Interesting Post on Forex

[s-a]

TraderGuy,

You could be right. He tells me they have a goal of moving towards 23 hour / day trading. If what he says is true, then they likely have batch processing that needs to be done for some reason or another - thats my hunch. This is what the fellow came back with:


Dear Trader,

There is a brief period in each business day where certain services may be temporarily unavailable as part of regular system maintenance at a given computing center.

During this reset period, customers may be unable to log in or enter/manage orders. Additionally, simulated order types may not be functional. Orders already placed at exchanges will continue to be represented in the market although execution reporting may be delayed. The typical reset period is roughly 30-60 minutes, from 23:45 – 00:30 EST for US/Europe and 04:10-04:40 HKT for Hong Kong servers.

As such, currency trading is not available 24 hours a day.

 

[JTrader]

Idealpro

A few months back IDEALPRO didn't seem to be offering a very competitive service - in my opinion. A 3 pip EURUSD spread AND a commission to pay for each trade - why would anyone choose IDEALPRO over any retail spot forex broker?

Cheers

jtrader.

 

[s-a]

Just thinking aloud here jtrader...

They don't play counterparty.
Spread is not fixed to a minimum of 3, instead you can trade between the bid/ask and spread is fixed to a maximum of 3.

Probably depends largely on what type of trading one does. For position, I don't see it as a really big deal myself.

HG

 

[henry766]

globex can rest easy as far as i'm concerned , current ib fx spreads are wide , and you can't scalp them , in mkt hours globex is the best .

 

[JTrader]

Overall, would these be positive or negative developments for small private traders

Hi GJ

your assessment does not sound too good for the spot forex market as a whole. Whereas it could be argued that the spot forex market would benefit from having more centralized prices, derived from a/the major platforms such as EBS & Reuters, the picture you paint would surely lead to a less central/more dislocated/splintered/fragmented spot forex market..............

With EUR/USD in mind, besides the narrower spreads, this would not seem to be beneficial from the individual private traders point of view. Because at the moment, while retail forex brokers do seem to base their prices on EBS etc., if there were five seperate platforms from which retail forex brokers derived their price - this would surely result in confusion amongst punters of retail forex brokers and retail forex brokers themselves, leading to a greater ability for the retail forex brokers to skew their prices and manipulate their punters tradeable prices - as a result of not having one LEADING source for price quotes - such as EBS - which retail forex brokers could then blame their manipulation upon.

If EBS say was replaced, and had its market volume shared - by five other platforms, would this also result in a less liquid forex market, with more gaps and spikes?
And could retail forex brokers then see their ability to accept customers trades of up to 20,000,000 without requote etc. reduced - due to them having less access to the HUGE interbank market?

It does in some ways seem a step backwards, rather than a step forward - for small private traders such as me. Besides the narrower spreads, will their be any long term benefits of such a restructure, that make up for the potential problems that i have mentioned?

Are my concerns on the right tracks?

Thanks again

jtrader.

 

[henry766]

i agree with you gamma, spreads are likley to tighten a little , though i don't know much about interbank mkt , but for traders globex euro is still to my way of thinking less than half the cost of interbank in practice , ( plenty of guys willing to pay mkt to ones advantage), to me a 3 pip spread on euro is very very wide compared to globex, ( again in practice).it's possible globex will get more liquid over more contracts ,before there is much movement on cash mkt spreads.

 

[s-a]

i agree with you gamma, spreads are likley to tighten a little , though i don't know much about interbank mkt , but for traders globex euro is still to my way of thinking less than half the cost of interbank in practice , ( plenty of guys willing to pay mkt to ones advantage), to me a 3 pip spread on euro is very very wide compared to globex, ( again in practice).it's possible globex will get more liquid over more contracts ,before there is much movement on cash mkt spreads.

Henry,

How do you figure less than half? I work them out as pretty much equal. Remember, FX you only pay the spread one way. So a 3 pip spread works out to $30USD round turn.

HG

 

[JTrader]

GammaJammer -
JT - not sure if what you said abt broker manipulation is strictly true. If anything I think it would tend to work the other way, and anyway, one likely offshoot of all of this could well be increased availability of affordable (to the small trader) pricing data in real time. It's only stayed out of reach for so long (imho) because it has been in the best interests of the data vendors to keep it that way.

And as for liquidity, I think that this will be taken care of by the new breed of ECN such as LAVA, which aim to aggregate the feeds from all these bank platforms and allow customers to access a single liquidity point. The voice brokers are also getting in on the act. Bear in mind that these are structural changes only, and shouldn't have a huge effect on bottom line total market liquidit.

Thanks GJ

are you saying that a possible outcome of the movement away from single major platforms like EBS and Reuters could be an increase in the numbers of ECN's, and an increase in the use of ECN type platforms by small private traders like us and a move away from the retail forex brokers?

If "one likely offshoot of all of this could well be increased availability of affordable (to the small trader) pricing data in real time", given that you say that there may be five equal in size platforms, how would a small private trader know which of these five datafeeds/prices to use, trust etc.?

Cheers

jtrader.

 

[henry766]

dear s -a ....euro on globex in mkt hours is less than half 3 pip spread , you can even play the spread, if thats to your taste , but even of not , it's a 1 ish pip spread and by pure chance you often hit a sort of mid price , interbank spread is a completly lost spread on other hand .(like all underlying mkts the spread is there to be taken advantage ). with globex there are as many gainers from the spread as losers , which is why in my opinion it will always have a great advantage on liquid mkts( over interbank) , which unfortunatly are limited at mo!! p.s. thanks for advice on spread being only "one way", good luck.

 

[options]

Henry. Who do you use for the eur on Globex? IB?

 

[henry766]

last time i traded on globex yes ib!!!

 

[Hamant]

Hello
I am a newcomer to Fores and have openned an account with Global Forex Trading.
Can anybody here tell me about Forex Van and what sort of experirnce they have had regarding their no pip spreads and no commisions.
How do they make their money?
Are they a good company to deal with?

Thanks
Hamant

 

[Straybow]

GFT is probably like FXCM, RefcoFX, and a host of other retail FX shops. They make their money 1) on the spread, and 2) by acting as counterparty to your trades.

In the latter case the FX becomes a form of legalized gambling. The broker is the house, you are the player. They know that 90% of new FX players lose money, so that is a substantial source of income for them. On the other hand, if you start to consistantly earn money on your trades they can flag your account and execute your orders in the "real" market.

 

[Hamant]

Thanks for the info
So then who is the best broker to trade the Forex. I do have an account with I B but have never enquired their forex spreads

 

[s-a]

Hamant,

You can view all of IBs FX products with IDEAL and IDEAL PRO spreads through adding the symbols on the TWS trade tabs. Spreads look fine to me. They do not act as counterparty and act like an ECN. I've just opened an account with them and they seem fine so far. Another good broker (best of the retail bunch?) is OANDA. They are honest and allow for flexibile position sizing with good spreads.

I use both these brokers every day.

MK

 

[mofo]

MK - who do you use for your forex charts. I have an FXCM account, but am not too sure about the charting service

 

[s-a]

mofo,

Just recently switching to Ensign through IB for real-time. Still getting used to this, but looks like a perfectly viable choice and its cheap

MK