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Market Makers & ECN’s, Is the grass greener?

  • #141
  • Apr 3, 2008 8:20pm Apr 3, 2008 8:20pm
For what it's worth, I have a live account at EFX, part of MBT and found them to be exceptional. Only had a problem with the platform once when it went down. You can call and have someone enter or get you out of a trade with no extra cost. I have seen choice spread countless times and most of the time can get one pip spread. There is a commission that is about one pip. Some say this is high. I'm not sure as this is the first ECN I used. When I had the demo, I had a lot of problems, but the live account has none.
  • #142
  • Apr 3, 2008 8:48pm Apr 3, 2008 8:48pm
Quoting steve930
For what it's worth, I have a live account at EFX, part of MBT and found them to be exceptional. Only had a problem with the platform once when it went down. You can call and have someone enter or get you out of a trade with no extra cost. I have seen choice spread countless times and most of the time can get one pip spread. There is a commission that is about one pip. Some say this is high. I'm not sure as this is the first ECN I used. When I had the demo, I had a lot of problems, but the live account has none.
yes, it is high. But so far it is the best (imo) broker for small retail players out there. I believe efx has taken the correct business model to approach the retail fx markets. Im expecting the organisation to grow leaps and bounds. (How do own a share? lol!)

An with that hoefully they can reduce their commision charges in the near future. 1pip per round turn is expensive, esp for high frequency traders.
  • #143
  • Apr 4, 2008 9:33pm Apr 4, 2008 9:33pm
From what I have read, everyone says the commission is high and mention Hotspot as an alternative. I just glanced at their demo (did not look close, so I might be wrong), but it seems that a trade might take a minute to process?? If so, that's useless.

Any other ECNs that are good with a decent commission?
  • #144
  • Edited 12:32am Apr 5, 2008 12:23am | Edited 12:32am
Quoting jest1081
1pip per round turn is expensive, esp for high frequency traders.
1 pip per side is only on the most expensive ECN (MBT/EFX) and only trading GBP pairs. For all other pairs, it would be much lower than 1 pip per side. But more important than that is how overpriced MBT is at $50/mil.

Quoting steve930
Any other ECNs that are good with a decent commission?
There are only 4 retail ECNs to choose from, is it that hard to comparison shop?
IB @ $20/mil and Duka @ $18/mil offer the lowest retail ECN commissions.
  • #145
  • Apr 5, 2008 12:28am Apr 5, 2008 12:28am
Actually, at EFX its 1.5 Pips for Eur/Usd and 1.99 Pips for Gbp/Usd per roundturn.
  • #146
  • Apr 5, 2008 7:18am Apr 5, 2008 7:18am
ECN or MM, it doesn't matter as long as you know how to trade.
  • #147
  • May 6, 2008 4:28pm May 6, 2008 4:28pm
  •  krue
  • | Joined Mar 2008 | Status: finger scares cat, power of illusio | 410 Posts
Is it true, DreamwalkeR? I am new to forex trading, reading through the threads, I am only concerned on stop hunting.

yestoday, I chatted with FXCM rep, this person told me that market maker loss if the trader wins, coz Market Maker is regulated to hedge trader's position,therefore, if one is a sustainable win trader, Market Maker tends to intervent his/her order by delaying, or simply don't pass through the order in particular situation.

however, I still don't understand well the relation between stop hunter and order hedge.

In any case, it seems both are bad thing to small traders like us, coz we are in a weak position comparing to institutionals.

The funny thing is that, when I searched the google engine later on, found that it was FXCM who was fined $100,000 by NFA for the reason FXCM made delay of traders' order. not for sure if this was a rumor or truth.but, it seems Bucketshop has notorious history since early stage of stock exchange, and now, they are everywhere so long as they make a market for traders. you know what I meant? the market no need any particular one to make it for you, the market is there; but, when some one called Market Maker makes one for you, then, you have to accept whatever they wanted to feed as long as you tied yourself with them.

But, I would agree with you, so long as you know how to trade, you still can beat them, just like what Jessie Livermore did. but, that's difficult, very difficult for me, at least. therefore, I wish there are fair trading rules to protect the weakers if you also agree with my point?

Still learning how stop hunter could happen, and how to aviod such bad thing. it seems there are a couple of solutions like ECN, or NDD. but, what confuses me is that even someone claimed being ECN, but, some experienced trader may point out they may not be a true ECN, I don't want to mention who they are,but, when someone can accept micro lot order, then, they are not real ECN. geeeeee, so complicated. I also worry pretty much about NDD, this sounds good given that the order got straight through to the market without a dealing desk in between, but, is NDD a regulated registration,just like MM and ECN?

Probably some one could give some input for clariy of the market structure.








Quoting DreamwalkeR
ECN or MM, it doesn't matter as long as you know how to trade.
  • #148
  • May 6, 2008 5:42pm May 6, 2008 5:42pm
Whether stop hunting occurs at the broker level is up for discussion. I believe it does happen, however, I am not willing to find this out the hard way. (Go ECN, or find an honest DD). HOWEVER, stop hunting does exist at the market level. Banks move large sums of money thorough the system, trigging stop order (usually at psychological levels), which in turn tigger a wave of sell-offs.

fxterrapin


Quoting krue
Is it true, DreamwalkeR? I am new to forex trading, reading through the threads, I am only concerned on stop hunting.

yestoday, I chatted with FXCM rep, this person told me that market maker loss if the trader wins, coz Market Maker is regulated to hedge trader's position,therefore, if one is a sustainable win trader, Market Maker tends to intervent his/her order by delaying, or simply don't pass through the order in particular situation.

however, I still don't understand well the relation between stop hunter and order hedge.

In any case, it seems both are bad thing to small traders like us, coz we are in a weak position comparing to institutionals.

The funny thing is that, when I searched the google engine later on, found that it was FXCM who was fined $100,000 by NFA for the reason FXCM made delay of traders' order. not for sure if this was a rumor or truth.but, it seems Bucketshop has notorious history since early stage of stock exchange, and now, they are everywhere so long as they make a market for traders. you know what I meant? the market no need any particular one to make it for you, the market is there; but, when some one called Market Maker makes one for you, then, you have to accept whatever they wanted to feed as long as you tied yourself with them.

But, I would agree with you, so long as you know how to trade, you still can beat them, just like what Jessie Livermore did. but, that's difficult, very difficult for me, at least. therefore, I wish there are fair trading rules to protect the weakers if you also agree with my point?

Still learning how stop hunter could happen, and how to aviod such bad thing. it seems there are a couple of solutions like ECN, or NDD. but, what confuses me is that even someone claimed being ECN, but, some experienced trader may point out they may not be a true ECN, I don't want to mention who they are,but, when someone can accept micro lot order, then, they are not real ECN. geeeeee, so complicated. I also worry pretty much about NDD, this sounds good given that the order got straight through to the market without a dealing desk in between, but, is NDD a regulated registration,just like MM and ECN?

Probably some one could give some input for clariy of the market structure.
  • #149
  • May 18, 2008 2:23pm May 18, 2008 2:23pm
i think this sums it up, read the whole article.

http://www.investopedia.com/articles...arketmaker.asp
If I Go Broke Trying Then I Will die happy.
  • #150
  • May 26, 2008 12:25pm May 26, 2008 12:25pm
Quoting mattfx
It all reminds me of an experience at the Casino where my friend and I attempted to leave and cash in our chips for what we thought was a great night out. I had the duty of taking our chips (profits) to the teller, when out of the blue sky a "pit boss" was approaching me at a rate of knots, much like a shark to a nervious fish, if you please, obviously he had been observing us the entire time we made money from this casino, he planted himself in front of me and said quote "nobody leaves this casino with money" I actually thought he was serious and started to quake in my boots, until he broke into laughter and let me go....
Lol...he got you there.
  • #151
  • Jul 24, 2008 8:11pm Jul 24, 2008 8:11pm
Quoting Trader KGB
1 pip per side is only on the most expensive ECN (MBT/EFX) and only trading GBP pairs. For all other pairs, it would be much lower than 1 pip per side. But more important than that is how overpriced MBT is at $50/mil.


There are only 4 retail ECNs to choose from, is it that hard to comparison shop?
IB @ $20/mil and Duka @ $18/mil offer the lowest retail ECN commissions.
Hi Trader:
Newb question here, are the 4 available ecn's, Hotspot, MBT/EFX Interbank and Duka? Do you have a preference, or a suggestion to a small account guy who doesn't want to get ripped off by a bucket shop? Thanks

Jim
  • #152
  • Jul 25, 2008 1:43am Jul 25, 2008 1:43am
Quoting bigjim1958
Hi Trader:
Newb question here, are the 4 available ecn's, Hotspot, MBT/EFX Interbank and Duka? Do you have a preference, or a suggestion to a small account guy who doesn't want to get ripped off by a bucket shop? Thanks

Jim
Depending on initial account size, my recs would be:

$400 - $10K = MBT
$10k - $100k = IB or HS FXr*
>$100k = IB or HS FXi

*IB offers lower commissions, more pairs, and many more features than HS FXr, however HS FXr's interface may be better suited for beginners than IB's.
  • #153
  • Jul 25, 2008 5:42am Jul 25, 2008 5:42am
Quoting Trader KGB
Depending on initial account size, my recs would be:

$400 - $10K = MBT
$10k - $100k = IB or HS FXr*
>$100k = IB or HS FXi

*IB offers lower commissions, more pairs, and many more features than HS FXr, however HS FXr's interface may be better suited for beginners than IB's.
Thanks for the information and the quick reply, this is a great forum.

Jim
  • #154
  • Jul 30, 2008 3:47pm Jul 30, 2008 3:47pm
any ECN has the following customer disclosure,thanks:
FDMA---
THE FOREIGN CURRENCY TRADING YOU ARE ENTERING INTO IS NOT CONDUCTED ON AN EXCHANGE. [MEMBER] IS ACTING AS A COUNTERPARTY IN THESE TRANSACTIONS AND, THEREFORE, ACTS AS THE BUYER WHEN YOU SELL AND THE SELLER WHEN YOU BUY. THE PRICES [MEMBER] OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE.

ALTHOUGH [MEMBER] IS THE COUNTERPARTY TO EACH OF YOUR TRADES, [MEMBER] LIMITS RISK TO ITSELF BY INSTANTANEOUSLY OFFSETTING THE TRADES AND POSITIONS IT ENTERS INTO WITH YOU WITH A BANK OR INSTITUTIONAL MARKET MAKER. AS A RESULT, [MEMBER] DOES NOT PROFIT WHEN YOU LOSE MONEY ON A TRADE. RATHER, [MEMBER] EARNS COMMISSIONS ON EACH TRADE IT ENTERS INTO WITH YOU. THE AMOUNT OF COMMISSIONS CHARGED IS DISCLOSED ON PAGE [x] OF THE CUSTOMER AGREEMENT.
http://www.nfa.futures.org/news/new...?ArticleID=2104
  • #155
  • Aug 3, 2008 4:42pm Aug 3, 2008 4:42pm
hi,guys,anyone could help for selectiing a good stock broker,which does offer a penny stock. regards
  • #156
  • Aug 3, 2008 5:30pm Aug 3, 2008 5:30pm
Quoting sps8
hi,guys,anyone could help for selectiing a good stock broker,which does offer a penny stock. regards
Certainly not Interactive Brokers. Btw, it can take days to sell off a penny stock. That is unless the stock disappears altogether. If we're talking Ford (F), well that's another story...
  • #157
  • Aug 4, 2008 2:28am Aug 4, 2008 2:28am
Quoting fxterrapin
Certainly not Interactive Brokers. Btw, it can take days to sell off a penny stock. That is unless the stock disappears altogether. If we're talking Ford (F), well that's another story...
yeh,it may be takes month to sell,if yoiu know wichone to buy,any suggestion a bout brokers
  • #158
  • Aug 17, 2008 9:18pm Aug 17, 2008 9:18pm
Supposedly Oanda, and FXCM are among a few brokers using this. Basically
"FxSpyder’s universal platform denies the dealer the advantage of having access to your exist strategy. Orders executed through FxSpyder do not reside on the dealer’s platform. They remain on your computer until the specified market price has been reached at which time they are forwarded to the dealer for execution". Has anyone actually tried and had success with this??
It's me...
  • #159
  • Aug 26, 2008 5:04am Aug 26, 2008 5:04am
Quoting AgentFx
Supposedly Oanda, and FXCM are among a few brokers using this. Basically
"FxSpyder’s universal platform denies the dealer the advantage of having access to your exist strategy. Orders executed through FxSpyder do not reside on the dealer’s platform. They remain on your computer until the specified market price has been reached at which time they are forwarded to the dealer for execution". Has anyone actually tried and had success with this??
Isn't that kinda risky? I mean, if you lose your internet connection, your orders are not passed for execution. At least if your targets and stop losses are with the dealer, you know they will trigger if you are offline.
  • #160
  • Aug 27, 2008 6:41am Aug 27, 2008 6:41am
Quoting oakmonster
Isn't that kinda risky? I mean, if you lose your internet connection, your orders are not passed for execution. At least if your targets and stop losses are with the dealer, you know they will trigger if you are offline.
People have been trading with desktop software stops for a very long time. One perfect example is those using automated Meta Trader type software programs that activate at certain price levels. And yes, if you loose connection or for some reason your limit or stop doesn't activate, it is on you not the dealer.
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