Here is an email from MB concerning "dealing desks". YMMV; Dear Trader: Recently, MB Trading Futures began a conservative launch of new order and quote technologies to support Spot FX trading. In keeping with our commitment to provide some of the finest technology in the industry, we not only wanted to launch an additional trading product, but design a better product than what was currently available in the marketplace. Our highest priority is to offer reliable technology at a competitive price. MB Trading Futures is and always has been a "Non-Payment for Order Flow", "Non-Deal Desk", direct access firm. In the Spot FX marketplace the use of a Deal Desk puts the client's best interest, with regard to order execution, in direct opposition of their broker. The broker not only profits from commissions, if any, but also from the clients "losing" trades. This is why the Forex industry has seen the recent growth of "No Commission" or "Free" Spot FX trading brokerages. MB Trading Futures remains aligned with our client's best interests by utilizing a system that is strictly transaction based and always direct access. The MB Trading Navigator, its SDK/API, as well as our FIX servers and quote farm, have all been upgraded to support Spot FX trading. Furthermore, MB Trading Futures is proud to announce that 3Dforex (TDFX) has been selected as our routing destination. TDFX offers MB Trading Futures clients direct access routing: TDFX allows our clients the ability to route orders directly to liquidity pools of major banks around the globe, via Straight-Through-Processing (STP). Those familiar with equity trading will notice that TDFX operates similarly to active ECN's such as ARCA or INET. TDFX currently routes to no less than eight banks, yet crosses against other clients resting TDFX orders first. TDFX offers MB Trading Futures clients transparency and reduced spreads: Since TDFX is not a deal desk, but rather an electronic execution system, the need to maintain fixed spreads is non-existent. As such, orders will reflect competitive quotes of FX pairs, reducing prices and minimum spread increments to as low as 1/10th of a pip. TDFX orders will display within the MBT Navigator at each price level showing the full depth of the market for each pair. TDFX offers MB Trading Futures clients the ability to cross orders anonymously: TDFX orders will execute against one another, eliminating the need to only fill orders against bank quotes. Furthermore, TDFX maintains an anonymous internal order book, meaning that Client-A can cross quotes with Client-B without the necessity of a deal desk. TDFX facilitates "best execution" for investors/traders and generates price competition. TDFX offers MB Trading Futures clients anonymity because there is no Deal Desk: Unlike a deal desk, or firms that trade against their own clients order flow, TDFX Stop/Threshold orders are not displayed or routed to the market until they are triggered. Clients enjoy full order anonymity on the system, thereby preventing "Stop-Hunting" or quote manipulation by a single market participant. We appreciate the opportunity to bring you access to this exciting marketplace with our new trading products. Good Trading, Ross Ditlove Chief Executive Officer
Hello Danger, I put up the CX chart to show that on the CX feed the price did not come near the price you had on the chart or the price you were stopped at, it is my opinion that this happens because because there is not the retail activity on CX that you find on other feeds. Now you do get gaps but I prefer that to the wacky retail swings. Bloomberg does not show what your local providers are doing, just as cx doesn't. Since there is no central exchange, there is no uniform quote. Here is another personal opinion, I don't think somebody ran your stop, I think that there was a liquidity provider that caused that low, due to retail trading, but for some reason the quote did not show up on your chart or platform. It seems to me that it is more a Tech problem than a trading problem, somehow there are executable prices floating around and they are not showing up on your platform. Also the fact that they could not find the source of the problem within an hour or so might be a point of concern. I still don't understand all of this secrecy about who the counterparties are, especially after you become a client. But these are only one reptiles opinions, and opinions are like fangs, every viper has two. The Ever Opinionated x2 VIPER
Viper, I agree with you. I don't know what all the secrecy is about either. I think you're probably right about someone not running the stop. What I don't understand is the following... The Michigan numbers were positive for gbpusd, so it makes sense that providers would pull their quotes off the ASK - not the BID. The sell stop order in MT4 was at 1.8751, so unless all of the providers bidding above 1.8749 (where the execution took place) pulled their quotes, the 1.8749 execution does not make sense. What do you think?
As I pointed out there were lots of spoof prices on euro dollar at the time. It was exceptionally volatile. Is it possible that your chart only shows say mid prices and that cable went 10-15 pips wide and therefore the stop was rightly triggered.
And this is exactly why I don't trade spot fx. You'll never have this problem in futures. There are not multiple quote providers, bucket shops, etc.
Lon Eagle, when the trader got filled at 1.8759 the spreads were not going all out of whack. Why would the BIDs disappear if the news is positive for GBP? It would make sense for the ASK prices to dry up somewhat, but why the BIDs? The price for over an hour had not been as low as 1.8749. His buy order got executed at 1.8759 right after the number. Who the heck was going to be selling to dry up the BIDs? I know that liquidity providers can pull their prices off at any time, but given the fact that this is an institutional feed and this phenomenon did not happen on Currenex, it is difficult for me to believe that the 1.8749 execution was proper. The firm turned that loss into a day on the same day. Why did they do that if it was a proper execution? I sincerely doubt it. brownsfan019, I do not want to trade futures because all our traders will need to get registered. I can fund a trader rather quickly without going through all of the regulatory hassle that does nothing for anyone.
Let's see -- one central place for trading and quotes, brokers not trading against you, more transparency -- I would not call the 'hassles' doing 'nothing for anyone'. Look at your example - had this trade been on the ES it either would have tripped your stop or not. And all you would have to do is go to the chart and look. There's no 'why does my chart not show this, yet it got triggered' b.s. Just my opinion though. It appears that spot fx is more appropriate for certain types of traders. Guess I am not one of them. Once the CME's version of FX is available though, maybe that will solve your problems. Maybe not. Guess we will see.
Danger, the question you ask is logical, which is why I think it was a retail feed that hit your stop and not a pro. A pro would have been doing what you said, but retail usually goes in the opposite direction. I am still of the opinion that there is a feed that is not showing up on your platform, and it is a retail feed. Or as I like to call them Local Liquidity. You should be able to find out exactly who the counter parties are. As soon as we set up our block account with our White Lable provider they told us. Also, I don't understand what you mean by institutional feed, could you explain this a bit more? The Ever Trying To Help VIPER PS As if all of the licensing and registration stopped refco, michael milken etc. The only thing it does is allows you to release Big Brothers hounds against the perp's, it does nothing to ensure your funds. Once the money is gone it is gone.