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Interactive Brokers for Spot Forex


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Interactive Brokers for Spot Forex

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  #1 (permalink)
Ventura, California
 
Experience: Intermediate
Platform: NT7
Trading: ES
 
Posts: 12 since Jul 2011
Thanks: 26 given, 3 received

I'm considering IB for spot forex trading and have a few questions for those that are trading spot with them.

1. I use range charts - do they have histoical data for backfill? If so, how many days?

2. Is their price data reliable - especially at 8:30 ET US market open and during important news? Is there any zig-zagging of price data across the chart at high volume times?

3. They state that their spreads are very tight. Is this true? If you have used other ECN-type spot forex brokers, how would you compare IBs spreads to theirs?

4. Any major issues with slippage.

Thank you.

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  #3 (permalink)
Market Wizard
Chicago Illinois USA
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
 
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in hearing pro/con from current IB account holders. My current broker does more to piss me off than they do to offer answers or provide service. DB

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  #4 (permalink)
las vegas
 
Experience: Intermediate
Platform: Sierra Chart
Broker: Velocity/IB
Trading: 6E
 
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sasnak View Post
I'm considering IB for spot forex trading and have a few questions for those that are trading spot with them.

1. I use range charts - do they have histoical data for backfill? If so, how many days?

2. Is their price data reliable - especially at 8:30 ET US market open and during important news? Is there any zig-zagging of price data across the chart at high volume times?

3. They state that their spreads are very tight. Is this true? If you have used other ECN-type spot forex brokers, how would you compare IBs spreads to theirs?

4. Any major issues with slippage.

Thank you.

It has been a little while since I last traded spot forex through IB, but this was my experience.

1. No, no historical tick backfill and their real time data is filtered compared to other brokers. Because spot forex data can vary wildly from source to source, my preference was to leave my computer running. If you use Sierra Chart with IB, which is what I recommend, then you will get 2 Second backfill from Sierra Chart, which is good enough for populating charts for discretionary trading, but not good for backtesting.

2. Not exactly sure what you mean by this, but if there is zig zagging of price then there will be zig zagging of price.

3. Spreads and fills are good during NY hours, spreads are good but limit fills are slightly worse during London hours, and I can't speak to Asian hours. Spreads do get bigger during off hours and news times. The biggest advantage will come if you are trading off-pairs.

4. You can get slippage with market orders, but during primary hours I never found it to be excessive. You get the occasional wtf, but obviously that's the nature of market orders.

A couple of other things. First, I had very frequent and scary order execution problems with NT and TWS, which is why I switched to Sierra Chart. Maybe someone else can speak as to whether this has improved or not over the past 18 months. While it has some nice features, basically TWS is a huge pile of Java Poo that you are going have to get use to eating. Second, If you trade non-usd pairs, when you exit the trade your money will be left in the other base currency, e.g. an aud/jpy trade will result you owning yen, so you will have to pay additional commissions and spreads to convert it back to USD or subject yourself to the fluctuations of that currency. This is really freaking annoying. Third, unless things have changes, federal tax treatment for currency transactions is different than futures contracts and there are certain elections that you may need to make, so do your homework on this before you start trading.

It essentially comes down to whether no restrictions on scalping, no restrictions on news trades, and not having to worry about getting screwed by your broker/dealer, e.g. stop hunted, outweigh the crappy data, commissions, problems with NT and TWS???, pos TWS, and the ridiculously stupid currency conversion requirements.

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  #5 (permalink)
Ventura, California
 
Experience: Intermediate
Platform: NT7
Trading: ES
 
Posts: 12 since Jul 2011
Thanks: 26 given, 3 received


wldman View Post
in hearing pro/con from current IB account holders. My current broker does more to piss me off than they do to offer answers or provide service. DB

wldman,

I see that you list MB Trading as your broker. Is this your current broker that you are talking about in your post?

I am currently demoing the MB Trading/NT combination. How is it that they piss you off? Sometimes I get "phantom" zig-zag data from them and that pisses me off - see attachment.

If I could ask, what problems are you having with MBT ?

Thanks

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  #6 (permalink)
Ventura, California
 
Experience: Intermediate
Platform: NT7
Trading: ES
 
Posts: 12 since Jul 2011
Thanks: 26 given, 3 received


vegasfoster View Post
It has been a little while since I last traded spot forex through IB, but this was my experience.

1. No, no historical tick backfill and their real time data is filtered compared to other brokers. Because spot forex data can vary wildly from source to source, my preference was to leave my computer running. If you use Sierra Chart with IB, which is what I recommend, then you will get 2 Second backfill from Sierra Chart, which is good enough for populating charts for discretionary trading, but not good for backtesting.

2. Not exactly sure what you mean by this, but if there is zig zagging of price then there will be zig zagging of price.

3. Spreads and fills are good during NY hours, spreads are good but limit fills are slightly worse during London hours, and I can't speak to Asian hours. Spreads do get bigger during off hours and news times. The biggest advantage will come if you are trading off-pairs.

4. You can get slippage with market orders, but during primary hours I never found it to be excessive. You get the occasional wtf, but obviously that's the nature of market orders.

A couple of other things. First, I had very frequent and scary order execution problems with NT and TWS, which is why I switched to Sierra Chart. Maybe someone else can speak as to whether this has improved or not over the past 18 months. While it has some nice features, basically TWS is a huge pile of Java Poo that you are going have to get use to eating. Second, If you trade non-usd pairs, when you exit the trade your money will be left in the other base currency, e.g. an aud/jpy trade will result you owning yen, so you will have to pay additional commissions and spreads to convert it back to USD or subject yourself to the fluctuations of that currency. This is really freaking annoying. Third, unless things have changes, federal tax treatment for currency transactions is different than futures contracts and there are certain elections that you may need to make, so do your homework on this before you start trading.

It essentially comes down to whether no restrictions on scalping, no restrictions on news trades, and not having to worry about getting screwed by your broker/dealer, e.g. stop hunted, outweigh the crappy data, commissions, problems with NT and TWS???, pos TWS, and the ridiculously stupid currency conversion requirements.

Thanks for your response.

In my previous post I attached an image of the zig-zagging of price I was referring to. It has occurred a few times already with the MB Trading/NT combination I have been demoing.

If I understand you correctly, if I want to run range charts with TWS/NT, then I can only capture this data in real time? And if I didn't have my computer running for 1 hr. during the day, I could not display that hour's range data?

Regarding trading non-US pairs and paying additional spreads and commissions to convert the foreign base currency back into USD, is this just the way IB handles the conversion? How do other brokers convert the foreign base currency back into USD?

What types of frequent order execution problems were you having with TWS/NT? Have these problems been resolved using Sierra Chart?

Thank you.

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  #7 (permalink)
Market Wizard
Chicago Illinois USA
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
 
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Posts: 3,341 since Aug 2011
Thanks: 1,978 given, 8,830 received

my current broker. Loyalty is waning and I have had to open the possibility of going somewhere else. Thanks @vegasfoster

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  #8 (permalink)
Australia
 
Experience: Advanced
Platform: NinjaTrader, Multicharts
Trading: Spot Forex, Gold, Silver
 
Posts: 176 since Oct 2010
Thanks: 114 given, 114 received


wldman View Post
my current broker. Loyalty is waning and I have had to open the possibility of going somewhere else. Thanks @vegasfoster


MB Trading is the absolute worst broker for providing consistent service. It's a coin toss whether their servers will fall over on daily basis or not. Last six months I don't think a week has gone past without them having some sort of technical outage - whether it is the quote servers or the order servers or logging into account management on their website or their smartphone trading app or even once when their whole phone system was out. And that's just in the last six months.

I trade during the Asia & London sessions and 95% chance that you will not get hold of their phone support during those hours. And I am not talking about staying on hold. The phones are simply not answered by anyone, they just keep ringing.

Even NY open time is not 100% for getting hold of them because they are in california and work on pacific time.

My recommendation stay the hell away. Check out LMAX if you want a good broker for forex.

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  #9 (permalink)
Bala, PA, USA
 
Experience: Intermediate
Platform: NinjaTrader
Broker: Mirus, IB
Trading: SPY, Oil, Euro
 
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Traderji View Post
MB Trading is the absolute worst broker for providing consistent service. It's a coin toss whether their servers will fall over on daily basis or not. Last six months I don't think a week has gone past without them having some sort of technical outage - whether it is the quote servers or the order servers or logging into account management on their website or their smartphone trading app or even once when their whole phone system was out. And that's just in the last six months.

I trade during the Asia & London sessions and 95% chance that you will not get hold of their phone support during those hours. And I am not talking about staying on hold. The phones are simply not answered by anyone, they just keep ringing.

Even NY open time is not 100% for getting hold of them because they are in california and work on pacific time.

My recommendation stay the hell away. Check out LMAX if you want a good broker for forex.

I just got an email this week from MB Trading apologizing for an outage during the week because their Telco broke a line or something. I was experimenting with Forex with a live test account with them. My problem is that sometimes it took in excess of 6 seconds to modify an order, outrageous! I would also regularly see the market surpass my profit target by 4 or 5 ticks and come back again, and I would never get a fill.

I never had these bad experiences with Interarcive Brokers. For me the only drawback to IB is that they don't do micro lots, although you can trade the EUR/USD in 1/4 lots. I also believe you can do fractional in other pairs but they will route them differently and you will get worst spreads.

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  #10 (permalink)
Dartmouth NS
 
Experience: Intermediate
Platform: MC, MC.Net, NT, TWS
Broker: IB / IQFeed / Kids
Trading: Forex, stocks
 
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Posts: 638 since Feb 2010
Thanks: 64 given, 460 received


I'm another IB user for spot Forex, agree with everything vegasfoster said, use them because I have a number of other accounts with them and find the quality of service for Forex acceptable. However, in my case data/order fulfillment quality is less of issue than simple spot Forex trading know-how. May rethink IB for Forex if and when I decide they're holding me back

My sons use other brokers (e.g., Gain) mainly because they cater to smaller accounts and because they interface with NinjaTrader. In general choice of a broker/data provider is dependent on your circumstances and your personal preferences. Unfortunately the Interwebz abounds with opinion and there is no real substitute for your own experience.

ETA: Also like vegasfoster I'm currently exploring other options than the NinjaTrader/IB combo.

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  #11 (permalink)
Dartmouth NS
 
Experience: Intermediate
Platform: MC, MC.Net, NT, TWS
Broker: IB / IQFeed / Kids
Trading: Forex, stocks
 
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Posts: 638 since Feb 2010
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monpere View Post
[...]
I never had these bad experiences with Interarcive Brokers. For me the only drawback to IB is that they don't do micro lots, although you can trade the EUR/USD in 1/4 lots. I also believe you can do fractional in other pairs but they will route them differently and you will get worst spreads.

Reminds me one thing I like about Interactive Brokers is their lot size--there is none, all that matters is $$$ amount, commission 0.00002 per unit, minimum commission $2.50. I believe the minimum trade size for Forex is $30,000 after leverage (which leverage is low compared to brokers that cater to smaller accounts, order of 30x IIRC for Canadians). The significance is we can write strategies that micromanage order quantity without worrying about standard 100K lot sizes.

Below 30K the order is switched from IB's Forex trading servers (IdealPro) to their "currency conversion" servers (Ideal), with a spread penalty.

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  #12 (permalink)
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Manta, Ecuador
 
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monpere View Post
I just got an email this week from MB Trading apologizing for an outage during the week because their Telco broke a line or something.

Here is the email for reference


Quoting 
Dear Valued Client,

On Friday, September 14, 2012, at approximately 3:27 pm EST, one of our primary telco providers inadvertently disconnected a critical circuit of ours while conducting maintenance on a non-MB Trading switch. This disconnect caused many users to temporarily lose access to their accounts. The line was restored at 4:22 pm EST, and all issues were resolved from that point forward. All historical data was immediately restored, and we are working with customers on any executions that they attempted during this window.

Critical failures such as this are often rooted in hardware failure. However, in this case, the root cause was human error on the part of a telco provider, and we are exploring restitution and moving business away from this company in the immediate future.

We apologize for any issues that this might have caused.


MB Trading

Mike

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  #13 (permalink)
Australia
 
Experience: Advanced
Platform: NinjaTrader, Multicharts
Trading: Spot Forex, Gold, Silver
 
Posts: 176 since Oct 2010
Thanks: 114 given, 114 received


monpere View Post

I never had these bad experiences with Interarcive Brokers. For me the only drawback to IB is that they don't do micro lots, although you can trade the EUR/USD in 1/4 lots. I also believe you can do fractional in other pairs but they will route them differently and you will get worst spreads.


My feeling exactly. I don't think IB is a good venue for spot forex. I like to scale into and out of my positions. Their minimum $5 commission (roundtrip) really kills it for me. I was paying them a fortune in commission and had to work that much harder to make my money.

Like I said in my earlier post, I haven't found a better broker than LMAX for spot forex yet. The spreads are tiny, it's regulated by UK authorities, really fast executions, good customer service.

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  #14 (permalink)
Budapest
 
 
Posts: 1 since Dec 2011
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Hi,
I have been account at IB for 6 years. I am trading forex at them as well.
Pro:
Stability. They have strong financial background and very large insurance four your account.
Tight spreads especially in non frequented pairs. I saw half pip in AUD.JPY but usually 1-2 pips only the spread.
You can trade from one account everything. It is important if trade other asset categories as well.
Cons:
$2.5 minimum commission and the smallest quantity is equal to $25000 so can't open 10000 eur.usd
Bad interest rates. For example in most forex brokers you get paid for an usd.jpy positions. At IB you have to pay for a lot (100000) around $100/month.
Hard to calculate the profit and loss. They do not convert back you profit to your base currency after you close the position, you have to convert it back periodically.

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  #15 (permalink)
Market Wizard
Chicago Illinois USA
 
Experience: Advanced
Broker: IB, ToS
Trading: /ES, US Equities/Options
 
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Posts: 3,341 since Aug 2011
Thanks: 1,978 given, 8,830 received

looking for broker alternatives.

A distraction I was hoping to avoid.

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  #16 (permalink)
Singapore
 
Experience: Intermediate
Platform: NinjaTrader,Amibroker,TOS
Trading: ES,EUR/USD
 
Posts: 15 since Oct 2011
Thanks: 6 given, 2 received


kardkovacsi View Post
Hi,
I have been account at IB for 6 years. I am trading forex at them as well.
Pro:
Stability. They have strong financial background and very large insurance four your account.
Tight spreads especially in non frequented pairs. I saw half pip in AUD.JPY but usually 1-2 pips only the spread.
You can trade from one account everything. It is important if trade other asset categories as well.
Cons:
$2.5 minimum commission and the smallest quantity is equal to $25000 so can't open 10000 eur.usd
Bad interest rates. For example in most forex brokers you get paid for an usd.jpy positions. At IB you have to pay for a lot (100000) around $100/month.
Hard to calculate the profit and loss. They do not convert back you profit to your base currency after you close the position, you have to convert it back periodically.


I know what you are saying. I have loose quantities left over and seems we have to enter the odd quantity as an order to close it. Now the way IB is organized, I am confused exactly how many units that I need to close.

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