Limit Orders in ECN vs Bucket Shop

Discussion in 'Forex' started by up23, Jun 22, 2011.

  1. up23


    This is a noob question. In an ECN (ie, IB), if you are the first one in line with a limit order, and someone else goes market, you get filled on your limit and make the spread right?

    And in a commission-free shop, you will not get filled on your limit, and your limit order position is jacked?

    This is assuming the you are limit short, and the bid has not traded up to limit price yet.

  2. rmorse

    rmorse Sponsor

    I'm not sure what your asking, but IB is not an ECN. They are a Prime Broker that also has a trading arm. If you have Direct Market Access (DMA) through the platform offered you, you receive time order priority on most ECNs, like ARCA. If your in 1st, you get done before the orders behind you. If you route your order to a route where an equity market maker is holding your order, he only has to fill your order when it is marketable. (The street bid matches your offer, the street offer matches your bid). Then if they don't want the other side of your trade, the must route the order to receive your price if available. This this the NMS mandate for best execution.

    At least this is my understanding.
  3. up23


    Thanks for the info. So Direct Market Access is what I need to get my limit orders filled fairly.

    IB states: "Our clients benefit from IB's worldwide direct market access to ... forex." So I feel better about them.
  4. emg


    that is marketing slogan. Doesn't mean anything. AT&T always have a slogan "Best customer service"

    Many people are duped from these false marketing slogan.
  5. emg


    also, FX market is the best place where brokerages and banks can easily churned and burned clients accounts with the slogan on their website "Our clients benefit from IB's worldwide direct market access to ... forex"
  6. rmorse

    rmorse Sponsor

    Forex markets are not the same as equity markets. FX is still the wild west.
  7. JamesL


    Please educate yourself on the difference between ECN equity trading and ECN forex trading. Your posting here is mis-informed.
  8. As someone who does 1,000 trades/day...
    And uses > 99% Limit Orders
    I trust IB's IDEALPRO ECN infintely more than, say, the NYSE...
    Both in terms of order priority and 20-30% price improvement.

    If you trade Forex using any sort of market order...
    Or any "stop" that turns into a market order...
    You are fucking crazy.
  9. AK100


    Why's that DDT?

    I would think that market orders on a very liquid market like FX (assuming your orders aren't massive) woulnd't be a problem at all, same with stops (turning into a mkt order) unless over some big time news or figures.

    I'm no way suggesting you're wrong, but what is wrong with market orders in FX?