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  • #321
  • Feb 27, 2012 12:07am Feb 27, 2012 12:07am
I still don't have one generic point clear. Let's say I place a market order of just 1000 units of base currency (that's minimum allowed in pepperstone, i.e. microlot), I get "good" execution and I get very happy.

Who filled this peanut order ? Who is the counter party? I don't see Liquidity Provider's directly handling these peanuts. So obviously some kind of aggregation is happening. I want to ask this "aggregation" is happening where and for a micro size order, how is STP broker different from a market maker?

So, during the time interval between a microlot trader's oder "execution" and the aggregated order actually reaching the LP, there is a vulnerability to manipulation even in STP model isn't it? I am talking ONLY about micro sized order.

Put in other words, as far as microlots are concerned, what is the difference between MM and STP model.

I have asked this question to Pepperstone email support and I am waiting for a reply. Will post here what they reply, if they do. I am looking for a trader reply here.
Not trend, but imbalance is my friend
  • #322
  • Edited 1:13am Feb 27, 2012 12:55am | Edited 1:13am
Quoting pbanerjee
I still don't have one generic point clear. Let's say I place a market order of just 1000 units of base currency (that's minimum allowed in pepperstone, i.e. microlot), I get "good" execution and I get very happy.

Who filled this peanut order ? Who is the counter party? I don't see Liquidity Provider's directly handling these peanuts. So obviously some kind of aggregation is happening. I want to ask this "aggregation" is happening where and for a micro size order, how is STP broker different from a market maker?

So, during the...
Err... from what I understand, the orders are routed straight to their liquidity providers across Integral's ECN grid. Integral having a facility for the 1k lot sizes. Since the quote itself is fed from Integral, it can't exactly be messed with... but please do post the email you get in return from Pepperstone.

I think you're misunderstand how an STP works. They aren't waiting for enough pending orders to submit a basket.. they are passing through all orders and can't claim to be an STP if they do anything to it in the meantime.

I'll give a good example, long ago when FXCM started their microlot division, FXCM's standard accounts couldn't do microlots. FXCM Micro opened up separately to use their existing LPs but staged the orders and submitted them as a basket once sufficient orders were built up. (So FXCM was taking the other side of the trade first, then hedging it once they had a large enough net balance on their books to be able to submit an order to their LPs.) In order to do this, they made it very clear that FXCM Micro was a market maker (they didn't hide this at the time,) and in turn they even has artificially lowered spreads to attract new clients... Since experienced traders wanted to take advantage of the lower spread, and FXCM didn't want to be holding huge amounts of unhedged risk on their books, they set a limit of $5k max deposits on all Micro accounts, forcing larger accounts to move to their standard service.

(Fast forward to about 3 years ago) FXCM later switched to the STP model once their major banks started to accept micro lot orders (most major LPs have opened up to accepting microlots or have a facility for accepting small lot orders, which is to say they take on the small lot order risk til they themselves can bundle it and hedge it) Once FXCM switched, and it became easy to route micro lot orders to their LPs, the reason for FXCM Micro's existence kinda faded... they removed the deposit cap, and upped the spreads to match their standard service. The only real difference these days is a lower initial deposit coupled with email support only (no live chat, no phone calls)...


TL;DR: An STP can't basket your order and must be a 'straight through' process. They are able to markup the spread if that's how they want to account for their fee. Once your order has been confirmed, that's it, you got filled. If whoever filled your order (LPs across Integral's ECN grid) is holding risk because of it, that's the LP's problem. FXCM is a good example of where a market maker who used to basket orders together ditched that model and went STP since most LP/banks now take microlots orders or at least have a way to handle small lots while being able to confirm the fill at the quoted price.

And as I said, please post the reply you get from Pepperstone. There might be something specific about how they handle this that's beyond the conventional STP model.
FXGears.com
  • #323
  • Feb 27, 2012 2:11am Feb 27, 2012 2:11am
Thanks Jack, for the quick post. Sure I will post when Pepperstone replies. They haven't yet.

I knew that all STP orders are "picked" up from a common grid by LP's. I knew that brokers route our orders "straight through" to that grid. My doubt was if a solitary micro order could even be visible by itself to LP's; forget about being directly filled by them.

Your post actually nullifies the whole basis of my doubt. Most LP's these days are able to handle microlots directly. So there is no need for a basket or bucket anymore. FXCM's example is a great case in point. That sounds logical really.

Do you have any idea why today's reputed market makers don't even plan to go STP despite MM's being considered villain's cousin for a couple of years now?

Also, if you were to "investigate" the claims of a broker to be true STP, what are the pointers that you would look for, as a trader?
Not trend, but imbalance is my friend
  • #324
  • Feb 27, 2012 2:27am Feb 27, 2012 2:27am
Quoting pbanerjee
Do you have any idea why today's reputed market makers don't even plan to go STP despite MM's being considered villain's cousin for a couple of years now?

Also, if you were to "investigate" the claims of a broker to be true STP, what are the pointers that you would look for, as a trader?
I'm going to be honest.. I'm really tired of the 'evil broker' witch hunt. A lot of this fear is born out of misunderstanding and people looking for reasons to blame others for their trading losses.

I just vented in another tread about this: but when it comes to execution models, being a market maker doesn't make the broker 'evil'. Not at all.

Sure, being a market maker means the broker has additional ways of being evil, but an evil broker can be an STP/ECN all the same.

A good example would be Oanda, they are a market maker and are far from evil. They have no plans on becoming an STP.

Let me let you in on a secret.. the LPs are often market makers... the banks dealing in quotes to some LP and direct to brokers are often market makers. They create the quoted market and hedge their risk (or expose themselves) all depending on what they consider to be within their risk tolerance.
FXGears.com
  • #325
  • Feb 27, 2012 2:39am Feb 27, 2012 2:39am
Quoting Jack_Larkin
I'm going to be honest.. I'm really tired of the 'evil broker' witch hunt. A lot of this fear is born out of misunderstanding and people looking for reasons to blame others for their trading losses.


Let me let you in on a secret.. the LPs are often market makers... the banks dealing in quotes to some LP and direct to brokers are often market makers. They create the quoted market and hedge their risk (or expose themselves) all depending on what they consider to be within their risk tolerance.
Exactly.

LP's fight for retail order flow because the retail trader will blow themselves up without the need for 'alleged' dirty games.
  • #326
  • Feb 27, 2012 4:54am Feb 27, 2012 4:54am
Quoting Jack_Larkin
the banks dealing in quotes to some LP and direct to brokers are often market makers.
At the end of the day, broker's "fairness" really depends upon their belief in good karma. I agree with you that a broker need not be MM if it wants to scalp the trader. Choosing STP/ECN broker doesn't save us from foul intent. To think we are enforcing fair play on the broker because they are STP, is a self fulfilling prophecy.
Not trend, but imbalance is my friend
  • #327
  • Feb 28, 2012 10:51am Feb 28, 2012 10:51am
I must say again that "Live chat" is very quick to respond. Was logged out again while i was in a trade and they answered right away. Nice.

Only one disconection today. Not bad.

Cheers,

Ramy
Fuck Forex Factory.Wake up people.
  • #328
  • Feb 28, 2012 11:21am Feb 28, 2012 11:21am
Quoting Jack_Larkin
And as I said, please post the reply you get from Pepperstone. There might be something specific about how they handle this that's beyond the conventional STP model.
It has been two days since I asked Pepperstone email support a question about how they handle STP routing of micro lots and no reply yet. Today I decided and funded my Oanda UK account as FSA regulation would give the best POSSIBLE client investment protection anywhere, anytime.

I will fund my Pepperstone live acct in near future though. By any chance if Pepperstone replies to my question in the email, will post here.
Not trend, but imbalance is my friend
  • #329
  • Edited 2:29pm Feb 28, 2012 1:16pm | Edited 2:29pm
Quoting pbanerjee
It has been two days since I asked Pepperstone email support a question
Took a week to answer my claim plus 3 days to rectify my trade, via email. But they did it. I tought they where ignoring me at one point, lol. They told me that they where pretty overloaded with emails.
Fuck Forex Factory.Wake up people.
  • #330
  • Feb 28, 2012 2:11pm Feb 28, 2012 2:11pm
Quoting pbanerjee
It has been two days since I asked Pepperstone email support a question about how they handle STP routing of micro lots and no reply yet. Today I decided and funded my Oanda UK account as FSA regulation would give the best POSSIBLE client investment protection anywhere, anytime.

I will fund my Pepperstone live acct in near future though. By any chance if Pepperstone replies to my question in the email, will post here.
Micro Lots are nothing special. Even Dukascopy who is a ECN takes micro Lots. At MB Trading you also can trade Microlots. There are banks who take Microlots, altough they don't like it.
Forex is a losers game.
  • #331
  • Feb 28, 2012 10:59pm Feb 28, 2012 10:59pm
Quoting trader121
Micro Lots are nothing special. Even Dukascopy who is a ECN takes micro Lots. At MB Trading you also can trade Microlots. There are banks who take Microlots, altough they don't like it.
Yes, I agree.

Reply from Pepperstone that I received half hour before:

"Thank you for your message. When a micro lot is sent to the market the aggregation is performed by the Intergral ECN grid bridge. This is what occurs at Pepeprstone - there are various ways a market maker performs this aggregation.

Please do not hesitate to contact us if have any further queries. "

I have live accounts with both Oanda UK and Pepperstone. I was not sure which one I should fund first. I decided for Oanda because of :

1. Tremendous flexibility of smallest possible lot size (and increments),
2. Their long track record of being PERCEIVED as fair (and FSA regulation)
3. I dislike MT4 order entry dialogue. I am looking at Oanda MT4 charts but placing orders on their java terminal (FXTrade).

Pepperstone has done everything to be called reputable in under 2 yrs of their existence. They are very promising and I will fund my pepperstone acct too.
Not trend, but imbalance is my friend
  • #332
  • Feb 29, 2012 2:02am Feb 29, 2012 2:02am
Quoting pbanerjee
Yes, I agree.

Reply from Pepperstone that I received half hour before:

"Thank you for your message. When a micro lot is sent to the market the aggregation is performed by the Intergral ECN grid bridge. This is what occurs at Pepeprstone - there are various ways a market maker performs this aggregation.

Please do not hesitate to contact us if have any further queries. "

I have live accounts with both Oanda UK and Pepperstone. I was not sure which one I should fund first. I decided for Oanda because of :

1. Tremendous flexibility...
I agree with you, i also don't like the MT4 New order's window, it is way too slow for scalping. Have you tried using scripts?
  • #333
  • Feb 29, 2012 3:52am Feb 29, 2012 3:52am
Quoting rooicol
Have you tried using scripts?
Not yet, will do that. Thanks for directing me to the same.
Not trend, but imbalance is my friend
  • #334
  • Feb 29, 2012 4:25am Feb 29, 2012 4:25am
Earlier was unable to connect for few minutes & then again into LTRO release a freeze!!! Only Pepperstone got that here!

13
Brokers are angels
  • #335
  • Feb 29, 2012 4:42am Feb 29, 2012 4:42am
Quoting fx13
Earlier was unable to connect for few minutes & then again into LTRO release a freeze!!! Only Pepperstone got that here!

13
if you're asking if any other pepperstone trader had a platform freeze during LTRO release? - i had platform freeze.
  • #336
  • Edited 9:26am Feb 29, 2012 9:15am | Edited 9:26am
Quoting Alpha-Bet
if you're asking if any other pepperstone trader had a platform freeze during LTRO release? - i had platform freeze.
I just had another platform freeze just then through a trade on Euro. Really losing confidence in Pepperstone at the moment.....


EDIT. Just spoke to P'stone chat. They reiterated that they are putting on a new server on the 3rd of March. We'll see if that helps.
Drink Coffee. Do stupid things faster with more energy.
  • #337
  • Feb 29, 2012 2:02pm Feb 29, 2012 2:02pm
Quoting forexpenguin
I just had another platform freeze just then through a trade on Euro. Really losing confidence in Pepperstone at the moment.....


EDIT. Just spoke to P'stone chat. They reiterated that they are putting on a new server on the 3rd of March. We'll see if that helps.
OK let's see but seem growth is killing them....

13
Brokers are angels
  • #338
  • Mar 1, 2012 2:41pm Mar 1, 2012 2:41pm
Quoting rooicol
No, i don't have a live account with them. I've attached the EA, so if anyone else does then they can share their experience.

The EA creates the log file in the directory: "drive_c/Program files/[MT4 folder]/Experts/files/Connection Log"
As server time is unknown when disconnected, the EA uses TimeLocal(), which is your computer time.
Where should I put these files in MT4 catalog and how to execute them? Thanks.
  • #339
  • Mar 1, 2012 4:04pm Mar 1, 2012 4:04pm
Quoting Askandia
Where should I put these files in MT4 catalog and how to execute them? Thanks.
Put the .mq4 and the .ex4 in your drive_c/Program files/[MT4 folder]/Experts/ folder, restart mt4, and then attach the EA to a chart. Make sure Experts are enabled.
  • #340
  • Mar 2, 2012 5:39pm Mar 2, 2012 5:39pm
All clients should have gotten this email, but just in case anyone was wondering about the server update / disconnection fix:


Quote
Dear Customer,

In the last few months, Pepperstone has grown at an explosive rate. Each day our clients are processing billions of dollars in FX transaction into the ECN Grid. To fuel this growth, Pepperstone will be implementing additional core infrastruture upgrades into our existing Equinix NY4 server suite. The infrastructure updates include multiple new MT4 servers and optical fibre cross connections. The upgrades will drastically enhance pricing connecttivity.

Our engineers are currently working around the clock to bring these new services online and executing trades into the ECN Grid by the 5th March.

Existing accounts will be split so that all Razor accounts will be relocated to a new Razor Server, while all Standard Accounts will remain on the primary server.

Both servers will be the same, the only difference will be that the Razor Server will feature Razor pricing on the charts.

During the updates this weekend, all servers will be offline for the full weekend period. You will not be able to access your accounts until late on Sunday, around 12 hours before the market opens.



So it looks like not only will we be getting a better server setup, but will also get the charts painting on razor quotes (which was a bit confusing for people before when the Market Center window would show the razor quote but charts painted on Standard account quotes.)

FXGears.com
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