MetaTrader = Dealing Desk? | Forex Factory

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MetaTrader = Dealing Desk?

  • #1
  • First Post: Dec 31, 2006 9:10pm Dec 31, 2006 9:10pm
Is it true that every MT4 broker has a dealing desk of some sort, since ECN doesn't accept MT4?
Binary Options Trader
  • #2
  • Dec 31, 2006 9:21pm Dec 31, 2006 9:21pm
This is a good question. I hope people aren't afraid to answer to upset the ForexFactory sponsors. Another person pointed out an interesting thing about certain features being advertised on the metatrader website that seem to indicate you might be onto something.

http://www.metaquotes.net/manager/

I've also heard other people say this. But MetaTrader's software seems to be pretty good and I guess the question might be is it worth using the program even if it means the brokers steals a couple pips from you here and there?

But I have no factual evidence, just speculation. Look forward to more replies.

Could be I'm breaking RULE #2 but I can't believe this would apply to sometime as important and central as MetaTrader. I'm sure there are a lot of people who have invested loads of time into learning to program MetaTrader. It's just that I'm on the verge of doing just that. I can live with a couple pips slipped here and there but that's about it.
  • #3
  • Dec 31, 2006 9:32pm Dec 31, 2006 9:32pm
There was a post over on the tsd forums with a link to a post from a guy who (supposedly) worked for a broker. The gist of it was that Metatrader is designed from the ground up to be dealing desk software, there were other worrying features as well, but the post seems to have been magically deleted!
The breaking of a wave cannot explain the whole sea.
  • #4
  • Dec 31, 2006 9:42pm Dec 31, 2006 9:42pm
Another question I have is just how bad are dealing desk? Does a dealing desk mean an occasional "water leak" or does it mean an eventual "breaking of the damn?" (that is, is it an occasional stolen pip, or will all of our profits be wiped out one day?)
Binary Options Trader
  • #5
  • Jan 1, 2007 9:42am Jan 1, 2007 9:42am
Justin pointed out (in the EFX thread) that they can't work with MetaTrader because it's set up for dealing desk brokers.

There's further proof right there.

I'm new to all this (have been reading a lot) and use MetaTrader for their charts. I don't trade through them, though.

I've read many posts (both here and on other forums) explaining how brokers use their dealing desk to trade against their clients (to the broker's advantage, of course).

That doesn't sit well with me at all.

Why would anyone want to deal with a company that is actually working against their clients' best interests?

That's just like being a sales rep for a company that offers discounts to anyone who buys directly from the company.

In both cases, we lose.

Since we're in Forex to make money, why trade with a broker that trades against us?

Since about 95% of Forex traders lose money, why not improve our chances by only trading with brokers that don't trade against us?

In other words, only use brokers that don't have a dealing desk.
  • #6
  • Jan 1, 2007 10:46am Jan 1, 2007 10:46am
  •  tesla
  • Joined Oct 2006 | Status: Friendly Neighborhood Programmer | 533 Posts
MetaTrader is absolutely designed to work with dealing desks as opposed to ECNs.

If your order gets placed directly to the market, there's a chance that you can get a partial fill. MetaTrader has no accomodation for partial fills. That in itself tells me the audience the software was designed for.

If someone has information to the contrary, I'm open to hearing it.
  • #7
  • Jan 1, 2007 11:40am Jan 1, 2007 11:40am
Something seems fishy to me. If brokers want to put their clients out of business, how will they continue their business? It's almost impossible to sort sour grapes (bitter traders who blame the broker instead of themselves) from the truth. And why are there are experienced, legit and profitable traders who use MT4 all the time? As was mentioned before, I don't mind a little under handedness going on, but not to the point where my account is going to eventually get wiped out. So I would really like to know what this whole “dealing desk” business really boils down to.
Binary Options Trader
  • #8
  • Edited 12:45pm Jan 1, 2007 12:12pm | Edited 12:45pm
  •  tesla
  • Joined Oct 2006 | Status: Friendly Neighborhood Programmer | 533 Posts
Just because a firm has a dealing desk doesn't mean it's a bad firm. Every firm out there is in it for the money; some charge a commission, some pad the spread, some have dealing desks, some do all three.

Understanding how you trade and what's important to you will go a long way towards helping you make a good decision on which firm to trade with. If you're trading news or scalping, you and the dealing desk are not going to like each other much. It's the nature of the beast that in short term trades the desk is your counterparty, so either they will make money or you will. The issue largely goes away if you're trading longer term.
  • #9
  • Jan 1, 2007 12:48pm Jan 1, 2007 12:48pm
Quoting Craig
There was a post over on the tsd forums with a link to a post from a guy who (supposedly) worked for a broker. The gist of it was that Metatrader is designed from the ground up to be dealing desk software, there were other worrying features as well, but the post seems to have been magically deleted!
Craig, is that post deleted for sure? I would like to know what features MetaTrader has for brokers... specifically what info it passes to the broker about the EAs... e.g. does it pass the name of the EA? and such things

and can it tell the difference between orders generated by an EA and a script?
  • #10
  • Jan 1, 2007 12:51pm Jan 1, 2007 12:51pm
Quoting tesla
If you're trading news or scalping, you and the dealing desk are not going to like each other much. It's the nature of the beast that in short term trades the desk is your counterparty, so either they will make money or you will. The issue largely goes away if you're trading longer term.
what is the minimum for longer term generally? holding the trade for 15 mins? 30 mins? 1 hour? a couple of hours?
  • #11
  • Jan 1, 2007 12:57pm Jan 1, 2007 12:57pm
Just out of curiousity, am I understanding it right?

1. There is the broker's dealing desk
2. There is the broker's bank's dealing desk

I thought all Brokers had dealing desks (because they are market makers) and only ECNs didn't. I just get confused when brokers start offering things that look like ECNs (e.g. FXCM with PropFX)
  • #12
  • Jan 1, 2007 1:09pm Jan 1, 2007 1:09pm
Quoting ycomp
Craig, is that post deleted for sure? I would like to know what features MetaTrader has for brokers... specifically what info it passes to the broker about the EAs... e.g. does it pass the name of the EA? and such things

and can it tell the difference between orders generated by an EA and a script?
I could not find it with a search on my posts, and I don't have many, so I'm fairly sure. It didn't say anything about EA orders being different, but I have seen that mentioned elsewhere, obvously this is not hard proof. I would say with the speed it was removed from the tsd forums that a sore point was hit.
One has to wonder if MT is somewhat of a 'gingerbread house'.
The breaking of a wave cannot explain the whole sea.
  • #13
  • Jan 1, 2007 1:45pm Jan 1, 2007 1:45pm
I realize that this thread is about MT4 platforms and I am using MT4 so what is being discussed is relevant to me.

On the other hand, we should maybe be considering and discussing the alternatives to MT4 such as possibly TradeStation and VT. Do the same problems exist with those? Does anybody know about this?
  • #14
  • Jan 1, 2007 2:35pm Jan 1, 2007 2:35pm
I do have an ECN broker but that doesn't necessarily make it easy to make money. I've found trading difficult regardless. MetaTrader is definitely a good platform and offers a lot of usefulness and flexibility to the users. Just the fact that it is so popular proves it. My guess is that many people know what's going on and still choose to use it. So the amount that a broker takes advantage of his clients has to be minimal. If they did something obvious I think it would end up being a huge problem for them. The thing that bothers me is the issue or requotes. If I understand correctly it means that each user can be getting quoted a different price. I'd guess that it could only deviate by maybe 5-10 pips though. Much more and it would be too strange. But if those are the 5-10 pips it takes to get your stop hit, I'm not sure how much of that I could take. I want to know what it is exactly they do to manipulate the clients trades. I may never find out. If someone does know, I'd appreciate being filled in.
  • #15
  • Jan 1, 2007 6:14pm Jan 1, 2007 6:14pm
Quoting dumbmoney
I do have an ECN broker but that doesn't necessarily make it easy to make money. I've found trading difficult regardless. MetaTrader is definitely a good platform and offers a lot of usefulness and flexibility to the users. Just the fact that it is so popular proves it. My guess is that many people know what's going on and still choose to use it. So the amount that a broker takes advantage of his clients has to be minimal. If they did something obvious I think it would end up being a huge problem for them. The thing that bothers me is the issue or requotes. If I understand correctly it means that each user can be getting quoted a different price. I'd guess that it could only deviate by maybe 5-10 pips though. Much more and it would be too strange. But if those are the 5-10 pips it takes to get your stop hit, I'm not sure how much of that I could take. I want to know what it is exactly they do to manipulate the clients trades. I may never find out. If someone does know, I'd appreciate being filled in.
Take a look at this. It may help.

http://www.forexfactory.com/forexfor...ad.php?t=10072
  • #16
  • Jan 6, 2007 10:43pm Jan 6, 2007 10:43pm
Quoting ycomp
and can it tell the difference between orders generated by an EA and a script?
According to this page:

"Trades executed on the Interbank FX servers using an Expert Advisor use a unique request and are easily identifiable."

Not sure what all that means, whether there's just an EA-specific signiature (maybe it includes the magic number?) or if it actually passes details about the EA, like its name.
  • #17
  • Jan 6, 2007 10:49pm Jan 6, 2007 10:49pm
Quoting brue
According to this page:

"Trades executed on the Interbank FX servers using an Expert Advisor use a unique request and are easily identifiable."

Not sure what all that means, whether there's just an EA-specific signiature (maybe it includes the magic number?) or if it actually passes details about the EA, like its name.
If I wasn't so lazy, I'd sign up for the interbankfx forums and ask them. It would be interesting to see what they say.
  • #18
  • Jan 7, 2007 3:36am Jan 7, 2007 3:36am
Quoting brue
According to this page:

"Trades executed on the Interbank FX servers using an Expert Advisor use a unique request and are easily identifiable."

Not sure what all that means, whether there's just an EA-specific signiature (maybe it includes the magic number?) or if it actually passes details about the EA, like its name.
I think that is a croc of horse poop. The fact is, EAs are so heavily modded that there is no way that a broker can tell what kind of EA one is running. Of course, if one is running a scalping EA, then I could see how an EA "signature" of sorts could be left behind.

I have a mini with InterbankFX, and I run an EA on it. So far I have been making money without any problems. The only type of dealing desk action that might be going on with IBFX is the spread increasing, other than this, there has been no other "dealing desk like" action going on at IBFX.

One of the things that I am fast becoming to learn is that there are a lot of brokers who pose as traders in order to defame other brokers. But there are more so a lot of traders out there who can not take responsibility for their own losses, so they blame it on the broker.
Binary Options Trader
  • #19
  • Feb 6, 2007 6:40am Feb 6, 2007 6:40am
Interbankfx uses metatrade but on their website they says that they are not dealing desk... What are they???

Below is text from their website:

hy Interbank FX?

Low Pip Spread

Interbank offers dealing spreads of 2 to 4 pips on the major currency pairs in normal market conditions. Because our spreads are not fixed they will fluctuate with market volatility.
No Dealing Desk

While other companies may act as Market Makers, essentially trading within their customer base, our platform allows our customers to trade in the Interbank market with no market manipulation. Our electronic access to the Interbank market also means there is no dealing desk at Interbank FX. Your trades are typically executed within one second and go directly to our banks. All of your trades with Interbank FX are completely transparent and anonymous.
Thanks and Regards Zamir M Iqbal
  • #20
  • Last Post: Feb 6, 2007 12:28pm Feb 6, 2007 12:28pm
PLease correct me if i am wrong??


Quoting zamiriqbal
Interbankfx uses metatrade but on their website they says that they are not dealing desk... What are they???

Below is text from their website:

hy Interbank FX?

Low Pip Spread

Interbank offers dealing spreads of 2 to 4 pips on the major currency pairs in normal market conditions. Because our spreads are not fixed they will fluctuate with market volatility.
No Dealing Desk

While other companies may act as Market Makers, essentially trading within their customer base, our platform allows our customers to trade in the Interbank market with no market manipulation. Our electronic access to the Interbank market also means there is no dealing desk at Interbank FX. Your trades are typically executed within one second and go directly to our banks. All of your trades with Interbank FX are completely transparent and anonymous.
Thanks and Regards Zamir M Iqbal
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