MB Stop Running - 10-19-06 at 1600GMT

D

danger66

Hi All:

I know that many of you use MB Trading or EFX to trade because of their "ECN" functionality.

I am testing an experimental product with a "proprietary" multi-liquidity provider feed, but I have reason to believe that MB is providing the feed. The "Server" name in the MT4 account has "MBFXi" in the name. I know this is just a description that the broker gives the feed and "MBFXi" might not mean MB Trading, but it seems too much of a coincidence.

If this feed is being provided by MB Trading / EFX, I would like to know if their forex feed is truly ECN-based (without a dealing desk) or if they have both a forex dealing desk feed and an ecn feed. Why am I asking this?

Because I think I have proof that they ran a stop blatantly for one of our traders yesterday (10-19-06) right after the Michigan numbers at 1600 GMT. I have attached a screenshot that explains everything.

Let me know if any of you that trade with MB or EFX experienced the same thing at 1600 GMT yesterday.

Take care.
 

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Hi guys, I just had a conversation with the brokerage firm and I was told that MBFxi does not mean MB Trading. What he said makes sense. They still can't offer me an explanation as to what happened and they said they're looking into it with their liquidity providers.

After the execution at 1.8759, the price never looked back. In fact, the low on the 1-minute bar of the execution is 1.8754. The low on Bloomberg at that same time was 1.8755 - so the 1.8749 exit makes no sense at all.

Furthermore, the figures at 1600 GMT were bullish for the pound. That means that buy orders were naturally going to be raised (not lowered) - unless (of course) we were being individually targeted. Who the heck knows.

Your take on this is much appreciated.
 
Who was the feed from as I would be interested in a multi ECN feed?

There were loads of spoof real prices at that time, to be fair. I wasn't watching cable but was watching euro dollar. At the time the release was due euro jumped 15 ticks although the figure had not been released on reuters, market news or bloomberg. The next price was 20 pips lower. When it was released -evidently a few seconds late, the weak figure caused the euro to jump 10 -15 ticks before falling back on profit taking. It then took off.

Around figure time as you know prices can be mad. May I ask why your traders leave stops so close to the market - surely that risks the very thing that happened? It sounds like you run a very proffesional place so surely the traders can be trusted to stop themselves out rather than risk this happening on an errant quote. By the way this isn't a criticism but rather be intewrested to hear the logic.
 
Lon Eagle, thanks for the reply.

I don't know who provides the feed. The firm tells me that they have confidentiality agreements with the liquidity providers. Right now I have a nondisclosure arrangement with them. I cannot disclose who the firm is yet.

I don't know what you mean by "spoof real prices."

If there was a real 1.8749 price in the mix (which doesn't make any sense), then it should have shown up on the chart. Shouldn't it?

The trader in question uses 8-pip stops. He does not want to be caught with his pants down and just holding on so that a position recovers. I want all traders to use stops and don't work with any traders that set stops too far away for the market. Trading without a stop scares the hell out of me. :)

Take care.
 
Quote from danger66:

The trader in question uses 8-pip stops. He does not want to be caught with his pants down and just holding on so that a position recovers. I want all traders to use stops and don't work with any traders that set stops too far away for the market. Trading without a stop scares the hell out of me. :)
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Stop placement 8 pips from one's sub-optimal entry -- as opposed to 8 pips beyond a local extreme price level prior to the news (in itself arguably too close, for cable) -- strikes me as a less than sound method of risk management for news trading.

Sounds like your trader's size is excessive for the degree of risk.
 
8-pips stop in the pound is really kinda asking for it. I've seen 60-pip spikes right before/after a news release which should have pushed it going the other way, with near zero volume in between.
 
late apex, thanks for your reply and for your opinion on the stops.

Please notice that the purpose of the post is not whether this trader's stop loss strategy is sound or not. I'm just trying to find out why was there a fill at a price that did not even show up on the chart and could not be confirmed on any other institutional feed.
 
Danger, it looks like your charting feed does not match the executable prices. You don't want to use a charting feed that does not match executable prices. What is a "multi liquidity provider"? For example, CurreneX is a multi liquidity platform but it depends on who your white label provider has relationships with. Or do you mean that the broker you trade with can execute against other brokers liquidity? The latter seems impossible to me.

Now as far as MB is concerned, on mini orders there has to be a dealing desk involved, because you are not going to interact with banks or hedges with mini orders. Now as far as standard orders are concerned, depending on size you may be dealing with other traders in MB's "pool".

I have enclosed some charts for you to look at, CX and Hotspot. Dare to compare, they are all different, this is caused by retail activity, the greater the retail activity the wilder the swings on prices. This can be especially dangerous when the market is slow like it is now.

It still looks like your chart does not match the executable prices to me.

The Ever Interested VIPER
 

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Viper, the charting feed does match the executable prices. I see the BID on the quote plotted pip by pip on the chart. It is just on this particular 1.8749 execution that the price did not show up on the chart.

I know that Currenex is as good as the liquidity that the broker has relationships with. What I mean by "multi liquidity provider" is something similar to Currenex, HotSpot, etc. I know exactly how the broker is able to pool liquidity from different sources through the platform, but they're doing it.

The feed is not MB's. I confirmed that already.

I can't make out what your chart is about.

Take care.
 
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