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Currenex troubles

  1. Hi folks.

    I am very new here and about to open a currenex account with ADM. I plan to do high frequency trading (scalping) with up to 50k funds (* leverage).

    I am aware of the risks market poses and have no general issues with that but while reading this forum I found several references to potentially fatal problems with the currenex platformt:

    1) Huge slippage for @MKT price orders, this is when your order gets filled with +/- 30 pips (some reported it to be up to 130 pips).

    Is this still happening? How is it called in professional terms? How can a trader protect himself in such case (besides not trading @MKT at all)?

    2) Bank reversals. How does this happen? I mean imagine you open a position, close it and then, sometimes later bank reverses one of the trades, leaving you with open position again????

    What is if this happens 5 hours later when your newly reopened position lost 400 pips to the market???

    Are there other "underwater stones" I should be aware of?

    Thanks!!
     
  2. OK, after reading some more I understood that the slippages in orders might actually be normal market mechanisms, although this is still very hard to believe in 200 pips slips as I read in some other forums / threads.

    Is it more or less safe to assume that under normal market conditions major (10+) slips should not be an issue?

    And, isn't currenex platform by itself come with "ESP Protection Alert" feature to prevent exactly that scenario?

    I am still not clear regarding reversals, can bank reverse your position even after it gave you a fill or does the term reversal "just" means not honoring the bid/sell offer placed into the market?

    Thank you!!!!
     
  3. Hi,

    one solution would be to use marketable limit orders instead of a market order. For example, if mkt is as 1.5510/1.5511 and you want to buy - submit a limit buy order at 1.5513 - this order should be executed immediately at 1.5511 - and in case of a fast move it will limit your slippage to 1.5513. So you would either be filled between 11 and 13 or not at all. That way you are not exposed to the risk of unlimited slippage and will still be filled 99% of the time.

    Unfortunately the currenex frontend is a pile of crp in my opinion, and that way of trading is not really convenient with it.

    As for the busted trades - no idea how ADM handles it. Judging by the numerous threads about it here, it appears it happens often on currenex - and that brokers rather piss off a trader than one of their liquidity providers.
     
  4. Thanks Pippi,

    I think another name for reversals is "last look" (Please correct me if I am wrong people), as far as I understood, we are talking about milliseconds to seconds delay to fill.

    Even Vcap writes about this in their CAX FX promotion:

    http://www.caxforex.com/trading.html

    I requested ADM to give me official stance on this.. Will post it here.

    But if they really can reverse minutes or hours later, then this is real BS, I can just as well flush my money into toilet.

    I heard Hotspot FXi does not give banks chance to do reversal, is that true?

    Is there any broker which would open an FXi account for 25-50k deposit?
     
  5. Hi,

    last-look means that if a market order is routed to a bank they can choose to not fill it - and it will be routed to the next bank in line, possibly at a worse price.

    A 'busted' or 'reversed ' trade means that a fill you already got will be undone at a later point in time - possibly leaving you with an unwanted open position. Every broker has a passage in their agreements ('clearly erroneous fill policy - or something like that). It means that the broker is allowed to correct deals done on an erroneous price. The keywords usually are 'in a timely fashion' and 'at the sole discretion of the broker'.

    ODL or London Capital Group will let you trade on HotspotFXi with that amount of money - maybe there are others, i don't know. On HS there are only limit orders (no market and no stop orders) - i guess that's one of the reasons they appear to have fewer problems with the aforementioned problems.
     
  6. Thanks!

    So 'busted' trades happen on FXi as well?

    How nice that is. I also BET it happens only if your long forgotten unwanted position puts you in loss.

    Plus, this is exactly the case where one could end up in really deep debt. And it will not help to scalp in "market direction" ether, because opening position could be a subject to bust as well.

    Could anyone who saw this happening tell me if it was during news trading (high fluctuation) and how long did it took banks to perform reversal? Minutes? Hours? Days?

    A scalper opens and closes 10-20 positions daily so statistically he would be in much greater danger then slower trading person. Dang.
     
  7. I've had busted trades before, and sometimes they happen at different brokers simultaneously. What varies is the length of time it takes for a broker to advise you of the issue. Once when it happened, Currenex advised me of the busted trade in about 15 minutes. I did the same trade at another broker who took several hours to advise me of the problem. From that broker I received compensation because of the unreasonable length of time that it took.
     
  8. Did that happen during unstable markets and where those trades which got busted executed at some really special prices?

    How likely is it to get a trade busted if you "ride" the 6-10pip wave of the normal market with 2mil positions?
     
  9. So you are placing a "MARKET" order and feel you have a right to complain about something you call slippage? IMO, there is no such thing as slippage on a market order. Place one at your own peril. Place one at a news event and your are just plain inexperienced.

    Especially since you are programatically executing, place a limit order with a price +- n pips from where you want your fill. If you dont, its laziness in your part and if the "true" market has not found itself after a news release, or if the true market is only in smalls and you want a larger amount, then you do not understand the forex market and you deserve the fill you get.
     
  10. Yep, I already understood that rule :)
    (It is pretty new if you come from MM)

    No @MKT orders.

    AFAIK Hotspot (At least FXr) does support variable +/- pips spread for @LIM orders. This is much better.
     
  11. Just avoid market orders during the highest-level news reports (Fed and NFP) and you will be fine. The reason for high slippage during these announcements is the banks aren't quoting rates at the time of the reports. You can get filled on a market order against another customer's limit order at a price the "market" never trades at. Avoid trading at those specific times and you'll be okay.

    On another note, I agree that the Currenex front-end is among the worst platforms ever for active trading. Order entry is laughable, and I find it hard to believe that Currenex is any kind of standard in this industry. Thankfully, we only use it in the event of a problem with automated orders.
     
  12. TrueStory,



    What platforms do you like ?
     
  13. I would suggest a different PB other than ADM. I've dealt with them before, and they run a tiered system whereby retail accounts are given padded spreads. 3 pip spreads on USD/JPY and EUR/USD were par for the course. Dealing desks offer better spreads than that.

    I'd say for account sizes <$100k, go with IB or HotSpot FXr. For account sizes >$100k, go directly with HotSpot FXi.
     
  14. Thanks.

    No the only thing left is to find a good CX HUB...
    I am now getting the life demos from ADMD, CapitalForex Pro and ODL.

    I now know that many brokers will open FXi account at the same conditions as CX.

    With all the issues with CX, would not FXi be a better choice?

    Edit: TraderKGB, &#1055;&#1088;&#1080;&#1074;&#1077;&#1090;, CapitalForex offers FXi with 35k deposit.
     

  15. To be honest, I have no experience with any other forex platforms. The reason for this is that, as I said, we trade fully automated using Currenex pricing but the execution does not occur on that front-end. If there is a problem, we fill using the Currenex front-end. It is not efficient for order entry. My alternate experience is trading futures and options, and EVERY platform I ever used was better than Currenex.

    My recommendation for active traders is to use Currenex pricing (datafeed) on another front-end with more features. But there are many others on ET with more experience in this area and with many brokers than I have.
     
  16. After reading this thread, I think I'll move to Index Futures.

    Reversed Trades notified hours later?!!

    Money down the toilet is an understatement.

    Don - I scalp as well with a 10 pip stop.

    Imagine what kind of damage a 3 hour post-bust notification would do with an 80 pip off market quote?!

    Oh yea. I thought Wholesale ECN FX was a fair game. Guess not. Wow.

    This is a real eye-opener. I guess thats why the PRO's keep saying FX is strictly for Banks. Everyone else gets royally screwed....
     
  17. What is the attraction of spot-fx?

    Globex currency futures is transparent and liquid with none of this nonsense like "bank reversals".
     
  18. To be fair (Correct me if I am wrong), I believe that busted trades are every day thing on regulated exchanges as well due to "quoting errors".
     
  19. I'm shocked they support accounts that low. I was told by HS that 1M is the minimum order size, which would put a 35k account out of reach for EUR and GBP pairs. However, that order size requirement might be just for HS Prime clients (FXi itself might support sub-1M orders).

    Pippi mentioned ODL, but they require much higher than $25-50k (low 6 figures last time I spoke with them). They also have a 250M/month minimum volume for FXi. This is why going directly with HS Prime is the best route in my opinion. Lower commissions without the middle man and also no monthly volume requirement.
     
  20. They are. But at least there's centralized prices and regulatory oversight to protect counter-parties from flippant renegs..

    Maybe I'm wrong about this, but how do you plan to account for reversed trades, as a scalper?

    How can any scalper account for that kind of risk?

    Hedge every transaction with both long/short options for >24 hours.....?

    The only answer seems low leverage and wide stops. Which is not really an answer at all...
     
  21. I will add CME Globex to my prorealtime subscriptions and check their behavior, maybe they are real alternative. All what interests me is their volatility on 5 sec chart.

    I had a chat with many brokers and they all say that unless we are really high frequency (automated) scalpers or scalp with really large positions (20+ mil), banks are very unlikely to specifically target us. We are below their radar.

    The only real reason a average scalper can get slammed by bust would be tech glitch, which is no different to regulated marked.

    Well, that's the point. We can't, except maybe making sure that our account can sustain 200 pip ride of any given position without being margin called. Which is a good idea anyway.

    For now I naively think a average (<200k) trader can mostly avoid busts by:

    * Using a good broker AND system which is as near to EBS market as possible, the farther your hub is, the likely is the chance of glitches I was told. FXi wins vs currenex here because to my understanding while some CX hubs are perfect, others are pretty far away from the EBS.
    * Avoiding news trading time
    * Riding 6-12pip wave of the 'nothing unusual happens' daily market
    * Keep positions to <5m $ size

    Once a trader has 200k, he should go to anonymous service such as CAX FX, not just for anonymity but also for good customer service.

    Please correct me if I am too "blue eyed" here :)
     
  22. Thats good information.

    Still disconcerting banks consciously target big scalpers by reversing trades.

    And goes against interbank mechanics I presumed to know.

    From my understanding, Banks are supposed to act as market providers. Not market makers. What I mean by that is, their bid/ask is *supposed* to reflect buy sell orders of private clients, other non-related banks, and *maybe* their in-house deal desk. All risk is on private counterparties, with the PB Bank taking the commish. Or, perhaps the deal desk takes the other side and has exposure?? Which negates the purpose of trading interbank to begin with, no? With an in-house deal desk taking the other side of a private traders orders - even if its just some of the time - it becomes a glorified bucketshop. But a bucket to be sure..

    Maybe I don't get it. Banks act as counterparty for any private trader using their facility to trade interbank.

    When any order is executed by that private trader, the order is simultaneously counterpartied and stamped as PB Bank order and matched with any other bank on EBS or Reuters.

    So if the private trader closes that position in a few pips, what does the PB Bank care if some other unrelated bank gets whacked? Where is the negative exposure here unless we're talking deal desk?




    Not at all. It appears you know much more than I. So thanks for being so open about the process.

    The ideas are good. Sweeping a trading account every month to minimize exposure is another one. But that really limits capital growth potential. Now maybe I'm the guy whose starry-eyed. But thats a big one.

    If indeed this info is true (which I believe it is), there's a real Cap on how big a private scalper can trade.... under 5 MIO or prepare for an shelacking...

    And that raises another interesting point.

    Scalping is entirely subjective. Hold time? Average take profit? Average Stop? Who determines?

    Its a big grey area and I'm afraid my strategy falls dangerously close to what most banks or brokers would consider scalping to be - 10 to 20 pips moves at 10 pip stop.....

    But then again, you're right. If a trader goes anonymous on an ECN wholesale, one would think that alleviates a big part of the problem right there.. Then again, how anonymous can any platform truly be unless its centralized under one clearing party? For instance, some bank has to counterparty a trade. If its FC Stone or DB or whoever. If a scalper - whilst remaining anonymous - continually hits a number of banks for a quick trip, the offended parties will approach FC or DB, cite the ticket# and have the scalper booted. Right?

    This is all just speculation, tho. If I'm wrong, let me know!
     
  23. Wow, reading this thread makes me appreciate my virtual-world bucketshop marketmaker even more! Sure he 'smooths out' and shades price but at least he fills pretty much everything I throw at him and doesn't ask for the money back later if I win!

    The 'real' interbank market? The heck with that, give me candy-coated pricing and bucket fills any day of the week over the crazy interbank world, those guys play too rough!
     
  24. Yes, this is correct. And you don't have to be a scalper for this to happen. If a bank gets hit for directional trades in amounts more than they are prepared for, they will also complain. From that point, it depends on how much your broker likes your business, and if you don't bend a little, you may get 86'd.
     
  25. How would a trader be expected to 'bend'? Higher commish?

    It seems u have first-hand knowledge of interbank 'etiquette'.

    If Banks are such Big League Pussies when it comes to the wrong side, it appears Spot Forex is unbeatable.

    At any moment, a traders Prime Broker could sell out to maintain relationships, reverse a few critical trades, whoops, sorry Mr Brown, your account is down 300 pips.... Down 60% on a whim.

    Live or die by your Counter-Parties good graces.

    Anyone else find this beyond ridiculous?
     
  26. Do any platforms or Prime Brokers to those platforms forbid bank reversals?
     
  27. You don't earn (or pay) yields on FX futures, unless of course there is an inverted futures curve, so long term strategies using FX futures have a higher tcost and require more active management on the part of the trader.
     
  28. Ok, a few points: The banks have a last look right on most platforms; if they don't like the trade, they can bust it. Most of the time, they don't, but they got fed up with a few bad apples in the high frequency trading community. On some platforms, it is also not possible to hide behind the PB. If a bank doesn't like your business, you won't be able to trade with them full stop. Until recently, the CME wasn't entirely anonymous either due to some weakness in its clearing protocols.

    You can earn the carry using futures, as the future price fully incorporates the forward points. In fact, it could easily be argued that by using futures, you get less ripped off on the roll - some of the OTC providers have a habit of nicking a little bit here and there.

    Hope that helps.