How are trading orders routed?

N

nourozi

Hi, can someone explain how trading orders are executed and what happens if I am disconnected from the data feed or broker while trading live?

Is this trading order routing process roughly correct?

Data Server > My Computer > Broker > FCM > Exchange > FCM > Broker > My Computer

Also, if I am disconnected from the data feed what should I do if I have a trade open?

Thanks,

Erfan.
 
Limit & Stop orders remain on the exchange unless you are using a platform that might hold stop orders locally (SierraChart & Ninja sometime do that).

Most members on this site will tell you that you must trade with a backup device... i.e iPad or second laptop loaded with brokers software.

Of course you could phone them in an emergency.
 
PUBLIC DATA: Exchange > Broker > Customer.
TRADE REPORT: Exchange > FCM > (Give-In to Broker) > Broker > Customer.
TRADE ORDER: Customer > Broker (Give-Up to FCM) > Exchange.
 
If the order goes through the broker before the exchange, then what is the advantage of colocated servers that Xtrader and CQG advertise?
 
Quote from XChamp:

If the order goes through the broker before the exchange, then what is the advantage of colocated servers that Xtrader and CQG advertise?
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because the colocated server should be closer to the broker.
 
Most of the trading API's (FIX based for example) could be configured so that all your live orders are canceled on disconnect. This is standard thing to do, unless you want your orders to wait in the queue even if you don't get any updates about the market etc.
 
twoshepards said:
The benefit of colocation is proximity to the matching engine of the exchange, not proximity to the broker.
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If you don't have direct exchange market access then colocating with the broker is the best you're going to get. This is especially true when trading cross border where they require broker sponsored access like Canada or Brazil.
 
Most of the trading API's (FIX based for example) could be configured so that all your live orders are canceled on disconnect. This is standard thing to do, unless you want your orders to wait in the queue even if you don't get any updates about the market etc.
More...

Positron, I could not agree more that this should be a standard option for all APIs, and all front ends for that matter ... but so far as I know this is impossible with Interactive Brokers TWS or standard API ... am I wrong about that?
 
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