I am currently trading with GFT forex. And I have to say these: Pros: Good Charting. Thats it. Cons: Too much of a slippage. I mean what I see, is not what I get. Some times, I get screwed up to 10 Pips -15 Pips. Platform freezes (like some one already has mentioned.) They requote too many times. I need to know what are my options here?
There's good and bad in everything, if you want to trade cash then find a good marketmaker (which GFT isn't, there are a few posts around these and other forums about them!) or go the futures route. I've traded profitably with a marketmaker for a number of years and not had any problems once I'd found the right one. You'll find an awful lot of people advising against trading cash, most if not all of them have lost money because they haven't known what they were doing (it's obvious from this thread that some still don't!) and it's human nature to want to blame someone, anyone, other than oneself. And don't be fooled by the ECN style STP sales pitch from companies like Hotspot (not Hotspot FXi), IB, MB, it's aimed at people who don't know any better, it's all retail. If you read the small print you'll see that most of them are counterparty to your trades and they state very clearly that they carry on trading as part of their business. That's not a problem, it just means they're not really any different than any other shop apart from charging commission. There are quite a few threads debating the pros and cons of marketmakers, with some of the same participants, it seems pointless going over the same thing over and over again
Unlike some posters , I will give you some options Hotspot, IB, MB Since I closed all my accounts with retail bucket shops brokers, no more slippage, platform freezes,requotes,stop hunting,etc...for which ONLY the broker was to blame Good luck.
Agreed on how MMs deal with orders, but you don't need millions to dealing on the interbank. 250,000 USD (leveraged) is enough.
What Cable is saying is that regardless if ECN or DD, your order will end up on somebody's dealing desk. Also, if you are dealing with an honest DD, then your order will end up on the interbank anyway (if the DD believes that your bet is correct and doesn't want to take a counter position). DD spreads will never get to 0 or .5 but they will stay constant (unless you get slipped). You can get slipped badly throwing a large order at a DD for one of the less liquid pairs. ECN spreads can get to 0-.5 but never stay constant and can be wider at times than DD spreads. On the other hand, ECNs can handle 10 mill + orders. As with most things it's a give and take. An honest dealing desk model can be better for certain cases than an ECN. It all depends on your needs.
As for fx futures, the problem is that this market space is created by global businesses wanting to hedge currency risks, not mainly by banks (or CBs). If you want to trade a pairs that involves 2 countries that don't trade frequently, you are out of luck in terms of liquidity (EUR/AUD for example, which only runs about 30 mill notional market depth on major ECNs - ie. fairly illiquidy compared to the other majors). This is why, despite being centrally cleared, the fx futures market, IMHO, will not surpass the ECN or DD model anytime soon. Especially if there is a contration in the global economy. FXMarketSpace is a centrally cleared spot marketspace (by CME and reuter, I believe) but is only available to institutional traders.
vCAP CAX would fit the bill but they have eligibility and volume requirements way out of my league, vCAP Aggregated may be an option but I've never come across anyone who knows very much about it until now (could be the 250k minimum!), have you used it? One problem I just thought of would be fund managers, I bet there are some restrictions or regulations. I'd appreciate any info you're willing to share, PM if you prefer.
Excellent posts scexglobal I read somewhere that FXMarketSpace has been a bit of a failure as far as participants, and therefore volume, goes. You never know, if things get really bad they may open their doors to individual traders, do you think that's likely or am I just wishful thinking