate. The fact that a difference between the rates specified when individual investors place an order and the contract rate occurs. Even if individual investors click the order button at the exchange rate displayed for the moment, the time is delayed and a time lag occurs when it actually reaches a Forex company's server and be processed. In the meantime the exchange rate will move so slippage will occur.
Of course, many individual investors want to make more profit. For that reason, it’s better to choose a Forex company that does not cause slippage as much as possible. Many individual investors are considerably conscious of spreads in Forex investment. No matter how narrow the spread is, if slippage and requote seem to occur frequently, you cannot exactly do Forex trading in your own way.
Let's compare the contract rate for overseas Forex companies at that time. Those using the domestic Forex, even if the trading environment seems to be good at first glance, if slippage and contract refusal / re-quote occur due to the low contract rate and judged comprehensively, it can be said that the environment is not good.
The order method is related to the low contract rate of domestic Forex companies. When individual investors are dealing on domestic Forex companies, they will be using an ordering method called OTC (DD) method. The OTC (DD) method is a trading method when a dealer intervenes between an investor and an interbank. (Investors and Forex companies have "conflict of interest" relationship). It’s a system where a Forex company can earn much profit if individual investors are losing, so unfavorable slippage and re-quote are also likely to happen.
If you use a domestic Forex company, even companies that are said to be less likely to occur by comparing contract rate, slippage happens with a probability of about 5%. There are Forex companies where slippage happens with 19% probability. That is, almost a slip out of 5 orders. Is it really possible to do Forex investment in a real sense using a Forex company? Although it would be better if individual investors can judge where it would slip, but slippage is not like that.
There are also Forex companies that have contract refusal with a probability of 7.0% with respect to re-quote. If you do a simple calculation, it means that you will be billed once in 14 times.
Unlike domestic Forex companies that adopt the OTC (DD) method, the ordering method used by most overseas Forex companies is the NDD method. The NDD method is a method of ordering a no dealing desk. It is a method that you rarely need to worry about re-quote because it is a method that traders actually buy and sell as they are ordered.
In order for overseas Forex companies to make money, there is no other way than to increase the volume of transactions. It is necessary for individual investors to make profit, in other words, there is no conflict of interest like domestic Forex companies here. In the case of the NDD method of overseas Forex companies, it is direct trading, and then the trading environment of the trader itself, it seems that it will depend on the platform that a Forex trader has prepared.
The NDD method can be further divided into the STP order method and ECN order method. If you select an overseas Forex company of the ECN method (such as GEMFOREX), the order is brought to each other directly at the "electronic exchange" place on the net. You can achieve buy and sell without a requote.
The reason for the use of overseas Forex companies is because there are overseas Forex companies with an order execution rate of 99.9%. Since it is a public announcement of a Forex company itself, there may be exaggerated expressions, but the result of the actual investigation will probably exceed the contract rate by 90%. If you choose an overseas Forex company, since in most cases you do not have to worry about the problem of requote, furthermore, "execution rate" is high when comparing the contract rate, by choosing an overseas Forex company whose average value of "contract speed" is fast, you can choose an overseas Forex company where slippage is unlikely to happen.
GEMFOREX tried to compare the contract rates of overseas Forex companies.
Average value (sec) 0.035, highest value (sec) 0.010, order enforcement rate (%) 98.22.
Individual investors who switched from other Forex companies seems to be amazed by the narrow spread, with US dollar / yen (pips) 0.80 euro / yen (pips) 1.50 US dollars / euro (pips) 0.80. It seems that satisfactory service is offered for both beginners and advanced users.
The contract rate of XM is average value (sec) 0.336, highest value (sec) 0.019, execution rate is 99.92%.
Maximum leverage 888 times is also one of the biggest attractions of XM / XEMarkets (XMe). XM / XEMarkets (XM) has also opened an ultra low spread account "XM Zero account".
The contract rate of Axiory average value (sec) 0.302, highest value (sec) 0.297, realizing execution rate of 99.84%
The high-level spread of all currencies is also the attraction of Axiory, and the evaluation seems to be quite high for an overseas Forex company with overall balance.
The contract rate of TitanFX is average value (sec) 0.338, highest value (sec) 0.015, order execution rate is 99.97.
Subsequently, TitanFX. Although the contract rate of TitanFX is slightly different, it also surpasses the execution rate (%) of 99.92 of XM / XEMarkets (XMe). TitanFX may be an overseas Forex company that can have great expectation in the future.
IFC Markets is an overseas Forex company that is recommended for beginners with minimum deposit of 100 yen. Maximum value (sec) 0.024, average value (sec) 0.401 and contract execution rate of 98.95%. This overseas Forex company works hard as well. It is also a big appeal of overseas Forex companies to be able to carry out bold high leverage trading even with a small budget.
GEMFOREX is an overseas Forex service operated by GEM - TRADE Co., Ltd. There are many EAs that can be used free of charge, and it is considerably useful to system trader individual investors.
The maximum leverage 1000 times can also be grasped as a big appeal of the overseas Forex company GEMFOREX. In GEMFOREX, we develop the highest level dealing system, in cooperation of major banks with excellent development camp. We provide "99.79% contract rate within 0.78 seconds" of "deliberately no re-quote”. Furthermore, realizes "100% order enforcement rate".
Recently there are many Forex companies that set the goal of how to offer customers with low spread. In GEMFOREX, we do not dare participate in the low spread competition with apparent risk and we are working hard to "provide real liquidity" and we also adhere to high level of contract rate.