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Proposed NFA Capital Requirement

  • #1,261
  • May 20, 2009 5:52am May 20, 2009 5:52am
Quoting blazespinnaker
Like you said, that only applies to STP. Yeesh, you just argued my point for me!
Wow, finally you understand that the broker can still adjust price, well done!
  • #1,262
  • May 20, 2009 6:00am May 20, 2009 6:00am
Quoting pipmutt
Wow, finally you understand that the broker can still adjust price, well done!
Only an STP BROKER.

Come on... you said it yourself. Just an STP BROKER. Shall I repeat that a few times because you seem to be having a hard time with the concept.

JUST .. AN .. STP .. BROKER.

Brokers like Oanda can not adjust trades after the fact.

There are situations when I'd like to be able to post a trade to them and I'm ok with them adjusting a small portion of a pip.

The rule has thrown the baby out with the bath water. Oanda is now forced to not to execute certain trades because they won't be able to adjust them, even in a controlled fashion.
  • #1,263
  • May 20, 2009 6:19am May 20, 2009 6:19am
Quoting blazespinnaker


This rule will force brokers to NOT EXECUTE TRADES because they will not be able to ADJUST THEM after the fact....



Come on... you said it yourself. Just an STP BROKER. Shall I repeat that a few times because you seem to be having a hard time with the concept.


Ummm yeah, I'm the one who pointed it out to you that STP brokers can still adjust the price of filled trades (actually it's not just STP brokers, bucketshops can still adjust if it's in the clients favor), fortunately it seems like you understand that now, I guess we should be thankful for that at least

I'm not sure how bucketshops like Oanda will handle the new rule, I imagine they will petition for equal treatment, that would seem logical somehow but then I'm not Stumm or Olsen so I can't really say. Perhaps they will opt to adjust nothing, who can tell.

Your idea to have some sort of limit on how much they can adjust is ridiculous, I've seen 200 pip erroneous spikes on Oanda which they had to reverse later. The way NFA have dealt with the problem is fair I believe, all they need to do is extend the STP provisions for adjustments to all brokers and it's job done.

Bottom line is it's already done, the rules have been decided, either live with them or move on. Sounds simple enough to me!
  • #1,264
  • May 20, 2009 6:27am May 20, 2009 6:27am
Quoting pipmutt
Ummm yeah, I'm the one who pointed it out to you that STP brokers can still adjust the price of filled trades, fortunately it seems like you understand that now, I guess we should be thankful for that at least
No, I posted what I posted because I knew about the STP rule only. Which is why it was valid before and why it is valid now.

Quote
I'm not sure how bucketshops like Oanda will handle the new rule, I imagine they will petition for equal treatment, that would seem logical somehow but then I'm not Stumm or Olsen so I can't really say.

Ideally, and it would be to the credit of the NFA if they gave them equal treatment, but I believe more flexibility is required.

Quote
Your idea to have some sort of limit to how much they can adjust is ridiculous, I've seen 200 pip erroneous spikes on Oanda which they had to reverse later. The way NFA have dealt with the problem is fair I believe, all they need to do is extend the STP provisions for adjustments to all brokers and it's job done.

Why is it ridiculous - because you say so?

You can control slippage, why not control price adjusting?

It's like 'price adjustment insurance'. By setting a factor it will help mitigate the risk of a trade and if the risk of the trade goes over some threshold, Oanda will execute it.

By having zero tolerance for price adjustment, then I can see a lot of situations where potentially profitable trades will not be executed.
  • #1,265
  • May 20, 2009 6:40am May 20, 2009 6:40am
Quoting blazespinnaker
No, I posted what I posted because I knew about the STP rule only
Sure you did, I mean let's face it it's not exactly rocket science.



Quoting blazespinnaker

Why is it ridiculous - because you say so?

You can control slippage, why not control price adjusting?

It's like 'price adjustment insurance'. By setting a factor it will help mitigate the risk of a trade and if the risk of the trade goes over some threshold, Oanda will execute it.

By having zero tolerance for price adjustment, then I can see a lot of situations where potentially profitable trades will not be executed.

It's not a practical solution as no-one can say by how much an erroneous quote will be erroneous, they're not planned in advance they're errors, the clue is in the name

Are we done here because this is getting repetitive and to be honest slightly nauseating. You've got your opinion, I've got mine, let's agree to disagree

Have a great trading day!
  • #1,266
  • May 20, 2009 6:43am May 20, 2009 6:43am
Quoting pipmutt
Sure you did, I mean let's face it it's not exactly rocket science.






It's not a practical solution as no-one can say by how much an erroneous quote will be erroneous, they're not planned in advance they're errors, the clue is in the name

Are we done here because this is getting repetitive and to be honest slightly nauseating. You've got your opinion, I've got mine, let's agree to disagree
I'm just trying to learn something here. I'm hoping you have some subtle reason for your viewpoint that I am missing and you'll reveal it at some point in the quest to make me look stupid.

I'm more than happy to look stupid if it means I can learn something new. But so far, you haven't done a very good job at it.

As far as I can tell, you've painted yourself into a corner as a cheerleader for the NFA.

My basic premise is that as traders, we should push back against any organization that attempts to restrict our flexibility.

Certainly an organization that pushes for more transparency and accountability .. more control over our trades, I'm all for, but an organization that is trying to make forex trading a more rigid, less fluid market .. that is against all our interests. Brokers and traders alike.
  • #1,267
  • May 20, 2009 7:16am May 20, 2009 7:16am
Quoting blazespinnaker
I'm just trying to learn something here. I'm hoping you have some subtle reason for your viewpoint that I am missing and you'll reveal it at some point in the quest to make me look stupid.

I'm more than happy to look stupid if it means I can learn something new. But so far, you haven't done a very good job at it.

As far as I can tell, you've painted yourself into a corner as a cheerleader for the NFA....
Oh dear......

Look, I've got no particular desire to make anyone look stupid, I find most people are perfectly capable of doing that on their own without any help from me!

Whatever ulterior motives the conspiracy theorists come up with it's hard to deny that both rules serve a very good purpose. It could be debated by some people that FIFO is too restrictive but personally I can't see it as I myself don't hedge like that for short-term trading as I can't see the point in it, in fact I don't know any professional trader who would even consider it viable let alone actually trading like that. However I don't claim to have the monopoly on profitable trading ideas and if it's an integral part of someone's strategy and it works for them then choices are there to allow them to continue using it.

On the other hand the Price Adjustment rule I think is excellent, although as I've already said I believe the concessions for adjustments should be extended to all brokers and not just STP. I fully support what NFA are doing as, like I've already mentioned, it will prevent a repetition of events like this and that can only be a good thing and in my best interests as far as I'm concerned.

I get the impression that some people here are anti authority by nature, I'm not sure any rule would meet with their approval despite whether it was in their best interests or not, the 'rebel' element if you like. Fortunately in this instance NFA, like all good legislators should, are considering what is in the best interests of the majority not the minority. Had they polled a cross section of traders instead of just brokers I think they would have found overwhelming support for both rules, perhaps with a few adjustments.

How's that, done now?
  • #1,268
  • May 20, 2009 7:23am May 20, 2009 7:23am
I'm not overly impacted by these rules either. However, I'm sure there will come a day when I'm in the minority and I will be seriously impacted. I'd rather fight these fights here, rather than those future ones.

I'd rather we all started taking a stand and started pushing back against the NFA.

I have no problem with rules. But let's make sure they're rules that don't restrict how we trade, but rather just rules that force transparency and control.
  • #1,269
  • May 21, 2009 12:28pm May 21, 2009 12:28pm
They are both stuck in bankruptcy with creditors (and traders) waiting in a line that stretches around the block. Let that be a lesson to anyone who owns shares in General Motors or has an account with an unlicensed Swiss Broker.

Here are the details of the Crown Forex Bankruptcy:
http://blogs.fxstreet.com/francesc/2...rown-forex-sa/

Quote
Dear clients,

The Swiss Financial Market Supervisory Authority (FINMA) has rendered on May 18, 2009 a decision opening the bankruptcy of CROWN FOREX SA as of Tuesday May 19, 2009 at 08:00 am (Swiss time).

The decision will be published on May 29, 2009 at 10:00 am (Swiss time).

Philippe von BREDOW and Laurent WINKELMANN have been appointed as bankruptcy liquidators by the FINMA.
Effective immediately, as of the date and time of the bankruptcy opening, the activities of CROWN FOREX SA are suspended, the company, its Directors and officers are forbidden to make or receive payments, and all the clients’ open positions are closed.
We thank you to communicate to the liquidators, until June 30, 2009, in writing the following :

1. Account Number and relevant details;
2. Open positions as of Tuesday 19 May 2009 at 08:00 (Swiss time), together with supporting documents thereof;
3. Any additional claim you may have toward CROWN FOREX SA;
4. Any debt you may have toward CROWN FOREX SA.

Sincerely
Philippe von BREDOW - Laurent WINKELMANN
NOTTER MEGEVAND & PARTNERS
Place Edouard-Claparède 3
1205 Genève
SWITZERLAND
[email protected]
[email protected]

This is why traders need to beware opening an account with any Swiss broker that doesn’t have a banking license. Notable Swiss brokers like ACM, DukasCopy and MIG have all applied for licenses. But they do not yet have that license. Beware opening an account with these firms until they do, lest you end up like the poor sods at Crown Forex.
  • #1,270
  • May 22, 2009 7:49am May 22, 2009 7:49am
You really don't need to trade using hedging anyway. it was explained to me very nicely in this example. (I think this applies to MT4 accounts too). At least for those that use hedging certain ways.

Hedge Trade(no longer allowed)

Buy 1 lot @ 200
The price goes down 50 pips. You place a Sell Trade
Sell 1 lot @ 150
The price continues down to 100. You close the Sell Trade.
Close Sell 1 lot @ 100
The price goes up to 250. You close the Buy Trade.
Close Buy 1 lot @ 250
Result:
Buy Trade: 250 - 200 = +50
Sell Trade: 150 - 100 = +50
Total = +100

Hedge Alternative

Buy 1 lot @ 200
The price down 50 pips. You close the Buy Trade.
Close Buy 1 lot @ 150
The price continues down to 100. You open a Buy Trade.
Buy 1 lot @ 100
The price goes up to 250. You close the Buy Trade.
Close Buy 1 lot @ 250
Result:
Buy Trade: 150 - 200 = -50

Buy Trade: 250 - 100 = +150
Total = +100


Just one example...
  • #1,271
  • May 22, 2009 12:28pm May 22, 2009 12:28pm
Quoting 1stepatatime
You really don't need to trade using hedging anyway. it was explained to me very nicely in this example. (I think this applies to MT4 accounts too). At least for those that use hedging certain ways.

Hedge Trade(no longer allowed)

Buy 1 lot @ 200
The price goes down 50 pips. You place a Sell Trade
Sell 1 lot @ 150
The price continues down to 100. You close the Sell Trade.
Close Sell 1 lot @ 100
The price goes up to 250. You close the Buy Trade.
Close Buy 1 lot @ 250
Result:
Buy Trade: 250 - 200 = +50
Sell Trade: 150...
Your example is good and shows clearly that the result is the same. But the underlying thought process is diverse. Each of your non hedge entries implies a directional view of the market. And you must be right to profit. On the other hand, hedge strategies do not care that much about market direction. The hedge thought process is more focused on volatility. Historical hypothetical results can always be hypothetically reproduced, but in real trading different thought processes will most surely produce different results. A directional view takes advantage of trends. A (strong) trend may be a killer to a hedger. I use hedge but I understand it is just an alternative. There is a (small) price to be paid for a certain kind of convenience. Nothing more than that. Regards and good trading.
  • #1,272
  • May 28, 2009 3:42pm May 28, 2009 3:42pm

Michael Greenberg at Forex Magnates has released an interesting new survey on forex broker trading volumes (in the billions).

http://forexmagnates.com/top-forex-brokers-report-over-105b-in-daily-traded-volume/

Monthly Trading Volume

  1. FXCM $560,000,000,000
  2. Oanda $338,000,000,000
  3. Saxo Bank $225,000,000,000
  4. Gain $200,000,000,000
  5. GFT $175,000,000,000
  6. ACM $150,000,000,000
  7. PFG $85,000,000,000
  8. IBFX $80,000,000,000
  9. Alpari $60,000,000,000
  10. IG Index $60,000,000,000


This is a useful tool for determining a broker’s size and stability (in addition to the net capital numbers.)

The following firms have net capital below $20 million
Easy Forex $15,552,000
Ikkon Royal $16,423,000
Alpari $16,557,000
MB Trading $17,031,000
Advanced Markets $19,686,000

The following firms have net capital above $20 million
Forex Club $21,354,000
CMS Forex $29,360,000
PFG $30,444,000
Interbank FX $38,393,000
FX Solutions $45,032,000
GFT Forex $87,169,000
Gain Capital $95,879,000
FXCM $113,463,000
Oanda $161,723,000

  • #1,273
  • May 28, 2009 8:07pm May 28, 2009 8:07pm
FYI-- i have a small options account with Ikon GM (Parent of Tradeview FX and Ikon-Royal) and i was told that they have over 20 mil they said something like 22 mil
  • #1,274
  • May 29, 2009 12:41pm May 29, 2009 12:41pm
Quoting Voldemort
FYI-- i have a small options account with Ikon GM (Parent of Tradeview FX and Ikon-Royal) and i was told that they have over 20 mil they said something like 22 mil
this should show up in the next cftc report
  • #1,275
  • Jun 1, 2009 12:27am Jun 1, 2009 12:27am
has this been mentioned? just FYI
latest FCM monthly financial data (jan, Feb & March 2009) here
  • #1,276
  • Jun 3, 2009 1:21pm Jun 3, 2009 1:21pm
The CFTC has just released their latest net capital figures. These appear to be the finalists who have survived the net capital guillotine:

http://www.cftc.gov/marketreports/financialdataforfcms/index.htm

The following firms have net capital below $20 million

Easy Forex $15,549,000
Ikkon Royal $16,355,000
MB Trading $17,100,000
Advanced Markets $19,796,000

The following firms have net capital above $20 million


Alpari $20,975,000
Forex Club $21,795,000
CMS Forex $29,649,000
Interbank FX $36,507,000
PFG $36,843,000
FX Solutions $41,546,000
FXCM $60,472,000
GFT Forex $80,693,000
Gain Capital $90,801,000
Oanda $159,739,000
  • #1,277
  • Jun 3, 2009 4:16pm Jun 3, 2009 4:16pm
Why did Fxcm drop from $113,463,000 to $60,472,000 ????
  • #1,278
  • Jun 3, 2009 4:45pm Jun 3, 2009 4:45pm
  •  onu
  • | Joined Feb 2006 | Status: superior senior member | 746 Posts
Quoting someone1
Why did Fxcm drop from $113,463,000 to $60,472,000 ????

I guess their CEO bought a loft in Dubai
  • #1,279
  • Jun 4, 2009 9:41am Jun 4, 2009 9:41am
Yeah, it'd be nice to know. If it was a dividend, that's one thing, but if it was simply dealing with moving markets, then that's a problem, because another one of those months and suddenly FXCM is out of business.
  • #1,280
  • Jun 4, 2009 2:07pm Jun 4, 2009 2:07pm
is fxcm having issues?
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