Brokers and Book Depth

[propensity]

I am shopping for a broker. I understand that some brokers’ trading platforms show quote depth beyond the inside bid/ask (i.e. multiple bids & asks, including lot size). I have a 2 part question:
1. Is this displayed book depth, at all significant (in terms of the global market)? Or, do these quotes merely reflect a handful of financial institutions that the broker is associated with?
2. If any brokers do display significant depth, who are they?

JO

 

[yigal]

Quote from propensity:

I am shopping for a broker. I understand that some brokers’ trading platforms show quote depth beyond the inside bid/ask (i.e. multiple bids & asks, including lot size). I have a 2 part question:
1. Is this displayed book depth, at all significant (in terms of the global market)? Or, do these quotes merely reflect a handful of financial institutions that the broker is associated with?
2. If any brokers do display significant depth, who are they?

JO

Currenex gives you market depth from many major players, but I think this will only reflect a very small part of the whole picture.
Actually I think that market depth is a useless tool in forex and can be of any use only in an exchange traded instruments.

 

[propensity]

Thanks yigal,
Actually, depth in exchanges (level 2) is also considered by many as "useless " due to the lax posting requirements for the participants. I guess with forex, it comes down to whether the broker "sees" a true book of quotes from the major players; and, wether those quotes are actually passed along to the retail layer.
JO

 

[Steve_IB]

Quote from propensity:

I am shopping for a broker. I understand that some brokers’ trading platforms show quote depth beyond the inside bid/ask (i.e. multiple bids & asks, including lot size). I have a 2 part question:
1. Is this displayed book depth, at all significant (in terms of the global market)? Or, do these quotes merely reflect a handful of financial institutions that the broker is associated with?
2. If any brokers do display significant depth, who are they?

JO

Interactive Brokers, and probably most of the ECN type brokers, - will provide market depth. The single dealer FX providers by definition would not provide it. The market depth would, in your words, "reflect a handful of financial institutions that the broker is associated with".
Generally I would say the main use of the market depth for you would be to check how much size you could do - assuming your size is larger than the inside quote.
Also, the more depth you have then the less likely you would be affected if a particular bank pulled or widened its quote.

 

[mortysill]

Quote from propensity:

Thanks yigal,
Actually, depth in exchanges (level 2) is also considered by many as "useless " due to the lax posting requirements for the participants. I guess with forex, it comes down to whether the broker "sees" a true book of quotes from the major players; and, wether those quotes are actually passed along to the retail layer.
JO

I wonder if I could introduce a topic in parallel with this: MNI post order summaries around 4:30 and sometimes update in the NY am session. Essentially these reports show where the strong demand and supply are for the day (GBPUSD, EURUSD, USDJPY and EURJPY). See attached.

I don't trade these levels as such but would avoid entering a trade if my target were on the 'other side' of a level where there were big orders.

The reports come out a little late in the session. Are there other sources, I can go to, to find where the names have their large orders?

Regards
Morty