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MB Trading Futures - Introduction

  • #3,681
  • Jun 30, 2009 1:14am Jun 30, 2009 1:14am
Justin

Could you tell me why with examples commissions are better than fixed spreads?
  • #3,682
  • Jun 30, 2009 1:30am Jun 30, 2009 1:30am
Quoting gotti911
Justin

Could you tell me why with examples commissions are better than fixed spreads?
Well, here would be my thoughts.

 

  1. Fixed spread means that the broker is making money against your trades. This means two things. If you are losing money, they are making it and happy because they are banking the other side of the trade. If you are making money, then at some point they will slip you and mess with you until you aren’t. If you’ve ever been with a broker and everything was good for 2-4 months and then started to get bad, you understand.
  2. Our interests are aligned with yours. You are paying us to get the most liquidity connections that we can to get the narrowest spreads possible and then have the best technology available to route your orders as fast as possible to the best price. Therefore, we get paid for giving you good execution. A spread-broker gets paid when you lose. It’s that simple.
  3. No other trading market exists where customers can’t interact fluidly together except for the deal-desk fixed spread forex model.

I could keep going, but that’s a good start.

  • #3,683
  • Jun 30, 2009 2:58am Jun 30, 2009 2:58am
Quoting jleblang
Well, here would be my thoughts.

 

  1. Fixed spread means that the broker is making money against your trades.
  2. A spread-broker gets paid when you lose. It’s that simple.

I hate to disagree with you because you post some useful info, but the above is a generalization and not strictly true.

The above describes a bucket shop, and while it's perhaps true a large percentage of fixed spread brokers do bucket trades it's by no means a universal model. Fixed spread brokers make money from spread and shade, and they'll either requote in a fast market (a fairer system in my opinion) or give slippage.

It's very much horses for courses, ECN-style brokers like yourselves might not suit everyone, even bucket shops have their plus points!
  • #3,684
  • Jun 30, 2009 3:11am Jun 30, 2009 3:11am
Hi Justin,

As per your request a private email has been sent.

Cheers,
Steve
  • #3,685
  • Jun 30, 2009 6:36am Jun 30, 2009 6:36am
Hello Justin,

Thank you for your time and effort in this forum. My question is about your old web based trading platform (remote trader) which used to be available some time ago. It is not available anymore. The thing is some of your customers like myself need a web based platform or a java platform so that one can trade anytime from public computers like those at work. I can see now that there is a new MBT Web Based trading platform on Beta being developed. is that for demo only ? If it is for live accounts, I need to give that a try since I cant download the navigator on my work's PC. I get so sad when I see my entry signals handy but I can't take them

Thanks and regards.
Salem
  • #3,686
  • Jun 30, 2009 8:55am Jun 30, 2009 8:55am
Quoting salem_747
I get so sad when I see my entry signals handy but I can't take them
It is a bit pricey, but perhaps worth it to sign up for a VPS. You can connect to it from just about anywhere. If you don't like MT4, you can install MBT Navigator on it, or any other Windows software. If you are a MacIntosh type, you can use this as a way to get around the lack of MT4 for Macs. Google Virtual Private Server.

Regards,

Edward
  • #3,687
  • Jun 30, 2009 11:15am Jun 30, 2009 11:15am
Quoting pipmutt
I hate to disagree with you because you post some useful info, but the above is a generalization and not strictly true.

The above describes a bucket shop, and while it's perhaps true a large percentage of fixed spread brokers do bucket trades it's by no means a universal model. Fixed spread brokers make money from spread and shade, and they'll either requote in a fast market (a fairer system in my opinion) or give slippage.

It's very much horses for courses, ECN-style brokers like yourselves might not suit everyone, even bucket shops have their...
Pipmutt-

I'm curious about the logic of what you typed. Spread brokers don't charge any fee, so if they are profitable, then it comes from trading, meaning trades that they run under their own guidelines or trades that they take against customers (in reality, they typically use trades against customers to get themselves net long/short as they want, meaning if they want to be long, they buy from their retail sellers and if they have retail buyers they offset that in the Interbank market). But at the end of the day, the only money they make is in some form of trading (which requires showing risk), and they have retail accounts at their disposal to do what they want. That doesn't imply that every spread broker is constantly banking their customer trades or messing with their customers. But as they say in the crime business, it gives them opportunity and motive. I didn't see anything in Justin's post that said that all fixed spread brokers are constantly doing this. But when someone asks for a pitch on why ECN brokers are better, that is the reason. You don't have to believe that every spread broker is constantly behaving with malice to know that at least the potential is constantly there, whereas with the ECNs, it is not.
  • #3,688
  • Jun 30, 2009 11:20am Jun 30, 2009 11:20am
Quoting salem_747
Hello Justin,

[size=3]Thank you for your time and effort in this forum. My question is about your old web based trading platform (remote trader) which used to be available some time ago. It is not available anymore. The thing is some of your customers like myself need a web based platform or a java platform so that one can trade anytime from public computers like those at work. I can see now that there is a new MBT Web Based trading platform on Beta being developed. is that for demo only ? If it is for live accounts,...
In addition to what edwardBe already said, the Web Nav is now pretty deep in testing and should be available in the coming weeks for live trading (it is not at this time). Help is on the way!
  • #3,689
  • Jun 30, 2009 11:55am Jun 30, 2009 11:55am
Quoting skfx
I just finished trying that but no glory Justin.
I just remembered back to sign up and i am sure i selected MT4 as the preferred platform due to the fact that when i tried out MB years ago there were not charts inside MBT Nav,so i went with the MT4 option.Had i known that MBT Nav had charts then i would not have worried about MT4.
I am not sure if this is the reason why i am not getting any chart data inside MBT Nav.
Just throwing this out there as a possible cause.

Cheers
Steve

Justin,

I'm confused, are charts available inside the navigator or do you still have to use a third party vendor?

Are there different versions of the navigator available, because my market depth window doesn't look anything like the one posted by Trader KGB?

Thanks
Angus.
  • #3,690
  • Jun 30, 2009 12:05pm Jun 30, 2009 12:05pm
Hello Justin,

During the webinar yesterday, it looked like Chris was trading microlots, but I don't see that size on the MBT demo I'm using. Was I wrong about his lot sizes?

Thanks,

Edward
  • #3,691
  • Jun 30, 2009 12:30pm Jun 30, 2009 12:30pm
Quoting IndyTrader
Pipmutt-

I'm curious about the logic of what you typed. Spread brokers don't charge any fee, so if they are profitable, then it comes from trading, meaning trades that they run under their own guidelines or trades that they take against customers (in reality, they typically use trades against customers to get themselves net long/short as they want, meaning if they want to be long, they buy from their retail sellers and if they have retail buyers they offset that in the Interbank market). But at the end of the day, the only money they make is in...

IndyTrader

This probably isn't the best thread to discuss this as it may be counterproductive to Justin's efforts, besides which this is his company's thread so it would be slightly disrespectful to debate the pros and cons.

I'm happy to discuss it in another thread if you like.

It might be worth noting though, like most ECN-style broker's agreements, in the MBTF customer agreement (which I only scanned through quickly) it clearly states that, as counterparty, "the prices MBTF offers might not be the best prices available" and "MBTF and its affiliates may also undertake proprietary trading activities". It would appear that a potential conflict of interest exists on ECN-style brokers as well.



*Note to moderators - please feel free to delete my post if you find these comments inappropriate in this thread.
  • #3,692
  • Jun 30, 2009 12:48pm Jun 30, 2009 12:48pm
Quoting edwardBe
Hello Justin,

During the webinar yesterday, it looked like Chris was trading microlots, but I don't see that size on the MBT demo I'm using. Was I wrong about his lot sizes?

Thanks,

Edward
Yes, you can use 0.1 lots for micros.
  • #3,693
  • Jun 30, 2009 12:48pm Jun 30, 2009 12:48pm
Quoting angus
Are there different versions of the navigator available, because my market depth window doesn't look anything like the one posted by Trader KGB?
That's QuoteTracker, a 3rd party charting/trading front-end that works with MBT and other brokers.
  • #3,694
  • Jun 30, 2009 1:11pm Jun 30, 2009 1:11pm
Quoting Trader KGB
That's QuoteTracker, a 3rd party charting/trading front-end that works with MBT and other brokers.

Ah, I see, thanks.
  • #3,695
  • Jun 30, 2009 8:34pm Jun 30, 2009 8:34pm
Quoting pipmutt
IndyTrader

This probably isn't the best thread to discuss this as it may be counterproductive to Justin's efforts, besides which this is his company's thread so it would be slightly disrespectful to debate the pros and cons.

I'm happy to discuss it in another thread if you like.

It might be worth noting though, like most ECN-style broker's agreements, in the MBTF customer agreement (which I only scanned through quickly) it clearly states that, as counterparty, "the prices MBTF offers might not be the best prices available" and...
Pipmutt-

(Yeah, Justin, if you don't think this fits with the thread, let me know and we'll just end the conversation).

I have actually done a lot of research into just about every broker that I have ever opened an account with (yes, several brokers, yes, probably more research than most).

The lines you point out really have no bearing on what you are saying. For example, can MB Trading guarantee that it always has the highest bid (versus say a deal desk broker out there that isn't attached to them) or the lowest offer (versus a desk)? No, of course not. They have no control. MB Trading could show a quote on EURUSD through the ECN of 1.34119 by 1.3413. That's a 1.1 pip spread. Another broker might be 1.3412 by 1.3415 (standard 3-pip spread). Technically speaking, at that moment, if you were selling, the bid on that other broker is better than the bid showing on the ECN. So of course every broker in forex, which is not centralized, should include in their agreement that they might not be the best price available. That's a great argument for centralizing the marketplace.

Regarding the "proprietary trading activities," this is a pretty generic statement. If there is an error trade that MB determines you should have received a fill (let's say your order gets stuck en route to a bank, as I have had happen), then they determine that you were entitled to a fill. Now they have to give you that price. That means that they had to be the counterparty for that trade through their error account. That becomes a proprietary trade. There's nothing there that says that they are regularly taking on proprietary trading. In fact, under the new guidelines for net cap, the NFA essentially has different rules for firms that are true "straight-through processing" firms and for firms that aren't. Clearly, the NFA views MB Trading as a firm that qualifies because they are subject to those rules. Yet certainly, they still need all of the legal jargon in place in their clearing agreement with their customers that states that they can fix trades, etc.

Again, there's nothing in what you have said that means anything specific about how MB Trading behaves. But it seems that Justin's answer was correct as a general response to what makes ECN trading better than desk trading (which was what had been asked, to start the conversation). You can't get around the fact that at some level, the desks have to be earning a living in numbers that you can't see, while MB Trading earns it in numbers that are disclosed. Does that mean every deal desk abuses this at the same level? No, but Justin didn't say that.
  • #3,696
  • Jun 30, 2009 8:46pm Jun 30, 2009 8:46pm
Quoting IndyTrader
Pipmutt-

(Yeah, Justin, if you don't think this fits with the thread, let me know and we'll just end the conversation).

I have actually done a lot of research into just about every broker that I have ever opened an account with (yes, several brokers, yes, probably more research than most).

The lines you point out really have no bearing on what you are saying. For example, can MB Trading guarantee that it always has the highest bid (versus say a deal desk broker out there that isn't attached to them) or the lowest offer (versus a desk)? No, of...
Pipmutt/IndyTrader,

Actually, I don’t mind the conversation at all. I think it is useful and we certainly have nothing to hide. I can elaborate more on the “affiliate” line. Like any broker, we have Introducing Brokers. We don’t solicit these people to do anything specific, but they would be viewed as “affiliates” almost by the definition of the word (they sign on to be partners with us and introduce customers). Because we have an open SDK and also connect through FIX, we now have hundreds of IBs that have or are developing their own software. Many have auto-trading programs, etc. We have no control over what they choose to write from a software perspective or how they trade. All we do is provide the connection and the account/order system for them and their customers. So technically, if you put all of that together, we have affiliates who do proprietary trading. Thus, the line in the agreement. It has to be disclosed. Does that mean that we have someone sitting on the trade desk running trades? No. In fact, I can tell you that the Trade Desk is only there to facilitate customer orders (if someone needs to call in), make sure the platform stays up and running, and monitor risk situations (i.e. margin calls) to protect the customers and the firm. We don’t have anyone in-house whose job it is to make a profit trading for the firm.

Our firm, going back to the very early days as a stock firm, was always about technology, low costs, and innovating in the execution world (order types, routing, etc.). We took that philosophy with us when we moved into the forex marketplace. Trading for profit isn’t part of that model.
  • #3,697
  • Jun 30, 2009 9:13pm Jun 30, 2009 9:13pm
For my 1000th post on these boards, I’d like to thank everyone for over two and a half years of great discussions. This thread started on November 8, 2006, as an EFX thread before MB Trading acquired EFX. I’m pleased to see that it remains on the top of the list of threads to this day and is the single most viewed thread in the Broker Discussion section of Forex Factory. We are very pleased that so many of you have embraced our strategy of transparency, liquidity, and direct access over the last several years, starting back at a time when most people didn’t believe.

Here’s a list of some of the obstacles that we have overcome.

 

  1. The general belief that retail customers could not be connected to the Interbank system.
  2. The general belief that the Interbank system liquidity providers would not allow trading at the mini levels.
  3. The general belief that we couldn’t meet the $2.5 million net cap requirement (yep, you read that right).
  4. The general belief that we couldn’t compete against the deal desks because they dominated the industry.
  5. The general belief that we couldn’t meet the $5 million net cap requirement.
  6. The general belief that we couldn’t offer a true pip-for-pip trailing stop.
  7. The general belief that hedging was good for the trader.
  8. The general belief that our system of cost-averaging positions would not be embraced by the marketplace (this, by the way, is part of the reason that we are fine with the new FIFO rules).
  9. The general belief that we could hook up MetaTrader to a true ECN system.
  10. The general belief that we could meet the $20 million net cap requirement.
  11. The general belief that the end of hedging for US brokers using MetaTrader would render our MetaTrader useless.

These were all points that we have been attacked with over the last three years relentlessly. Every time, we have stated that we would resolve the issue ahead of any regulatory requirements. Every time, we have delivered.

So, now the latest notion is that the new FIFO will destroy MetaTrader and make it useless for US brokers. There is even a broker out there suggesting the US customers should move their funds out of country as the only solution to having a functional MetaTrader.

So, with my 1000th post, I’d like to say that the FIFO situation is being worked on both with MetaQuotes and internally with our system that handles the translation between Meta and the ECN, and we feel comfortable (sound familiar) that we will be able to deliver a working product that meets the FIFO requirement while still allowing EAs to work. In other words, you don’t have to move your money offshore to use MetaTrader…with a true ECN no less.

Thanks everyone for the conversations and here’s to the next 2 ½ years.

  • #3,698
  • Jun 30, 2009 9:39pm Jun 30, 2009 9:39pm
Quoting jleblang
Thanks everyone for the conversations and here’s to the next 2 ½ years.
Justin,

Even though you oddly ignored my last two inquiries, I'd like to congratulate you on your 1000th post.
  • #3,699
  • Jun 30, 2009 10:38pm Jun 30, 2009 10:38pm
Any ETA on MBT Nav Wireless? The website says its available... Your customer support says "no". Thanks!
  • #3,700
  • Jul 1, 2009 3:33am Jul 1, 2009 3:33am
Quoting IndyTrader
Again, there's nothing in what you have said that means anything specific about how MB Trading behaves. But it seems that Justin's answer was correct as a general response to what makes ECN trading better than desk trading (which was what had been asked, to start the conversation). You can't get around the fact that at some level, the desks have to be earning a living in numbers that you can't see, while MB Trading earns it in numbers that are disclosed. Does that mean every deal desk abuses this at the same level? No, but Justin didn't say that....
IndyTrader

Seeing as Justin doesn't mind us discussing it here......

What he said was:

"Fixed spread means that the broker is making money against your trades.
If you are making money, then at some point they will slip you and mess with you until you aren’t.
A spread-broker gets paid when you lose."

While that's true of some brokers it's a gross generalization and not true of every broker, that's what I was taking exception to, there are in fact some excellent marketmakers out there which offer a fair deal.

Brokers like MBTF say they make their money solely from commissions, plus they probably get a rebate on spread from their liquidity provider(s). It obviously pays otherwise they wouldn't be in business.

If ECN-style brokers like MBTF can be profitable from that business model then there's no reason to suggest a marketmaker can't be equally as profitable by building commission into the spread (padding spread) and calling themselves commission free. There's no justification for Justin to say what he said above, if you do the math obviously marketmakers don't need to rely on your losses to be profitable either.

Are brokers like MBTF just agents? No, it would seem not. Just like any other broker they're counterparty and initially take the other side of your trade and then offset it with another party. Nothing wrong with that. As their agreement clearly states, the price they offer may not be the best price available, they may get a better price than they gave you and they may undertake proprietary trading activities on their own behalf. Right, so no different than a marketmaker then, the only difference is that apparantly the price feed is not theirs but their liquidity provider(s). That's an obvious plus but don't forget marketmakers can't stray too far away from the underlying market otherwise they leave themselves open to arbitrageurs.

When you mention MBTF qualify under the NFA STP exception rule regarding price adjustments it might interest you to know that shops like Oanda also qualify under the same exception, as do a number of other marketmakers so it's hardly an NFA seal of approval and shouldn't be taken as such.

Don't get me wrong I'm not knocking brokers like MBTF but by the same token I don't think they should knock other brokers and marketmakers without justification and in such a general way. Like I said it's horses for courses and it's up to the individual trader who he trades with and where he thinks he'll get the best deal for his trading style, it's not one-size-fits-all.

There's a good thread about MM's and ECN's here in these forums: http://www.forexfactory.com/showthread.php?t=8046
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