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  • #181
  • Feb 23, 2015 3:47pm Feb 23, 2015 3:47pm
Quoting MaximeCau
{quote} link no more available. You should merge your posts, it will be clearer.
I Cba lol
  • #182
  • Feb 23, 2015 3:55pm Feb 23, 2015 3:55pm
Look at this article about a Prime Broker:

http://leaprate.com/2015/01/price-ma...vidual-trader/
Forex is a losers game.
  • #183
  • Feb 23, 2015 4:09pm Feb 23, 2015 4:09pm
Quoting actalis
Since most players in this thread seem to be trading in large contract increments, I'm curious about your experience in trading FX futures rather then spot. Typical spread I see on IB for the EUR/USD future contract is at 0.5 for about 10/15M which seems on par with the liquidity on Currenex or even Currenex Big. Granted, those are fixed EUR 125K contracts but then there's regulated central execution, no room for broker mark-ups, low commission, no swap costs and even mini contracts are starting to see some decent liquidity. Am I missing any obvious...
How did futures perform over the CHF fiasco can I ask ?
  • #184
  • Feb 23, 2015 4:26pm Feb 23, 2015 4:26pm
Quoting plotinus82
{quote} Cause since no body trades illiquid, counter party risky FX futures in the professional world people getting swayed by the OTC argument that they are centralised is just joking themselves, FX futures are used as a hedge for LATAM and NDFs, no one trades EUR USD Futures. Not being a douche but the fact that you believe in fx futures means you dont understand what you are trading / investing in.
CME does more volume in FX than EBS(must be all one-lot pikers, right?). And futures have virtually no ctpy risk since they are cleared and transactions are guaranteed by CME Clearing. Not entirely sure who lacks understanding here..
  • #185
  • Feb 23, 2015 4:39pm Feb 23, 2015 4:39pm
Quoting shrike
{quote} CME does more volume in FX than EBS(must be all one-lot pikers, right?). And futures have virtually no ctpy risk since they are cleared and transactions are guaranteed by CME Clearing. Not entirely sure who lacks understanding here..
EBS count one side only.

when CME count contracts are they talking a buyer and a seller as 2 contracts or 1 ?
  • #186
  • Feb 23, 2015 4:43pm Feb 23, 2015 4:43pm
Quoting shrike
{quote} CME does more volume in FX than EBS(must be all one-lot pikers, right?). And futures have virtually no ctpy risk since they are cleared and transactions are guaranteed by CME Clearing. Not entirely sure who lacks understanding here..
Firstly not sure if you know that EBS is ancient, it was the hit 20 years ago with Reuters but no one really uses EBS anymore. RBS puts 3% of their flow into EBS. If you compare one of the execution venue for ccy futures then of course it'll have higher volume than EBS. Also ctpy risk does exist for retail traders trying to trade on these instruments, the counter party risk is there as it's the broker who signs the ISDA with the exchange and PB. They cannot do anything and hence CME clearing although gurantees it for the broker, there is a margin of error. Hence shouldn't really be traded by retails.
  • #187
  • Feb 23, 2015 4:47pm Feb 23, 2015 4:47pm
Quoting shrike
{quote} CME does more volume in FX than EBS(must be all one-lot pikers, right?). And futures have virtually no ctpy risk since they are cleared and transactions are guaranteed by CME Clearing. Not entirely sure who lacks understanding here..
At the RBS floor in 135 bishopgate london there's a volume counter for the day. Hits 50 yards everyday.... And nearly all of that flow goes into the banks very own aggregator. Which I know for a matter of fact that EBS is not included in the system.
  • #188
  • Feb 23, 2015 5:15pm Feb 23, 2015 5:15pm
CME does 100bn ADV in the FX complex (without options), so to say "nobody in the professional world trades futures" is ridiculous.

lasty: obv. single count, the only one who published double-count was Hotspot and they stopped it when the press got wind of it
  • #189
  • Feb 23, 2015 5:19pm Feb 23, 2015 5:19pm
Quoting plotinus82
{quote} At the RBS floor in 135 bishopgate london there's a volume counter for the day. Hits 50 yards everyday.... And nearly all of that flow goes into the banks very own aggregator. Which I know for a matter of fact that EBS is not included in the system.

I just saw EBS Jan2015 at $129.6 billion single count http://forexmagnates.com/icap-plc-re...umps-23-7-mom/ that's spot only one side only.
  • #190
  • Feb 23, 2015 5:37pm Feb 23, 2015 5:37pm
Quoting lasty
{quote} I just saw EBS Jan2015 at $129.6 billion single count http://forexmagnates.com/icap-plc-re...umps-23-7-mom/ that's spot only one side only.
True, they are bigger than CME again. Last year ebs was almost down to 70 for a few months, then cme was bigger. EBS also almost had a member mutiny when they switched to decimal quoting for a short time.
  • #191
  • Feb 23, 2015 7:23pm Feb 23, 2015 7:23pm
Learning the correct terminology and how the market really works may clear some of this up and be helpful in this discussion because I see wrong terms thrown around this entire thread.

By "ECN", I assume you mean a true ECN or "broker". A broker will have a system to show you the best available prices which you can trade at and then they help you match your trade with one of the liquidity providers. They work on your behalf as a middle man and do not take part in the trading transaction themselves. Think of a real estate broker, a real estate broker is not buying the house from you at one price and then selling it to another client for a higher price, they are simply acting to match buyer and seller.

A "dealer" will take the other side of your trade. They make the market.

ECN stands for Electronic Communication Network. Nothing more, nothing less.

So what many retail dealers do is promote themselves as ECN's because they know you guys think that means they are a true broker. But, the dealer is simply using their OWN version of an ECN which displays their OWN quotes.

For those on this thread that posted about firms being highly regulated and not being able to say something that isn't true, well technically they aren't doing anything illegal because it IS an ECN (Electronic Communication Network) but it's deceptive because it's their own quotes being displayed in a closed environment (not like a broker).

Read the firm's small print OR ask them what their business model is to find this out.
  • #192
  • Feb 24, 2015 1:58am Feb 24, 2015 1:58am
[quote=broker1107;8090531]They work on your behalf as a middle man and do not take part in the trading transaction themselves. Think of a real estate broker, a real estate broker is not buying the house from you at one price and then selling it to another client for a higher price, they are simply acting to match buyer and seller.

Supposedly.

Quoting broker1107
A "dealer" will take the other side of your trade. They make the market. ECN stands for Electronic Communication Network. Nothing more, nothing less. So what many retail dealers do is promote as ECN's because they know you guys think that means they are a true broker. But, the dealer is simply using their OWN version of an ECN which displays their OWN quotes.
Quoting broker1107
For those on this thread that posted about firms being highly regulated and not being able to say something that isn't true, well technically they aren't doing anything illegal because it IS an ECN (Electronic Communication Network) but it's deceptive because it's their own quotes being displayed in a closed environment (not like a broker).
And the problem is you don't know whether they ARE giving you the price from the market from all those liquidity providers or it's their own quotes. There is no way to check it because there is no centralized exchanges for forex. Every broker's price is different.
Make your losses in demo. Earn your profits live.
  • #193
  • Feb 24, 2015 2:22pm Feb 24, 2015 2:22pm
Again, not accurate. A true broker is not a dealer. If they have a dealing desk, they are a dealer not a broker. This will be disclosed. If they have no dealing desk, they are NOT providing their own quotes because they aren't taking the other side of the trade.

No supposedly about it and the fact that there is no centralized exchange is irrelevant.
  • #194
  • Feb 24, 2015 3:00pm Feb 24, 2015 3:00pm
Quoting broker1107
Again, not accurate. A true broker is not a dealer. If they have a dealing desk, they are a dealer not a broker. This will be disclosed. If they have no dealing desk, they are NOT providing their own quotes because they aren't taking the other side of the trade. No supposedly about it and the fact that there is no centralized exchange is irrelevant.
They can also be NDD and outsource market making : STP through a big Market Maker
  • #195
  • Feb 24, 2015 9:27pm Feb 24, 2015 9:27pm
Quoting broker1107
Again, not accurate. A true broker is not a dealer. If they have a dealing desk, they are a dealer not a broker. This will be disclosed. If they have no dealing desk, they are NOT providing their own quotes because they aren't taking the other side of the trade. No supposedly about it and the fact that there is no centralized exchange is irrelevant.
Well there is plenty of brokers out there that make themselves to be NDD but still provide their own quotes to you and take the other side of your transaction. CMC Markets is one and FXCM is another. They are both market makers and do take the other side of your transaction BUT they state they are NDD, non dealing desk. There are even brokers out there who state they are STP DMA ECN but still disclose themselves as taking the other side of the transaction and is a market maker.

I think today the meaning of "NDD" today just means they don't requote or reject your orders when you place a trade on their platform that your order will always go through but whether you are TRULY trading in the "market" or still with them is yet to be determined. I agree that in theory "NDD" should mean that they act as a broker and not a dealer, just somebody who matches buyers with sellers and vice versa hence the term "non dealing desk" but that's NOT how it works in reality.
Make your losses in demo. Earn your profits live.
  • #196
  • Feb 25, 2015 7:45pm Feb 25, 2015 7:45pm
Quoting Forexia
{quote} Well there is plenty of brokers out there that make themselves to be NDD but still provide their own quotes to you and take the other side of your transaction. CMC Markets is one and FXCM is another. They are both market makers and do take the other side of your transaction BUT they state they are NDD, non dealing desk. There are even brokers out there who state they are STP DMA ECN but still disclose themselves as taking the other side of the transaction and is a market maker. I think today the meaning of "NDD" today just means they don't...
If there were any doubts before, it should be pretty clear now that FXCM does not benefit when clients lose on our No Dealing Desk (NDD) forex execution. That's because we offset each of your orders one-for-one with the best prices from competing liquidity providers. Those liquidity providers are independent from FXCM, which means we don't profit from your losses, or lose from your profits. Instead, we make money from your trading volume.

In fact, with our new super-tight spreads, we have replaced the old markups to the spread with transparent commissions, so you can see exactly how much we make for executing your orders. The live FXCM spreads you see here are from the best bid and ask prices we receive from our liquidity providers without any markups: http://www.forexfactory.com/brokers.php#spreads
  • #197
  • Feb 25, 2015 8:36pm Feb 25, 2015 8:36pm
NFA's NDD Disclosure
Attached Image (click to enlarge)
Click to Enlarge Name: NFA.PNG Size: 258 KB
  • #198
  • Feb 25, 2015 11:06pm Feb 25, 2015 11:06pm
Quoting Jason Rogers
{quote} If there were any doubts before, it should be pretty clear now that FXCM does not benefit when clients lose on our No Dealing Desk (NDD) forex execution. That's because we offset each of your orders one-for-one with the best prices from competing liquidity providers. Those liquidity providers are independent from FXCM, which means we don't profit from your losses, or lose from your profits. Instead, we make money from your trading volume. In fact, with our new super-tight...
Thanks for the clarification, Jason. What we are discussing here with is more with regards to the actual definition of "NDD" which does not necessarily mean "non dealer" and automatically a broker or agency model as stated by Broker1107. This statement just proved my point further that "NDD" just means no dealer interference from the broker but that broker can still be a market maker and thus act as a principal rather than an "real estate agent" type to the trade.

At least brokers like CMC Markets, FXCM, Oanda are honest about it in their disclosure which is our main concern here instead of like many brokers out there who advertise themselves as operating in STP/DMA model but still may act as an market maker and may or may not hedge against our trades which produces the potential conflict of interest which existed in the original market maker model. And this is what is being debated here.

Yes, it is more re-assuring to us traders that at least our trades are now hedged so if we lose, the brokers will lose too (unfortunately like what we saw in the SNB crisis). Going off-topic, I wonder if a broker would've lost less in this SNB crisis if they had operated in a pure agency-type of model where it absolutely does not act as a counterparty to any trades and instead passed all trades 100% to the liquidity provider to execute and they just earn commissions just like a real estate agent. In the case of the SNB crisis, those unscrupulous liquidity "providers" would've borned 100% of the counterparty risk from all of our negative balances and would've had to chase after us directly themselves but at least the broker would've been off the hook sort of speak since they didn't take any part in the deal. But instead when they hedged, they suffered more losses because we all lost.

Which begs the question: WHY being a market maker in the first place if you were going to hedge out the trade anyway and supposedly make 0 profit from it? WHY not just ditch the market making model completely and then just earn purely on commissions? That way, the transparency is there and everything is simple and clear for everyone. No more guessing works. No more doubts, no more disclosures and extra clarifications. Everybody can just concentrate on trading and brokering.
Make your losses in demo. Earn your profits live.
  • #199
  • Feb 26, 2015 2:35am Feb 26, 2015 2:35am
Quoting Forexia
{quote} WHY being a market maker in the first place if you were going to hedge out the trade anyway and supposedly make 0 profit from it? WHY not just ditch the market making model completely and then just earn purely on commissions? That way, the transparency is there and everything is simple and clear for everyone. No more guessing works. No more doubts, no more disclosures and extra clarifications. Everybody can just concentrate on trading and brokering.
I'm going to make an educated guess that what you suggest would work at a minimum threshold for volume (100K or 1M ?) and probably in round increments as they could simply be passed through directly to the interbank market without being tampered with. Anything below that doesn't work, as orders need to be aggregated at the broker to meet that threshold and what doesn't fit may need at times to be taken straight as MM otherwise there'd just be no market for all those odd low retail orders.

Anyone with a better understanding, feel free to amend.
  • #200
  • Feb 26, 2015 8:25am Feb 26, 2015 8:25am
Yes the main reason of the troubles is many retails can't invest enough money and take standard lot size. That’s why many forex brokers are dealers and offer fake forex trading.

Another reason is commissions are based on volume... Retails don't make millions and millions volumes, so brokers' income won't be high and they will charge high commissions. But lot of retails won't be happy with such commissions... and even with trading conditions : slippage, no guaranteed stop loss...

As most of retails are loosers, it's a big business to take the other side of the trade . Lot of money to make....
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