20-50mm size in FX with IB

Discussion in 'Forex Brokers' started by traderhf, Jan 28, 2010.

  1. traderhf



    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!
  2. You are a big guy£¬few people can answer your questions£¡
    Your account balance should be above 2 million£¬with such amount you should find a prime broker £¨like UBS,Barclay capital etc£©or have a bank guarantee.
    Currenex£¨most popular ECN platform£© will be a better choice comparing with IB £¬for IB has a per trade size limit£¨6 million usd max£©.
    I compare LCG Currenex live account with IB£¬and i am sure Currenex has a Little better spread (@ the size 2M below) in E/U A/U.
    EBS maybe the best choice for your trading size.
  3. traderhf


    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?

  4. moarla


    on IB you can trade from "minimum 25.000 up to 10 million USD, or more..."
  5. Barclay Futures Ltd ¡¢LCG (London Capital Group) both offer the best liquidity Currenex platform£¬as far as i know from the others (scalper).
    I am a scalper too, I take a good look into LCG Currenex live account for several day £¬comparing with IB at the same time.
    1. the spread of E/U, A/U LCG is a little better than IB. G/U£¬G/J almost the same. but for the trade size 20m, I have no ideal !!
    2. at some rapid time£¨such as news£©£¬IB platform may freeze for 3~5 seconds£¬but the price on Currenex is still smoothly jumping.
    3. LCG charges $15/m£¬cheaper than IB

    I am happy with IB for year£¬but LCG Currenex seems to be a better choice£¬still not knowing the execution of LCG Currenex£¿

    one thing you must do is get a bank guarantee for the fund safety. It won't be a problem with 1 million deposit.

    you are a big guy in the market£¬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.
  6. traderhf


    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.

    Moaria: IB website says for example single ticket size for E/U is 5mm max. Where did you find 10mio ticket size. Thanks!
  7. BigSalad


    Unfortunately, IB does not give up FX trades so you can consolidate them with a prime broker. (They do on other products).

    You could checkout Newedge's FX offering - they had like 50 banks when I checked them out, slightly wider spreads (not much) and could accomodate more size.

    Someone wrote of finding tighter spreads than IB. In my opinion, that is impossible unless it's either Mickey Mouse size or consolidated size from even more banks than IB offers liquidity from.

    You could also look to automate multiple trades with IB through a front-end or their API - one click equals five 5m orders at market as an example. (Not sure what IB and the banks think of that, they are a lot less trader friendly than they used to be).

    One last thing: You might want to be a bit careful with going to one bank and trading with them alone, be it Barclays or Deutsche etc. They'll keep their wicked eye on you...

    Good luck to you!
  8. I wiil/can answer your question in 10 years.
    I means talk to the ICAP directly £¬just like you are a bank corporation not a individual . ICAP may guide you next move.
    with 10m per trade size £¬they will treat you VIP.
  9. I hope you are right.
    But the live account shows LCG obviously has avg 0.4pip(@ the size 2M £¬not a Mickey Mouse size) better spread in A/U.
    You can ask LCG forex Director for a live account to view£¨0 balance to trade£©£¬ not a demo.

    It seems IB has larger liquidity at the best bid/ask £¬because the price is 0.5 pip precision£¬but Currenex 0.1pip.
  10. moarla


    #10     Jan 31, 2010