Gain Capital and market orders

This reminds me of one thing though. You may be getting a market price that you CANNOT execute.

But this has absolutely NOTHING to do with volatility.

FX is all relationship based. No clearing. So GAIN (don't know them... probably don't have enough $ to have prime relationship) is probably what they called a prime of a prime. Essentially, in FX markets, banks have relationship with each other to trade. They setup these relationships based on credit,etc. If a broker wants to offer FX service, unless they are efn big, they will have to open a FX account with a prime broker - which is a bank typically. Let's say GAIN holds an account with JPM.

Let's say JPM has prime relationship with C, UBS, and GS. So JPM can ONLY trade with C, UBS, and/or GS. But the data feed JPM gets is from LAVA or from EBS (typical setup). Those data feeds contains ALL the quotes. So a better/tighter quote maybe from BofA. But JPM can't trade that (neither can GAIN since they fall under JPM). So even though you can see the market at bid/offer, you can't execute this market price.

That's my guess. But that still begs the question why your market order wasn't executed at a dealable price. Maybe your execution system sends the order out with a price? I am not sure if all execution system sends market order without price.
 
I think "volatility" was the lazy answer given to me by the 21 yr old girl who picked up the phone. I'm sure that's the canned response that she was instructed to give. I hung up on her when she gave me that answer b/c I figured they weren't taking my complaint seriously w/such an inane response.

Your scenario of a difference b/t the consolidated feed and the prime/prime of prime relationships seems plausible though.

No, there's no price w/my market orders. It's just flagged as a market order, no other conditions. Of course, that's exactly what I want since I always want to get filled, w/o conditions.

Maybe you can tell me what a "requote" is specifically?

Thx,
Lou
 
Quote from bluelou:
Maybe you can tell me what a "requote" is specifically?
More...
While waiting for mickmak's response to you, I want to add that in my earlier screenshot of the account disclaimer, I did ask my broker and got an answer relating to dealing desk. Since Gain is similar to my broker and counterparty to your transactions, they should have included the same disclaimer I showed ("XXXX in its absolute discretion can accept or reject the market order"). Best is to have your broker explain it to you but I see you already did. My understanding is that "dealing desk" brokers will have the same clause as my screenshot and you will encounter frequent re-quotes during low liquidity or spiking prices.
 
@bstay,
In effect, my dealer customer agreement says the same thing, but the statement is opaque. Gain says that they will make their "best efforts" to execute customer orders. I had interpreted that to mean short of an Act of God that they would fill a market order. Apparently, Gain interprets best efforts much more broadly as in "what's best for Gain" efforts.

I'm still not sure why this is called a "requote". They rejected the market order. What makes that a requote?
 
Well, my broker falls under the category of dealing desk, counterparty, bucket shop, crook, since it is not ECN/direct-market-access type. But Gain Capital is known as the worst of this group so I am not surprised that they did not specify clearly in their account agreements. From first look, it appears my broker's disclaimer is abusive, but then again they say it out front.

I am not recommending the below two brokers but they were shown to me by friends to explain the difference between dealing desk and ECN. You can read about "direct-market-access" or "aggregate bank feed" or "multi bank liquidiy feed" or "interbank liquidity" in your search for the best broker.
http://advancedmarketsfx.com/ (fined by NFA before)
http://www.ctnsystems.com/ (also known as ChoiceFX)
http://www.cfhmarkets.com/ (not for retail clients)
 
well... I am not sure about "requote". But maybe the market was volatile and they have pulled their existing quotes and are only quoting indictive quotes? not sure. You may google a bit on indictive quote in FX market, but essentially, it is not a firm quote or executable quote.

Either way, ask your broker why the hell that matters since you didn't have a condition on the order. The problem is a non-executing market order. That is the problem. It isn't requoting, volatility, etc. It is the issue of Order Reject. What the reason for that. Ask them to explain it to you... and then dumb it down for all of us! :D

Btw. my wife's cousin is a 26 years old girl working at a FX brokerage (not naming it here). She is a broker there and sells binary options on FX accounts, and she hasn't a clue about FX market, futures market, etc.... maybe the handbags market!

So ask to speak to a senior broker or a senior trader. I would be interested to know what type of sca..cough....strategy they run there.
 
@mickmak,
I'm not even going to bother to ask Gain. I know they'll just spend 1/2 hr+ jerking me around. So, I've learned my lesson working with dealers. My only choice is a 100% agency firm otherwise I'm just wasting my time. I've already started making calls.

Thanks for your interest,
Lou

@bstay,
Why are you still working with dealers if you know you don't have to? What's wrong with FXCM or IAB? Both are 100% agency I believe.
 
Quote from bluelou:
@bstay,
Why are you still working with dealers if you know you don't have to? What's wrong with FXCM or IAB? Both are 100% agency I believe.
More...
FXCM's "no dealing desk" (or NDD) model added about 1pips to the best quotes. see video at, http://www.elitetrader.com/vb/showthread.php?s=&threadid=204913
the resulting spread is rather big, http://2.bp.blogspot.com/_buPOR1D4eXw/TM6JxJgVdrI/AAAAAAAAFHI/myYOKCjM-Tg/s1600/fxcmspread.png
I won't discuss FXCM further and we should go to that FXCM thread so that Jason Rogers can answer better.

IAB is InteractiveBrokers? I don't like their charting platform and other features.

There are pros and cons of using dealing desk brokers vs ECN brokers. Here's one discussion, http://www.forexfactory.com/showthread.php?t=8046 rather old 2007 post. I will explain my own reasons in private message. You have to filter what you read on forums, as most losers blame crooked brokers (and the rigged forex market) rather than their own bad trading skills. If you can trade well, then you pay your broker through spreads or commissions, and its a business cost like office rental. The tools they offer to give me an edge is more important, http://4.bp.blogspot.com/_buPOR1D4eXw/TNLfa8wwXhI/AAAAAAAAFJ4/O2SoSwEZb8U/s1600/USDCHF.png

You seems to want to find out about InteractiveBrokers, but why ask in this thread with a "Gain Capital" subject?? go start a new thread with a big "InteractiveBrokers" as title subject to get response. Don't use "IAB" as few know what that is.
 
Dukascopy and Alpari both claim to be ECN brokers, so you can look into those guys. Note that you also pay a commission on top of the spread with ECNs, but you aren't (usually) trading against the broker.

As far as IB having bad charts...most people run a 3rd party charting app on top of IB's feed.
 
@bstay,
I'll check out the threads for FXCM and Interactive Brokers. Thx for the links. With FXCM I should expect the extra pip since that's how they get paid. I'd expect whatever their "Active Trader" spreads are.

I haven't looked at IB for awhile but I recall that they pay lower carry than some other brokers. They all get paid somehow.
 
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