Is MBT really an ECN ?

Is mbt really an ECN? if so then why the GBPUSD spread is at 1.9pips most of times??? This is unrealistic.

That means MBT take profit from commission and spread !!!

I check with FXPRO, it is market maker, and calculating between them MBT is more expensive! and mbt commission is 2.95 per side == 5.9 open and close of base currency, not us dollar, so if we trade GBPUSD when it is at 1.5000 then the commission is about USD $9 !!! That i think is too expensive considering the spread is not better than a Market Maker like FXPRO that dont have any slippage on stop loss unlike ECN.

Please correct if wrong

Yes.

Asalada,

I think commission is 2.95 per 1 standard lot (open and close), not for opening and closing both ways, which is about 0.3 pips. So if spread is 1.9 + 0.3 commission and your total cost is 2.2 pips. Spreads in general seem to better and varies on MB Trading. What you should test is execution as even though you might save .2 pips on some trades but will it always execute at the price you want. I haven't tired MB trading live, but with bucket shops you can loose a lot more with requotes.

$2.95 per $100k USD, each way.

They are not a real ECN......at least not in the sense that most people think an ECN means they are trading on the real market and not against their broker.

The common perception from retail traders is that by using an ECN they are trading on the real interbank market, and their broker is not taking the other side of the trade. However this is an extract from the MB trading written terms:

MB TRADING FUTURES (MBTF) AS COUNTERPARTY
THE FOREIGN CURRENCY TRADING YOU ARE ENTERING INTO IS NOT CONDUCTED ON AN EXCHANGE. MBTF IS ACTING AS A COUNTERPARTY IN THESE TRANSACTIONS AND, THEREFORE, ACTS AS THE BUYER WHEN YOU SELL AND THE SELLER WHEN YOU BUY. THE PRICES MBTF OFFERS MIGHT NOT BE THE BEST PRICES AVAILABLE.

When I spotted this I contacted one of their reps by email and asked them about this apparent contradiction compared to what they advertise on their site, and this was the email reply:

"As required by NFA regulation, MB Trading Futures (“MBTF”) must act as counterparty to all customer forex transactions."


So what does this mean for you? MB trading are taking the other side of your trade. If they can not pass that trade off within milliseconds to someone else, they will lose if you win, or win if you lose, and therefore just like all other retail brokers, they have a vested interest in seeing you lose. So they are certainly not what they would like you to think they are.

Thank you for clearing this up, so my conclusion is MBT is not real ECN and they still trade against trader.

What do you guys think about FXPRO?

I have some problems with requotes on FXPRO during fast market, but not news time, and my lack of discipline makes me wait for better price to get out, but then it happened, it goes against me more and more. I know this is my stupid mistake but that requote things that happen many times does make me loses much more than it should.

The only thing that attracts me to MBT is that it support Ninjatrader which i really like, but there is a big big problem connecting NT to MBT, when connection dropped, we have to Restart Ninjatrader which could take a minute to load all the stuffs, really ANNOYING, imagine we have positions to manage and we have to wait a minute to see it back online.

What a joke.

If you want a REAL ECN that is MT4, check out FX OPEN.

I started another thread but this answers one of my questions. Anyone have any similar issues with Interactive Brokers?

If thats true then I will probably go with Interactive Brokers. Does anyone know if they (IB) are a true ECN, or not a counterparty to trades?

Asalada,

Can you please identify for me what you think an ECN means exactly? Let’s start there.

In my opinion they're the worst ECN broker.

I've noticed price and spread manipulation all the time.

Looks like they don't get the real tight spreads from their LP or they have no interest in offering best spreads to the clients.

Justin,



How do you explain why the spreads are so stable ?

I tried out IB,Currenex, even AT from FXCM and those spreads vary a lot more > banks putting bids/offers and pulling them.

For example the EUR/USD spread is about 0.9 pips most of the time, when I watch the spread on IB , it varies constantly between 0.2 and 0.8 pips

I believe IB is not market maker and the spread is much much better than all other brokers. U need Ninjatrader for daytrading, and u need to know the 2.5$ minimum commission per side on fx, and that means u need to trade 1 full lot 100K so it will be a wonderful price.

But if u are a new guy, dont go to IB, u will regret it coz they dont have any support, u can wait for 1 hour till get someone online to help u.

Last time i applied with IB, the minimum deposit is 10K.

MB is ok. Sure there are ECNs with a little better bid/ask-spreads, but they don't accept 1000 unit orders or $400 accounts. You cant expect the same pricing like on ECNs with 20K+ min. balance and 100K minimum order. Nickelplayers always pay a bit more, same thing in stocks or futures(higher commissions for small traders) or everywhere else. IB charges more for small orders too, with there minimum ticket fee.

Flotsam,

Sorry buddy but what you are saying is completely inaccurate and has been covered many times on our thread. If you use our platform and place Limit orders, you can quickly see that what you are saying is not true. Anything you send is posted immediately, it isn’t held by us.

Where the confusion comes in (and the reason for the language in the account agreement) is that you don’t have a settlement agreement (and large deposit) with the liquidity providers in our system. In other words, in the stock market, you can open an account with your broker (let’s say us). You have an account. You are watching AAPL trade. You want to buy. There are multiple exchanges and market makers that make the price, which moves. You press the button to buy 1000 shares at the market. Our system looks and says, “Oh, XYZ firm is the lowest offer price right now” and routes your order to them. They sell the stock to “you.” You get the stock at that price in your account from an accounting perspective immediately. But what you don’t think about is, you didn’t buy from XYZ. You aren’t a registered broker/dealer. The actual transaction took place on your behalf between us and them, who are registered dealers. And over the next three days, we settle that transaction by sending them the money and receiving the stock behind the scenes. But the reality is that while you saw the price and hit a destination, the actual mechanics of the trade is that MB Trading bought 1000 shares of AAPL from XYZ, and we have a clearing arrangement with them through our clearing firms based on the fact that we are both licensed BDs.

In the FOREX world, we have many liquidity providers that can place quotes in our system. If they put up a quote and we route an order to them, they are expected to fill a certain amount at a minimum or the whole order. In order for us to do that, since FX doesn’t work the same way as stocks in terms of a centralized market, is that we have to create the relationships with these liquidity providers. That means putting a deposit with them. That means setting up secure networks with them. So just like in stocks, when you decide to buy the GBPUSD, we route to the best price at the time. Whoever that hits, you deserve to see your fill immediately, but again, make no mistake, YOU didn’t just buy from ABC liquidity provider because you don’t have a clearing arrangement and agreement with them that legally states that we pay each other daily at settlement based on the sum of our trading activity. We do that, as the FX broker. So while you see a price on the screen and you immediately know the price that you executed at into your account, the reality is that we have clearing relationships with these providers and we have account relationships with you. So from a technical and legal perspective, we are the counter-party to your trade. Now, if we didn’t give you the actual fill that you got from the street, then that wouldn’t make sense, just like in the stock world. But none of this means or suggests that we have a dealing desk who takes the other side of your trade and tries to profit from our customer trades.

In fact, if we did that (had a deal desk showing risk), we would have to hold a higher net capital under the latest NFA rules. They have verified that we are a true STP/ECN broker, and thus we don’t show regular risk of trading (beyond any errors).

Thanks for your thoughts though. I understand the need for due diligence. It is a common mistake that people assume when they read that language in the account agreement.

Cocoflanel,

Our spreads obviously do vary based on Limit orders from our customers. However, we have asked our key liquidity providers to try to maintain more stable spreads. A lot of these firms we have observed create an illusion of movement by flashing their quotes all over the board, and of course, where you get filled when they move around like that is really up to them. We also know that some of the firms showing tighter spreads typically don’t allow much size to trade at those prices or they do a lot of slipping and requotes. What we asked our closest providers to do is to try to maintain tight but fairly stable pricing. Now, of course, one firm can be the bid and one the offer, or we can have customer orders in there, so it does cause the spreads to vary. But, if you watch some of the pairs long enough, it is generally easy to see what the biggest liquidity provider’s spread is on the pair.

For example, someone above on this thread noted a common 1.9 pip GBPUSD spread. Yes, it does appear that one of our providers typically maintains a 1.9 pip spread that often ends up being our total spread unless another bank cuts under their ask or over their bid or another customer order slips in between. What this should tell you is that our MAXIMUM likely spread with solid liquidity is 1.9 pips. We don’t think that’s a bad number at all on the GBPUSD. And it is a big provider. But sometimes, the spread is even well under a pip. Now, you might find a broker that regularly shows 1.5 or 1.2, but it doesn’t matter if you can’t commonly get filled when you want to. And based on what we see from a variety of the biggest liquidity providers in the world, I can tell you definitively that you aren’t going to find a high quality provider with a lot of liquidity with a spread tighter than that.

One of the great tricks in Forex is that people want to try to measure spreads and then spreads and commissions and come up with “this is the best broker because this is the cheapest net cost when you include spread and commission.” Of course, none of that accounts for whether you can get filled. It may not matter much to someone trading a couple of minis who can always get filled, but believe me, the reason most of our larger customers use us is because they are sophisticated and fully understand the actually execution process and that there is a limit to what the market can provide. If we wanted to, we could easily show a 0.1 pip spread on everything but then when you go to buy, you get your first mini at that price and the rest a pip or two higher. Suddenly, we would have the tightest spreads in the industry, but to a big trader, we would be a joke. So the reality is that it isn’t at all about what you see in spreads. Our system is designed to provide solid liquidity from multiple providers with a high-speed routing system that gets your orders out there and executed in the best manner possible.

Isn't it refreshing to actually get good information from someone who knows their business....

MB trading, I really would like to trade with you guys but if you had higher leverage or at least hedging it would be excellent. Any plans to open any office outside USA?