LEGAL DOCUMENTS & POLICIES

Know Your Legal Rights on LIRUNEX

LEGAL DOCUMENTS & POLICIES

Know Your Legal Rights on LIRUNEX
Legal Documents & Policies
Prohibited Trading

What is Prohibited Trading Practises?
Prohibited Trading is also termed as Abnormal Trading by Lirunex. We have classified certain actions perform by clients who have the intention to exploit trading environment as abnormal trading. You are kindly advised to refer to “Chapter J : Prohibited Trading Practises” in the legal Terms and Conditions for full details. Some of the examples are listed for your reference.

Prohibited Trading Practise – Arbitraging Activities
Arbitraging are activities that exploit price difference between trading platforms, between different trading accounts with the intention to take advantage of the brokerage. These activities are carried out to exploit :

  1. Swap difference such as Muslim account versus normal trading account.
  2. Exploiting price discrepancies between Broker A and Broker B during the illiquid opening or closing hour of the market.
  3. Taking advantage of different Bonus Scheme offered by different brokers by establishing long positions in broker A and short positions in broker B.
  4. Establishing large positions on positive swap product before Wed/Fri trading day market close to earn the triple swap charge.
  5. Establishing large positions before Friday weekend market close or before market close for long holiday.

Prohibited Trading Practise – High Frequency Activities
High Frequency Activities involved more than 30% of the trades are open and close, or, hedge within 3 minutes.

Prohibited Trading Practise – Exploitation of Negative Balance Protection
Establishing large positions or multiple small positions by utilizing all the equity in the trading account few minutes before important news announcement with the intention to benefit from over-loss protection during huge trading price volatility.

What is Forex Slippage?

When you’re trading Forex, sometimes you’ll notice a slight difference between the price you expect and the execution price (the price when the FX trade is completed). When this happens, it’s known as slippage. It’s a common thing to experience as a Forex trader and it can work either positively or negatively.

The main reasons for slippage are Forex market volatility and execution speeds. When a market experiences high volatility it generally means there’s low liquidity and market prices fluctuate very quickly. Where this affects Forex traders is when there’s not enough FX liquidity to fill an order at the requested price. When this happens, the liquidity provider will complete the trade at the next best price.

Another cause for slippage is execution speed. This is how fast your Electronic Communication Network (ECN) can complete your trade at the price you want it to. With market prices changing in fractions of a second, having faster execution times can make a difference, especially on large trades.

Examples of Forex Slippage

Say that the price of the AUD/USD was 0.8210. After analysing the market, you speculate that it’s on an upward trend and long a one standard lot trade at the now current price of EUR/USD 0.8250, expecting to execute at the same price of 0.8250.

The market follows the trend but goes past your execution price and up to 0.8260 very quickly – within a second. Because your expected price of 0.8250 is not available in the market, you’re offered the next best available price. For the sake of the example, that price is 0.8245. In this case, you would experience positive slippage:
0.8250 – 0.8245 = 0.0005, or +5 pips.

On the other hand, let’s say your trade was executed at 0.8255. You would then experience negative slippage:
0.8250 – 0.8255 = -0.0005, or -5 pips.

It’s important to note that slippage can occur with all types of requested orders including Stop Loss, Take Profit, Buy/Sell Stops and Buy/Sell Limit Orders. As Lirunex Limited uses market execution, we cannot guarantee such orders.

We operate under Market Execution and for this reason, we are unable to fill a Forex order that no longer exists. If your requested price is no longer available, your order will be filled by our liquidity providers at the going market rate.