DislikedHi Justin,
I have a couple of questions regarding your last post, and another question on a separate topic.
What is the extra step involved in order execution that you mentioned?
And, can you give an example of when it wouldn't be necessary to route an order to 3DForex?
Also, how is the NFA FIFO rule going to affect the order placement structure on the MT4 platform at MB Trading?
I've been reading that the new rule not only affects straddled orders, but also limit and stop loss orders with other US based brokers.
Is this true?
Thanks for...Ignored
“What is the extra step involved in order execution?”
It’s exactly what I said. Technically your order goes from us to 3DFOREX to the banks/liquidity providers. But it’s not relevant to your fill or anything else, so generally I just say “you orders route through the ECN to the banks.” That’s you to us to ECN to liquidity, is my only point, if you are trying to get a 100% full assessment.
“Can you give an example of when it wouldn’t be necessary to route an order to 3DForex?”
Only thing I could imagine would be if a second ECN comes around someday, and MB Trading decides to route to both. Other than that, no, it’s the only option because the ECN is what provides all of the liquidity and order handling. In other words, in stocks, there was ISLD and ARCA, and we routed to either. So if there was 3DFOREX and something else, then maybe we would use both, but that doesn’t exist today.
“NFA FIFO”…all I can say right now is the same thing that I said in post 3697, which is that at this time, we are comfortable that we have a solution to the FIFO accounting rules for BOTH Navigator (which is already fine) and MT4 (which is being worked on now).
And yes, you have been reading correctly about the other brokers. However, we have ALWAYS averaged entries into one position instead of keeping separate positions, so FIFO does not affect us in Navigator.
In other words, the issue is that when you separate trades into the old school deal desk concept of “deals,” so you buy 10 EURUSD at 1.3050 and then buy 10 more separately at 1.3060. If you keep those separate, then under FIFO accounting, you must close 1.3050 entry before you close 1.3060. Thus, if someone had a stop on the 1.3060 position and it hit before something closed out the 1.3050 position, then they have created a problem under FIFO accounting. However, on Navigator, we have always blended the trades, so you end up with one position of 20 lots at 1.3055. Therefore, there only is one “in” and you can sell any piece of it that you want and still be in Compliance with FIFO. So our entire Navigator platform is already protected from the new FIFO rules. You can use it exactly the way that you always have. When it comes to MetaTrader, I think you’re about to discover that even some of the firms that claimed that they were ECNs using MetaTrader really weren’t, because they would be able to do the same we are if that were the case. But you’ll need to wait a couple of weeks for that.
Keep the questions coming.
