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Discussion on ECN forex broker

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  • First Post: Jan 29, 2009 10:50pm Jan 29, 2009 10:50pm
Ok, my first post here and I read the rules so I try not to mention services by name but I'm sure for the experienced you can guess who I'm referring to.

I'm scalping with an ECN broker which charges $0.5 per 10K lots which is $$$ expensive! I fully realized the gravity of this when at the end of the week I made $400 in trades but I paid $200 in commission, almost half of my earning! WHAT THE ..... lol

I'm using that service because it is popular with many good reviews and so on and so forth and apart from the price of commission I have no real complaints. It is a good broker. And I've also tried MM brokers before but I always lost money with them, my opinion.

But there must be competition for it somewhere which is cheaper, right!?

According to another website (pinch of salt here )

http://www.100forexbrokers.com/stp-ecn-brokers

The cheapest I found is $0.25 per trip but not sure if that broker is up and running as there is no answer to my emails.

Anyone willing and brave enough to discuss this topic? Maybe we can make the other $$$ broker sweat a bit

And another thing , whilst I was doing a search from the website about ECN brokers, how would you know if it is truly an ECN broker, they say they are but how can a retailer check!? I've seen some who claim to be ECN but their spreads are fixed. How can that be?
IB charges $2 per $100k, but their minimum lot size is 25k. That's the cheapest rate amongst the 3 retail ECNs (IB, MBT, FXCM/HotSpot).

Quoting pa18
how would you know if it is truly an ECN broker, they say they are but how can a retailer check!? I've seen some who claim to be ECN but their spreads are fixed. How can that be?
Well there are only 3 retail ECNs, so that should make determining which broker is or isn't an ECN relatively easy. No ECN would ever have fixed spreads, which one is making this claim? Keep in mind that if a dealer offers STP, that does not mean they're an ECN ("no dealing desk" and "STP" are really just marketing terms dealers use to not sound like dealers).

Best way to determine if a broker is an ECN is whether they show depth of market, like this:
http://i44.tinypic.com/2r2m9fa.png
Quoting Trader KGB
IB charges $2 per $100k, but their minimum lot size is 25k. That's the cheapest rate amongst the 3 retail ECNs (IB, MBT, FXCM/HotSpot).


Well there are only 3 retail ECNs, so that should make determining which broker is or isn't an ECN relatively easy. No ECN would ever have fixed spreads, which one is making this claim? Keep in mind that if a dealer offers STP, that does not mean they're an ECN ("no dealing desk" and "STP" are really just marketing terms dealers use to not sound like dealers).

Best way to determine if a broker is...

You dare leave out DUKASCOPY!!!!!????!

The more you trade, the lower the commission will get. Trade for a month or two then show your broker your volume.

Trader, what is the minimum opening account size (deposit) at IB?

Dukascopy is low commission too. If im not mistaken, they need a big initial funding to open.
Quoting fxterrapin
You dare leave out DUKASCOPY!!!!!????!

Quoting BurgerKing
Trader, what is the minimum opening account size (deposit) at IB?
$10k.
Thanks for the replies everyone.

I heard Dukas is very good but a bit out of my league ;(

I do have an dormant account with IB, but i haven't traded forex there before. 1. I heard their fills stink 2. The leverage is quite low. Maybe I try and see.

So ...

ATC brokers, AMIFX, ADM deritives and Nordmarkets are not one or any of the following? No Dealing Desk + STP + ECN

Strange, I seen some of them with fixed spreads so i did think it is a bit weird that they claim to be and also some of them have variable spreads too which charge commission. I'll see if any have market depth.
Quote
I do have an dormant account with IB, but i haven't traded forex there before. 1. I heard their fills stink 2. The leverage is quite low. Maybe I try and see.
No problem with fills here, but their leverage is low comparatively.

Quote
ATC brokers, AMIFX, ADM deritives and Nordmarkets are not one or any of the following? No Dealing Desk + STP + ECN
ATC - white labels HotSpot and offers Currenex, both are ECNs
AMIFI - not an ECN
ADM - offers Currenex & HotSpotFXi, both are ECNs
Nordmarkets - not familiar with them
Quoting Trader KGB
No problem with fills here, but their leverage is low comparatively.


ATC - white labels HotSpot and offers Currenex, both are ECNs - i wonder how the FXCM take over will affect them. they were an ib for hsfxr which will be gone soon.
AMIFI - not an ECN
ADM - offers Currenex & HotSpotFXi, both are ECNs
Nordmarkets - not familiar with them
= they are connected to Currenex - but they are not the best option.

There are a lot of retail aggregators out there who offer Currenex to their bigger clients. Usually 6 figures to get on a decent Currenex feed.
Im not in the loop how well HotspotFXi performs at the moment, but its another option for 'not-that-big' accounts. It can be accessed through Advantage Futures for example - commission is $18/mm USD traded. They only have a $5000 minimum deposit, but obviously the account needs to be adequately funded to trade 500K+ lots on a 40:1 margin (overnight margin is only 20:1).
Quoting shrike
Im not in the loop how well HotspotFXi performs at the moment, but its another option for 'not-that-big' accounts. It can be accessed through Advantage Futures for example - commission is $18/mm USD traded. They only have a $5000 minimum deposit, but obviously the account needs to be adequately funded to trade 500K+ lots on a 40:1 margin (overnight margin is only 20:1).

Not sure about advantage futures, but i used HSFXI for about 3 years and unfortunately their liquidity was surpassed by others. I have no idea why... but i currently dont use them right now. I was set up through my PB and did not use a second tier PB to access their liquidity. BTW, my smallest order size with them was a standard lot, so that must be something that Advantage has asked FXI to implement.

All the best
Yes, but they charge a minimum of $10 per ticket so its really expensive to do less than 500K. Maybe thats an Advantage specialty.
You can actually trade less than 25k in currency through Interactive Brokers. It runs through IDEAL, which has a slightly larger spread than IDEAL PRO. The minimum commission is $2.50. As in $5 round-turn. Plus the spread. Unless you are trading larger amounts, it's not worth it. In fact, it's so bad - I trade my forex with IBFX instead.

I have an Interactive Brokers account, but think it's a horrible Forex platform. (As a side note, their customer service even admitted this to me.) It turns out forex is one of the newest products they offer.

One major issue is that if you buy a foreign currency, it has to be "swapped" back into USD. It gets really confusing if you are buying stocks in Switzerland, for example. When you close out your position, it's in Francs. (And is listed as such in your P/L column while trade is open. If you do not swap it back, you are at the mercy of currency movements until you do. (This brings on a new understanding of the carry trade if you watch it.)

I love IB for stocks, etc.....but Forex is a joke. You really can't beat a nickel per stock commission at all. The minimum us $2 round-trip. Love it.

Clockwork
I love IB for forex, I find the way it works very logical and shows the underlying market's ways of working.
If you buy something that is quoted in CHF like in your example, actually you are buying something for CHF.
It is logical, that when you sell it again, you recieve your CHF back, together with your P/L in CHF.
Converting your earnings into your account currency is easy; you do not even have to use IDEAL for it.
For example, if you want to convert CHF 5000 into dollars, you can just go long 125,000 USD/CHF and after having gained some pips, sell back ca. 120,000 instead of selling it all. Your earnings will stay in USD and effectively you have used IDEALPRO with its excellent conditions for converting your CHF into dollars.
Quoting clockwork71
You can actually trade less than 25k in currency through Interactive Brokers. It runs through IDEAL, which has a slightly larger spread than IDEAL PRO. The minimum commission is $2.50. As in $5 round-turn. Plus the spread. Unless you are trading larger amounts, it's not worth it. In fact, it's so bad - I trade my forex with IBFX instead.

I have an Interactive Brokers account, but think it's a horrible Forex platform. (As a side note, their customer service even admitted this to me.) It turns out forex is one of the newest products they offer....
Check out the BookTrader--makes scalping easy as hell.
Quoting pescador
I love IB for forex, I find the way it works very logical and shows the underlying market's ways of working.
If you buy something that is quoted in CHF like in your example, actually you are buying something for CHF.
It is logical, that when you sell it again, you recieve your CHF back, together with your P/L in CHF.
Converting your earnings into your account currency is easy; you do not even have to use IDEAL for it.
For example, if you want to convert CHF 5000 into dollars, you can just go long 125,000 USD/CHF and after having gained some pips,...

Spreads and liquidity at Interactive Brokers are good but there are other difficulties. When trading USD / CHF you would expect normaly that your profits are in francs, but interesting why when you trade EUR / USD the profit is in EUR!! Whatever the currency pair you trade your profit are always exchanged in currency other than the base currency on your account thus you are taken once more a commission when you try to convert the result in the base for your account.
As to whether in the spot currency trading there is real ECN and how should it look like, I have opinion about it! What Tradre KBG had posted is Medved Quote Traker software which, as I see trough which he runs MBtrading. Looks great, but do not be fooled that all you see is true. When you enter into transactions incidentally do you by chance know which exactly bank you do it with? Most probably you do not know and you would not be told which is normal.
Did it came to your mind that the 10 000 is very small amount for the interbank market and you enter into transactions directly with Mbtrading, which in reality is a market-maker for you and just generate its own liquidity in their own ECN? Maybe that does not go through your mind. I have nothing against Mbtrading or any "broker" which offers similar software for trading. I also happen to do some trading from time to time with IB, but I cannot understand why you want to believe that transactions are concluded on the interbank market
Quoting Karol
Spreads and liquidity at Interactive Brokers are good but there are other difficulties. When trading USD / CHF you would expect normaly that your profits are in francs, but interesting why when you trade EUR / USD the profit is in EUR!! Whatever the currency pair you trade your profit are always exchanged in currency other than the base currency on your account thus you are taken once more a commission when you try to convert the result in the base for your account.
Here you are mistaken, better check it again. If you trade EUR/USD at IB, your P/L will be in USD, not in EUR. P/L is always in the quote currency.
As for converting, just read my post again. It is possible to get around converting. Trading in an intelligent way you will get all your winning into your desired currency just by trading, without extra "conversion" transactions.
Quoting pescador
Here you are mistaken, better check it again. If you trade EUR/USD at IB, your P/L will be in USD, not in EUR. P/L is always in the quote currency.
As for converting, just read my post again. It is possible to get around converting. Trading in an intelligent way you will get all your winning into your desired currency just by trading, without extra "conversion" transactions.
Pescador believe me I am not wrong! I’ve traded EUR / USD and GBP / USD. Even now I have realized results in my account in EUR and GBP. I have a statement for and a chat with a Customer Service where I was very calmly explained that this is normal with them. I suppose you must be looking at a demo account, because there when you close open positions on EUR / USD and GBP / USD you haven’t got any problems, but again in the demo account there is no and statement of your account! I am not going to go into further discussion on this issue, and I still use Interactive Brokers from time to time.
Quoting Karol
Pescador believe me I am not wrong! I’ve traded EUR / USD and GBP / USD. Even now I have realized results in my account in EUR and GBP. I have a statement for and a chat with a Customer Service where I was very calmly explained that this is normal with them. I suppose you must be...
Karol, I do not use demo (demo is not relevant anyway, with its artificial feed - paper trading account is better, but I don't use it); I trade live. And I trade Eur/Usd every single day.
My P/L is in USD with these trades. The same goes for GBP/USD.
I have never had a trade on any pair yet, where the P/L would not be in the quote currency. This is the way it works with IB. Eur/Jpy P/L is in Jpy and so on...
Well there are just 3 retail ECNs, so that should make figuring out which broker is or isn't an ECN moderately simple. No ECN could ever have settled spreads, which one is making this claim? Remember that if a merchant offers STP, that does not mean they're an ECN. "No managing work area" and "STP" are truly simply showcasing terms merchants use to not seem like merchants.
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