Originally Posted by
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I would appreciate if Traders with firsthand experience of Institutional Platforms (Hotspot, Currenex, FXAll, Lava) and Interbank Platforms (EBS, Reuters), could remark. Additionally, those who have direct knowledge of these platforms....
Over the past couple of months, several disturbing accounts of interbank 'etiquette' happen to be relayed by authoritative internet posters which, IMO, talk credibly on the subject.
The major complaint across Institutional ECN (Currenex) and Interbank Platforms (Reuters, EBS), is busted trades. Or what is called a bank reversal.
Basically, this is a trade executed by a private trader, counter-partied with a bank, which at some time in the future, is reversed or canceled by the bank, effectively canceling their original sale or purchase.
Under many intra-day styles (scalper), the private trader has already closed the profitable standing and is left with a currently OPEN position (ex if a Bank cancels their sell order, the trader still has an open place, presumably to shut his long that was 'pinpointed' by the bank).
To confound matters, notifiion isn't made directly to the Trader by the Counter-party Bank . Rather telling is made to the Traders Prime Broker, who in turn, is expected to notify the Trader at a timely manner.
This introduction of telling delay only compounds the problem. I've heard it can take hours to get a Trader to get notifiion an interbank trade was previously canceled. In real life, the market can be several hundred pips OFF MARKET, from this point...
This can drastically slash a traders capital, empty their account, or set them into deep debt as their closed position is reopened and presumably unattended for hours, after-the-fact...
Why would a Prime Broker sell a Trader?
The response is easy: to preserve a relationship between the Prime Broker and the Offended Bank (ie Coveted Liquidity Provider). Which relationship is more important? That between a private, HNW Trader and Deutsch Bank? Or DB and Citibank??
Lets Name Titles. I've read from several traders, bank reversals are common on Currenex. FXAll? Do not know. Lava? Do not know. Hotspot? Do not know. Happens on EBS and Reuters....
This really is a major concern and critically begs the question: whats the purpose?
A Traders profession is at the only real of a Counter-Parties good graces....
The next disappointment pertains to scalping.
Apparently, Banks routinely target scalpers who exchange large dimensions ( 20 MIO) to get some pips or quite frequent (automated).
By goal, we are talking bank reversals online orders. Or having them booted from a supplier for unfair trading practices.
That is upsetting because a Prime Broker acts as bucketshop by working a deal-desk and accepting vulnerability on the Traders positions....or, they bend such as reed when one of their liquidity suppliers whose been whacked a few times runs crying to the Prime Broker - possibly reversing the trade (leaving the trader money) or using the Trader booted in the liquidity network...
I've even heard banks will probably complain whenever they take a big hit on a longer-term directional trade... They'll just cancel cause they do not wish to take a loss. .
Frankly, this is all beyond foolish and pure robbery. Categorically untradeable.
If anyone can share their experiences around the Institutional and Interbank Platforms, it'd be much appreciated!
Thanks In Advance.