Right now I am with IB and have been trading relatively small 1-3 mm size with them. Never had a problem in fills, slippage etc., no complaints at all.
Looking to trade majors EUR/GBP/JPY/CHF and build position size of 20-50 mm, primarily during Tokyo, London and NY open times. Looking to build the 20-50mm position pretty quickly like in <5 seconds. If possible, will like to stay with IB and do not want to move to EBS/reuters right now, at least for next 6-12 months. The reason is too occupied right now with other more pressing matters.
I will be ok with execution upto 1-2-3 pip away from best bid/ask. I see liquidity in IB on majors is typically 20-40mm up to 3 pip from best bid/ask. So, theoretically I can just go and hit and will get filled for 30mm in 5-6 trades(since IB restricts trade size to 4-5 mm per trade).
My question is what will happen if I show this behavior everyday? I understand that in the interbank space, 30-40mm does not move EUR/USD market more than a pip at most. But what will happen on IB platform.
After this behavior for 20 days, will liquidity providers take out liquidity and widen spread as soon as I hit 10-15 mm? Will I be forced to move to EBS/Reuters within 1-2 months? For e.g. if Citi goes and always buys/sells 500mm EUR at London open, then other banks(like GS/DB) know this pattern, but they can just guess if Citi is going to buy or sell on a given day and they will quote spreads based on what they think Citi will do. Citi will not give other banks a chance to re-quote mostly, because they will simultaneously hit 10 banks for 50mm each, thus covering their 500mm transaction in one go. Now, in my case also, banks won't know what I will do on a particular day, buy or sell. But since I can buy only in 5mm increment with IB, it will take me 3 hits to buy 15 mm, I will be showing my cards w/o completing the transaction. Based on my prior behavior, banks will know I will likely buy upto 30mm more, and algos will promptly move their quotes on IB away from me. Net result: I end up buying 4-6-10 pips higher than normal market! (who knows how much higher!)
Maybe, my reasoning is nonsense, and doing 20-50mm with IB quickly is not an issue. Anyone doing size with IB, please guide. If you suggest I have to move, where should I move? EBS/Reuters or vcap CAX or somewhere else? Thanks a lot!
Thanks Braveheart for your suggestion on LCG Currenex!
I will look at the LCG option. Glancing through their website, they offer Currenex, EBS, FXAll, Hotspot, Lava basically everything that is out there. Just wondering why should I go for EBS not via Icap itself.....I will have to do more research on them, especially about account safety with LCG. I am based in US, not sure if LCG have a US entity.
I never had a prime broker and a bank guarantee before. Thanks for pointing out, I need to look into that as well!
In your opinion, which platform is best for high frequency e-trading for FX?
Thanks again for your detailed reply. The optimum thing for me to do might be to have access to all 3: IB, Currenex and EBS.
In the last line you said,<< all the bank are your enemy. they want you down. Don't let them know your dead line. So you should directly get into the market without prime broker UBS etc. So EBS maybe the best choice for you just talk to ICAP.>> But in the previous post you mentioned I find a prime broker and get bank guarantee. Also, when you go via ICAP through EBS prime, you trade on the credit of your prime broker, which means you need to have a prime broker.
Thanks for all your inputs, just that above left me a bit confused. Do you recommend a prime broker or not.