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  • #121
  • May 17, 2006 9:38am May 17, 2006 9:38am
a lot of people were stopped out this morning after the CPI data when the price went the wrong way ... spiking upward. You guys think it was the brokers pushing the price the wrong way after many people like myself buying the USD?
  • #122
  • May 17, 2006 10:08am May 17, 2006 10:08am
Quoting mrmikal
ECNs include MBT, Interactive Brokers, InterbankFX and CoesFx.

I believe most of these charge commissions (InterbankFX being the only one that doesn't).
InterbankFX is an ECN...LOL...That is really funny.

Did you see the lag in there quotes? Have you heard of an ECN that will punish you for scalping?


Here, http://www.wallstreetandtech.com/for...nge/directory/
  • #123
  • May 17, 2006 10:26am May 17, 2006 10:26am
Quoting nitman
a lot of people were stopped out this morning after the CPI data when the price went the wrong way ... spiking upward. You guys think it was the brokers pushing the price the wrong way after many people like myself buying the USD?
My opinion: This was the brokers/banks stopping people out....
  • #124
  • May 17, 2006 10:29am May 17, 2006 10:29am
Quoting Yigal
InterbankFX is an ECN...LOL...That is really funny.

Did you see the lag in there quotes? Have you heard of an ECN that will punish you for scalping?


Here, http://www.wallstreetandtech.com/for...nge/directory/
OK...perhaps I misunderstood exactly what an ECN is. I was under the impression that most ECNs do not have a dealing desk...which, at one point, IBFX didn't. I don't know if they do now or not...but a delay in feed does not exclude a company from being an ECN if the only they do is pass through price. They just may have really slow connections or their servers are working overtime or whatever...but an ECN is just an electronic communications network, which to me just means they match orders against multiple systems electronically. I still think an ECN could participate in stop hunting...after all, if they trigger more trades, they make more in commissions...even if they don't profit from trading the information, those commissions are risk-free profit for them...that's an awfully big carrot for them.

I will give you the point, though for them being slower than what I've noticed from MBT...the price jumps all over the place...but MBT has vast resources as they handle a lot more products than just FOREX. However, I haven't compared IBFX to COESfx or IB (although IB is probably pretty fast).

And what exactly does this link tell me about InterbankFX?
  • #125
  • May 17, 2006 11:58am May 17, 2006 11:58am
Merlin,

Quote
yeah i agree. forex sucks. i think i'll go get ripped off by the specialists at the NYSE, or maybe ill head up to Chicago to get robbed at the CME. or i could trade NASDAQ and get shitted on a bad ARCA fill. hmmm...maybe i will just stick to forex and avoid scalping FOMC announcements

I hope you start a new thread so you could provide a commentary prior to these announcements and we all can take whatever precaution needed.
  • #126
  • May 17, 2006 12:02pm May 17, 2006 12:02pm
Quoting mrmikal
OK...perhaps I misunderstood exactly what an ECN is. I was under the impression that most ECNs do not have a dealing desk...which, at one point, IBFX didn't. I don't know if they do now or not...but a delay in feed does not exclude a company from being an ECN if the only they do is pass through price. They just may have really slow connections or their servers are working overtime or whatever...but an ECN is just an electronic communications network, which to me just means they match orders against multiple systems electronically. I still think an ECN could participate in stop hunting...after all, if they trigger more trades, they make more in commissions...even if they don't profit from trading the information, those commissions are risk-free profit for them...that's an awfully big carrot for them.

I will give you the point, though for them being slower than what I've noticed from MBT...the price jumps all over the place...but MBT has vast resources as they handle a lot more products than just FOREX. However, I haven't compared IBFX to COESfx or IB (although IB is probably pretty fast).

And what exactly does this link tell me about InterbankFX?
A MM will spike up or down a few pips to trigger stops when its deemed prudent. On an ECN manipulation is less likely because a) they compete with other MMs for your business and b)they follow the agenda of the trader/traders who trade directly on the interbank market. The trader who trades direct will manipulate when ever he feels the risk is worth the payoff. Its just a big game that exists in all markets.
I was here, here I was. Was I here? Yes I was!
  • #127
  • May 17, 2006 12:15pm May 17, 2006 12:15pm
Quoting SterlingTDR
A MM will spike up or down a few pips to trigger stops when its deemed prudent. On an ECN manipulation is less likely because a) they compete with other MMs for your business and b)they follow the agenda of the trader/traders who trade directly on the interbank market. The trader who trades direct will manipulate when ever he feels the risk is worth the payoff. Its just a big game that exists in all markets.
Thanks Sterling, for the clarification.

So, in your opinion, is InterbankFX an ECN or no?
  • #128
  • May 17, 2006 12:37pm May 17, 2006 12:37pm
Quoting mrmikal
Thanks Sterling, for the clarification.

So, in your opinion, is InterbankFX an ECN or no?
Well they quote the following on thier site:
" Interbank FX offers a revolutionary approach to foreign exchange trading. Our customer's trade directly with a streaming interbank quote feed. This is the price that banks trade at. We do not have a dealing desk that widens the spread to the traditional 5 pips. Execution is instantaneous. All trades are completely transparent and anonymous." (emphasis mine)

How they do this, I don't know. My understanding is that the barrier to entry to trade interbank direct is $million per trade minimum, cash. How do they do it? Beats me. In short I really don't know.
I was here, here I was. Was I here? Yes I was!
  • #129
  • May 17, 2006 12:47pm May 17, 2006 12:47pm
Quoting SterlingTDR
Well they quote the following on thier site:
" Interbank FX offers a revolutionary approach to foreign exchange trading. Our customer's trade directly with a streaming interbank quote feed. This is the price that banks trade at. We do not have a dealing desk that widens the spread to the traditional 5 pips. Execution is instantaneous. All trades are completely transparent and anonymous." (emphasis mine)

How they do this, I don't know. My understanding is that the barrier to entry to trade interbank direct is $million per trade minimum, cash. How do they do it? Beats me. In short I really don't know.
Interesting, I don't think MBT does this either...there is no way they have that many clients to pool from. However, I would consider them an ECN because they use a price discovery system from various sources and match orders from systems to system.

I guess it's true, MBT and InterbankFX are not exactly ECNs in the same sense that INET (for stocks) is an ECN.
  • #130
  • May 17, 2006 1:10pm May 17, 2006 1:10pm
Quoting mrmikal
Interesting, I don't think MBT does this either...there is no way they have that many clients to pool from. However, I would consider them an ECN because they use a price discovery system from various sources and match orders from systems to system.

I guess it's true, MBT and InterbankFX are not exactly ECNs in the same sense that INET (for stocks) is an ECN.
I use an ECN where the primary market makers are banks, five of them, and they are obligated to quoting bid and ask prices at any given level. I can also post my own bid/ask quotes in between their spreads therefore I can make my own market.
I'd like to hear more about this price discovery system. Who are the various sources? How do they interact etc..
I was here, here I was. Was I here? Yes I was!
  • #131
  • May 17, 2006 1:14pm May 17, 2006 1:14pm
Quoting SterlingTDR
I use an ECN where the primary market makers are banks, five of them, and they are obligated to quoting bid and ask prices at any given level. I can also post my own bid/ask quotes in between their spreads therefore I can make my own market.
I'd like to hear more about this price discovery system. Who are the various sources? How do they interact etc..
I would contact MBT via chat...they're really good about answering these types of question. I believe they work directly with a bank using the technology. They tried to explain it to me once, and I only got the gist of it.

FXSol uses multiple sources for their feed too. Similar technology, I believe.
  • #132
  • May 17, 2006 1:21pm May 17, 2006 1:21pm
Quoting mrmikal
I would contact MBT via chat...they're really good about answering these types of question. I believe they work directly with a bank using the technology. They tried to explain it to me once, and I only got the gist of it.

FXSol uses multiple sources for their feed too. Similar technology, I believe.
" a bank" .....If they don't have multiple market makers providing quotes, they are not an ECN and therefore you are trading at their mercy.
I was here, here I was. Was I here? Yes I was!
  • #133
  • Edited 1:34pm May 17, 2006 1:25pm | Edited 1:34pm
Quoting SterlingTDR
" a bank" .....If they don't have multiple market makers providing quotes, they are not an ECN and therefore you are trading at their mercy.
Well, there you have it...the official definition of an ECN then. Thanks for the clarification.

Let's ask again...does anyone know who the ECNs are out there?

Actually...I'm editing this post. I just called COESFx and got some great info.

They are definitely an ECN by Sterling's definition. They use 4 different banks are in the process of signing a 5th (goldman sachs). Obviously, no fixed spreads but most have sub 1-pip spreads, although I'm confident that they widen with volatility.

The downside is that they charge $10 per lot per side ($20 per round trip). However, as Sterling pointed out previously, the chance that they will manipulate your order is next to nothing. So...trading a currency like the GBP would be equivalent to a 3.5 pip spread IF the spread for the GBP is about 1 pip...which isn't that bad.

They did say that the commission is variable with volume, although I suspect that you have to be trading in the $500K to $1mil to get any sort of decrease.

Minimum opening is $5000, but the request that all their clients have at least $10K to allow for some "comfort".
  • #134
  • May 17, 2006 1:29pm May 17, 2006 1:29pm
Quoting mrmikal
Well, there you have it...the official definition of an ECN then. Thanks for the clarification.

Let's ask again...does anyone know who the ECNs are out there?
Interactive Brokers, CoesFX, Hotspot and a few others but I can't remember who they are.
I was here, here I was. Was I here? Yes I was!
  • #135
  • May 17, 2006 1:43pm May 17, 2006 1:43pm
Quoting SterlingTDR
Interactive Brokers, CoesFX, Hotspot and a few others but I can't remember who they are.
Thanks, Sterling...just FYI, I did contact MBT via chat and talked with a bloke named Kenny.

He was able to verify that MBT actually does use multiple sources for their price feed and that their technology follows the ECN model. However, he himself said they aren't quite an ECN yet because of their routing system (???) It's not completely intelligent enough just yet to be considered an ECN. They are, however, in the process of upgrading their technology to be completely complient with the standard definition of an ECN.

Also, I contacted COESFx...Scott, the guy I talked to was point blank in saying they were an ECN.
  • #136
  • May 18, 2006 3:55am May 18, 2006 3:55am
Quoting mrmikal
And what exactly does this link tell me about InterbankFX?



It's just a list of true ECNs. Regarding InterbankFx, I would like to remind that an ECN would never punish trader in any way for scalping (like Interbankfx does). If there is a latency in quotes delivery then the only orders that will be matched are market orders.

Interbankfx is a bucket shop.
  • #137
  • May 18, 2006 9:30am May 18, 2006 9:30am
Quoting Yigal
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It's just a list of true ECNs. Regarding InterbankFx, I would like to remind that an ECN would never punish trader in any way for scalping (like Interbankfx does). If there is a latency in quotes delivery then the only orders that will be matched are market orders.

Interbankfx is a bucket shop.
Again, it makes sense that you've probably been badly burned by IBFX. I'm sorry for that.

However, while I now agree that Interbank is not an ECN in the traditional sense, I'd like to learn more about the assumptions you are making in this post. Are you saying that because of their price latency, if the rate of the EUR/USD is currently at 1.2901/1.2903 and I put a LIMIT order at 1.2905 I would not get filled by any broker because most brokers have some price latency? or are you specifically saying this specifically about IBFX?

And, in what way exactly does IBFX "punish" a person? is there some sort of penalty charged? or do they freeze your account or something? or were you just speaking figuratively (and you believe that the price latency IS the punishment)? I'd really like to know, because these are practices that I'd be very wary of, and I'll take my business away from IBFX if they actually do this.

I can only assume that all of these comments are directed at IBFX, because I've scalped a few times with a different bucket shops including FOREX.com (didn't really enjoy that experience) and FXSol (which is still my broker of choice for most trades at the moment) and I never felt punished for doing it. Some of these trades lasted over an hour, but some were only about 10 seconds depending on the moves. As noted several times, I haven't actually used IBFX to trade (primarily because I'm not keen on the trading platform aspect of their system), but I always felt that if the need arose, I would do it.

In any event, any information you can provide on the matter would be helpful.
  • #138
  • May 19, 2006 4:08am May 19, 2006 4:08am
Quoting mrmikal
Again, it makes sense that you've probably been badly burned by IBFX. I'm sorry for that.

However, while I now agree that Interbank is not an ECN in the traditional sense, I'd like to learn more about the assumptions you are making in this post. Are you saying that because of their price latency, if the rate of the EUR/USD is currently at 1.2901/1.2903 and I put a LIMIT order at 1.2905 I would not get filled by any broker because most brokers have some price latency? or are you specifically saying this specifically about IBFX?

And, in what way exactly does IBFX "punish" a person? is there some sort of penalty charged? or do they freeze your account or something? or were you just speaking figuratively (and you believe that the price latency IS the punishment)? I'd really like to know, because these are practices that I'd be very wary of, and I'll take my business away from IBFX if they actually do this.

I can only assume that all of these comments are directed at IBFX, because I've scalped a few times with a different bucket shops including FOREX.com (didn't really enjoy that experience) and FXSol (which is still my broker of choice for most trades at the moment) and I never felt punished for doing it. Some of these trades lasted over an hour, but some were only about 10 seconds depending on the moves. As noted several times, I haven't actually used IBFX to trade (primarily because I'm not keen on the trading platform aspect of their system), but I always felt that if the need arose, I would do it.

In any event, any information you can provide on the matter would be helpful.
They punish traders for scalping by decreasing leverage to 25:1 and if this does not help to 1:1. I wasn't burned by them, I have left after seeing what is going on. Regarding latency in prices I mean if as they claim they have no dealing desk and you deal on interbank prices, then all of your limit orders would be left unfilled cos there is no counterparties for your order.

Example EURUSD is at 1.2780-81 at real interbank and is 1.2772-74 on IBFX (because of the latency) if you place a limit order to buy at 1.2774 in reality there is no counterparty at that moment and this price, but with IBfx you will get filled and here comes up a punishment thing if you'll do it too often you'll get your leverage decreased.
  • #139
  • May 20, 2006 12:32pm May 20, 2006 12:32pm
sorry to bother ya guys - but what exactly is that 'scalping'

is it sth that is profitable - or what?

I don't have a clue :surprised
  • #140
  • May 20, 2006 1:31pm May 20, 2006 1:31pm
Quoting FxLuke
sorry to bother ya guys - but what exactly is that 'scalping'

is it sth that is profitable - or what?

I don't have a clue :surprised
There were several definitions of scalping in the earlier days of online day-trading. However, now, with Forex, it's just really a term for very short-term trading trading. For the most part, forex scalpers want very quick trades that earn them a few pips (1-30 pips or so).

Is it profitable? That depends on the trader, really. Because of the nature of scalping, the desire is to have long runs of profitable trades, so for the most part, they're looking for breakouts in the direction of the trend.

Note that this doesn't mean that if you're trade earns you 5 pips, you're a scalper. The intent is key...scalpers expect their trades to last only minutes to seconds. Longer term trades (hours and days) are less desirable, although sometimes necessary.

Again, scalpers have to be quick on their feet and absolutely ruthless in their conviction about a trade (without being unnecessarily loyal to it, if that makes sense). If there is a wiff that a trade has gone bad, scalpers jump ship...

It's not an easy life.
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