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Virtual Dealer Plugin - Brokers Please read

  • #61
  • Jul 22, 2013 4:42am Jul 22, 2013 4:42am
Quoting FXOjafar
{quote} I can guarantee that FXOpen AU doesn't use such a plugin. We don't clear any trades within the Metatrader system. MT4 is just a front end to our proprietary ECN network.
Who is your liquidity Provider?
Forex is a losers game.
  • #62
  • Jul 25, 2013 3:58am Jul 25, 2013 3:58am
I think everyone in this thread is completely missing the point as to why VDP was really introduced for brokers in the first place.

VDP was not introduced to rip off clients as the fear mongers of the world would have you believe, it was introduced to stop predatory traders from ripping off brokers.

Huh..???? this makes no sense right...?

Think about it. What does a B book broker do differently to an A book broker?

B book brokers ‘automatically’ execute trades at the MT4 server without first confirming the trade in underlying market, this leaves them vulnerable to predators.. A book brokers confirm the trade in the underlying market first which means they can’t be ripped off by predatory traders. The banks on the receiving end of the predatory flow can be ripped off for a short period of time but they’re the smartest guys in the room and they’ll likely start rejecting these trades, the client will be slipped and the profitability of said predatory system will ultimately diminish.

Does this mean the bank is using their own VDP of sorts..? oh wow, all of a sudden it seems no one wants this predatory flow... me sad 

VDP is not used to rip off traders, its used to simulate the execution a trader would experience if their order really did go to market. So.. predatory traders which seek to exploit “automatic execution’ cannot rip off brokers.

Of course there are some brokers which have likely abused the VDP but this shouldn’t undermine what is was created for in the first place, to simulate live market execution, hence the name “Virtual Dealer Plugin”.

Summary:

In a perfect world there would be no VDP and we could all use the million dollar pips EA and make a million dollars together and talk about how good we are but then how would we get our money out of the broker because we just sent them insolvent...?

End of rant, Happy trading!
  • #63
  • Jul 25, 2013 5:50am Jul 25, 2013 5:50am
Quoting trader121
{quote} Who is your liquidity Provider?
We have quite a few including Hotspot FXi, Integral, Currenex, LMAX, London Capital Group, Renesource Capital, Gain Capital, Alpari, other brokers, LPs and other FXOpen AU and NZ clients.
  • #64
  • Jul 25, 2013 6:48am Jul 25, 2013 6:48am
Quoting eurscalpr
I think everyone in this thread is completely missing the point as to why VDP was really introduced for brokers in the first place. VDP was not introduced to rip off clients as the fear mongers of the world would have you believe, it was introduced to stop predatory traders from ripping off brokers. Huh..???? this makes no sense right...? Think about it. What does a B book broker do differently to an A book broker? B book brokers ‘automatically’ execute trades at the MT4 server without first confirming the trade in underlying market, this leaves...
100% agree! Happy to know at least someone know what he's talking about. The VDP is not a bad thing for Traders, if I were a Broker, I would use it as well.

The only traders which have to fear the VDP are the traders that send toxic order flow.
Forex is a losers game.
  • #65
  • Jul 25, 2013 7:03am Jul 25, 2013 7:03am
Quoting FXOjafar
{quote} We have quite a few including Hotspot FXi, Integral, Currenex, LMAX, London Capital Group, Renesource Capital, Gain Capital, Alpari, other brokers, LPs and other FXOpen AU and NZ clients.
Hi FXOjafar,
Thanks for sharing that amalgamation of technology providers and brokers with us. Can you please explain:


a) How you aggregate the aggregators?
b) Is it simple or advanced aggregation?
c) What happens if I place an order for 5 million EURUSD and LMAX is at the top of book and they only have 500k showing, will I sweep your book or LMAXs?
d) Do the LPs pricing you in Integral, HotSpot, Currenex and all the other venues you’ve mentioned like the fact that they’re being aggregated several times over?
  • #66
  • Jul 25, 2013 7:05am Jul 25, 2013 7:05am
Quoting trader121
{quote} 100% agree! Happy to know at least someone know what he's talking about. The VDP is not a bad thing for Traders, if I were a Broker, I would use it as well. The only traders which have to fear the VDP are the traders that send toxic order flow.
haha, thank you. i couldn't help myself.
  • #67
  • Jul 25, 2013 8:23am Jul 25, 2013 8:23am
Quoting eurscalpr
I think everyone in this thread is completely missing the point as to why VDP was really introduced for brokers in the first place. VDP was not introduced to rip off clients as the fear mongers of the world would have you believe, it was introduced to stop predatory traders from ripping off brokers. Huh..???? this makes no sense right...? Think about it. What does a B book broker do differently to an A book broker? B book brokers ‘automatically’ execute trades at the MT4 server without first confirming the trade in underlying market, this leaves...
Please do explain what a "Predatory Trader" is?
  • #68
  • Jul 25, 2013 6:28pm Jul 25, 2013 6:28pm
Quoting eurscalpr
I think everyone in this thread is completely missing the point as to why VDP was really introduced for brokers in the first place. VDP was not introduced to rip off clients as the fear mongers of the world would have you believe, it was introduced to stop predatory traders from ripping off brokers. Huh..???? this makes no sense right...? Think about it. What does a B book broker do differently to an A book broker? B book brokers ‘automatically’ execute trades at the MT4 server without first confirming the trade in underlying market, this leaves...
Are you saying that despite these sneaky features (as listed in the attachment) offered in VDPs to brokers, no brokers would bother to use any of them against traders?

And why were these two brokers fined by the NFA for using the VDP?

Forex.com/Gain
IKON GM

BY the way, VDP does not refer only to Metaquotes VDP or Tools4Brokers VDP, but including any brokers' own apps to act like a virtual dealer.

Brokers and Traders alike could actually come together to develop a fair trading policy for FX trading forbidding the use of any apps to rip one another off, and trade only basing on skills. However, I seriously doubt brokers are willing to make this happen.
Attached Image(s) (click to enlarge)
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  • #69
  • Jul 25, 2013 7:36pm Jul 25, 2013 7:36pm
Quoting eurscalpr
{quote} Hi FXOjafar, Thanks for sharing that amalgamation of technology providers and brokers with us. Can you please explain: a) How you aggregate the aggregators? b) Is it simple or advanced aggregation? c) What happens if I place an order for 5 million EURUSD and LMAX is at the top of book and they only have 500k showing, will I sweep your book or LMAXs? d) Do the LPs pricing you in Integral, HotSpot, Currenex and all the other venues you’ve mentioned like the fact that they’re being aggregated several times over?
a) We connect them into our ECN via FIX.
b) Can you clarify a bit more what exactly you want to know?
c) Your order would be executed via VWAP from best price to worst depending on the available liquidity.
d) A double hit is possible since LPs can be doubled due to also being connected through other networks and to our ECN. However there is still the possibility of being filled via the LP's B-Book. If it is A-Book, it would likely be rejected. LPs hate double hits, but that is their headache to sort out. It is in their best interests to be on top of things since all of our LPs compete with each other to get more of the order flow through them.
  • #70
  • Jul 25, 2013 8:13pm Jul 25, 2013 8:13pm
Quoting pcbg007
{quote} Are you saying that despite these sneaky features (as listed in the attachment) offered in VDPs to brokers, no brokers would bother to use any of them against traders? And why were these two brokers fined by the NFA for using the VDP? Forex.com/Gain IKON GM BY the way, VDP does not refer only to Metaquotes VDP or Tools4Brokers VDP, but including any brokers' own apps to act like a virtual dealer. Brokers and Traders alike could actually come together to develop a fair trading...
as per my post above I said some brokers may abuse the plugin and try to rip off/disadvantage clients, however, this is not the case across all brokers.

Again, the role of VDP is to simulate live market execution and automate the role of a dealer, this is actually improving the execution for the client. Think about this.... if you are broker XYZ, is it faster and better for the client to

a) have a human deal desk manually confirm your trade
b) have a plugin or algo automatically execute the trade based in predefined set of variables

the answer is simple.

Automation means faster and better fills, cheaper spreads and commissions for clients, etc.. the only crowd disadvantaged by this is those using predatory strategies that prey on B book brokers. not sticking up for B book brokers, I think they stink, but lets get real here about VDP and what it really does.
  • #71
  • Jul 25, 2013 8:15pm Jul 25, 2013 8:15pm
PS.

you gotta love tools4brokers for putting photos of their female staff on their site. I would..
  • #72
  • Jul 25, 2013 8:25pm Jul 25, 2013 8:25pm
Quoting FXOjafar
{quote} a) We connect them into our ECN via FIX. b) Can you clarify a bit more what exactly you want to know? c) Your order would be executed via VWAP from best price to worst depending on the available liquidity. d) A double hit is possible since LPs can be doubled due to also being connected through other networks and to our ECN. However there is still the possibility of being filled via the LP's B-Book. If it is A-Book, it would likely be rejected. LPs hate double hits, but that is their headache to sort out. It is in their best interests...
Hi FXOjafar,

b) advanced vs simple aggregation, questions c) below should provide some more clarity on what Im getting at
c) if the order is executed via VWAP will the 5M go down LMAX's pipe or would i be split up amongst said amalgamation of other aggregators?

d) more on the "double Hit" later...
  • #73
  • Jul 26, 2013 2:25am Jul 26, 2013 2:25am
Quoting eurscalpr
{quote} Hi FXOjafar,
b) advanced vs simple aggregation, questions
c) below should provide some more clarity on what Im getting at
c) if the order is executed via VWAP will the 5M go down LMAX's pipe or would i be split up amongst said amalgamation of other aggregators?
d) more on the "double Hit" later...
b) Ok then, we are advanced.
c) There are too many factors to give a simple yes and no answer.
If it was a market order, and say for example, LMAX offered to fill 500K, the rest of the order would be filled fully or partially at the next best price, then fully or partially at the next best price....... until the order is fully opened.
If it was a limit order, it would be filled partially and remain on the order book until conditions appear to fully fill the order.
d) Sure, no problem.
  • #74
  • Jul 26, 2013 4:09am Jul 26, 2013 4:09am
Quoting FXOjafar
{quote} b) Ok then, we are advanced. c) There are too many factors to give a simple yes and no answer. If it was a market order, and say for example, LMAX offered to fill 500K, the rest of the order would be filled fully or partially at the next best price, then fully or partially at the next best price.......
What I am getting at here is will the whole order be filled with LMAX who is currently showing the best price or will only the 500K go to LMAX and the rest to one of your other LPs?

i.e. if your aggregation engine is seeing 500K with LMAX and 500K with Gain at the next best price and 4M through Integral at the next best price will it split the order up?

Typically when a larger order hits an aggregator it will sweep the order book and you will be partially by several LPs. Where the FXOpen model is different is you are aggregating aggregators. To my knowledge, no aggregator of aggregators such as http://soft-fx.com/Solutions.aspx#aggregator has the capacity to look at lets say Integrals API and disseminate the LPs, volumes, etc.. to work out the best course of execution for an order. If the whole order was going to Integral then it would be a very different story..

I know other brokers who do this such as Armada and FinFX compromise execution as the volume in each of their pipes is thinner as the banks don't like pricing into multiple aggregators and being "double hit". They recognise this and start rejecting trades so when a largish order hits them the execution turns to shit.
  • #75
  • Jul 26, 2013 6:28am Jul 26, 2013 6:28am
Quoting eurscalpr
{quote} as per my post above I said some brokers may abuse the plugin and try to rip off/disadvantage clients, however, this is not the case across all brokers. Again, the role of VDP is to simulate live market execution and automate the role of a dealer, this is actually improving the execution for the client. Think about this.... if you are broker XYZ, is it faster and better for the client to a) have a human deal desk manually confirm your trade b) have a plugin or algo automatically execute the trade based in predefined set of variables the...
Yes, perhaps, not every broker plays with such dirty tricks to rip off traders.

Whatever you say, however, in reality, the experience encountered by myself and many other Alpari UK's clients are just the opposite - slower and worse fills, higher spreads etc. even during non-peek and non-news period. If it occurs only occasionally or even about half the time on average, I won't mind and I'd rule out any intentional platform manipulation by this broker, in particular. In my case all these started only after I made >80% of Win trades consecutively over a few days. And when it happens, entering or closing every trade had all resulted in more pips and more losses caused by the re-quotes and other delays!
Even when I decided to cancel the order after several repeated re-quotes the order still got through with a much worse price.

So, what I claimed here are all based on Results, and Results won't lie - not on imagination and hearsay.
  • #76
  • Jul 26, 2013 6:57am Jul 26, 2013 6:57am
Quoting eurscalpr
{quote} as per my post above I said some brokers may abuse the plugin and try to rip off/disadvantage clients, however, this is not the case across all brokers. Again, the role of VDP is to simulate live market execution and automate the role of a dealer, this is actually improving the execution for the client. Think about this.... if you are broker XYZ, is it faster and better for the client to a) have a human deal desk manually confirm your trade b) have a plugin or algo automatically execute the trade based in predefined set of variables the...
Let's be realistic. A broker looks at a customer in terms of much revenue he will get from that account.
A broker will try to maximize commissions from your account or/and acquire the entire account.
Any strategy thats fits this business model that is within the law -or almost (: - is fair game.
  • #77
  • Jul 26, 2013 8:12am Jul 26, 2013 8:12am
Quoting pcbg007
{quote} Yes, perhaps, not every broker plays with such dirty tricks to rip off traders. Whatever you say, however, in reality, the experience encountered by myself and many other Alpari UK's clients are just the opposite - slower and worse fills, higher spreads etc. even during non-peek and non-news period. If it occurs only occasionally or even about half the time on average, I won't mind and I'd rule out any intentional platform manipulation by this broker, in particular. In my case all these started only after I made >80% of Win trades consecutively...
Can I ask which strategy and trading style made 80%+ in a few days?


Quoting Mingary
{quote} Let's be realistic. A broker looks at a customer in terms of much revenue he will get from that account. A broker will try to maximize commissions from your account or/and acquire the entire account. Any strategy thats fits this business model that is within the law -or almost (: - is fair game.
thats crap... this is why there are so many whinging people on forums and review sites. my strategy doesn't work because of VDP, i got slipped during a news announcement, etc, etc....

I'd love to know what'd happen if the same crowd traded equities and got slippage on all their trades. they'd probably send an email to the exchange and complain about liquidity. get some more buyer and sellers, the slippage is too high! im going to the regulator

Fact is many of the strategies employed by said complainers don't really work in the real world. i read about someone complaining about slippage on a stop entry order during a news announcement before - must be that dreaded VDP again...

Really? VDP? or maybe stops just dont work in volatile markets.

Find a strategy that makes money and makes sense, that isn't execution sensitive and can handle some slippage and a good slap across the face from the market. if you're relying on your broker to play stupid and execute you at prices that dont really exist then its likely going to end in tears. (BTN Lightning, MDP, etc.)
  • #78
  • Jul 26, 2013 3:30pm Jul 26, 2013 3:30pm
Quoting eurscalpr
PS. you gotta love tools4brokers for putting photos of their female staff on their site. I would..
hahaha my thoughts exactly!

Eurscalper which broker do you use? got experience with institutional type brokers?
Forex is a losers game.
  • #79
  • Jul 26, 2013 6:00pm Jul 26, 2013 6:00pm
Quoting trader121
{quote} hahaha my thoughts exactly! Eurscalper which broker do you use? got experience with institutional type brokers?
I don't spruik about my broker like others in the forum do. I just put my account up so you can check it in my profile. im not leaving it up for long as all these clowns start contacting you asking for tips.

note: the balance is at zero as I have moved to their cTrader platform. and yes, they have been good...
  • #80
  • Jul 27, 2013 3:02am Jul 27, 2013 3:02am
Quoting eurscalpr
{quote} I don't spruik about my broker like others in the forum do. I just put my account up so you can check it in my profile. im not leaving it up for long as all these clowns start contacting you asking for tips. note: the balance is at zero as I have moved to their cTrader platform. and yes, they have been good...
Never heard of this Broker yet. But based on their Webpage, they look very good. I might open a MT4 account with them.

I like your XAUUSD profits btw. lol
Forex is a losers game.
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