MB Trading Futures - Introduction

US based brokers are prohibited from allowing opposing positions in the same account per regulation. It doesn't matter what MBT should or should not do. They legally can't even if they really really wanted it. (Merits of hedging are a separate topic).
Open a second account and hedge your heart out.

That is exactly what i mean if MBT want to open their branch at london or somewhere else why people keeps bothering others who hedge (by asking why we need to hedge etc)

all i hope is MBT would open someplace which allow 100:1 leverage and hedgeable so i could put my heart in it

MBT Chat rep told me that pattern day trader rules dont apply to Forex IRA accounts. He also told me that you can short Forex in a Forex IRA account. Is this accurate with MBT and all other brokers?

It's not the same thing.

here are many advantages with hedging,
one of them is because you can eliminate the spread,
if you enter 2 positions in both directions simultanious,
then wait for the movement to begin, and then close the unfavorable position, there is no gap before you can start making money,
meaning the spread is eliminated,
I know many are using this trick with fib retracements,

another thing is if you have a large position and you think that
it will go up over the long term, but you worry about the short term volatility, and that it will temporary go down,
so you could protect your self by hedging and then remove the hedge
when the market stability is back.

another thing would be if you are sure the market will make a big spike in price, but you dont know the direction, then you could enter both directions and let the stoploss execute on the loosing direction,

you could enter one long, and when the price temporary moves down you could go short each time, this will prevent you from loosing money when the market goes down, even if it is a up trend,

Im not saying this is something you should do, Im just saying what it can be used for, Im sure there are more thing you can use hedging for

You are joking right? You will NEVER eliminate spread no matter how hard you try.

I don't know abut eliminating the spread. It sounds a bit fishy to me, but maybe its possible.

But all the others can be done just as well without hedging.

1) If you are worried about volatility, you can close your trade, which isolates your position against any short term volatility, and then re-open the trade when the market stabilizes.

2) If you know the market is going to spike, but not sure which way, you can put on two pending orders in opposite directions and have one close when the other opens. (Or you can do the same sort of thing with an EA in MT4).

3) If you are long and you know price is going down, you could close your position, or part of it, for those periods, and re-open when its going back up.

It's possible to do all of these things with hedging. It's also possible to do it by simply adjusting your position. The only real differences between the two will come from the transaction costs involved. It's a matter of how much you will end up paying in spread, commission, and swap.

As I understand it, the reason the U.S. regs were put into place was to prevent brokers from overcharging customers on fees when the customers hedged. Take a simple case: a person opens a single lot long, and the trade starts to move against him. So he hedges the position with a single lot short. Then after a time, he gets fed up and closes both at the same time. Looking at this from the standpoint of position only, there was a trade opened and then closed. So the customer should be charged for one round trip. But brokers were charging for two round trips on exactly this sort of transaction, and that's what the regs are designed to prevent.

The problem most traders have here is that MT4 can't handle balancing positions. So, it won't let you adjust your position isn a long trade by simply selling part of it. This has become an issue for me recently, mostly because of MBTs new limit order policy. I would dearly love to be able to take partial take profit on a limit order, but there is no way to do that with MT4.

Justin please read.

Anyone else get latency during NFP? I had a stop market take 49 seconds from the time it triggered (was received by MBT) to the time it filled. This resulted in a minor slippage of 10 pips.

I'm not concerned with the slippage. I'm concerned with the latency.

From the information I have gleaned from MBT, this is due to the way STP works. From my viewpoint, its also due to the lack of liquidity on the ECN, and the way MBT routes orders to STP.

Here is what happens:

1. sell stop market order gets triggered for EUR/USD
2. MBT checks for best price, ECN or STP, best price is on STP provided by ABCbank
3. MBT routes my order ABCbank as a limit order
4. ABCbank has lowered their quote a little and so limit order is not executed
5. MBT repeats steps 2-4 until filled.

In a fast moving market, this means latency. My market order took 49 seconds because it went through the above steps so many times.

You might say that I should place a stop limit order instead. But regardless of the type of order i place, MBT routes all STP orders as limit at the best price available. So it is this checking for the best price and trying to hit that best price that is taking so long.

Lets talk about solutions.

I have a suggestion. Give the customers an option to get slipped if step 5 is reached more than X number of times. I was told these steps happen in milliseconds. If that is correct, my order went thru to step 5 possibly over 100 times in 49 seconds.

I would like the option that if my order goes to step 5 more than 3 times, that I can set the slippage to 3 pips.

What this means is that MBT can now route my order to the best quote as a limit order 3 pips below the quote received.

This ignores the possibility that there may be better quotes on the STP or ECN below the best quote but above the 3 pip slippage mark. But since MBT is failing to hit these quotes due to fast moving market, hitting the best quote with a limit that allows for slippage would make it so that my order executes in less than 5 seconds even when the market is volatile.

This eliminates the need for MBT to get a requote from the STP provider.

If the best quote doesn't fill with 3 pips slippage, then look for the next best quote and place order with 3 pip slippage. Also, always give preference to the ECN, since we know the depth and execution speed is most likely faster.

//edit The more trades executed on the ECN, the more likely the ECN will increase in liquidity. So this implementation can be used to make the ECN better for all parties. Right now its not often that the ECN orders fill against ECN. But if you give us the transparency to choose the ECN or the STP, we will often choose the ECN due to there being no requotes. This benefits MBT immensely. //end edit

This should be implimented with transparency and user input settings. The customer should be made aware of the process if an order was executed in this fashion via the OrderBook (desktop pro).

In general, it would be good if customers could see how many iterations of the above process their order goes thru before it is executed. This would provide transparency and i'm sure it would lead to improvements and perhaps implementations such as the one I have suggested to increase execution speed in volatile markets.

Nobody likes latency because latency results in slippage. I know its not due to slow servers, but I beleive the latency is due to an inefective process for finding the best price in very volatile markets. It is in MBT's best interest to provide a solution if a solution is possible.

Justin, if you could comment on this issue I would appreciate it. You know more about what goes on behind the scenes than we do. Also if you think my solution could be implemented please forward it to the appropriate department.

I decided to make a follow up post about the ECN.

MBT should really let users decide where to execute their orders. This is what made stock market ECN's so popular, they give you the option.

Give us options such as:

Best price (STP/ECN)
Best price ECN

If you give users this option, MBT's ECN will be the best place to trade during volatile times and this will add to the ECN's overall liquidity.

For this to work you will have to give us a seperate identity for ECN orders vs STP.

IMO, until you do this, the ECN will always lack liquidity because there is no advantage!!!!! Let us bypass STP if we want.

Let us have order types that fill or kill on STP and then go to ECN with x ammount of slippage.

You guys are way underselling the ECN by keeping the traders seperated. You are putting STP quotes which are not directly executable directly in our way!!!!!!!!

Wondering if MB uses the same mechanic for marketable limits, or if they would execute faster in this scenario. A market/stop order taking a minute to fill is not really acceptable anyways. Continously trying to send FOK orders to LPs appears just not to be a reliable solution in fast market conditions.

http://www.forexfactory.com/showpost...postcount=7006

Here we are again.....off line....on line....off line.....on.....off...

Yep.... EA is trying to close two positions and going crazy banging its head on their server.... POS right now, they are....

Wow, so let me get this straight. You no longer use the broker, you have no interest in the broker, but you stay up at night watching their time and sales and looking for lots that execute on the ECN for size so small that it doesn't even register (versus all of the other prints that were for hundreds of lots and stuff.

You are, and there just is no other way to say it, a hoot. And I mean that in the Boston Legal sense of the word.

it think its ok to do so.afterall everyone is constantly looking for a better and reliable broker,is that not alright?

That guy is in denial, it is not worth responding to him, it is a waste of keystrokes. LOL.

Sure, what is his point? That they had a customer put up size less than the minimum you would see on a Time and Sales and get filled, so the system registered him as zero? Is that problem, that even the smallest size imaginable can adjust the price and get filled? He puts it up like it is a problem...what is the point? That all people, no matter how small their account, are treated equally and can get filled on the MB system?

Hi Chip4Pips,

Just hopped on to take a look before I headed to bed and saw your post so I checked in with my trade desk. Don’t see that there was any significant issue tonight, charts aren’t missing any data, trading never went down, and trade desk never got on a wait, so if you are having any issues, I assume you are calling the trade desk to have them assist with those two orders? When you have a problem, please don’t assume that it is global and just put a post on FF, this isn’t a support forum. None of our support people read this. Please make sure that if you want to close a trade and something happens, you call the desk immediately. Unless I missed something, I don’t see that there’s an issue right now. If you are still having any issues…contact them immediately and they can resolve immediately. It is possible that your order got stuck out to a bank, in which case, it will never get resolved until the trade desk sees it or you point it out.

Thanks

Justin,

It's true that you have start a partnership with multicharts? If it's true may have same more info?

thanks

they never have they have always been FIFO if you were long, and placed a short it would close your long.