IB or Oanda or ????

Quote from LoosenUp:

Hi TGM,

In your experience in IdealPro, do you find that putting in stop entry or exit orders could be a potential problem if market is fast and the market makers do not quote so tightly? And in your experience, during fast markets like before news or data announcement, what is a typical spread in quotes in EURUSD pair?

Thanks
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I tested this (the spread during a news event), a few months back, with ButtonTrader, in which I can have FX-cash (IDEAL-pro) and FX-Futures (Globex) side-by-side with tickCharts.
I was happy to see that the spread in Cash keeps at the same size or even better than the Futures. Both widen a few ticks for some seconds, but not as much as I expected it to be....I even can recall one time that I had an OANDA-simu-account running as well, and that one gave really huge spreads and spikes during the same moment (news release).

I have to say that I did these tests visually, but I'm highly interested in the performance of IDEALPRO in comparison to the FX-futures, and will build something in ButtonTrader to measure the spread constantly and accurately....when I have these results I will probably post them (if you like).
 
Quote from Hoi:

I tested this (the spread during a news event), a few months back, with ButtonTrader, in which I can have FX-cash (IDEAL-pro) and FX-Futures (Globex) side-by-side with tickCharts.
I was happy to see that the spread in Cash keeps at the same size or even better than the Futures. Both widen a few ticks for some seconds, but not as much as I expected it to be....I even can recall one time that I had an OANDA-simu-account running as well, and that one gave really huge spreads and spikes during the same moment (news release).

I have to say that I did these tests visually, but I'm highly interested in the performance of IDEALPRO in comparison to the FX-futures, and will build something in ButtonTrader to measure the spread constantly and accurately....when I have these results I will probably post them (if you like).
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I have noticed this so many times of late. The futures are getting way more out of line and hitting stops etc. Whereas the Market Makers on IBFX are very slick and keep it tight. As more Mook desk traders are blasting the EUR on CME. It has gotten sloppy. 5 ticks here and 5 ticks there it is all over the place and the volume is growing so the MERC market makers are stepping back and sitting deeper in the deck to make more money (this is my opinion). IBFX is making their money by facilitating orders and making a good tight market. I have been scalping more and more on IBFX. On the front end ---it seems more expensive. But it is more orderly than the CME.

I have seen Oanda do crazy stuff as well. IBFX for the EUR/USD ----is fine for scalping. I prefer it (of late) to the Euro Futures.
 
Quote from LoosenUp:

Hi TGM,

In your experience in IdealPro, do you find that putting in stop entry or exit orders could be a potential problem if market is fast and the market makers do not quote so tightly? And in your experience, during fast markets like before news or data announcement, what is a typical spread in quotes in EURUSD pair?

Thanks
More...


Well I have been trading a long time. So it really depends on if the trader knows what he or she is doing. I find Stops (in the actual market) to be a bad ideal (unless they are wide ---and scalpers do not like wide stops---don't get me started ---I was on a desk and I have seen many traders do dumb things with stops).

I have had orders filled on Ideal Pro that did NOT get fully filled in the futures. In the futures ---most traders assume that there is a market there for them at this or that price. Well maybe or maybe NOt ---just depends.

I would say of late. The futures will hit your stop ----when it is against you! And the futures will not give you all your size when you want to get in. There are many mooks blasting in over a 5 tick range when it is moving. That is good if you are skilled ---you can sit back and get SOME at your price. But this is bad of you are trading good size. The good thing about IBFX ----I always get my size done ---when it trades through! Not so with CME.

Now I am a big proponent of Futures in general they are a better deal. But of late IB ---is avery good deal. To be fair, so is Hotspot. But IB is showing more size than Hotspot right now.

I would advise you to use a good frontend. I have never tried Hoi's --it is looks slick and good. But I am used to TT so it seemed backward to me (buying and selling on different sides than what I am used to). I use Zerolinetrader with IB. Or you can just use booktrader.
 
Quote from Hoi:

I tested this (the spread during a news event), a few months back, with ButtonTrader, in which I can have FX-cash (IDEAL-pro) and FX-Futures (Globex) side-by-side with tickCharts.
I was happy to see that the spread in Cash keeps at the same size or even better than the Futures. Both widen a few ticks for some seconds, but not as much as I expected it to be....I even can recall one time that I had an OANDA-simu-account running as well, and that one gave really huge spreads and spikes during the same moment (news release).

I have to say that I did these tests visually, but I'm highly interested in the performance of IDEALPRO in comparison to the FX-futures, and will build something in ButtonTrader to measure the spread constantly and accurately....when I have these results I will probably post them (if you like).
More...

Yes Hoi, please post the results when you have them. And thanks TGM for your comments.
 
Quote from Steve_IB:



SK: Yes, but with the traditional retail model you only have one market-marker providing liquidity - so you are stuck at the whims of one entity. With an ECN model, such as IB's, you have multiple market-makers providing liquidity and you have other clients providing liquidity.

Perhaps, but as you know market makers on the retail level are hardly sitting and punching in their own prices: they also use "multiple liquidity providers" (e.g. banks) to feed quotes into their system.

I accept the possibility of better pricing through tighter spreads on an ECN model, however from the end user perspective I am still not seeing the fundamental difference in the design from a single-MM model, since an ECN like IB or CoesFX does not reveal who the multiple liquidity providers are. This is not much different from a traditional market-maker saying "we have multiple liquidity providers".

Either way a) both the ECN and the single-MM are the counterparty to my trades b) both have multiple liquidity providers c) in both cases I have no way of knowing who these are, especially not from the Customer Agreement. All I am left with is to rely on your statement that you operate a white-label -type of arrangement with your liquidity providers whereby you automatically pass on your position to them instead of having a dealing desk that will manage the risk. This is perhaps a comforting thought for some, but ultimately unverifiable. Don't get me wrong, I have no doubt that your model works the way you describe, but for legal or practical purposes I have no way of confirming it, apart from experiencing it through tighter spreads and higher liquidity.

I do support your comments that we need a fairer and more transparent market, and I do hope that MMs with bad practices will disappear instead of leading the pack as they seem to be doing now.
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Quote from misha7:

since an ECN like IB or CoesFX does not reveal who the multiple liquidity providers are. This is not much different from a traditional market-maker saying "we have multiple liquidity providers".

[/B]
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When you do some searching on ET, you might learn that the MM's on the IB-ECN are these big-banks: UBS, DeutscheBank, JP Morgan Chase and BearnStearns. Also when you have an IB-account you can request this info per Currency-Pair (so you can see who the MMs are on that pair and what their specific trading-times are during the day).

Further I have analyzed closely the MarketDepth (ECN-book of bids/asks), and when you do the same you will clearly see that those MM's each have their own Liquidity and Spread.....As I read your post you still do not understand how the ECN-model works: the MM's are QUOTING in real-time on the ECN-platform, so you see in realtime their Bid and Ask and liquidity. For instance there is one that always quotes with 4 Mln Bid and Ask on the EUR.USD with a spread of 3 pips, while another is quoting in realtime with 10 mln with a 4 pips spread, and another with 8 Mln also in 4 pips....You REALLY see this happening in front of you!....Because of the different biases each MM has, and because of the different spreads they use, you will nearly always have a 2 pips spread (with 4 to 30 Mln on Bid and or Ask as the sum of one or more MMs on that price)....and these are REAL offers from the MMs that you and I can trade with one single mouse click.....

Reading your posts you will never believe how good the IB-model works...several other posters including the IB-reps tried it...and also my post will not help, because you have no trust in that it might be as could as they say it is....I can only tell that it works for me, and I'm very glad that IB offers me a market-place where I can trade Spot-Forex in a way I was used to in the Futures-market.
 
Quote from misha7:

I am still not seeing the fundamental difference in the design from a single-MM model, since an ECN like IB or CoesFX does not reveal who the multiple liquidity providers are. [/B]
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The fundamental difference is that in the single-MM model, your broker/market-maker has a conflict of interest, motivating him to give you the worst possible price on your trades, so that the broker makes the most profit in taking the opposite side of your order; while in the ECN model, your broker is not your market-maker, and makes no money from your losses, and therefore has no conflict of interest, and is motivated instead to give you the best possible price, so that you will be profitable and happy and recommend your broker to others, and your broker will profit from commissions, instead of from your trading losses.
 
In my view, those ratings are essentially worthless.

First, the owner of GoForex, Steven Moxham, is an IB (Introducing Broker) for HotspotFX. Not suprisingly, Hotspot is the only broker he officially endorses right there, under the "Recommended Brokers" link. So much for any hope of objectivity.

As if that weren't enough to discount the ratings heavily, take a look at the "Rate Your Forex Broker" instructions:

"Rate your broker on a scale of 1-10 where 10 is the highest rating and 1 is the lowest. Rate as many firms as you've traded a live account with in the last 12 months. You may take this poll more than once, but you may not rate the same broker twice. If your broker is not listed, enter it in the "Other" field and give it a rating out of 10. Employees and introducing brokers are not eligible to take part in the survey."

That so-called poll methodology is as deeply flawed as it gets. Where do I start?

1) a self-selected sample of anonymous online visitors... anyone who's ever studied statistical sampling methods knows that this fact alone makes the "poll" results extremely unreliable.

2) no way to screen out employees, IBs and any other APs (Associated Persons).

3) no way to prevent anyone from taking the poll "more than once", or 100 times, for that matter.

4) a single number from 1 to 10 is meaningless, without knowing a prospective trader's location, experience, needs, goals, capital, currency pairs traded, strategies employed, risk profile, and so on.

Do we really need to go on?

In short, that website is a perfect example of the internet at its worst. Seemingly providing useful information, while in fact providing nothing but gross misinformation.
 
Agreed re the poll. Meaningless sample and sample process.

Agreed also about the Market (ECN) vs Bucket Shop. A great bucket shop may be as good, or by charitably keeping spreads tighter than the real market even better than a market ... but ... they are motivated to be at least a little worse. So most will be worse, some much worse, and because charity from bucket shops is not rewarded they are unlikely to ever be better.

I pick markets (IB) - they have issues but at least the issue isn't caused by the broker being rewarded for cheating you! :)


Also, FWIW, unless Oanda have created a "free" open interface you can't use the range of order management, charting and analysis options with Oanda that you can with IB.
 
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