Direct trades without a round trip back to USD

[b1tr0t]

Quote from Trader/God:

Why would any broker provide you with a way to circumvent their charges while leaving them with odd lots all over the place? The FX market has gotten along fine with out such a silly system in place. If you want GBP buy it, if you want JPY then buy that. So to answer your question, no brokers are going to provide this but if you were looking to break into the market you can make this your niche. You will have very little competition.

Trader/God

If a broker allowed me to do this, I would more than make up for their lost commission through a very high volume of trades. Maybe I need a very large account at a bank rather than a broker?

 

[Hoi]

Quote from b1tr0t:

I am trying to find a broker that will support the following style of trading:

1. On day one, you decide to go long JPY, so you sell USD and end up with a position that is long JPY, short USD
2. A week later, you are ready to take your profits. After careful analysis you decide that GBP is a better place for your money to be than USD. You could move your GBP back to USD and then from USD to GBP, but then you pay two commissions rather than one. Plus you risk losing a few PIP if there is much motion in the USD/JPY and USD/GBP rates between your trades.
3. Another week later, you are ready to return to USD, so now you can sell your GBP and return to a long position in USD.

More concisely, I might want to:

Day 1: LONG USD/JPY
Day 7: SHORT GBP/JPY
Day 14: SHORT USD/GBP

Is this possible? If so, what broker has a trading system that will let me do this?

You can absolutely do this with IB, because you don't trade two-sides contracts, but you move real foreign-currencies from one to another budget...And Yes you will only pay one-time commission.

 

[Hoi]

Quote from crazy_trader:

I think you will lose all you profit on the spread from Ideal.

Of course you don't use IDEAL but IDEALPRO, which has quite good spreads (1 pip for EUR.USD, USD.JPY 2 pips, GBP.JPY 5pips, USD.GBP 3pips the moment I write this).

 

[Hoi]

Quote from KS96:

There is also lots of slippage on IdealPro's
stop-orders recently, even on periods of low volatility.
I had stops executed with slippage of 5-7pips on EUR/USD
and 10pips(!) on EUR/CHF.

I contacted them about the *very*annoying* 10pips
slippage on EUR/CHF, and they replied with the typical
bullsh*t that "price is not guaranteed"!
We all know that!!!!!

What happened implies that
either the EUR/CHF spread "opened up" from 1 (typically) to 10pips
when my stop was hit,
or it took some time (at least 7-10secs) before my stop-order
got activated.
In either case, VERY RISKY.

Currently EUR.CHF is 3 pips and the Bid 4 Million the Ask 18 Million. When you take the Bid or Ask it will immediately execute.

But with Stops and fast moving markets you should know how to use the Stop or StopLimit orders from IB....First you have to understand that the triggering is on the Ask when you want to Sell...so the market is already passed with the Bid when your trigger on Ask..which will give already a Slippage on the moment that the trigger sends your Limit to market (or in case of a Market Stop a 10 pips slippage).....So with a volatile market (news event) this triggering will not really work well...!

That is why I use ButtonTrader (connected to TWS) for this and can use a completely different triggering system: my triggers (stopLimit) are on the BID when I sell...that is much and much faster...also I use a plus 1 pip for my Limit (of the stopLimit) in which case my limit is send 1 tick below the Bid, in which case I get immediately an execution (most of the time on the Bid because it has at least 4 million so na slippage at all).

With above I do not say that large slippage is not possible with IB, but is is less likely in the system I use.

 

[Hoi]

Quote from b1tr0t:

If a broker allowed me to do this, I would more than make up for their lost commission through a very high volume of trades. Maybe I need a very large account at a bank rather than a broker?

To be clear: IB is not a FX-dealer..IB does NOT trade against you..you trade on a ECN agains other IB-traders and 4 major banks who are the MarketMakers....IB offers you a multi-budget-account..and you can move budgets all over the place.. from USD to JPY to HKD to EUR...no problem at all...You swap these budgets...and pay only one time commission per swap..

 

[b1tr0t]

Quote from Hoi:

To be clear: IB is not a FX-dealer..IB does NOT trade against you..you trade on a ECN against other IB-traders and 4 major banks who are the MarketMakers....IB offers you a multi-budget-account..and you can move budgets all over the place.. from USD to JPY to HKD to EUR...no problem at all...You swap these budgets...and pay only one time commission per swap..

What is the proper terminology for the various types of Forex trading systems?

At the bottom seems to be the retail brokers - all the trades have to originate from and return to US dollars, and the "broker" may or may not trade against you. It isn't clear that the broker will ever take your trade all the way to the interbank market, nor is it clear how "real" the quotes are.

At the opposite end, there are very large banks and commercial operators that trade actual lots in the spot market.

It seems like IB lies somewhere between these two extremes - is there anything else? How do active traders describe these there (or more) categories of forex operators?

 

[Hoi]

Quote from b1tr0t:

What is the proper terminology for the various types of Forex trading systems?

At the bottom seems to be the retail brokers - all the trades have to originate from and return to US dollars, and the "broker" may or may not trade against you. It isn't clear that the broker will ever take your trade all the way to the interbank market, nor is it clear how "real" the quotes are.

At the opposite end, there are very large banks and commercial operators that trade actual lots in the spot market.

It seems like IB lies somewhere between these two extremes - is there anything else? How do active traders describe these there (or more) categories of forex operators?

I'm currently writing a document on this very subject (called "Forex-trading with IB and ButtonTrader"), I hope to have it ready somewhere in Jan-2006 (will release at that time here: http://www.buttontrader.com/content.asp?lang=en&page=8
).