An interview with highbury fx

This is a discussion on An interview with highbury fx within the Spread Betting & CFDs forums, part of the Commercial category; Originally Posted by timsk Hi highbury fx, Thank you for your insights and for being so candid. I'm sure you ...

Reply
 
LinkBack Thread Tools Search this Thread
Old Dec 8, 2016, 4:28pm   #33
Joined Mar 2014
Quote:
Originally Posted by timsk View Post
Hi highbury fx,
Thank you for your insights and for being so candid.

I'm sure you won't comment on anything that you don't want to but, by the same token, I don't want to put you in the position of having to politely abstain from answering or side stepping 'difficult' questions! With this in mind, I'll keep my question very general - feel free to ignore it altogether if you wish . . .

SB firms take the other side of their clients trades - this is well known and accepted. By extension, many people will argue that SB firms actively want/need their clients to lose so that they win. Some folk claim that the SB firm will employ dirty tricks (price spikes, cancelled orders, slippage plus a bit more etc.) to accounts that are consistently profitable. Ultimately, if that doesn't work and the client remains profitable, they will decline that client's business and close the account.

My (general) question is: would you care to comment on any of the above?
Thanks in advance,
Tim.
Hi Tim

thank you, no prob.

it all depends what type of license or model the spreadbet firm has.

SB firms that run B books want their clients to lose. they may say otherwise but that is how they anticipate making most of their money.

SB firms that run STP models/A book models want their clients to do lots of volume, not make too much money (in order to not annoy their liquidity providers) and not lose too much money (in order to stay in the game).

SB firms don't need to resort to dirty tricks such as price spikes or cancelled orders. Slippage is different - its hard for the client to really prove that they shouldn't have been slipped 1 pip or half a pip. lots of half a pips really add up and if a broker decided to slip each order or every 3rd order 0.5 pip, 1 pip, it would be a dirty thing to do but I wouldn't like to say for sure that that doesn't happen. It used to back in 06, 07 that kind of time but now? maybe - even probably at some places.

B book firms can deal with profitable accounts by hedging them and giving their liquidity providers (i'll call them LP from now) a heads up that they may wish to widen spreads in certain products so they avoid that flow and it can be passed anonymously to the market. it isn't so much the making profit that upsets brokerages, its the manner in which its done by some clients that causes offense. these clients are usually sent on their way.
highbury fx is offline   Reply With Quote
Thanks! The following members like this post: darktone
Old Dec 8, 2016, 4:41pm   #34
 
sminicooper's Avatar
Joined Jun 2016
Highbury – thanks for an extremely informative and interesting thread. Two things are apparent to me:

1. People such as yourselves know more about their customers and how they work/don't work than they do themselves.
2. The amount of research and data analysis you must do on your customers' trading is quite remarkable – and of course you wouldn't do it if it wasn't worthwhile.

There's some good guidance in your answers for those who wish to pick it up. Many thanks.
sminicooper is online now   Reply With Quote
Thanks! The following members like this post: highbury fx
Old Dec 8, 2016, 5:18pm   #35
tar
 
tar's Avatar
Joined Nov 2006
tar started this thread
Quote:
Originally Posted by highbury fx View Post
Hi Tim

thank you, no prob.

it all depends what type of license or model the spreadbet firm has.

SB firms that run B books want their clients to lose. they may say otherwise but that is how they anticipate making most of their money.

SB firms that run STP models/A book models want their clients to do lots of volume, not make too much money (in order to not annoy their liquidity providers) and not lose too much money (in order to stay in the game).

SB firms don't need to resort to dirty tricks such as price spikes or cancelled orders. Slippage is different - its hard for the client to really prove that they shouldn't have been slipped 1 pip or half a pip. lots of half a pips really add up and if a broker decided to slip each order or every 3rd order 0.5 pip, 1 pip, it would be a dirty thing to do but I wouldn't like to say for sure that that doesn't happen. It used to back in 06, 07 that kind of time but now? maybe - even probably at some places.

B book firms can deal with profitable accounts by hedging them and giving their liquidity providers (i'll call them LP from now) a heads up that they may wish to widen spreads in certain products so they avoid that flow and it can be passed anonymously to the market. it isn't so much the making profit that upsets brokerages, its the manner in which its done by some clients that causes offense. these clients are usually sent on their way.
Is it safe to say that :

1- Profitable swing traders dont bother you one bit .

2- Profitable scalpers may force you to put them on your watchlist - you keep an eye on their activity - .
tar is offline   Reply With Quote
Old Dec 8, 2016, 5:36pm   #36
Joined Mar 2014
Quote:
Originally Posted by tar View Post
Is it safe to say that :

1- Profitable swing traders dont bother you one bit .

2- Profitable scalpers may force you to put them on your watchlist - you keep an eye on their activity - .
swing traders will generally do better than day traders so its not entirely true to say they wont bother me. its strange because none of it bothers me too much and all of it bothers me. I trust my model is right and that we will have swings in our pnl depending on volatily but that doesn't mean to say we're nonchalant about anything. our clients are trying to win money from us and we need to make sure we know all about them and what they're doing. we don't want to be a nuisance and get in their way but by the same token we have to provide evidence all of the time that we are on top of our business. if things go wrong at a brokerage you lose your shirt potentially.

profitable scalpers are a problem even though we're stp. they wont win the money from us but they will win it from people that provide me services for me to be a profitable business. if I can help protect my lp on occasion then I will for the better conditions that that will ultimately give to all my other 'non profitable scalper' clients.

my problems aren't so much the day to day trading - that's all taken care of by remarkable infrastructure that firms like us operate within. the problems are regulatory, that's what takes our time and efforts. for example its easy to say ok the new rule is the leverage cant be more than 50:1. ok, no worries we have to accept that and for all new clients and clients with no open position they can be moved to groups that have new leverage limits in place. but what about someone who has $900 on his account and 1 lot of eur/usd open? once I move the leverage to 50:1 it's going to put him on margin call and close his position automatically. how do I ensure that we act in a fair way to those clients? that has to be considered, planned and implemented and that will take up far more of our time than watching someone swing trade or take 0.1 pip off me 50 times a day.
highbury fx is offline   Reply With Quote
Old Dec 8, 2016, 6:01pm   #37
tar
 
tar's Avatar
Joined Nov 2006
tar started this thread https://www.interactivebrokers.com/i...p#open-account


tar is offline   Reply With Quote
Old Dec 8, 2016, 6:16pm   #38
Joined Apr 2012
Hi highbury

Have you heard of WH Selfinvest? What sort of DNA do they have?

What do you think about FxPro's DNA?

Thanks

Last edited by metrader; Dec 8, 2016 at 6:25pm.
metrader is offline   Reply With Quote
Old Dec 8, 2016, 6:56pm   #39
 
cbrads's Avatar
Joined Mar 2014
Hi Highbury, this thread's great! My question is: What is your definition of scalping?
cbrads is online now   Reply With Quote
Old Dec 9, 2016, 10:14am   #40
Joined Mar 2014
Quote:
Originally Posted by metrader View Post
Hi highbury

Have you heard of WH Selfinvest? What sort of DNA do they have?

What do you think about FxPro's DNA?

Thanks
hi metrader

I would prefer to not critique other firms if that's ok.

thank you
highbury fx is offline   Reply With Quote
Thanks! The following members like this post: metrader
Reply

Thread Tools Search this Thread
Search this Thread:

Advanced Search

Similar Threads
Thread Thread Starter Forum Replies Last Post
RE:interview jagk Trading Firms 3 Aug 12, 2013 5:43pm
Highbury House (HHO) cookie Technical Analysis 1 Jan 24, 2001 6:43pm

Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)