Have been researching different foreign exchange brokers and platforms for about three months, with a strong desire to start trading these products, coupled with a nagging doubt about the "bucket shop effect". That said, I am not the typical "my forex broker took me out of my one lot" whiner. However, I have spent some time in open outcry pits and am well aware of the nature of the game. I understand the business models of these off exchange shops and realize that any time a broker creates a price feed, books a trade, is completely aware of customer intention (stop and limit levels, et cetera), the model is ripe for dealer abuse. This is true if it is Joe Schmoe setting a 15 point stop on his mini lot with FlyByNight Capital Markets, or George International HedgeFund Superstar entering into an Index or Commodity Swap with the MorganGoldmanBarclay investment bank. There is going to be clippage. All that said, it seems to me that the IB Forex setup is ideal for retail customers. From what I am able to gather from there site, they list the dealing banks streaming bids and asks into their system for each paired offered. I have alson been told that each transaction is stamped with the Counterparty Dealer. It seems as fair as can be expected in an OTC market, and there rates also seem reasonable. What am I missing? Is it just the huge margin levels big and small retail offer. Is it ease of platform use or user friendly charting? With all the complaints out there constantly being rehashed ad nauseam by dissatisfied customers of retail, why would anyone not use IB? It seems to me that they are letting the individual trade prices from 5-10 banks alongside some pretty big players, and are happy to lend out balance sheet for pretty small commisions. What am I missing, why am I wrong? I am not a shill for IB, nor do I have an account there yet. I just don't get it. Someone please tell me why I should use FXCM or CMS or Gft or whoever, if my goal is to trade these markkers safely and ultimately in a professional manner. I am sure I am not that smart and I must be missing some key consideration, or these forex specialty firms would'nt exist and be so popular. Elizabeth
Elizabeth, I'd be interested in knowing who you decide to go with. I've spoken to a # of these shops. I've never traded spot b/f, only futures. IB looks like the cleanest deal out there. However, I think I'm going to give Gain/Forex.com a try first. The problem for me is data. I need the live and the historical tick data provider to be the same and to be compatible w/NinjaTrader. I don't know where to go for both live and historical FX tick data for IB. Best of luck, Lou
IB is a futures house first, Forex is kind of secondary. IE, two screens to trade from, and margins are a bit high, and they raise them whenever they want. Charting isnt to great so you will have to find another program. Stay away from Gain, you will lose money, they have a dealing desk, and the fills are pretty poor. You will have a lot of slippage in price and in the end you will lose. OANDA is pretty good, check them out. They have a game account so you can get accustomed to them. I personally have switched to them.
Everyone uses IB. It's the best broker out there, especially for a typical retail trader. Don't pay attention the charlatans posting nonsense about IB on this forum. There is always a small group of unhappy people that will spread negative publicity about a big firm that they perceive is "out to get them". Be it Microsoft, Wal-Mart, BofA, InteractiveBrokers, etc.
If you're auto-trading FX w/IB, what are traders using for historical and live tick data? Can the feed be run on Ninja? That's really been my only reason for looking at Gain. They've got about 10 years of tick data available for free and I can run the live feed through Ninja.
As a longtime IB trader I can say I'm thrilled with them as a broker, and they're my primary broker for my active trading accounts. IB rocks. -ken
I'm a fan of IB and have traded forex with them (I use Sierra Chart for my charting and do my order entry for forex etc from SC). But to be fair, I've only played with forex as my primary income comes from day trading the asian futures markets. IBs model is honest although because its a real market you cant get guaranteed this and that. But at least you can work with real market behaviours, split the bid/ask and put your stops, limits and stop limits where you want. Its almost like real trading. The other broker I'd consider is Oanda. Primary benefits are that they do have an excellent rep (unlike most of the bucket shops) and they allow much smaller trade sizes than IB. For that reason I've recommended them to a number of starter futures traders.
IB is great. Against the retail brokers, no comparison. Side-by-side vs. HotspotFXi, Currenex, EBS, and MBTrading, IB is the best, with the only exception being EUR/USD and USD/JPY on EBS.
I've had good luck with IB for forex as well. The charting isn't very good so I use QuoteTracker which works out OK for me. Commissions are cheap and the best way I know of to tell I'm not getting cheated is when I have a limit order executed with price improvement. This results in many of my trades effectively being commission free.
I trade with IB too and wouldn't trade with anyone else. Here in Canada, nobody comes even remotely close to their commission rates, and quality of their TWS platform. They're simply the best. I don't understand these whiners. They trash IB, yet STILL trade with them, obviously because they're the best.