Someone needs to build a pure, transparent ECN, no liquidity provider retail broker

Basically, no liquidity providers. Just customer to customer matching. If a bank wants to make markets, they can just sign up like everyone else.

It'd be pure profit - no negotiating with third parties. No data feeds. Nada.

The commission structure would have to be transparent though. Just a table with volume and $/mio. You wouldn't be allowed to negotiate a personal commission rate.

Some might argue the liquidity would be poor ... I disagree. There are some pretty sophisticated indie market makers out there. I think they'd fill the vacuum pretty quick.

Anyways, it'd be pretty cool, and very transparent.

Didn't they already try something similar with FXMarketSpace?

There's a bunch of traders who got fed up with broker quote manipulation so they set up a brokerage for themselves, I'm not exactly sure how it works but it sounded very fair. I'm not in any way connected with them but I won't risk mentioning their name just in case!

You'll still need a price feed though won't you?

FxMarketspace was a jointventure between the CME and Reuters. Basically noone was interested in trading there (noone that matters in the FX world anyways) - so they closed it down last year.

It didn't work, eh? I think they just didn't give it enough time. People have developed pretty sophisticated systems and I bet something like that will just work more and more as time goes on.

HotSpot was like that. Transparent - could see the counterparty, low commissions, inside spread trading. I liked em but MT4 integration came too late to save them. Hopefully we'll get something similar in the near future.

It sounded like a reinvention of the wheel anyway, institutional traders already have a perfectly good network as far as I can tell.

For retail fx traders who want the option to trade with each other I think Interactive Brokers is about the closest thing isn't it? Book Trader I think they call it, or something like that, I seem to remember a logo of a little book coming up if there was a better price available.

So you really think the solution is to have a market place where $1000 accounts can trade micro lots? ... get real... either swing with the big boys or hang out in the bucket shop... its the way it always has been and always will be... you guys know where spreads come from right?

FXMS was a great idea. OTC, cleared by CME. Back then, no one gave much thought to counterparty risk, and hence it failed. It isn't really a big risk, EXCEPT when there is a huge crash....

Fat spreads = pure profit.

if you cant make money trading micros what makes you think you'll make money trading millions?

although not that popular at the moment, why not try trading FX futures. At least they are exchange traded and no messing about.

They will be once someone develops a MT4-like interface that allows easy auto-trading and analysis. The retail success story is really a MT4 success story. Just like Itunes changed the whole MP3 ripping game - MT4 changed the retail forex marketplace. Make it easy and understandable for the average consumer and they'll beat a path to your door. It's not the security, it's the interface.

hi all,

so is trading with a broker who offers stp ok?? some offer mt4 and some don't. i prefer 1 with mt4 as some indicators i use are mt4 base. was thinking of adm also. what do u guys think?? thanks