Why would an ECN-broker be stophunting? | Forex Factory

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Why would an ECN-broker be stophunting?

  • #1
  • First Post: Aug 31, 2011 5:48pm Aug 31, 2011 5:48pm
Hi,

I recently opened an ECN-account with FinFX and as I was studying todays charts I came accross what looks like as stophunting-spike (see attached picture, FinFX(MT4, GMT+7) is an hour ahead of Plus500(own software, GMT+6)).

Its on the GBP/USD 5 min chart.

I cross-checked with a demo account I have with Plus500 and also against a free online chart, both had no spikes.

Why would an ECN-broker be stophunting like this? Or is it something entirely different that is going on?

Please help me understand.

Kind regards.
Attached Image (click to enlarge)
Click to Enlarge Name: finfxstophunting.jpg Size: 109 KB
  • #2
  • Aug 31, 2011 5:58pm Aug 31, 2011 5:58pm
FinFX is a bucket shop. As such, they can basically manipulate their feed any way they like. Being located in Finland (if they really are, even) provides absolutely no added protection from nefarious bucketshop-type practices.
To improve is to change. To perfect, is to change often.
  • #3
  • Aug 31, 2011 6:03pm Aug 31, 2011 6:03pm
It was the only ECN-broker I could find that:
Allows $2.000 startup account
Low commission
Low Spread
MT4 platform (Dukascopy has a very tricky 3rd party bridge which had me flee)

What else is there?
  • #4
  • Aug 31, 2011 6:09pm Aug 31, 2011 6:09pm
You have to understand that a broker can say ANYTHING, especially when they are located in a country that offers no consumer protections. Finland is such a place. Finland is no different than Russia, and if you look on the map they are neighbors. It wouldn't surprise me at all to learn one day that FinFX actually had Russian owners that were taking advantage of an open-borders loophole of some kind. So just because they say they are an ECN broker means squat. Less than squat.
To improve is to change. To perfect, is to change often.
  • #5
  • Aug 31, 2011 6:11pm Aug 31, 2011 6:11pm
Not 100% sure on this but if that is so, then they are definitely not a true ECN, if they are touting that they are in fact a ECN, again have not really checked them out enough, but am going to. Think of it this way, if the retail trader starts becoming more successful and they are taking the opposing side of your trade, the broker would start loosing money and if they are a bucketshop then they will do everything they can to eliminate or trash your positions or better yet deploy the VDP(Virtual Dealer Plugin). Most brokers are not around for us to make money and they other small percent are true ECNs. The larger percent of so called ECNs and Market Makers want the trader to loose and most the time they do, so that is why you see so many of them, if they are truly stop hunting then it's just a small part of what they are really doing, expect freezes and requotes and slippage. You may have to manually trade without a SL, not the best scenario as it puts the traders emotions back into the equation. Though it's your money and they want you to part with it, their tactics say that very thing.
It's easy to be humbled but hard to be humble.
  • #6
  • Aug 31, 2011 6:15pm Aug 31, 2011 6:15pm
Great, 2 weeks of research and I still end up with a bucketshop... just wow!

So, are there any kind of list or index of real ECN-brokers?
This way I can visit their website and see if they have an account-size, commission- and spred-size and software that fits me.

I thought I had done my homework, but clearly not.

Please help.
  • #7
  • Aug 31, 2011 6:24pm Aug 31, 2011 6:24pm
What happens if you sign out and then back online later?

Spikes are sometimes nothing nefarious, just aberrant data that gets cleaned up in due time.
  • #8
  • Aug 31, 2011 6:31pm Aug 31, 2011 6:31pm
try dukascopy they are true ECN apparently http://www.dukascopy.com

min acc. bal is now $1000

min lot size 0.1
  • #9
  • Sep 1, 2011 2:56am Sep 1, 2011 2:56am
Quoting Skovjuul
Great, 2 weeks of research and I still end up with a bucketshop... just wow!

So, are there any kind of list or index of real ECN-brokers?
This way I can visit their website and see if they have an account-size, commission- and spred-size and software that fits me.

I thought I had done my homework, but clearly not.

Please help.


Well, prob is to know if they are --REAL-- ECN-brokers,
but maybe this list can help you to make your research.

http://www.100forexbrokers.com/stp-ecn-brokers

BTW my favourite is MB-trading
  • #10
  • Sep 1, 2011 3:14am Sep 1, 2011 3:14am
Its easy to find various user-made lists of brokers but the problem with those lists are that they still have a lot of brokers on, that you should probably avoid (as in this tread: http://www.forexfactory.com/showthread.php?t=299780)

Dukascopy was my also my choice, but to use MT4 I would have to use their 3rd party bridge. Its a hassle to set-up and if you read the agreements to use it, it states somewhere that you can expect it to be slower that regular trading (by 1-2 seconds - which can be a lot).

I should probably just try their own software a little bit more, but its hard trading with software you don't like / feel comfortable with.
  • #11
  • Sep 1, 2011 3:21am Sep 1, 2011 3:21am
Quoting Skovjuul
Great, 2 weeks of research and I still end up with a bucketshop... just wow!

So, are there any kind of list or index of real ECN-brokers?
This way I can visit their website and see if they have an account-size, commission- and spred-size and software that fits me.

I thought I had done my homework, but clearly not.

Please help.

I have been on the case of Finfx for quite a while now, there is a thread running on the subject.

Why would you pick an unregistered, unregulated broker in a jurisdiction with no financial controls that accepts US clients against the law.

I am not surprised to find that they manipulate the price to hunt your stops, do you really think they are an ECN? Really?

Why pick a broker like this is beyond me, you need to do more homework.

Make sure the next one has at least 100Mn in capital and is regulated by one of the big regulators, either US/UK and stay away from dodgy jurisdictions such as Finland, Russia, Cyprus.


Here is what I wrote on that particular thread:

Quoting cloggie
All joking aside.

All joking aside. Picking a broker is not easy, and most retail traders only spend a few minutes picking one, mostly based on glossy advertising or 1000:1 leverage.

Do your due dilligence, this link is a good start:

http://www.cftc.gov/ucm/groups/publi...cmdata0611.pdf

If the broker you are thinking about does not list its capital with the CFTC, would you really want to deposit your funds with them? Check with the local regulator at least for their capital requirement reports.

Next step is to make sure your broker is properly regulated, and I mean with one of the big regulators, not some dodgy one on a Caribbean island somewhere.

The next step is calling that regulator to make sure they have a good record. Check each and every action against them.

The next step is finding out the liquidity providers, do your due dilligence on them, at least call them and check their record with the regulators.

The next step is checking on the corporate side of the business, get a credit report about them from one of the big leading credit agencies.

The next step is calling or visiting them and talk to them.

The next step is opening a small live account and see if your trading style suits their platform/liquidity/spreads etc.


Do your due dilligence or else live with the consequences, just don't come here complaining on these forums about some dodgy broker, if you had gone about your business the right way, you wouldn't be with a dodgy broker in the first place.

Are the big regulated brokers perfect? Of course not, you will have problems with them, at least you have somewhere to go if you can't get it resolved and a broker with a 100 Mn in capital is not going to run of with your 500 bucks.
  • #12
  • Sep 1, 2011 3:54am Sep 1, 2011 3:54am
Thank you for that. I thought I had checked and read everything I could on those guys (between them and Dukas based on reviews, recommendations etc found here and on FPA).


Even the list from CFTC contains "problem" brokers based on the comments and threads on this site (alpari, oanda, fxcm) so what can you do?


FinFX is listed on http://www.integral.com/partners/truefx_brokers.htm which lead me to believe it is a valid broker.


What if I don't want a US based broker? Where to look then?


There arent a lot of ECN-brokers allowing:
small account ($2.500/€2.000)
Hedging (no fifo)
scalping
spread <1 pip on eur/usd
commission less than $4/lot pr. trade
MT4-platform



This is why I didnt end up with Dukascopy (from their userguide of the 3rd party MT4-bridge):
From ver. 1.7 the new checkbox - "Execute only by MetaTrader Approve" was added. By default the bridge sends trading signals to JForex directly by MQL strategy request. With this option, the signals will be sent only after MT4 server approval. In that case the speed of signals transfer will be reduced due to delay for MT4 server approve.
Comment: For the orders transferred from MT4 to JForex, rounding of prices till 1 pip is applied.
  • #13
  • Sep 1, 2011 4:02am Sep 1, 2011 4:02am
Quoting Skovjuul
Thank you for that. I thought I had checked and read everything I could on those guys (between them and Dukas based on reviews, recommendations etc found here and on FPA).


Even the list from CFTC contains "problem" brokers based on the comments and threads on this site (alpari, oanda, fxcm) so what can you do?

All of the big brokers will have issues, guaranteed, however you will get them resolved one way or the other, if not you always have the regulator to fall back on.

At least a well capitalised broker is not going to run of with your 2 grand.

Quoting Skovjuul
FinFX is listed on http://www.integral.com/partners/truefx_brokers.htm which lead me to believe it is a valid broker.
That is just a commercial site recomending cr@p as a white label. Useless.

Quoting Skovjuul
What if I don't want a US based broker? Where to look then?

UK/Switzerland

Quoting Skovjuul

There arent a lot of ECN-brokers allowing:
small account ($2.500/€2.000)
Hedging (no fifo)
scalping
spread <1 pip on eur/usd
commission less than $4/lot pr. trade
MT4-platform
Just do more research.

Quoting Skovjuul
This is why I didnt end up with Dukascopy (from their userguide of the 3rd party MT4-bridge):
From ver. 1.7 the new checkbox - "Execute only by MetaTrader Approve" was added. By default the bridge sends trading signals to JForex directly by MQL strategy request. With this option, the signals will be sent only after MT4 server approval. In that case the speed of signals transfer will be reduced due to delay for MT4 server approve.
[size=2]Comment: For the orders transferred from MT4 to JForex, [b]rounding of prices till...

MT4 is cr@p with each and every broker, the latency will kill any scalping strategy eventually, stay away from MT4, it looks nice for the noobies with loads of bells and whistles, by all means keep it for your charting, just use another platform for execution.
  • #14
  • Sep 1, 2011 4:19am Sep 1, 2011 4:19am
I'm more of a naked trader so don't need the bells and whistles. I just like the layout and the quick on-graph trading, which I have not found anywhere else.

But will keep looking. Hopefully I can find something to my liking at some point.
  • #15
  • Sep 1, 2011 4:28am Sep 1, 2011 4:28am
Quoting Skovjuul
I'm more of a naked trader so don't need the bells and whistles. I just like the layout and the quick on-graph trading, which I have not found anywhere else.

But will keep looking. Hopefully I can find something to my liking at some point.

Start a little spreadsheet, put your requirements on and rate the UK/Swiss brokers to your standards, one will float to the top eventually for you. Just ignore each and every broker that is not regulated or does not have at least 100Mn in capital. Most traders spend months and years working on their strategy and spend all of 10 minutes on picking their broker.
  • #16
  • Sep 1, 2011 6:48am Sep 1, 2011 6:48am
the job of a " marketmaker / bank trader " is to trap the retail trader.

they jam you up at the low and high of the day.

they run spikes into the game to show false breakout direction in order to get you to push the buy or sell button and blow your wad.

if you think your trade is being matched up with some other trader in San fran. or Cleveland ......

think again.

to move the price you need to trade 5 to 10,000 cars at a time.

these guys control the game, not you with a 1, 10 or 100 lot order.

" break out traders " will get blown away as the market retraces and the zone is shifted.

this is retail mentality.

you want to win..........?

then stop worrying about comparing broker's data and ECN and all that other crap.

start thinking like a bank trader.

cheers,

Shop
  • #17
  • Edited 11:35am Sep 1, 2011 7:09am | Edited 11:35am
I've recently signed up with MB Trading and seen this as well. Attached are screenshots of AUD/CAD and ILS/USD on the daily charts, but I've seen this with AUD/NZD, GBP/AUD, NZD/CAD, DKK/USD, EUR/SEK, EUR/NOK, EUR/NZD, USD/SEK and USD/MXN charts also.

MB users want to comment?

(edit: Edited pics to remove account number)
Attached Image(s) (click to enlarge)
Click to Enlarge Name: mb spike2.png Size: 25 KB
Click to Enlarge Name: mbtrading spikes.png Size: 61 KB
  • #18
  • Sep 1, 2011 7:47am Sep 1, 2011 7:47am
Quoting grimReaper
I've recently signed up with MB Trading and seen this as well. Attached are screenshots of AUD/CAD and ILS/USD on the daily charts, but I've seen this with AUD/NZD, GBP/AUD, NZD/CAD, DKK/USD, EUR/SEK, EUR/NOK, EUR/NZD, USD/SEK and USD/MXN charts also.

MB users want to comment?
for me the spike has nothing to do with stop hunting. Is just a normal spike caused by lack of liquidity in that pair , so the first bid or ask which is sometimes far away becomes the first price , from this the spike.
This is happening very frequently on ecn type of broker ( like mbt) and for me is a true sign of ecn. Having said so : 1 i know nothing about finifx 2 i am not sure what will happen to your stop if you have position open,as the price return to normal very fast. ( i never traded with mbt)
if somebody has some info on N2 please share . thanks
  • #19
  • Sep 1, 2011 8:12am Sep 1, 2011 8:12am
Quoting Rfbfx
for me the spike has nothing to do with stop hunting. Is just a normal spike caused by lack of liquidity in that pair , so the first bid or ask which is sometimes far away becomes the first price , from this the spike.
This is happening very frequently on ecn type of broker ( like mbt) and for me is a true sign of ecn. Having said so : 1 i know nothing about finifx 2 i am not sure what will happen to your stop if you have position open,as the price return to normal very fast. ( i never traded with mbt)
if somebody has some info on N2 please share...
That was my first impression, but I'm still unsure about that. For that to be true, that means practically all of the buyers removed their bids, and that doesn't sound like a multi-bank ECN. Even when trading shuts down at 17:00est, the bids that were placed before shutdown automatically become live once trading resumes.
  • #20
  • Sep 1, 2011 8:13am Sep 1, 2011 8:13am
" the spike has nothing to do with stop hunting. Is just a normal spike caused by lack of liquidity in that pair ............."

this is a retail metality.

the spike is a reset, to clear the board, run the long or short stops.
blow you out.

the marketmaker knows your equity , your % margin used and can see your stops

once they accumulate in the market they run them

they also run a dashboard program by the minute and see it all.
where does a retail trader put his stops.
10 to 25 pips away.

you don't think these guys know that.....?

give your head a shake.

there is no lack of liquidity in any pair, ever.

s
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