MB Trading Futures - Introduction

if this, why do they make the demo environment more stable and more attractive, make the wire method more flexible, make atleast a good Chart, made ads all round....etc, etc

This will bring them more client, and it's surely a worthy investment! Just look around...

Good,

I can tell you right now, if I wanted to open my own FX firm. It would be a hybrid ECN and dealing desk model. Similar to what Gain does now. However, I would try to offer better spreads then they do but I would run a book as it makes no sense not too. If it didnt then the banks wouldn't do it and they certainly do. One other thing that makes me think MB does run a book is because of their smallest lot size. I think the smallest you can do with them is 1K. They have claimed that banks allow MB to offer this to their traders because MB has such great relationships with those banks. However, I have never seen a bank offer anything smaller then a standard lot. That is the smallest I have ever seen so the only way to allow smaller in my opinion is by booking trades. The other problem is that almost all other ECN models will tell you the banks they do business with and MB does not. The only firms that I know of that dont tell their clients the source of their liquidity are dealing desk models. However, for all of you who like MB trading and think that their execution and spreads are great for your trading you should continue to like them as this really doesnt mean much in the long run of things.

All the best.

Note about spreads -

I’m sure that the spreads are slightly wider on all true market platforms since the open Sunday. Obviously, with the Bear Stearns news, the Fed surprise ¼ point rate cut, and the potential of inventions by the Central Banks, all of the banks are not showing as much liquidity as they usually do. They don’t want to get caught in spike any more than traders do. That means wider spreads until things calm down. Just the nature of the market.

For those pointing out MB is not alone today with the unusual spreads, thank you.

No MB was certainly not the only one today. Justin do you have anything to say about my post earlier?

So let me see if I understand this correctly. The fact is that some unnamed person who used to work for MB is now trying to earn your business at another firm, but yet you're unwilling to name them and this person is unwilling to provide you with any facts. It's a falsehood with no weight and by posting such comments you're actually providing a disservice to the readers on this forum.

MB does not have a deal desk, therefore we have no way to have an A book and a B book - that isn't our business model.

Having said that, if we were trading against certain customers, those customer orders would not reflect directly into the market when placed. Someone out there would have documented that their limit orders weren't displaying into the market. Since that has not happened out of all of the customer scrutiny that goes on, it pretty much proves that the accusation is bogus.

Justin,

Fair enough! I had stated in my post that I could not be sure how true the statement was. However, FX firms do not have to have to say they are trading against the client on their web page until June 1 according to the NFA. So MB does not have to do this yet if they were running a book. The reason I am curious is that MB does not give any transparency as to the banks or Market Makers that act as the counterparty to MB's traders. Most other reputable ECN firms do. You have stated that the agreement between those counterparties and MB doesn't allow MB to disclose who MB's counterparties are. This makes no sense. Why wouldn't those counterparties not want to be named? EBS shows all of the banks that make up their liquidy pool, as does Hotspot, as does Dukascopy from what I am told, if you deal directly with Currenex (State Street) they do, and I am not sure about IB (maybe someone else knows who works with them.) My point is it makes sense for the broker to show how deep their liquidity is unless in fact they have something to hide. Please excuse me for pointing out to those in this forum that your company is acting like they have something to hide. The other thing is that your swaps are not as competitive as the other ECN models. IMO this is because MB doesn't just make money on commissions but also on swaps. I think most firms do this but MB seems to be making a lot more. Again where is the transparency. The other thing is that MB is offline for about 7 - 10 mins two times a day. You are the only firm that does this. These things dont make sense Justin. I truly hope you can enlighten me and the rest of us on this forum as to why your ECN model is so much less transparent then the others. Wouldn't it be in MB's best interests to give atleast the same transparency as your competition? If not please tell us why. I will say, that since you do work for MB and the guy I talked to earlier no longer does or never did. I will take your word that MB does not run a book. I will not bring it up again unless I can get some substantial proof. I simply wanted to know if anyone had some proof as to which I could not provide. I posted only what I heard and I never claimed that I had evidence to back it up which I still do not. However, I would love to hear your thoughts on the lack of MB's transparency. It only makes MB look worse then their competition. I would love to see this change so the rest of us can make a more informed decision. Not to mention I think it would make your life a little easier and hopefully bring in more business for you.

Looking forward to your reply.

All the best

They are DEFINATELY in the level...

You can go right to the NFA website and click on file a complaint. However, maybe you should try and speak with Justin first maybe MB just made a mistake. I am sure he can probably help you get some answers. Let us know how it goes. Best of luck

Karl,

Not sure I am following you here... did your issue get resolved or not? How was it resolved?

Great! Sounds like the only issue was a lack in communication.

Is it really MBT's call on announcing liquidity providers? Shouldn't this question be posed to 3DFOREX?

I'm curious as to the relationship between MBT and 3DFOREX, does MBT's parent own both? If not, where are 3DFOREX's other brokerage partnerships? Justin, if you can comment on this, I'd appreciate it.

That's not technically accurate. IB's ECN goes offline from 5:00 - 5:15pm daily and for a minute or two around midnight. HS FXr closes a half hour early on Friday, and both HS FXr and Duka open an hour late on Sunday.

I think any deviance from interbank market hours should be severely limited. With that being said, in terms of total offline minutes during the Sun 5pm - Fri 5pm timeframe, technically Duka & MBT are in front w/60 mins, IB at ~80 mins, HS FXr last at 90 mins + whatever 5pm rollover closure they have (they don't list it, but their demo server is offline right now at 5:17pm).

As a client of Duka, IB, and soon to be MBT, I can honestly say that Duka is the least transparent (mainly b/c they can't rebroadcast the 3 ECNs they presumably aggregate due to "double execution" risk). Compare the book depth of any pair (esp. the non-majors) on MBT vs Duka and you'll be in for quite a surprise..

traders....

I made a critical error and very unfortunate error in judgement concerning MBTrading.
Due to my lack of judgement thorough investigation, I have probably caused others to misjudge MBT for that I'm sorry. Even if I may not continue the relationship with them, I strongly advise even if it is for their cust. service alone that traders look no futher for a broker than them...

MBT offered to credit the account but due to my lack of judgement and thoroughness I must refuse

they definately get 5 stars

TraderKGB,

Thanks for pointing out a few of my errors from your experience. However, I am curious about Dukas - I thought you could see when you traded who the counterparty was? You are saying this is not correct right? I understand the market depth is better for MB but do we know how reliable the market depth is for MB or Dukas. With regards to the platform going down around Friday and coming back up on Sunday it seems that all firms are different. However, most are not down for so long during the week around 5pm rolls and they dont go down for a minute or two during midnight. This was more what I was referring too. Does IB give a list of their counterparties? I know HSFXI does. Also, if you do a basic search on the NFA of MBTrading you will see that almost all of their princiapals listed are also listed as principals of 3DFOREX. Also, MBT International owns more then 10% of the company. It looks like 3DFOREX only gives liquidity to MB unless someone else has first hand knowledge of something different. Once again I stand corrected on parts of my post that were not correct. I am only trying to figure out the facts.

All the best.

Justin,

Fair enough! I had stated in my post that I could not be sure how true the statement was. However, FX firms do not have to have to say they are trading against the client on their web page until June 1 according to the NFA. So MB does not have to do this yet if they were running a book. The reason I am curious is that MB does not give any transparency as to the banks or Market Makers that act as the counterparty to MB's traders. Most other reputable ECN firms do. You have stated that the agreement between those counterparties and MB doesn't allow MB to disclose who MB's counterparties are. This makes no sense. Why wouldn't those counterparties not want to be named?

>>There are a few answers to this question, but the most important is this. TDFX is unique compared to all of the other firms that say they are ECN’s. In fact, the transparency of TDFX is completely unbiased, where the others that match what you have mentioned have some degree of bias. TDFX uses its own credit to go to liquidity pools to create a montage of bids and offers for a quote. No destination is a “client” of the ECN like they are with the companies you mention. There are no “requotes” or “minimum spreads,” which some of the other alleged non-dealing desk platforms maintain. Think about that. How can there be a minimum between a bid and ask in a truly competitive pricing market? Who is making that minimum or benefitting from it? That’s what full transparency means, not having someone have that sort of control over the market. One mistake that people make is in assuming that MBT is the executor of the trade. We are not. TDFX handles the execution. It would be wrong for us to state that we have “Banks X, Y, and Z” in the mix as we don’t. We route all orders directly to TDFX. TDFX maintains a true market of quotes from a multitude of banks. They make a market; we display their market and get a fill for the customer based on the type of order that they send through us. Just like in the stock market of the past, other brokers could also route their customer orders to TDFX and tap into the net liquidity of the ECN, including customer limit orders, which are displayed anonymously. In other words, if you have a limit order, we know your account here and send an order to the ECN. The ECN doesn’t know who you are, your account number, nothing. It’s just an order to be filled. That’s why traders want to use us for transparency and privacy. The system that matches the trades has no knowledge of which customer is which order, whether they are opening or closing a position, whether they win or lose 80% of their trades. All orders are treated equally. With all due respect, how can our routing methodologies or transparency be questioned when you post a quote you immediately see it, if you trade against the quote both parties immediately get a fill? Can you get that anywhere else?

EBS shows all of the banks that make up their liquidity pool, as does Hotspot, as does Dukascopy from what I am told, if you deal directly with Currenex (State Street) they do, and I am not sure about IB (maybe someone else knows who works with them.) My point is it makes sense for the broker to show how deep their liquidity is unless in fact they have something to hide.

>>That’s why we show the size that is compiled at TDFX in our Level 2, and based on the fills we get, you can assume that there is plenty more size than what the banks show. In other words, the size you are seeing is a MINIMUM and could actually be much greater, but not smaller. Many times a bank will show 500 lots and fill a 1000 lot order or more. And that’s just one bank out of several at any price. Plus, what we like about TDFX is that they have enticed their banks to display liquidity at sub-pip increments, so now our customers are getting terrific fills at prices that weren’t available before. Instead of just seeing 5000 lots on the bid at 1.5500 and 5000 lots on the ask at 1.5501 on the EURUSD, you might see 1000 lots on each side down to the tenth of a pip. That means that the same liquidity is now available at better net pricing for customers. So yes, I think it is very important to show depth of liquidity via the Level 2. As for which banks are actually each order…banks want privacy too. Why would Bank A want the market to see that they are constantly on the sell side of the EURUSD? As I’ve already stated, the privacy and liquidity goes both ways. That’s what draws tens of thousands of customers to our platform, which only makes the liquidity on the ECN better. The judgment of the ECN is size and liquidity, which is judged by the fills and pricing that you get trading. It isn’t about which banks are doing the buying and selling at any moment, just like it shouldn’t be about the banks knowing who you are.

Please excuse me for pointing out to those in this forum that your company is acting like they have something to hide. The other thing is that your swaps are not as competitive as the other ECN models. IMO this is because MB doesn't just make money on commissions but also on swaps. I think most firms do this but MB seems to be making a lot more. Again where is the transparency. The other thing is that MB is offline for about 7 - 10 mins two times a day. You are the only firm that does this. These things dont make sense Justin. I truly hope you can enlighten me and the rest of us on this forum as to why your ECN model is so much less transparent then the others. Wouldn't it be in MB's best interests to give atleast the same transparency as your competition? If not please tell us why. I will say, that since you do work for MB and the guy I talked to earlier no longer does or never did. I will take your word that MB does not run a book.

>>This has been covered many times on these boards, and Trader KGB just gave you some examples in his response above. We shut down once to calculate commissions and fees so the proper bookkeeping can be done for tens of thousands of accounts. It is necessary in the Interbank market to have a “settlement point” with the banks since it is a 24 hour market. Then we shut down a second time at midnight because unlike all of our competitors except for one (that we’re aware of) we trade Equites, Options, Futures from a single login or account. As such we need to upload and process our clearing files for the other part of the firm. Plain and simple, we thought the few minutes of maintenance was worth the benefit of trading almost every single asset class from one desktop through one broker.


I will not bring it up again unless I can get some substantial proof. I simply wanted to know if anyone had some proof as to which I could not provide. I posted only what I heard and I never claimed that I had evidence to back it up which I still do not. However, I would love to hear your thoughts on the lack of MB's transparency. It only makes MB look worse then their competition. I would love to see this change so the rest of us can make a more informed decision. Not to mention I think it would make your life a little easier and hopefully bring in more business for you.

>>I would think that our tight spreads, low fees, and the ability to bid/offer with 15 order types has not made us look all that bad. We have grown from 0 to tens of thousands of clients worldwide. The proof is in the results, and obviously, an awful lot of traders seem to think we’re on the right path, despite repeated discussions on these boards by people trying to suggest that we are something else. Trading with us pretty much speaks for itself.

Looking forward to your reply.

>>Final note in regard to fees. Keep in mind that we were the ones that started this whole Forex ECN model several years ago, and we had to fight the battle of everyone telling us that it couldn’t be done. We know that our cost to do all the above was higher then bucketing trades like our competitors. We make less per trade because we’re unbiased, and the cost of developing systems like this is astronomical. To make more money we had to have a system that worked and revolutionized the industry. It does and we did! Just like with any maturing, commoditized business you will see our prices start coming down as costs fall due to volumes increasing. A little at first then it should pick up speed. Basic economics.

You can see the counterparty exchange at Duka after a trade is completed. For my live trades, I've only seen Duka's ECN listed (SWFX). For demo trades, I've seen Goldman, Citi, HSFXI, Lava, CNX (only by throwing completely irrational 50-200mil market orders out there for testing purposes).

Quite often, Duka's displayed depth is borderline terrible, especially outside the majors, and also on everything for that matter outside of NY/euro hours. Here's a live shot of their GBP/USD, GBP/CHF, & GBP/JPY books:
http://i32.tinypic.com/doky2c.png

As you can see, pretty atrocious.. Now, the theory goes, they will fill you on those aforementioned exchanges if they currently offer a better quote. They just can't broadcast them into their own book due to "double execution" risk (the same liquidity being shown on two different exchanges at once). Essentially, they are trying to ride as a layer on top, rather than a true ECN aggregator like CAX (speaking of CAX, notice FCSX 41% stock collapse today? ).

This gets into concerns about order flow. Assuming they must pay a portion of their commission when they farm out the order to a venue with a better quote, what guarantee does the client have they will actually do this? (it's obviously an incentive to have the order executed on SWFX and keep the full commission). With a rate of $18/mil, there really isn't much to share with a different venue anyway..

None of my executions raise any red flags thus far, and I've done pretty sizable market orders and not received any slippage. The second anything suspicious happens, then it's back to IB, and soon MBT.

Even the live Currenex hubs I once tested were closed for similar periods during the 5pm rollover. I don't fault any broker for this. I assume it's more bank-imposed than anything. A few minutes at midnight is a hassle, but not a huge one.

Closing early/opening late around the weekend hours is a MUCH bigger peeve of mine, especially after the volatility we just witnessed on both sides of this past weekend. On a weekend like that (Fed cut + Bear blowup), if I'm holding a position, I want immediate access once the interbank market opens. fwiw, MBT was the only retail ECN open at 5pm on Sunday.

Yes, the banks for each currency are listed on their website (some banks provide liquidity for more pairs than others).

All the best.

So, if I'm reading your message and the info on your site correctly, it basicly means that for E/U you have what translates to a FIXED spread of 0.64+0.1=0.74 pip ALL the time ?

Thanks

Mbtrading does not have fixed spread. That is the information about how the commission is calculated

Hmm... but it's written they have 1/10 spread on all pairs. Just opened a demo - looks far from a pip plus constantly changing... Not for my small trades system..

Hi jleblang,

On my current MT4 broker I am restricted to placing pending orders at a minimum of spread plus one pip away from my requested open (entry) price, is this the case with MBTrading? and if so can you explain, specifically, how MBTrading handles this?

Regards,
lucidlamp

No restrictions.