When size is a problem

The Bishop · Nov 3, 2009

Quote from cabletrader:

You're up on all this stuff, would you trade with vCap, and if so which platform would you opt for, Currenex?

I did use vCap last year when they were an i-broker for FCStone. Stone ran into problems and was rumored to follow Bear and Lehman last fall (remember when MF Global was trading in the low single digits?) so I moved monies from them to the ol' stand-by - IB. Been too lazy to look at them again. At least for now.

When I traded with them, I used HS exclusively, but always wanted to use their ChoiceFx frontend (CAX) because if you see how it operates, you could enter an order that gets executued on one platform, say HS, and then closed on another, like EBS, almost guranteeing you the best possible spreads. One drawback for the ChoiceFX is I could not see the depth like on Currenex or FXAll (maybe they have a feature for that now). Commissions were a little high tho at about 35/mil at the time. Can't speak for it now. Also, since you are trading as a subaccount of their prime, you were able to trade spot and futures from the same account for those who like to hedge.

Customer service was responsive and good. People say why don't you just by-pass the introducing broker and just go directly with the FCM, well sometimes you get much better CS from an ib than you will from the FCM since really all the ib does is just customer maintence. The heavy load is carried by the FCM.

Overall, good experience with them...if you are looking.

regards

chipmunk · Nov 4, 2009

sorry you misunderstood. I am not interested in what leverage they offer but when you talked about $5M tradeable without moving the market was this $5m no leverage or $5m with leverage?

So if you had a $2m cash acount and used 4X leverage that would be $8m. Is this what you mean?

Beause $5m WITH leverage isn't so big.
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OK thx for that. Are we talking WITH leverage or without?

cstfx · Nov 4, 2009

Quote from chipmunk:

sorry you misunderstood. I am not interested in what leverage they offer but when you talked about $5M tradeable without moving the market was this $5m no leverage or $5m with leverage?

Doesn't make a difference whether or not your 5mil trade is all cash or leveraged, it is still a 5mil trade that you are trying to cross in the market. If I am taking the other side of your trade it is still the same thing to me - 5mil whether you leverage it or not.

nukethewhales31 · Nov 4, 2009

Quote from Georgii:

Hello all,

I've generally noticed that there are traders who are able to produce some very high rates of return from small account sizes. I've read of a number of cases where traders have run up five and even four figure sums to seven figure sums in the course of 12-24 months. Granted, I don't know what their risk strategy is and if they just got lucky on a general market trend, but suffice it to say there seem to be enough such stories where we hear of over 100% returns a year.

However, once the account approaches seven figures, it seems that the rate of return is often significantly lower, and a 30% return is something to be very happy about.

I have always tried to pinpoint why this is the case (we're talking Forex, specifically). Is this because:

a) Large contracts are more subject to slippage and can't get as good of a fill, you get delayed execution.

b) Your order's size moves the market and doesn't get you a favorable entry/exit.

c) The psychological fear of losing such a large sum of money and consequently a need to take less risk.

?

Is it possible, for example, to successfully use an intraday "scalping" or "jabbing" strategy with seven figure positions? Or do traders at this point resort to swing trades/position trades only?

Also, are there any figures that represent benchmarks of difficulty here, i.e. a noticeable performance decline above a certain amount of traded contracts, etc?

Thanks for any input...

use high returns to build your account so that just a few trades make you your money you can be picky.

ccooper · Nov 4, 2009

Quote from The Bishop:

I did use vCap last year when they were an i-broker for FCStone. Stone ran into problems and was rumored to follow Bear and Lehman last fall (remember when MF Global was trading in the low single digits?) so I moved monies from them to the ol' stand-by - IB. Been too lazy to look at them again. At least for now.

I am using FCStone for some of my trading. I, too, withdrew money last year over the same issues, but put it back eventually. There have been no problems since. Also, I must say that customer service has been fine at FCStone.

cabletrader · Nov 4, 2009

Quote from The Bishop:

Overall, good experience with them...if you are looking.

regards

Excellent, thank you for your comprehensive reply!

Unfortunately I've got another problem now, they have a 'CTA certification process' requirement, more red tape!

cstfx · Nov 5, 2009

Hey cable,

I know how much you "love" Interactive Brokers, but maybe you should really give them a second look if you are doing some type of forex CTA trading. Since I moved from the Hotspot platform to IB, I have been getting comparable fills plus they have the ability to set up friends and family/cta accounts with directed trades or proportioned like FXManager if that's what you need. I know you have your issues with them, but they might be what you are looking for (with the proper front end tho - their FX Trader is for the birds).

Just a thought.

cabletrader · Nov 5, 2009

Quote from cstfx:

Hey cable,

I know how much you "love" Interactive Brokers, but maybe you should really give them a second look if you are doing some type of forex CTA trading. Since I moved from the Hotspot platform to IB, I have been getting comparable fills plus they have the ability to set up friends and family/cta accounts with directed trades or proportioned like FXManager if that's what you need. I know you have your issues with them, but they might be what you are looking for (with the proper front end tho - their FX Trader is for the birds).

Just a thought.

That might not be such a bad idea, and like you say with a proper front end this time, FXTrader was a nightmare. It may have changed/improved since then as they had literally just released it (around May '07) and no-one at IB seemed to know how to use it or solve the bugs in it!

I've actually still got an F375XXX F&F Advisor account which I think is still live, that would save some time....

Yes, I think I'll have a serious look at it again, thanks for that cstfx!