Which forex brokers DON'T trade against you ???

Discussion in 'Forex Brokers' started by Detonator, Nov 9, 2005.

  1. Besides Oanda, which forex brokers DON'T trade against you ?

    I'm looking for a quality broker that has no dealing desk and - tight spreads, fast execution, and flexible contract sizes. Oanda does offer all of the above but they really drop off in their platform and charting.

    Which other brokers would qualify ?
  2. neverwas


  3. How can anyone be certain?

    Unless some company is will to disclose this has a fact.

    People for some reason automatically believe that their brokers trade against them, but don't consider the fact how unethical this is.

    Here's a better question.

    Why would a broker trade against you. You who have a tiny account in the scheme of things.

    You who trade against the interest rates, and have your stops set a very tight levels.

    Forex brokers make money everytime you execute a trade.

    They deal in volume, and make out on interest payments.
  4. Steve_IB

    Steve_IB Interactive Brokers

    IB. Plus the brokers that allow you to trade against another customers order. Only the brokers with ECN/exchange type models will allow this.

    If you are with a standard FX broker, then they are the only firm making a market and you trade against their quote. All of them will need a dealing desk in order to manage any exposure. The fairest will manage exposure only. The shadey ones will also manage their quotes and your stops.
  5. The problem is not so much that someone may be making a decision to take the other side of your trade vs lay it off in the market, that is what banks normally do, the problem is that you are trading against someone who knows your position, how much buying power you have in your account and makes his own prices.

    FYI the bet is that the customer will eventually lose [expediated by leverage] because "..............one of two things will happen when a customer opens an account, he will either lose in which case we keep the money, or he will win until he loses, in which case we keep the money" [novice winners increase their size too quickly and too much for the acount equity].

    The worst possible customer for a bucketshop is someone who trades too small to cover in the interbank, wins, and withdraws his winnings. If they are not covering the business then they have to find the money to pay the winnings (probably from the account equity). You may want to give some thought as to what they might be doing with your "margin deposit" if they are not actually making trades with a counterparty.

    If the FX broker is not covering your business on paper he will have huge P&L swings, probably way beyond that which would be tolerated by an exchange which is probably one of the reasons why you never see listed retail FX brokers.

    I have FX accounts with Hotspot and IB and personally would never consider the other models. Trading is hard enough without your counterparty having that kind of advantage. It is not unheard of for Major banks to find ways not to quote you if they see the trade as a sure loser for themselves, they are in business to make money for themselves.
  6. Mokwit thanks for the reply . . .

    Hotspot - 25k minimum
    IB - ???

    Anyone have any direct experience with CMC Markets ?

    Is my best bet currency futures for fairness ?
  7. Steve_IB

    Steve_IB Interactive Brokers

    IB - 25k minimum trade size. 2k minimum account opening.

    Currency Futures vs FX - depends on what currency pair. If you have an IB account you can put them on the screen side-by-side and take your pick.
  8. taboni


    Hotspot minimum trade size is 100K, no minis. Minimum account
    opening is $7500
  9. Steve_IB

    Steve_IB Interactive Brokers

    Here's a screenshot of the futures vs IDEAL-Pro on IB. Spreads are similar for USD crosses. However, there is barely any liquidity in the non-USD futures.
  10. I have been critical of IB in the past but as far as cash currency trading goes it has happened to me many times where I will get a fill on the smallest sized lot and within five seconds I will be in a position to punch out at a profit. I would say that often you will at least split the spread by putting in a limit order and sometimes better. I have to say this was a pleasant surprise.
    #10     Nov 10, 2005