Find out what a FX platform can't do...

Discussion in 'Forex Brokers' started by 9th Gate, Nov 4, 2005.

  1. 9th Gate

    9th Gate

    In the past when I tested a FX platform I would enter orders around a trade system and see if I could profit. If that's your goal then go through Oanda's FX game because the account does not expire. This time I changed my mind and said let me hit the platform I'm testing with as much activity I can and find out what it can not do under various market conditions.

    I would list the name of the FX market maker's platform if I thought it mattered but I think the results of what I saw this week would be typical of what can be expected from any market maker's platform when you throw size at it.

    Trade Sizes:

    Round turned 1000 lots in one wk ($100M CV)
    Min trade size = 10 lots
    Max position = 30 lots

    Specific Tests:

    1. Wanted to find out if large positions in the profit can be closed out quickly with profit vs positions with a loss.
    2. Wanted to find out about the possible delay tactics.


    1. Orders placed at the market seemed to go through alot quicker during the week vs on Sunday, Monday, and Friday.
    2. During fast moving markets Right click options to close out positions were not enabled and orders were routinely held, one time almost 10 minutes, even though loosing trades were closed out without too much delay.
    3. On Friday 11/4/05 the time delay and slippage was very noticeable. For entry orders the platform was time delaying the direct deal to the pending working order status where it would get more delay then even more time delay before the order reached the open position status.

    In one case I was trying to close out a profitable short @ a 1.1879 direct deal and it showed up as a pending order @ 1.1880 then to closed position @ 1.1885 after minutes of delays and the market was already much lower than the 1.1885.

    The worst case of holding onto my order was 3 separate 10 lot orders to buy back profitable shorts at 1.1845. My orders were held 10 minutes in pending status. I could not close or modify them. The market then went much below the 1.1830 level and my orders were filled at 1.1845 even though the market was well below 1.1830 at this point. In other words most of my trouble centered around closing out profitable positions and entering market orders in the direction of the trend.

    In the end the good news is that if you trade with a good plan you'll make money, but just realize what is waiting for you. Good luck trading.
  2. Thanks for sharing that interesting experiment. Since you've only described your real money testing on one particular (as yet unnamed) MM platform, what is the basis for your conclusion that "the results of what [you] saw this week would be typical of what can be expected from any market maker's platform when you throw size at it"?
  3. Just tell us the name of the Platform, it would be interesting to comment on.
  4. 9th Gate

    9th Gate

    I've traded on FXCM's platform (real), Gain's(real), and this one was GFT's (not a real account). I like GFT's setup very much and I have nothing bad to say about them or really any FX broker / market maker because without them alot of traders would not have access to these markets. I also understand that these market makers should make money for the service they provide, I have no problem paying $300 (3pips) to trade 10 lots ($1M) currency position although I understand it can be done for cheaper.

    Apex, I have no doubt that you can take on size with these market maker platforms I am just trying to quantify exactly what type of slippage you can try to factor in.

    What do I think is happening ? I think market makers protect themselves by offering a requote if your order entry would give you a potential advantage or time delay your orders to entry to fill you on a short term zig vs a short term zag.

    Why am I doing this study ? I am preparing for Tradestations FX automation that is due next year. I am trying to see what kind of slippage I can expect in a fast moving markets. Slippage will be a key factor in determining whether a strategy can win or not, especially for the ST strategies. I don't know how Tradestation is going to get around Gain's requote for market orders ?
  5. have you tried IB IDEALPROFX ?

    let us know what you think of it compared to the others if you are able to "test it" real time

    also ... have you ever traded CME FX futures ?