Dukascopy JForex access cut off for U.S. traders

[FutureScalper]

Dukascopy execution is fair, transparent, absolutely no slippage, bid/offer live on the ECN inside the spread, use micro lots without penalty, mergeable positions, and a dozen other reasons for Forex scalpers and traders.

FXCM, and all the others, well... there's simply no comparison whatsoever.

The spread? That's only the tip of the iceberg of a fair and honest broker. So FXCM is claiming they're "narrowing" the spread specially for the JForex clients they bought, so we'll feel less ripped off !! Ya really think that's a big deal?

I've told several at FXCM that if they want to help us, they will front Dukascopy and otherwise leave us alone. But they can't make enough money doing that, of course....

This is my last comment on the subject. Yes I am disgusted by the U.S. regulatory environment but that's not saying anything new....

HyperScalper

 

[MRBRETTONWOODS]

Trade currency futures at CME then, if you believe FX brokers are eating your lunch. It's liquid enough, unless you are a "whale" and like to trade 200 to 1000 contracts or more per position.

That's why I explained that there were more actual ECN options available to non-US citizens, and yes, spreads do matter, otherwise, you're literally giving money away for no reason. It's not a surprise, that these bucketshop brokers also tend to have the most incompetent and most unprofitable retail customers, they don't expect their customers to make much money. They only expect to use their orders as a means of selling their chump order flow to institutional clients or as a means of trading against it directly.

 

[xelite777]

, and yes, spreads do matter, otherwise, you're literally giving money away for no reason.

The size of the spread matters if you trade frequently (scalp or day trades).

Otherwise your FX broker could triple the spread and it wouldn't matter a bit in the long run, if you trade only once or twice a month or less.

 

[MRBRETTONWOODS]

The size of the spread matters if you trade frequently (scalp or day trades).

Otherwise your FX broker could triple the spread and it wouldn't matter a bit in the long run, if you trade only once or twice a month or less.

What is your point, same could be said about any trade in any asset class in any instance (even for futures, but it would be illegal there). Do you want worse spreads?, then enjoy your mediocrity, futures are somewhat leveled, but the point is that there are real options, esp. for non-us citizens, so to accept anything sub-par is foolish and illogical (just keep in mind, that someone will be on the other side of that trade taking the free money), as you'll never be able to compete on a remotely level playing field with institutional money, ECNs somewhat greatly assist in leveling the playing field though.

 

[xelite777]

Do you want worse spreads?

No, but spreads will only eat a tiny portion of your profits in the long run, if you are a successful long-term trader.

Anyway, you want "transparency"? Then trade currency futures on a centralized exchange like CME, where is the problem?

Also note that it is possible to trade directly on the Interbank, if you are a high-net worth individual.

 

[MRBRETTONWOODS]

No, but spreads will only eat a tiny portion of your profits in the long run, if you are a successful trader.

Anyway, you want "transparency"? Then trade currency futures, where is the problem?

And likewise, spreads will give your counterparty a greater portion of their profits for no reason, why should you willingly give it to them when they compete on a different playing field? I've already stated that by simply being a non-us citizen there is much greater opportunity in accessing legitimate FX ECNs abroad, ironically, even non-US citizens have greater access to US-Based ECNs than even Americans do. That is a peculiar and imbalanced situation.

To be a US entity regulated as an ECP, it requires $10 million in net assets, that's not retail anymore, and it diverts from the discussion.

 

[Jack_Larkin]

Trade currency futures at CME then, if you believe FX brokers are eating your lunch. It's liquid enough, unless you are a "whale" and like to trade 200 to 1000 contracts or more per position.

They are not liquid enough... especially on currency crosses and exotics.

This problem gets really painful when you operate in an intra-day context.

 

[Jason Rogers]

Not bashing them, I'm just stating the facts. FXCM retail openly states that they are a dealing desk, they also notoriously sell even their order flow for their 'NDD' alleged retail accounts to institutions via their FastMatch ECN with Credit Suisse, so you would be getting ripped off either way.

FXCM does have a No Dealing Desk (NDD) service for Forex transactions, on top of the dealing desk model.

First, as Xelite mentioned, FXCM offers clients the choice between No Dealing Desk (NDD) and dealing desk forex execution.

In case you mixed it, I explained how even with their 'NDD' service they still openly sell their retail order flow to institutions like in their JV w/ Credit Suisse with their FastMatch ECN.

The 16 liquidity providers currently on FXCM's NDD price feed include global banks, financial institutions, and other market makers. While we accept payment for order flow (PFOF) from certain market makers, this represents only 3% of revenues as was mentioned publicly in our last earnings call.

Our NDD model offers true price competition and eliminates potential conflicts of interest that can exist with other execution models. Client order flow is offset with the liquidity provider quoting the best bid/best offer (BBO) at the time in question. A market maker paying for order flow must be at or better than BBO in order to receive the order flow. They can't get the order flow if their price is worse than BBO. (No BBO, no flow)

By contrast, many so-called ECNs in the retail forex industry use only a single market maker to offset their clients' orders and accept a percentage of their clients' losses as payment. At FXCM, we never bet against our NDD clients either directly or indirectly. Instead, we are compensated based on the execution volume.

Now, of course, the resident FXCM rep is going to say, it is all done in the name of 'price improvement'

Not quite. Why do we use PFOF?

BBO quotes that are very competitive are often for small sizes like $1 to $2M notional. Having several market makers that offer PFOF and match the BBO can help make the price good for much more size, routinely up to $10m. This allows more clients to execute at the BBO price.

 

[MRBRETTONWOODS]

The 16 liquidity providers currently on FXCM's NDD price feed include global banks, financial institutions, and other market makers. While we accept payment for order flow (PFOF) from certain market makers, this represents only 3% of revenues as was mentioned publicly in our last earnings call.

http://edgar.sec.gov/Archives/edgar/data/1499912/000144530514001063/fxcm-20131231x10k.htm

(iv) retail revenues earned from contract for differences (“CFD”) trading, fees earned through white label relationships, payments we receive for order flow from FX market makers and commission income earned from spread betting, equity and related brokerage activities. For the years ended December 31, 2013 and 2012, 31% and 27%, respectively, of our retail trading revenues were derived from the activities noted in item (iv).

"As of December 31, 2013 and 2012, accounts receivable, net, consisted primarily of amounts due from institutional customers relating to the Company's FX business, and fees receivable from the Company's white label service to third parties and payments for order flow, described in “Retail Trading Revenue” below. Receivables are shown net of reserves for uncollectible accounts. "

 

[xelite777]

http://edgar.sec.gov/Archives/edgar/data/1499912/000144530514001063/fxcm-20131231x10k.htm

(iv) retail revenues earned from contract for differences (“CFD”) trading, fees earned through white label relationships, payments we receive for order flow from FX market makers and commission income earned from spread betting, equity and related brokerage activities. For the years ended December 31, 2013 and 2012, 31% and 27%, respectively, of our retail trading revenues were derived from the activities noted in item (iv).

"As of December 31, 2013 and 2012, accounts receivable, net, consisted primarily of amounts due from institutional customers relating to the Company's FX business, and fees receivable from the Company's white label service to third parties and payments for order flow, described in “Retail Trading Revenue” below. Receivables are shown net of reserves for uncollectible accounts. "

MRBRETTONWOODS, the real question is : do you want to make money trading or do you want to criticize the way some FX brokers are "behaving"?

I mean seriously, think about that for a minute...