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Call for Regulations regarding Liquidity Providers

  • #81
  • Jan 19, 2015 5:51pm Jan 19, 2015 5:51pm
Quoting Forexia
{quote} Actually I don't expect liquidity "providers" to do that. They are our competitors NOT our brokers so they are really under no obligation to inform us of any positions that are taken (although they do have an unfair advantage over us retail traders in that they see all of our positions and our Stop-Loss and TP orders). Doing this is like showing your hand to your opponent in a poker game. I don't mind competing against them with what I know so when I beat them, I beat them fair and square but what I do expect however is them to follow the...
what i meant was that when you place stop-loss with the LP as the counterparty, they either bite and guarantee the SL and hedges further or says "sorry dude i cant take your SL since i cannot risk-manage-it"...in such case it indicates SL orderer that it is best to close such position....you dont take the SL 4 months ago and then when time comes hide under the bed
  • #82
  • Edited 10:55pm Jan 19, 2015 6:17pm | Edited 10:55pm
Quoting kalastaja
{quote} LP's or Banks or whatever you call them took huge losses at Thursday. City and Deutche bank both took 150 million loss. They also have limits how much they can lose and therefore are forced to act according that.
Yes that's their swan song right now "they took huge losses too on Thursday" LOL Citi as of right now still did not disclose their losses/winnings, Deutsche lost $150 million (according to one article, Deutsche only lost $125 million) but what's the size of Deutsche let's see, according to the Deutsche's 2013 Annual Report, its total assets is 1,611 BILLION EURO. Take EUR/USD exchange rate of today, not in 2013 which would've been higher, but today's E/U rate of 1.16026, that is $1,869 BILLION USD, that is $1.8 TRILLION, more than 1/5 of the daily trading volume of the ENTIRE forex industry. In other words, the ENTIRE forex industry's ONE day trading volume, more than 1/5 of is the asset of this ONE company! And let's look at how much Interactive Brokers lost, hmmnn, interestingly, $120 million, around the same loss amount as Deutsche, but let's see what's the size of Interactive Brokers? According to the 2013 Annual report of Interactive Brokers, its total assets is $37,870 million, which is $37.870 Billion USD, approx. 1/49th of Deutsche Bank of $1,869 BILLION of total assets!! So basically Deutsche, a company that is 49 times BIGGER than Interactive Brokers just took in 30 million more in losses (something that they contributed to themselves by stopping their price quotes to force us to close our positions at absolute rock bottom price I might add) or put it another way, Interactive Brokers, a broker that is only 1/49th in size of Deutsche Bank took in roughly the same size of losses as Deutsche!

So excuse me for not swooning at their swan song of "they lost money too!" LOL
Make your losses in demo. Earn your profits live.
  • #83
  • Jan 19, 2015 10:54pm Jan 19, 2015 10:54pm
More reasons why we need regulations against the "Big Banks", the liquidity "providers" to curtail and deter their unscrupulous and dishonest actions and to bring out fair dealing:

In effect, what has appeared to have taken place is a massive ‘requote’ in the market. Mostly known for taking place between retail brokers and their customers, the table has been turned with brokers receiving word from banks that some of their trades with them have been cancelled. A letter to clients from one of the largest primary bank reviewed by Forex Magnates, stated that “significant issues” took place during the price drop and actual executions may not match that which was reported by their electronic systems. The result is that brokers who had filled customers, may still be on the hook for those trades with their counterparties after seeing trades with banks repriced due to initial rates ‘being out of the market’.

http://forexmagnates.com/breaking-ig...tility-in-chf/

Institutional traders and buyside members have seen an influx in banks using last look practises to overpower their clients. One trader who commented on the basis of anonymity said to Forex Magnates: “Quite simply Banks are having the biggest last look ever, typical of the market today, they enter a risk market and when it goes against them they fail to honour the trades.”

http://forexmagnates.com/banks-face-...mln-bloomberg/

I thought institutional traders would enjoy better and fairer trading conditions than us small retail traders. I can't believe they are getting even more raw deals trading directly with these liquidity f***ers.

And of course this article about how liquidity "providers" bucket shopped brokers and retail traders in turn just because they could due to their sheer size:

http://forexmagnates.com/banks-bucke...nc-volatility/
Make your losses in demo. Earn your profits live.
  • #84
  • Jan 19, 2015 11:41pm Jan 19, 2015 11:41pm
Quoting Princeton
Frankly, I believe that the issue is not on the LP's side. If there is no market because of a major market dislocation, then they are not going to create a fake market out of thin air where they will take losses after losses. We all complained about bucket shops for years. These guys provided a bid/ask at all times and had to recoup that by trading against their clients, doing stop hunting, charging higher spreads and what not. Now we got ECN's, people complain again for other reasons. The fact is that you cannot complain about ALL aspects of the...
man, SNB is private CB. please..
  • #85
  • Jan 20, 2015 1:14am Jan 20, 2015 1:14am
Quoting Forexia
{quote} I am actually not "relatively" right, I AM right LOL but I thank you for your acknowledgement. Nothing is all roses and flowers in trading but that does NOT give them the excuse for what they did. They basically did EXACTLY what we complained about the MM brokers did to us only ten times worse. And just like what I said, since they trade against us so our gains is their loss and their gain is our loss because it's a zero-sum game and everybody loses whenever they are on the wrong side of a trending market except when the Euro was tanking...
Yeah i get your point, one last thing however.

When you talk about the majority of retail and the SNB, i guess the SNB (like the LP) don't really care about what retail traders are doing, even with all the leverage the whole retail industry is just a tiny very tiny part of the market (some say 4%), so my thought is that nor Snb nor Liquidity providers really cared about which the retail side was.

Retail traders losses was really what in war-games they call "collateral damage", they was in the wrong side in the wrong time, unlucky! But i guess on an institutional level nobody really cared about retail traders lol.

The retail traders losses made news because retails was the only ones that really lost money, mainly because only them was stupid enough to sell a pegged currency (the swiss franc) that was way below it's real value, if institutions would have made such mistake, we would not hearing of hundreds-millions losses, but of hundreds-billions (some hedgefund made such mistake and burned a few billions here and there, but the mistake on an institutional level was really limited).

This just to say, that the reason of such bad situation for retails (and brokers) was not a LP problem that need to be regulated, mostly was a retail problem that sold a currency (the swiss franc) artificially (by the snb peg) undervalued of 20%, Liquidity providers have provided liquidity from the right market value (from around 1.04).

The 1.20 price was simply WRONG, artificial, not real!
It was an illusion perpetrated by the swiss national bank, this is the point that is not understood well i guess.

Suppose that now you want to sell at 1.20 again right now, in order to do so you would need a LP to buy from you at that level, well no LP would do it now, because that one is not the right market value.
One week ago, if you sold at 1.20, the snb was buying from you, NOT an LP! Like now, one week ago the only liquidity provider on the bid side was the Swiss National Bank, not Commercials Liquidity Providers.

3 Years ago, whent he snb bringed up eurchf from 1 to 1.20 in a total surprise, there was a LOT of liquidity providers on the Ask side (there was a big downtrend), well the snb bought all way up untill 1.20 in a hurry, locking all those liquidity providers in 2000 pips losses, they didn't cried or get crazy, just like real men, they remained silent and waited for their revenge.
From that moment, the only bids below 1.20 was the snb bids, the LPs, patiently, waited for 3 years..

When the time has come, and the snb decided to stop bidding, everybody started looking to LP for a market at 1.20.
Well my friend, the LPs very politely said "fuck you, if you want to sell, we are going to buy at 1.00, not one pip above".

You say that they are the bad guys, that they must be regulated.

I say that they are the real heroes here, the only thing to be regulated is the regulation itself, the central bankers interventions, the artificial suppressed or inflated values, the quantitative easings, the minimum floor rates, the seasonally adjusted NFPs, all the bullshit of the governments and central banks.
  • #86
  • Jan 20, 2015 8:45am Jan 20, 2015 8:45am
Quoting spaceduck
{quote} Yeah i get your point, one last thing however. When you talk about the majority of retail and the SNB, i guess the SNB (like the LP) don't really care about what retail traders are doing, even with all the leverage the whole retail industry is just a tiny very tiny part of the market (some say 4%), so my thought is that nor Snb nor Liquidity providers really cared about which the retail side was. Retail traders losses was really what in war-games they call "collateral damage", they was in the wrong side in the wrong time, unlucky! But i...
SNB real heroes????Throwing an atomic bomb in financial terms...haha...there move was a wrong move completely. if you ask me on 15/1/15 SNB should have lowered interest rate to 0,75, as they did and rise the peg to 1,25 and signal in the statement that it is willing to do further risings if necessary to protect overvaluation of CHF..as it was normal and all normal traders expected after their last meeting 1 month ago...by doing so they would have punished those who purchased CHF and made a pressure on themselves to protect their economy and fx reserves...in this way the market would have stopped bying CHF when you have a centralbank treatening to go the other way...by doing what they did they have rewarded those who made a pressure on CHF and their efforts to protect economy...now those rewarded ended up with huge profits, while their own citizens and companies especially will have to fight with competitiveness....swiss producers now suffer the risk that their product at cost of 1000 chf will be more expensive from EU products costing 1000 eur....moreover they have now a lot of foreign reserves that need to be transferred back in CHF but today at much higher price for CHF crosses...instead of buying back CHF at levels between and above 1,25 now they will trade it below parity 1,00....they've incured huge losses for sw2iss citizens.....this SNB move is totally juvenile and uncompetent if you ask me
  • #87
  • Jan 20, 2015 10:28am Jan 20, 2015 10:28am
Quoting spaceduck
{quote} Yeah i get your point, one last thing however. When you talk about the majority of retail and the SNB, i guess the SNB (like the LP) don't really care about what retail traders are doing, even with all the leverage the whole retail industry is just a tiny very tiny part of the market (some say 4%), so my thought is that nor Snb nor Liquidity providers really cared about which the retail side was. Retail traders losses was really what in war-games they call "collateral damage", they was in the wrong side in the wrong time, unlucky! But i...
Great post! Unfortunately though, some people are incapable of understanding these things (no prizes for guessing that they were on the wrong side of the trade!), these people will only stop moaning when regulators shut down retail forex or significantly raise the entry-level, just like regulators have pretty much locked new daytraders out of the exchanges by raising the entry-level to $25000. I'll feel bad for the new aspiring daytraders if regulators decide to impose even more of their stupid sh!t on forex but that's how it works I guess, some people ruin things for everybody.
  • #88
  • Jan 20, 2015 1:32pm Jan 20, 2015 1:32pm
Quoting r41225
{quote} Great post! Unfortunately though, some people are incapable of understanding these things (no prizes for guessing that they were on the wrong side of the trade!), these people will only stop moaning when regulators shut down retail forex or significantly raise the entry-level, just like regulators have pretty much locked new daytraders out of the exchanges by raising the entry-level to $25000. I'll feel bad for the new aspiring daytraders if regulators decide to impose even more of their stupid sh!t on forex but that's how it works I guess,...
You know what? If the regulators want to shut down retail forex trading they can and will shut it down at any time with any lame excuses that they can think of. Don't blame it on somebody who's trying to bring awareness to something s***ty that's going on in the forex trading and feel something should be done about it. You and I both know what the liquidity "providers" did and still are doing is s***ty but I just have the guts to say it. What those liquidity "providers" did and still does everyday is NOT trading. It's bullying just because they have $1.8 trillion in assets. I am here to trade NOT to be bullied.
Make your losses in demo. Earn your profits live.
  • #89
  • Jan 20, 2015 4:57pm Jan 20, 2015 4:57pm
Quoting spaceduck
{quote} When you talk about the majority of retail and the SNB, i guess the SNB (like the LP) don't really care about what retail traders are doing, even with all the leverage the whole retail industry is just a tiny very tiny part of the market (some say 4%), so my thought is that nor Snb nor Liquidity providers really cared about which the retail side was. Retail traders losses was really what in war-games they call "collateral damage", they was in the wrong side in the wrong time, unlucky! But i guess on an institutional level nobody really...
Ok so they are just in it for the fun??!!! Well next time, USE THEIR OWN F***ING MONEY they don't give a s*** about!!! DON'T USE OURS!!! The loss for LP's in this debacle is like the peanuts of peanuts. Deutsche Bank supposedly lost $150 million USD in this SNB event, you know how much is Deutsche's total asset as of 2013? $1.8 TRILLION USD!!! That loss is 150,000,000/1,800,000,000,000 = 8.33333E-05 That loss number is so small with so many zeros before the "8", Excel couldn't even display it!! If I lose 8.3333E-05 of my total assets, I would "take it like a man" and wouldn't cry either! Piece of s***!!

IF this is really between LP and SNB, why don't they settle it with SNB themselves?!! With what they did, we ended up bearing the brunt of it all and SNB came out totally unscathed still! You know what, if the LP's REALLY wanted to make the SNB feel the pain, they should not only forgive our negative balances but actually reimburse us for the losses that we incurred on behalf of the LP's up to our stop-losses that should've been executed and then send that bill to SNB for them to pay for it. Then we are square otherwise the LP's are just making us retail traders lose the shirt on our back for nothing. LP's score with the CB's still didn't get settled. The CB's are not going to learn their lesson; they are still going to continue to intervene.
Make your losses in demo. Earn your profits live.
  • #90
  • Jan 21, 2015 8:24am Jan 21, 2015 8:24am
Four weeks ago ONE guy, trading guru John Carter said "trade stocks, stay away from Forex. One day you will wake up and your account will be gone".

For years every Forex hypester told traders "Come to Forex...it's the most liquid market in the world". Sure...until something happens. This is an industry-wide bamboozle. "but all you had to do is read your 17,000 word disclaimer saying "there is risk". Yea, thanks
  • #91
  • Jan 21, 2015 10:53am Jan 21, 2015 10:53am
The fx market IS the most liquid market in the world, who still haven't understood what happened with the chf 1 week ago, let's say he/she deserve to have wiped out his/her account.

Wake up kids!

About tomorrow, the big day for eur (draghi will announce or not announce a big or not big QE).

Reports of the liquidity on the Eurusd (Euro Fx future) hitting a record-low today, and is expected to stay low untill after the ecb announcement of tomorrow.

(image attached, Source: @NanexLLC)

So.. for the eurusd traders here, if you are planning to trade the ecb event tomorrow with full leverage, please don't come here later screaming for regulations if your account get wiped out in a minute.

Be smart!
Attached Image
  • #92
  • Jan 21, 2015 11:02am Jan 21, 2015 11:02am
Quoting toncuz
Four weeks ago ONE guy, trading guru John Carter said "trade stocks, stay away from Forex. One day you will wake up and your account will be gone". For years every Forex hypester told traders "Come to Forex...it's the most liquid market in the world". Sure...until something happens. This is an industry-wide bamboozle. "but all you had to do is read your 17,000 word disclaimer saying "there is risk". Yea, thanks
If only the stock quotes can give me the spread of 0, leverage of 500:1, commission of 2.0 and pay me interest for my trades and a trading volume of $5.5 trillion, I will be willing to take a second look of stock trading although I still enjoy forex trading more.
Make your losses in demo. Earn your profits live.
  • #93
  • Jan 21, 2015 12:51pm Jan 21, 2015 12:51pm
Quoting Forexia
{quote} Ok so they are just in it for the fun??!!! Well next time, USE THEIR OWN F***ING MONEY they don't give a s*** about!!! DON'T USE OURS!!! The loss for LP's in this debacle is like the peanuts of peanuts. Deutsche Bank supposedly lost $150 million USD in this SNB event, you know how much is Deutsche's total asset as of 2013? $1.8 TRILLION USD!!! That loss is 150,000,000/1,800,000,000,000 = 8.33333E-05 That loss number is so small with so many zeros before the "8", Excel couldn't even display it!! If I lose 8.3333E-05 of my total assets, I...
Those banks didn't lose their shirts because they weren't stupid to bet shirts, farms & whatever on a terrible, overleveraged trade! That's why got by with small losses while overleveraged, ill-informed traders got slashed to the bone. And how are LPs supposed to "settle it with SNB"? By asking for regulations against SNB? No, they are mature enough to realize that they can't bitch & moan about losses, it's part of tradng, everybody tries to do what they believe is in their interest, so did SNB, LPs knew (as did most informed traders) that SNB can't hold the line forever because even central-banks have their limits so LPs just waited for their opportunity. Nobody put a gun to retail traders' head to get them between LPs & SNB, retail traders that got caught in the crossfire got there on their own, they could have chosen to stay informed about the markets they are trading, about the risks involved but they didn't & in the end, they got what they got. Of course, central-banks aren't going to change their ways because the big part of the reason they exist & meddle in the markets is because their mandates tell them to do certain things that involve meddling in the markets but that's only because most people want governments to meddle in the markets & regulate them!

Quoting Forexia
{quote} If only the stock quotes can give me the spread of 0, leverage of 500:1, commission of 2.0 and pay me interest for my trades and a trading volume of $5.5 trillion, I will be willing to take a second look of stock trading although I still enjoy forex trading more.
You know why trading stocks isn't as profitable as it could be? Regulations!
On the other hand, forex is less regulated & hence more freer, more profitable but hey, no problem, let's regulate the sh!t out of forex too!
  • #94
  • Jan 21, 2015 1:13pm Jan 21, 2015 1:13pm
Quoting r41225
{quote} Those banks didn't lose their shirts because they weren't stupid to bet shirts, farms & whatever on a terrible, overleveraged trade! That's why got by with small losses while overleveraged, ill-informed traders got slashed to the bone. And how are LPs supposed to "settle it with SNB"? By asking for regulations against SNB? No, they are mature enough to realize that they can't bitch & moan about losses, it's part of tradng, everybody tries to do what they believe is in their interest, so did SNB, LPs knew (as did most informed traders) that...
That's the point, we have to understand that buying was not making any sense at all, i mean just look at the chart.

The very sad part of the story is that because of some traders a few of the best retail brokers went burst.
Attached Image (click to enlarge)
Click to Enlarge Name: EURCHFWeekly.png Size: 28 KB
  • #95
  • Edited 7:56pm Jan 21, 2015 4:01pm | Edited 7:56pm
Quoting r41225
{quote} Those banks didn't lose their shirts because they weren't stupid to bet shirts, farms & whatever on a terrible, overleveraged trade! That's why got by with small losses while overleveraged, ill-informed traders got slashed to the bone. And how are LPs supposed to "settle it with SNB"? By asking for regulations against SNB? No, they are mature enough to realize that they can't bitch & moan about losses, it's part of tradng, everybody tries to do what they believe is in their interest, so did SNB, LPs knew (as did most informed traders) that...
First of all, most of the traders DIDN'T bet their shirt, farm or whatever. Using your analogy, they only bet their little glove but instead they got stripped down to their shirt by the unscrupulous liquidity "providers" who shut down liquidity, requoted well below market and even try to dishonour fills and after being f***ed over by SNB AND the liquidity "providers", now the retail traders has lost his/her shirt on his/her back and they are the lucky ones at least they didn't lose the farm like some of them.

Quoting r41225
{quote} Nobody put a gun to retail traders' head to get them between LPs & SNB, retail traders that got caught in the crossfire got there on their own, they could have chosen to stay informed about the markets they are trading, about the risks involved but they didn't & in the end, they got what they got. Of course, central-banks aren't going to change their ways because the big part of the reason they exist & meddle in the markets is because their mandates tell them to do certain things that involve meddling in the markets but that's only because...
Yes we got into the line of the fire between the LP & SNB true but the LP's really kept us there when we tried to get out with our stop-losses and used us as meat shields instead of taking the shots themselves. If they were so "man" enough to "take the pain", WHY did they hide behind us retail traders like little sissies instead of taking the bullets themselves especially when they are armed with titanium bullet-proof vests of $.1869 BILLION assets. Bunch of chicken s***!

Quoting r41225
{quote} You know why trading stocks isn't as profitable as it could be?
Yes all the WRONG regulations against us little guys, same crap they are doling on us for forex trading, leverage cap and $25K minimum capital requirement. Seriously, WHY would you need $25K deposited there with leverage of 2:1 when the average movement of a stock is like couple of cents a day? Ridiculous! Well I hope they are happy that they wiped out a $billion industry and now they are about to wipe out another. Have fun!
Make your losses in demo. Earn your profits live.
  • #96
  • Jan 21, 2015 5:34pm Jan 21, 2015 5:34pm
"If only the stock quotes can give me the spread of 0, leverage of 500:1, commission of 2.0 and pay me interest for my trades and a trading volume of $5.5 trillion, I will be willing to take a second look of stock trading although I still enjoy forex trading more."

SO you want huge leverage but do not want to pay for the consequences? if things go wrong
FX pays interest if you are long and that too that comes from the counter party who is short and has to pay interest ..in doing so the broker dealer makes spread also
With stock you dont pay interest ( unless you are borrowing) both ways

5.5 trillion: Once again Notational value like me long 1million you short 1million, Do we ( with our broker) really physically have 2 million on table? DOn;t think so
How much is real FX transaction for personal and business purposes out of that
With stock there is real money on table!

So it is funny you should compare stock trading with Margin OTC FX
  • #97
  • Jan 21, 2015 6:50pm Jan 21, 2015 6:50pm
Quoting Moka
"If only the stock quotes can give me the spread of 0, leverage of 500:1, commission of 2.0 and pay me interest for my trades and a trading volume of $5.5 trillion, I will be willing to take a second look of stock trading although I still enjoy forex trading more." SO you want huge leverage but do not want to pay for the consequences? if things go wrong FX pays interest if you are long and that too that comes from the counter party who is short and has to pay interest ..in doing so the broker dealer makes spread also With stock you dont pay interest...
Really going in and out of a stock transaction in 2 seconds puts real money on table?
Make your losses in demo. Earn your profits live.
  • #98
  • Jan 21, 2015 6:57pm Jan 21, 2015 6:57pm
Quoting spaceduck
if you are planning to trade the ecb event tomorrow with full leverage, please don't come here later screaming for regulations if your account get wiped out in a minute. Be smart! {image}
With what? Our negative balances? LOL For those who do have bit of money still left in our account, thanks to those liquidity f***ers, my broker slashed leverage 5 folds until next Monday so there is no full leverage and I won't be able to trade at all. So there, those banks' dream finally came true, shutting us little guys out of the market.

So since we don't have any money anymore and no means to help us to trade, so we would have no choice but to sit this one out. I hope you are happy. I hope Draghi makes an announcement that he is not going QE and I am going to laugh like that talk show host in your video while watching all the "Big Banks" taking it like a man. Better top up on their testosterone supplements!! LOL Cuz this time if they f*** up, they are NOT getting bailout from us ever!
Make your losses in demo. Earn your profits live.
  • #99
  • Jan 21, 2015 7:01pm Jan 21, 2015 7:01pm
Quoting Forexia
I am ALWAYS wrong on my trade and I am ALWAYS highly leveraged and I am ALWAYS facing to me unreasonable slippages and spread but that has NEVER been a problem before. The question is WHY now?
Because you were an accident waiting to happen.
"Risk comes from not knowing what you're doing." - Warren Buffett
  • #100
  • Jan 21, 2015 7:10pm Jan 21, 2015 7:10pm
Quoting Spili
{quote} Because you were an accident waiting to happen.
pussycat is going angry, blaming others for itīs trading "skills"
fortis fortuna adiuvat
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