Hi guys, I am moving my currency trading away from a spot fx dealer and I am exploring two marketplaces: Globex futures through Open E-Cry or Velocity and Currenex via PropFX. I am demoing both environments and the costs of trading appear to be the same - a mixture of tight spread + low r-t commission. Which marketplace, however, is better when it comes to buying on the bid and selling on the ask? I guess it's a matter of liquidity. Any comments?
Highest probability of being able to do that is on Globex. Specifically the EURO FX. You only get spread widenings during news releases - the first 5 -8 secs after the release. Other then that spreads are consistenly 1 pip on EuroFX with the occasional 2 pip. On Currenex, spreads avg 2 pips. It'll be difficult to buy the bid and sell the ask as currenex deals only with banks who need to make a market in order to profit. There is no payment for order flow (i.e. transaction fee) in Spot FX. At least not yet. When FX marketspace opens up early next year, you should see some of that. I'd go with CME Globex unless you're doing size north of 25 - 30 contracts per trade. But I suspect you're trying to scalp so you rarely should see a problem trading 10 - 15 contracts during the liquid London and New York session overlap.
I just talked to a guy at PropFX. He told me the Currenex platform is for price-takers. I cannot improve the market with my bids and offers. Is this the case with all Currenex whitelabels? I certainly hope not.
Prop FX is not real Currenex. They add pips to the spread instead of charging commision. So the transparency is gone. If you compare Prop FX to a prime currenex platform you will see that they add 1 to 2 pips to the euro spread and 2 to 3 pips to the Franc and Pound vs the dollar. If you do the math, that is a boat load of commission.
propfx and fxcm are the same thing. Only propfx currenex has a bit tighter spreads, but the price we get is still easily manipulated. Definitely go with Globex. On top of being a central market it is cheaper than any forex MM. redduke
Stay away from PropFX aka FXCM ... I don't understand why some people keep gravitating towards FXCM. They're bunch of crooks. Try http://www.aarontrade.com/html/forex_trading.html. G.