Quote from Tango 6 Alpha:
And, that means that your trades will never see the light of day on the real Interbank Market - which by definition means that you are trading inside a closed-loop proprietary pool of liquidity, where your Bid/Ask is being "cooked" just right for the conditions that keep short-term day traders less than profitable in the aggregate.
I would advise retail traders do not short-term trade (as in scalping) FX. I'm not at all saying you can't intraday trade.
Trading swings and positions like retail should... they should be fine until they are up into the millions.
Can you be successful long-term in Retail Bucket Shops? Sure, but that all depends on what you classify as "successful" to begin with and you can count on running into all manner of "dealer gamesmanship" along the way: Excess slippage, Unfilled Orders, Partial Filled Orders, Price Spike Not Seen on Other Platforms Near Your Stop Level, etc., etc., etc. So, get ready for those games.
I am pretty sure this happens in the "Institutional" realm and platforms as well. It's a liquidity issue. They also have "last look" on most platforms, so it's not like the game is much different there. You will see more liquidity and spreads not open as wide for news trading if thats you're thing, but IB should be fine for that.
I am pretty sure retail brokers do this (spread widening on news etc) to cover their own ass, not f*ck everyone over. I am sure they take where they can, but they are offering you a service that would take atleast 5-10MM to do with a prime broker relationship. You could probably get in with a few of them for less.
VCapfx is a tier 2 prime, there are others you can get with for much cheaper then 300k, they are insane.
Price spikes off market I have seen it very rarely, and never on my broker. I most recently saw this from someone trading with Dukascopy... which I do not use, but it's usually a glitch in their server, which they would most likely refund.
There are benefits to retail service... many pros use retail as well, which is one of the reasons that it would be too risky for them to try any funny stuff these days.
The only reason I could see in moving up to an institutional platform is if you need the liquidity and relationship with a bank for security reasons and what have you. Talking millions of dollars.
If you cant trade profitably on a retail broker, being with a PB is not going to change anything.
Better if they just focused on watching markets and figuring out the interplay and what moves it, and how it tends to move etc etc.
I may be wrong here but this is how I am seeing it, as a retail trader of FX.
