Broker Challenge quotNDD/STPquot vs. True quotECNquot and quotMkt Mkrquot broker talk
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Thread: Broker Challenge quotNDD/STPquot vs. True quotECNquot and quotMkt Mkrquot broker talk

  1. #1
    Hi,
    I hope this thread can lead to positive, constructive and useful conversation between a number of the wonderful minds here in forexintuitive.

    This is not a thread to speak up /encourage or even post suggestions of ANY brokers' name. If and only if it is okay to theforexintuitiveprinciples shall we cite a real broker simply to use as an example of a service provided, gt;MODS please chime in if that isn't an acceptable way of notation.lt;

    I intend and will be posting all my encounters with all three of these types of brokers.
    Mostly ALL my posts with regard to this matter will be from LIVE trading, diverging to demo only in an effort to illue the
    prior expertise, to dwell trading, with stated broker kind.

    There are celebrities alongside certain terms which suggests that I will elaborate further in later posts
    ---------------------------------------------

    What I would like to see at some stage - is an arrangement amongst traders here
    of exactly what the best type of broker is for the independent, or for that matter any off exchange trading party. I also hope this thread can slice through a number of those smoke in mirrors that many brokers use as marketing egies to employ new found money in their shop.

    Ideally, there'll be a conclusion in the end. I encourage everyone to donate, this is an effort to put a great deal of great knowledge in 1 place for the larger good.

    To make things even more interesting, for those who may not feel as giving an impression in words, I ask you to PLEASE VOTE, at the survey will attach.

    ----------------------------------------------

    Everything we're looking at here is trading FX, plain and simple, The simultaneous buying and selling of one currency against another, making both a long and short position at the desired pair (for those that don't know.) Or as I like to phrase to family and friends, It is just like going to the airport exchange office - Had I been an FX trader the last time I was in CDN! I would certainly exchanged my USD/CAD way ahead of the trip!

    Additionally, unless you are a central bank, hedge fund, large multinational corporation, market manufacturer FX or alternative or somebody who's capitalized wealthy enough to give liquidity (ie: Warren Buffet) to the largest money market in the world ForeX, you are off exchange trading. Not within the inner group of (a quite little in global retrospect) central banks that include (trade with eachother) the real FX Interbank (this terms is to frequently thrown around at the retail market) Foreign Exchange has no centralized place place of exchange like additional EXs - ie; NYSE or NYMEX /ComEx -- etc..

    ----------------------

    Therefore the choice here is simple. How do YOU / we the retail consumer/trader receive the nearest way to being on market?

    Everything you/we need is easy - however - multi-fold:
    -Transparency - In quotes, spreads, business practices. * (I'll return to this later)
    -Tight Spreads with reduced commissions.
    -Reliability - Client service that's THERE. Tech support
    -A Platform - that packs YOUR NEEDS -ie(scalping? - news trading? Etc) not mine - maybe not the man next door - maybe not other members - YOU and only you're the one that matters.
    -Orders Filled** TO WHAT THE MARKET DICTATES. Ie: Sunday open a true GBP/USD spread will be different from Sunday 5pm to Monday 3:AM
    -NO re-quotes - NO odd messages preventing you from earning profit/ taking trades - ie trade circumstance busy
    -Minimal technical shocks if any - ie; no host link, no access to trading host in high volatility (LDN/NY cross / Asia Close LDN open)
    Etc. the list continues.

    Seems like a lot? Not really this is the BARE minimum a broker that's profiting every time you trade needs to and can offer.

    -----------------------

    I am having some difficulty with thinking prior market manufacturers, are currently NDD/STP. I shall explain my potential contradictions of a former MM broker truly offering NDD/STP. Where as an with an ECN - (NDD/STP) goes without saying.

    And that I SINCERELY feel that MMs have made it TOO straightforward to exchange for the retail user using Far removed software Like MT4, for people to operate losing EAs (I do not use any EAs currently) along with other un-edued mass trader to get rid of money, like a drop in the bucket! LoL -bucket shops.
    Sure MMs can provide other proprietary means to trade, nevertheless, even if the most prosperous card counter in a black jack table is KEPT playing against the house he also will LOSE. Forex should not be treated as a bet - rather a multinational startup firm to the freelancer CEO/CFO/COO all of that are YOO or YOU!

    A couple of nuggets,
    Why does MT4 generally have fixed spreads? = MM4
    Why does MT4 or other prop MM trading never provide MARKET DEPTH? To show Actual orders occurring in REAL TIME by additional Traders, institutions and banks?
    Why do Prop trading MM platforms not show WHO the liquidity Providers would be that are Quoting the prices you are taking? (SOme ECNs DO)
    Why are spreads and transactions simple to take (4 pips) if the true market may have a 30 pip spread? At low liquidity instances on a pair such as GBP/USD?
    Would these alone not make you Question Where your Hard Earned Money is Going?

    I enjoy the Simplicity and Simplicity of use within an MT4 chart, nevertheless can't we do the same TA on others????? YES. I am not bashing the MT4 system, Just the ultimate pair of a MM using a too simple / not enough thickness software combo to the ordinary FX interested person.

    Just wanted to get the thread started and hope many here inforexintuitivewill see, vote and donate.
    Sincerely,


    EDIT
    Edit:WELL I WROTE A LOT HERE AND REALIZE NOW There's A STICKY ABOVE THIS ABOUT THE Exact Same TOPIC!!! LOL I THOUGHT that I READ IT.

    Yet there are many differences and I have decided to leave the thread up.
    PLEASE VOTE PEOPLE - THE CONCLUSION IS FOR THE GREATER BENEFIT OF THE MEMBERS HERE ATforexintuitiveAND YOU!!!! TOO! [/color][/b]

  2. #2
    There is one important lesson to learn for new (and some not so new) traders who wish to live in Forex.

    All retail brokers (and except Prime brokers that provide you access to institutional markets of EBS calibre), all without exclusion brokers are middlemen manipulating monetary stre of numerous (comparatively ) small traders (intra-marketmaker market) and real FX market. In between, you will find ZILLION OF DEALS that have nothing with REAL MARKETS.
    Broker's appliions algorithms monitor internal buys and sells orders, in addition to, general situation on REAL MARKETS, therefore engaging traders GET ILLUSION they are a part of trading stre where many small lots are aggregated toward tradeable lot which socialized with REAL MARKET.
    As idea, there is nothing wrong with that, retailer must basically do that and charge commission (or take part of disperse ) for deals completed.
    In reality, commission is not as important to retail broker than OPPORTUNITY to execute prices per own algorithmic criteria when no REAL MARKET is involved whatsoever (or if REAl MARKET serves just to score the gap between intra-marketmaker market and REAL MARKET), consequentelly, implementation of bargain is readily made in favour of particular scenario that makes considerably bigger profit for broker retailer compared to commissions and pure spreads.
    The lack of clear, company rules and regulations enables FX brokers to tweak platforms in way which is not really obvious and definitelly not simple traceable by ordinary small trader.
    Bigger or real FX professional traders are totally aware of such conditions and they are able to really see the difference, but not to extent to have hard evidence of wrongdoings.
    Crucial point is that REAL FX MARKET is fluid and there is not any one single benchmark FX rate at any given moment of time. There are bargains between interbank participants which vary from mainstream deals at precisely the same time and depending on marketplace such differences happen naturally.
    Retail brokers (especially advanced ones) have accesses to various marketplaces simultaneously and with progress of progr they get more and more abilities to match REAL MARKET conditions with their own implementation to prevent clear evidence of playing against any single trader.
    When scenario becomes especially congested and too difficult to be implemented in both'reasonably manipulated fashion' and'in accore with profit-making criteria' than many strange things enter into picture just like platform glitches, slippages, re-quotes and all range of nasty creations that make final equilibrium adapting to broker's anticipation.
    It ought to be noted that market situation can create problems to brokers, also, therefore it's additional time when brokers are made to compensate for their issues with traders losses.
    It SHOULD BE CLEAR to some little, non-pro trader that earlier he becomes competent (financially, in addition to, by experience) to trade in more direct manner using'institutional' marketplaces (without retail brokerage involved) he'll be a victim of aforesaid and last price paid for trades done will be way higher than it could or it ought to be. This greater price turns to increase of overall risk for each particular trade and may became not just reduced profit or improved loss, but can ultimatelly bring about margin call and loss of deposit.
    All, and in daring ALL RETAIL FOREX BROKERS do same, just degree of their manipulation differs. There are more complex methods to rip traders also it may be very primitive.
    Whole point is that aggresive advertising, ill promotions and incredible lack of common sense drive craziness and people continue to play something which is extremely well thought money making machine for broker companies and their owners.

    Way outside is not that easy.
    If trader is too little (thousands mean nothing in real FX market) he's fully on mercy of bucket shops (market manufacturers, DD brokers), subsequntelly he'll easily face situation of total loss.
    True FX market becomes simple for person with heavier cash deposits in prime banks that allow trader to establish his direct access to marketplaces.
    Electronic platforms with a number of accesses to several liquidity suppliers function as aggregators for ace trader and enable him to execute egy in the best manner per current market position.
    There are basic conditions necessary to make such trading potential and they're largely beyond the reach of small traders.
    It goes without saying that nothing can save yourself trader from incorrect decisions on any marketplace, but he won't be ripped off by so called brokers and I've clearly in view all of these, independently to various degree of'dirtiness' involved -from some marginally better like Dukascopy or even DBFX via Oanda to total critters like FXCM, FX Guru, Easy Forex, Alpari and endless line of similarly inspired legal thiefs.
    Regulators should likely restrict small FX trading whatsoever or provide kind of specific aggregating rules for small traders (with obvious constraints ), in addition to, forbid existence of non-segregated broker's accounts.

  3. #3
    Quote Originally Posted by ;
    There is one important lesson to learn for new (and not so new) traders who would like to live in Forex.

    All retail brokers (and except Prime brokers that provide you access to institutional markets of EBS calibre), all without exclusion brokers are middlemen manipulating monetary flows of numerous (comparatively ) small traders (intra-marketmaker market) and real Foreign Exchange market. In between, there are ZILLION OF DEALS who have nothing with REAL MARKETS.
    Broker's appliions calculations track internal buys and sells orders, in addition to, general situation...
    I wish all broker rep on the forum would explain/comment on this but I believe they are afraid to show anything.

    I hope trades here will think about It

  4. #4
    I think some of the information within this thread requires updating. Once upon a time that the retail market was such a little bit of liquidity in the FX market. But as of late, the retail (ECN,MM,Whatever) market is beginning to create important chunks of liquidity. For instance You will find brokers doing over 100 billion monthly liquidity. That really is nothing to poke a stick at. Its a massive figure, and some prime broker/bank will be happy to do business together with the expectation they can lap up that liquidity.

    The FX market is manipulated by the word go. Its not a charity, so everyone is in it for money. Its a battlezone. Some retail brokers (a very very select few) are supplying relatively (not entirely ) honest services, and providing an environment that's good for trader and broker in the same moment.

    That is called evolution.

    Its getting harder and more difficult for brokers to think of new tricks, and the government regulators specifically are becoming more and more conscious of the games that Retail brokers can playwith.

    Its only a matter of time, until ECN actually means ECN. . But at the same time, broker numbers will reduce significantly as the amount of profit to be made from an ECN model is minimal (and traders still believe that they are being over charged).

  5. #5
    Quote Originally Posted by ;
    I feel some of the information within this thread requires upgrading. Once upon a time the retail market was such a small amount of liquidity in the FX market. But as of late, the retail (ECN,MM,Whatever) market is beginning to create significant chunks of liquidity. For example There are brokers doing over 100 billion yearly liquidity. That is nothing. Its a huge figure, and some prime broker/bank will be delighted to do business with them with the hope they could lap up all that liquidity.

    The FX market is manipulated by the word go....
    I believe ultimately all broker will probably be ECN or even stp broker.

  6. #6
    Quote Originally Posted by ;
    I believe ultimately all broker will probably be ECN or stp broker.
    And who is going to give the liquidity? Market maker seems to be a lousy word today, but when there are not market maker who is going to offer you the liquidity. ? If you're putting order on NDD broker that's passing to a prime broker wich execute using a tier 1 bank. Is the grade 1 bank not a market maker?

  7. #7
    Quote Originally Posted by ;
    I need all broker rep about the forum would explain/comment on this but I think that they are scared to disclose anything.
    As a rep of a broker I want to show you that not all of trading methods and practices fall under the common description above. I can give you example of a ECN/NDD/STP service for retail customers that we have discussed in a different forexintuitive topic. I will use a quote from this topic to describe how it functions in order to show you that a NDD/STP system may be different and may actually represent a true ECN environment.

    Quote Originally Posted by ;
    1. We think that the major idea of this Forex ECN is to resemble stock exchange trading as far as you can. For instance, clients' limit orders are displayed from the orderbook under Deltastock's name. Moreover they can be put inside the spread, which creates liquidity. The limit orders submitted by the customers in the orderbook are instantly visible to all. Thus traders may place trade orders . That defines the genuine ECN environment in which we act too as a liquidity provider. That could be readily checked with...
    Since we are firm that operates from the European Union and is regulated by EU directive MiFID, we have to comply with current regulations and prepare for the forthcoming changes and implementations. In this regard, there's suggestion for major changes in the financial regulation on derivatives, central counterparties and commerce repositories which are expected to come into force in Europe in 2013.

    Quote Originally Posted by ;
    In September 2009, G-20 Leaders agreed in Pittsburgh that:

    All standardised OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and eliminated via central counterparties by end-2012 in the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.
    The entire text of this proposal is available http://ec.europa.eu/internal_market/...roposal_en.pdf.

    It is not clear whether FX trading will fall under the new directive, but because most brokers trade Forex as CFDs from the EU, notably UK based ones, it is going to be required that those tools are traded via a CCP (Central Counterparty). If that is true FX trading cannot continue existing in its present form in Europe, but as it's clear from the header of quote above, it's likely that it affects all G-20 nations.

    We believe we are the only true ECN/STP service available to retail customers at the moment, but likely it will become standard way for trading FX.

    Unfortunately, these regulations will create FX trading much more expensive to the retail client and the constraints imposed will stop many small clients from engaging with this market.

    I have discovered a different topic that includes screenshots from our order book at which you are able to take a look .

    Since I find the topic very interesting I'd be pleased to comment and answer any questions you may have.



    Regards,
    Deltastock

  8. #8
    Quote Originally Posted by ;
    As a rep of a broker I want to show you that not all of trading methods and practices fall below the frequent description above. I can provide you example of a ECN/NDD/STP service for retail customers that we've discussed in another forexintuitive subject. I'll use a quote from this topic to explain how it functions in order to show you that a NDD/STP system may differ and may actually represent a true ECN environment.



    Since we are firm that operates from the European Union and can be governed by EU directive MiFID, we must obey current...
    Thank you for providing a response for my concern.

  9. #9
    [quote=DeltaStock;4422891]

    Regrettably, such regulations will make FX trading much more expensive to the retail client and the constraints imposed will stop many tiny clients from participating with this market.

    So be it. . It's high time FX and other OTC products ( CFD in UK, Australia) are regulated like central inventory exchanges
    Client money safety
    Transparency

    It will wipe out the scrupulous brokers, if you are not on eof them then you should not worry.

  10. #10
    Quote Originally Posted by ;
    It'll wipe out the meticulous brokers, if you aren't on eof them then you shouldn't worry.
    You should bear in mind that we provide ECN/STP but we're also a Market Maker therefore we're more or less worried.

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