Is arbitrage activity prohibited by brokers?

Discussion in 'Forex Brokers' started by sdp2000, Sep 2, 2005.

  1. sdp2000


    Most of the brokers don't like scalping trading techniques, but whats about arbitrage? Is it prohibited by brokers? or this is one of the trading techniques avalaible for traders which have own sprecific.
  2. Yes, this is what is specifically prohibited. They do not want you to get e-signal and compare quotes to find out if "they" (your dealer) are lagging or leading the group.

    arbitrage however is a big word.....I suppose you could watch gold or some other commodity and base a decision off of it...I suppose if you found an index that lead a currency you could arb it...but in retail spot forex most people when they say is the prohibited version of it...One of the traders here coined the term "Picking" for this prohibited practice, not "scalping".

    Michael B.
  3. flakac


    How your broker can recognize you are taking datafeeds from any other broker?
    I have found no mention in the broker agreement that using this kind of information is forbidden.
  4. flakac,

    They know what you are doing, cause they know when they are has nothing to do with YOUR tools. In Retail Spot Forex, your dealer controls the quotes you see and your fills. They hold the purse strings to YOUR money in a secondary market that they present, control and execute...

    You don't want to be labled a "picker" or they will slow you down...

    The manuel execution designation to a Retail Spot Forex Trader is the same as the 'PDT" designation to the equities trader.

    I suggest you talk to someone that has been caught... I really do not know, as I trade long term in Retail Spot Forex with a dealer/marketmaker that I trust so far, and that allows me to pull a very modest annual profit....

    Michael B.

    P.S. I know you think that this is all poppycock...I did too...but I will tell you that your trades never see the interbank market, they simply remain internal and within the SECONDARY market.
  5. phildunn


    Which is the best and honest broker right now in your opinion?:confused:
  6. Hamlet


    You're right about it sounding like poppycock. From the viewpoint of someone who does not trade currency, this sounds hard to swallow. How or why could a firm who is offering you a quote to trade at, hold it against you for taking that trade regardless of what you are basing your decision on (except inside information I suppose)? Come on, if they dont want to sell it where they offer it or buy it where they are bidding then they should adjust their quotes accordingly!!! Hell, learning that this leading/lagging phenomenon exists makes me want to consider jumping into the currency arena. Perhaps I'm missing a piece of the puzzle here and you could further enlighten me.
  7. flakac


    Thank you for your answer,
    1) how "short" trades (timeframes) are to short so the trader is designed to manual execution?
    2) Is any defense against it?
    3) I found no statement in the broker's documents in the sense "you must not trade to quickly". Please give me some ling where is this "forbidden technique" described in more detail (where is clearly stated that "this" and "this" is explicitly forbidden).

    I am asking because I am developing an ATS for forex.
  8. How could I answer your question? Most Dealers have it embedded somewhere. They always reserve the right to end their relationship with you, if they have not spelled it out.

    I did not mean to interuppt your project. I think you should talk to others who trade with your dealer...scan Moneytec to find someone that was put on manuel execution.

    They usually label the arbitrage of quotes incorrectly....they call it scalping. The earlier sponsor here in ET...called it "picking" and coined the phrase. Some actuaslly mechanically spell it out in a way, that is clear. I think my dealer attempted to do that. I will look for how they explained it...but I may not be able to find it...if I do I will post it..if their name is not all over it.

    Good trading to you...

    Michael B.

  9. Due to constraints in ET, I am unable to spell it out. But its the one that allows one unit increments...

    Earlier I always mentioned them, until I was warned by one of the moderators to stop my relentless activity of promoting them.

    It's just, I am so happy with my Dealer/MM that I wanted to share. They do not advertise and I wanted to do my part, as I need them to survive. They are miles ahead of their competition.

    Michael B.

  10. Hamlet base your discovery in the real world, not on what I post. The fact is... it is happening in the partially regulated world of retail spot forex.....just read the posts here and in other Forums, if you do not believe it.

    Some dealers need that buffer zone to collect up the executions to find their net position to hedge with, while others just do not find the income from their spread enough money to make, so they run stops and other shenanigans...therefore the spikes...

    There is no central data feed for Retail Traders in Spot Forex...Each orex Dealer/MM make their own individual markets, therefore the regulation of this global secondary market is limited.

    Most traders that discover this, leave Retail Spot Forex or never tradit it to begin with..... or figure out how to deal with it...

    Don't you see the games in Equities....? AND ITS REGULATED!

    Some traders have no other way to make markets and money, unless they hold the unfair advantage. Welcome to America....

    Michael B.

    #10     Sep 5, 2005