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Large lot trading broker?

  • #1
  • First Post: Jan 18, 2010 10:08am Jan 18, 2010 10:08am
Hi

I have some questions about trading large lots in Forex. I have been trading GBPUSD and EURUSD scalping successfully for a while now and have been approached to manage a large fund by a group of private investors.
I usually scalp 5-10pips about 7-10 times a day, with about 3 in 4 winners. My questions are as follows:

1) I currently trade from IB and have not had any issues trading 10-20 lots at a time for scalping. Will there be any issues trading 200-300lots, (20-30 million) such as fills, etc?

2) Will IB have issues with scalping large lots several times a day?

3) Are there any specialized brokers I should be looking at with enough liquidity that 20-30 lots are not a problem to fill regularly?

4) In general, are there traders who scalp these large amounts on Forex and have they run into issues before?

Any advice and/or comments would be much appreciated.
  • #2
  • Jan 18, 2010 10:31am Jan 18, 2010 10:31am
Yes, IB (assuming Interactive Brokers and not InterbankFX) will have a problem with 20 mil trades, since IB sets a maximum ordersize of 5 mil in eur/usd and 4 mil in gbp/usd.

If you trade that big, its almost certain that you wont be filled at the best bid/offer, but get partials a lot. Use a frontend that has capability to display quotes/depth in VWAP (like currenex or hotspot tradeview). This way you can see the spread cost right away (you can assume 1 to 2 pips more in spread for 20 mil in eur/usd - compared to top-of-the-book quotes).
  • #3
  • Last Post: Jan 18, 2010 3:17pm Jan 18, 2010 3:17pm
1) EURUSD not much of a problem at that size for directional trades, but for scalping you will be better off at about half that size. GBPUSD is a bigger problem, and you probably can't get the size and price you want.

2) No.

3) EBS for EURUSD will fill better than IB, but with 1-pip spreads, while IB can be better than that. Reuters with GBPUSD is not actually as good as IB.

4) Liquidity, as always, is the biggest problem. IB is a great place to start, but you may need to branch out to other venues.

Don't worry about IB's maximum order size. Simply enter multiple orders, it's not a problem.
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