I don't know Nick, but I think you are not understanding the point and certain mechanics in Forex. And yes, there are spikes in Forex that are similiar. Most occur during news events. The point is, you can significantly amplify the effect of volatility in Forex in a manner that you simply cannot do in futures. There's cross margin/ spread trades among currencies. Carry trades. The list goes on. All of which are very much volatility sensitive. I was trading back in Jan '01. It wasn't a 5% move in a few seconds. It took a little longer than that. Much longer. But if you looked at time and sales for that day, a lot of stops were being hit with some backing and filling after the initial gap. Were there some cheesy $500 daytrade margin shops with customers going negative? Sure. I'm sure there were a few stupid customers who liked to max out their trading account margin who got hit. Unless of course it was at a firm that while giving you $500 daytrade margin didn't allow you to trade more that 50% of your total account equity. Anyway, here's a link to noted forex volatility per pair: http://www.mataf.net/en/analysis-volatility.htm And I doubt Steve is going to answer you seeing as how you behaved. I'd be surprised if he PM'd you ever again. Did you ever think that the reason why he doesn't go into detail about what is considered "unethical" is because those who really don't know how Forex works will be "clue'd in" to a mode of trading that looks like "easy money" on the surface but will invariably lead to their own hurt given their lack of understanding?
Ddunbar, You really sound like a lawyer for IB You say similar spikes in forex on news ?! Please give us a specific example of such , not some volatility table, I have never seen spikes of more than 2 % intraday Like I said they just need to increase their margin requirement to protect themselves for such "unethical" trades. So we can do "unethical" trades as long as the size is lower than 5 million. A restriction on size in the BIGGEST market in the world,makes sense , yes Not one of the other ECN's ; Currenex,Hotspotfx,Lavafx..... has ANY size restrictions besides size in function of the margin requirements and the bigger the size you trade the higher the margin requirements, why doesn't IB do the same ?????!!!!!!!!!!!!! I guess all those ECN's also not understand the point and mechanics of the forex market, you must be really smart... You probably haven't figured out the "hidden" agenda. Why in the first place did Steve had to answer a PUBLIC question in a private way ?! any reason for that ?
What IB calls "unethical" , FXCMpro calls "predatory" TradeViper Registered: May 2006 Posts: 180 01-05-07 03:14 PM Hello all, talking about fxcmpro, when we were setting up our managed account side we spoke with fxcm about Pro, the sales lady walked me through the CX platform, when I asked her to explain why the spread was 3 pips and PFG's was 0-1 pip she said that PFG was creating an artificial market and 3 pips was the "real" market, I almost burst out laughing at that statement. I also asked about API trading and she told me that FXCM would have to approve any programs to make sure they were not "predatory", I guess that means profitable. After this experiance, I would not reccommend them to anybody. Since PFG was already mentioned, I willl tell you that they have treated us very well and we are pleased with their service, if you want to trade CX with a 50k size minimum, I would reccomend them. The Never Trading With FXCM VIPER danger66 Registered: Oct 1999 Posts: 117 01-05-07 03:36 PM Good one, Viper. Predatory = Profitable! What a joke! I hope you are smart enough to see the similarities in approval for the 2 mentioned brokers.
So do you think IB is "holding" some of the liquidity? They are a pretty good firm I have a hard time accepting this. No biggy though. Just open several accounts and hedge your risk. When you want to trade larger use a different platform. That is what you are suggesting isn't it?
Guys, when you will finally understand that forex at retail level is not REAL. It is a VIRTUAL way to store you trades. In any real marker any broker would love you to make as many round trips and as fast as you want. Every trade rings their commissions cash register. Any professional decent size trader laughs when their hear all this crap that goes on in forex and peoples inability to see it.
What I do know for sure is that traders have been kicked off on platforms of white label currenex brokers because the banks requested this according to the broker. Is this because the broker interferes (dealing desk) with the orders or because the banks requested this (like I have been told) , I don't know for sure This was told by those brokers themselves to me.
LOL. I know, you believe IB is a bucketshop/market maker in disguise. But of all the ECN's you listed, none of them has a currency conversion service (ideal). <-- hint, hint. And Forex isn't all that big. Most of it is swaps on forwards. 1/3 of it is Spot. And of that 1/3, the bulk of it is interbank which none of us are dealing in. BTW, Currenex and Lavafx are platforms (Like Reuters dealbook, EBS prime, HotspotFXi, FXall, espeedfx, baxter-fx,etc), not broker/dealers. Whoever your prime broker is, they are the ones who would give you credit and allow you access to these platforms. With no centralized clearing... this is the way it must be. Hotspot (not FXi ) is the only ECN you listed and has margin of 50:1 and 33:1 or there abouts depending on size. And they might "limit" your order size depending on your trading history. I'm sure initially they will/do. Accounts for the 50:1 and 33:1 risk managed leverage. CoesFx, another ECN, has 100:1 last time I checked. But They are different in terms of the number of liquidity providers. They basically have access to everything and everyone. They don't have a max order size. Plus they have choice to 1 p spreads. Since IB allows you to trade many instrument classes, they keep it simple. Forex isn't their main game. Plus you can execute strategies that you simply couldn't do at the other ECNs. (If you know what I'm refering to, you know. If you don't, don't worry about it.) You could always put in multiple 5m orders (eur). It's just an order size limit. Not a position limit. What's funny to me is that your paranoia seems to miss that IB is openly stating what the max order size is depending on pair. Ever think that this might also have to do with their matching algorithm also? Oh yeah, as for specific example of a spike; I don't have that info offhand nor is it all that important to look up. You say 2% is the most you've seen. Great. Let's go with that. But again you seem to be ignoring the fact that a 50p or less move with certain strategies can lead to negative excess liquidity, instantly. There are also certain types of trades that you can make with IB that effectively double or qualdruple your leverage or more. So why did Steve answer you privately? Well he told you why. But you believe there is something sinister going on. Hey, if you can prove it... awesome. Until then... "Walk good mon."