DislikedNo it just means they would have to give me a larger spread and they sometimes did that when I was dealing at their max but it wasnt a regular occurance. Also, I only traded EURUSD and USDJPY with them and I didnt trade that often with them. The real reason they wont go higher is because they are a smart bunch. They have a business model that works for retail clients and some small institutional business. Larger orders is not what they do and what they do, they do real well.Ignored
DislikedAnyone? are in house stop losses special cases of stop losses?Ignored
DislikedBut wouldn't that happen with any broker? Since they can't really control liquidity, why would there be a broker our there that _can_ give you lower spreads on giant orders? there arent brokers that are going to give me a better spread on larger orders. However, I can get a better spread on orders below 10M.
Why do you say that Hotspot is much different? Hotspot has deeper liquidity and a much more stable platform. Spreads dont widen as much during off hours as well.
And how big of orders are you dealing with? Trade size for me depends on a lot of things, when I am not dealing with DB my orders are never over 50M at one click. However, I do not trade that size often. Not sure why it matters or why knowing how much I trade will help you?
Sorry, but I'd also appreciate it if you could answer my above post on moving pips as well, since I havent' really seen FX market depth before.Ignored
Dislikedwhy would they be? if they act as a true middleman, they win on your opening and they win again on your closing (with their spread).
Of the order can't go through because of loq liquidity, then the broker would simply not let it through, so there is no risk.
Or am I thinking something wrong?Ignored
DislikedMarketplaces earn only from volume (open and close) because then they charge you commission. But with them there are one great thing if you place your bid or ask in the market then you do not pay spread at all.Ignored
The second type of FDM is an ECN and they are technically speaking brokers. Brokers make their money by bringing buyers and sellers together for a fee. By definition they should be accepting no risk. They set up a platform where the technology is set up to bring all market participants together bringing many different liquidity providers together. They only charge a commission and this is the only way they should be making money. All trades get matched with another liquidity provider on the platform. The idea is that clients trading on that platform will have more liquidity providers available to them and therefore giving the client more competitive price. This is a fairly straight forward process. As a client regardless of which model FDM you decide to go with you need to compare these four things and see which company is best for you.
More to come in my next post about Market Makers....
DislikedHey fxtrader42,
just wanted to say thanks for your efforts to pass on your experience about market microstructure/"brokers". - truly appreciated!
Do you plan on another info about ECNīs or which brokers to choose when youīre trading really large sizes? That would be great if you had some info on this and were willing to share it!
Keep up the good work!
RMIgnored
DislikedHey fxtrader42,
just wanted to say thanks for your efforts to pass on your experience about market microstructure/"brokers". - truly appreciated!
Do you plan on another info about ECNīs or which brokers to choose when youīre trading really large sizes? That would be great if you had some info on this and were willing to share it!
Keep up the good work!
RMIgnored
DislikedI use them since ~2 month, so far it works as expected. I did choose them because they appear to be a quite solid company, have been around since a long time, and seem to be somewhat well regarded among bigger traders as well (altho on their institutional branch). I guess thats more what could be said about 90% of the other retail shops.
There is most of the time less than 10 mio on their best bid/offer, i would guess more like 5 on average. I rarely trade more than 1 mio, so this is not an issue for me, but i could see how thats a problem for bigger traders.
They charge $30 per 1 mio USD traded (the american branch charges $30 per 1 mio units traded, thats cheaper, but i wanted my funds held in euros). That is negotiable, but thats the fee when they dont impose monthly volume requirements.
I also like their new platform, with their older java application it was a headache putting in stops and targets, in general order entry is solved much better than what they had before.Ignored
DislikedHotspot is not bad , but I use Dukascopy and they charge only 18 $ per million and their liquidity is much bigger.Ignored
DislikedSandy,
I have not used Dukascopy but there is no way they're liquidity is much deeper. I wonder why you think that...I also remember TraderKGB, who uses I believe both Dukas and Hotspot where he said Dukas liquidity has been crap. I very well doubt that Dukas is going to keep up on orders around 5 to 10M.Ignored
DislikedSandy,
I have not used Dukascopy but there is no way they're liquidity is much deeper. I wonder why you think that...I also remember TraderKGB, who uses I believe both Dukas and Hotspot where he said Dukas liquidity has been crap. I very well doubt that Dukas is going to keep up on orders around 5 to 10M.Ignored
DislikedJust to be specific, the displayed liquidity at the inside spread is crap at Duka. Most oftentimes it's under 1M on the best bid/best offer, which is too small to be coming from a bank liquidity provider.. The overall book depth for the majors is usually quite high, in the hundreds of millions (higher than many ECNs), but if the spreads and inside liquidity aren't there, what good is total book depth.
In talks with their reps, they have assured me that orders are automatically routed to HotSpot FXi/Currenex/Lava if those venues offer better prices/liquidity..Ignored
Dislikedyou can still trade 100-200 mill with 4-5 pip spread, witch is still not bad.Ignored