MB Trading announces Pay for Limits in Forex

[Marsupilami]

Quote from intradaybill:

It does not make any difference to the trader as you pass the flow to a market maker, like GAIN for example, and you get paid for this. I am talking from the trader's view point. If a trader is willing to reveal his future positions he may get a rebate at the expense of the market maker knowing what he intends of doing. If many traders decide to take the rebate at price X, they are a sitting duck for the market makers at X. This is so simple. I prefer to never get a rebate and enter market orders. Don't get me wrong, I like your firm. But celebrating over rebates is for uninformed traders, IMO.

Good luck with your new program.

Intradaybill, I really don't get your point.

How could a market maker profit from knowing your position ? And what difference would there be between a limit order and a market order ?

Are you implying that a market maker would manipulate the price feed just to take out your stop ?

Pretty hard to do an an ECN.


Anyway, I hope MB's new model will help to add more liquidity.

 

[intradaybill]

Quote from Marsupilami:

Intradaybill, I really don't get your point.

How could a market maker profit from knowing your position ? And what difference would there be between a limit order and a market order ?

Are you implying that a market maker would manipulate the price feed just to take out your stop ?

Pretty hard to do an an ECN.


Anyway, I hope MB's new model will help to add more liquidity.

Do you know who are the big market makers in forex? Answer: the big banks.

Do you know that forex dealers consistently make money and retail forex traders consistently lose money?

I said nothing about feed.

It is good they are offering rebates for adding liquidity but I will not take them.

 

[Marsupilami]

Banks are the market makers in FX, agreed.

But does Deutsche Bank or Citi Bank care whether Joe Shmoe has just entered a limit order of a position of 50k on his little MB platform ?


Most people lose in FX, but so do the stocks and futures traders. Trading is synonymus with losing, actually.

 

[NY0BScalper]

This sounds awesome. Intradaybill doesn't know what he's talking about.

If your limit is going to get picked off or leaned on... you cancel it. Reality is no trader's order on the MB trading ECN will holdup the FX Market as a whole. For traders who constantly enter passive orders, this is huge.

 

[intradaybill]

Quote from NY0BScalper:

This sounds awesome. Intradaybill doesn't know what he's talking about.

If your limit is going to get picked off or leaned on... you cancel it. Reality is no trader's order on the MB trading ECN will holdup the FX Market as a whole. For traders who constantly enter passive orders, this is huge.

Go ahead and spend your lunch money on it then....

 

[Peternam]

Quote from intradaybill:

It does not make any difference to the trader as you pass the flow to a market maker, like GAIN for example, and you get paid for this. I am talking from the trader's view point. If a trader is willing to reveal his future positions he may get a rebate at the expense of the market maker knowing what he intends of doing. If many traders decide to take the rebate at price X, they are a sitting duck for the market makers at X. This is so simple. I prefer to never get a rebate and enter market orders. Don't get me wrong, I like your firm. But celebrating over rebates is for uninformed traders, IMO.

Good luck with your new program.

How is this different from entering an order on the CME ? (less anonymous?)

 

[Surprise]

Of course there is a situation where MB will have to pay for the limit order without getting paid from whom hit the order , ie : when your limit order got hit by their liquidity provider orders , at this point they pay u and MB dont get paid , here MB will lose money , but they look at the whole picture i guess ...

 

[AK100]

Bill

I see your point and am not trying to knock you but say you short dollar/yen at 84.53 today and want to cover it sometime over the next few days at 82.87. Why not enter the limit order and if it goes through it then who cares, you've got your fill and are happy.

The above position would not be large, ie I'm not talking about $50million+, more like under $1m-$5m.

 

[intradaybill]

Quote from AK100:

Bill

I see your point and am not trying to knock you but say you short dollar/yen at 84.53 today and want to cover it sometime over the next few days at 82.87. Why not enter the limit order and if it goes through it then who cares, you've got your fill and are happy.

The above position would not be large, ie I'm not talking about $50million+, more like under $1m-$5m.

Good question. This works well if the usdypy falls below your limit. But there are many occassional when traders put limits near key s&r levels. If the market maker knows your order and since he is your counterparty, he may get your money. This will depend of course on how many others are set at those levels and whether it is more beneficial for them to go through the level or bounce up. What I am saying is that it is a bad practice to enter limit orders in forex in general. Why do you think they pay you after all? Because it is good for you? When someone pays a wh*re, he does that with the intention of phaking her. Do you get my point?

 

[esc_trader]

This is pretty big.. Your prob of success is levered alot more on your vig than people talk about - they're too busy chatting up (and selling) their respective crystal balls.

Will certainly tighten spreads too. The only downside is when adding you're always taking the counter-trend.

For scalping though, MBT deciding to do this - especially if other Forex brkrs decide to implement too - to compete. It's a pretty big deal.