How to know if a Forex dealer is taking the other side of your trade? - Reviews of Brokers and Data Feeds | futures io social day trading
futures io futures trading


How to know if a Forex dealer is taking the other side of your trade?
Updated: Views / Replies:3,798 / 19
Created: by Big Mike Attachments:1

Welcome to futures io.

(If you already have an account, login at the top of the page)

futures io is the largest futures trading community on the planet, with over 90,000 members. At futures io, our goal has always been and always will be to create a friendly, positive, forward-thinking community where members can openly share and discuss everything the world of trading has to offer. The community is one of the friendliest you will find on any subject, with members going out of their way to help others. Some of the primary differences between futures io and other trading sites revolve around the standards of our community. Those standards include a code of conduct for our members, as well as extremely high standards that govern which partners we do business with, and which products or services we recommend to our members.

At futures io, our focus is on quality education. No hype, gimmicks, or secret sauce. The truth is: trading is hard. To succeed, you need to surround yourself with the right support system, educational content, and trading mentors Ė all of which you can find on futures io, utilizing our social trading environment.

With futures io, you can find honest trading reviews on brokers, trading rooms, indicator packages, trading strategies, and much more. Our trading review process is highly moderated to ensure that only genuine users are allowed, so you donít need to worry about fake reviews.

We are fundamentally different than most other trading sites:
  • We are here to help. Just let us know what you need.
  • We work extremely hard to keep things positive in our community.
  • We do not tolerate rude behavior, trolling, or vendors advertising in posts.
  • We firmly believe in and encourage sharing. The holy grail is within you, we can help you find it.
  • We expect our members to participate and become a part of the community. Help yourself by helping others.

You'll need to register in order to view the content of the threads and start contributing to our community.  It's free and simple.

-- Big Mike, Site Administrator

Reply
 1  
 
Thread Tools Search this Thread
 

How to know if a Forex dealer is taking the other side of your trade?

  #1 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,238 since Jun 2009
Thanks: 29,350 given, 83,214 received

How to know if a Forex dealer is taking the other side of your trade?

Other than taking their word for it, or what others might say on the forum etc --- how can one be sure a forex broker is not taking the other side of your trade? Is there a list somewhere that can be trusted?

Reply With Quote
 
  #2 (permalink)
Quick Summary
Quick Summary Post

Quick Summary is created and edited by users like you... Add FAQ's, Links and other Relevant Information by clicking the edit button in the lower right hand corner of this message.

 
  #3 (permalink)
Elite Member
australia
 
Futures Experience: Beginner
Platform: NinjaTrader
Favorite Futures: -
 
Posts: 300 since Sep 2010
Thanks: 123 given, 137 received


ehmm would it be an issue if they do that? The prices they quote have to move in sync with the real spots which they have no control. So if they take a trade against you and the real spot price move against them, would it not be perilous for them?

I would think the only problem is they increasing the spread so wide that it could hit your stops.

Reply With Quote
 
  #4 (permalink)
Elite Member
Bala, PA, USA
 
Futures Experience: Intermediate
Platform: NinjaTrader
Broker/Data: Mirus, IB
Favorite Futures: SPY, Oil, Euro
 
monpere's Avatar
 
Posts: 1,858 since Jul 2010
Thanks: 300 given, 3,275 received


Big Mike View Post
Other than taking their word for it, or what others might say on the forum etc --- how can one be sure a forex broker is not taking the other side of your trade? Is there a list somewhere that can be trusted?

I don't trade Forex, so I'm ignorant about the issue. So, what would be the difference between the broker taking the other side as opposed to another trader?

Reply With Quote
 
  #5 (permalink)
Elite Member
Aurora, Il USA
 
Futures Experience: Advanced
Platform: TradeStation
Favorite Futures: futures
 
kbit's Avatar
 
Posts: 5,872 since Nov 2010
Thanks: 3,301 given, 3,332 received

I don't know how you could figure that out...FXCM for example has no dealing desk but does in fact trade against thier clients. I suspect most all do the same

Reply With Quote
 
  #6 (permalink)
Big game hunter
NY
 
Futures Experience: Advanced
Platform: Esignal, MBT navigator
Favorite Futures: Currencies
 
Posts: 2,526 since Jun 2009
Thanks: 1,397 given, 2,570 received

Answer
This post has been selected as an answer to the original posters question Answer

When you sign the agreements with your broker/dealer it states that they are your "partner" and when you buy they sell and vice versa .

From the MB risk agreement that must be signed before opening an account .....


(1) TRADING IS NOT ON A REGULATED MARKET OR EXCHANGE—YOUR DEALER IS YOUR TRADING PARTNER WHICH IS A DIRECT CONFLICT OF INTEREST. BEFORE YOU ENGAGE IN ANY RETAIL FOREIGN EXCHANGE TRADING, YOU SHOULD CONFIRM THE REGISTRATION STATUS OF YOUR COUNTERPARTY.
The off-exchange foreign currency trading you are entering into is not conducted on an interbank market, nor is it conducted on a futures exchange subject to regulation as a designated contract market by the Commodity Futures Trading Commission. The foreign currency trades you transact are trades with the futures commission merchant or retail foreign exchange dealer as your counterparty. WHEN YOU SELL, THE DEALER IS THE BUYER. WHEN YOU BUY, THE DEALER IS THE SELLER. As a result, when you lose money trading, your dealer is making money on such trades, in addition to any fees, commissions, or spreads the dealer may charge.

Therefore theres no reason to NOT think the broker/dealer trades against you in every trade .

Reply With Quote
 
  #7 (permalink)
Elite Member
arizona
 
Futures Experience: Intermediate
Platform: rolling my own
Favorite Futures: ES,CL,GC,6E
 
GoldStandard's Avatar
 
Posts: 211 since Oct 2009
Thanks: 326 given, 188 received

Answer
This post has been selected as an answer to the original posters question Answer


monpere View Post
I don't trade Forex, so I'm ignorant about the issue. So, what would be the difference between the broker taking the other side as opposed to another trader?

One difference is if the broker has taken the other side of your trade and stands to profit if you lose, then they might play dirty tricks with the data feed or platform that they control. Metatrader software which many forex bucket shops use has features on the broker's side (google metatrader virtual dealer plugin for details) that let them play tricks such as freezing the platform or delaying orders.

Reply With Quote
The following user says Thank You to GoldStandard for this post:
 
  #8 (permalink)
Site Administrator
Manta, Ecuador
 
Futures Experience: Advanced
Platform: My own custom solution
Favorite Futures: E-mini ES S&P 500
 
Big Mike's Avatar
 
Posts: 46,238 since Jun 2009
Thanks: 29,350 given, 83,214 received

Thanks guys.

I raised the question simply because there has been a lot of talk about "I don't want to use a broker who trades against me". People cite that as probably the primary reason for not trading Forex.

Where personally, when I started trading Forex through MB Trading, I noticed zero effects or issues with them "trading against me". I opened the MBT Forex account so I could 1) learn more, and 2) use it for larger term swing trades on the Euro, while I maintained my primary Velocity account for my intraday trading.

I've used limit orders every time, usually placing a limit order @ the current offer and getting filled immediately. There has been no slippage, and there has been no bad spreads. In fact, the spread is almost always less than 1 pip.

Compare this to the futures market, I would have to trade the Micro EUR/USD (M6E) to offer a similar $1/pip risk. I still have no capability of buying into or scaling out of at less than $1.25/tick on M6E, whereas on Forex I could go as low as $0.10/pip. But that is fine, $1/pip is cheap enough.

So then compare the commissions, fills and spread. Futures commissions are much higher. Forex has clear advantage here, as the CME Euro is a secondary market with far less liquidity. On M6E in particular, the spread is enormously huge, often times 5 or 6 ticks.

The only thing left I can think of are: 1) Bad press by some Forex Dealers, like FXCM's recent bad press and $2MM fine from the NFA. This was a result of asymmetrical slippage. 2) Desire to trade a market other than currencies. Obviously if you want to trade an Index or Commodity, Futures are the way to do it.

But as the admin of the site, when new traders ask my advice, I'd like to see them position themselves for the most likely change of success. And I think that for some traders, especially less experienced ones, that means they should open a Forex account first, before a Futures account, so they can minimize risk during the learning process. If the CME Micro's were more liquid this wouldn't be necessary, but unfortunately that is not the case. The CME should really consider lowering margins and fees further on the Micro's to try to create more liquidity.

Mike

Due to time constraints, please do not PM me if your question can be resolved or answered on the forum.

Need help?
1) Stop changing things. No new indicators, charts, or methods. Be consistent with what is in front of you first.
2) Start a journal and post to it daily with the trades you made to show your strengths and weaknesses.
3) Set goals for yourself to reach daily. Make them about how you trade, not how much money you make.
4) Accept responsibility for your actions. Stop looking elsewhere to explain away poor performance.
5) Where to start as a trader? Watch this webinar and read this thread for hundreds of questions and answers.
6)
Help using the forum? Watch this video to learn general tips on using the site.

If you want
to support our community, become an Elite Member.

Reply With Quote
 
  #9 (permalink)
Elite Member
Honolulu, Hawaii
 
Futures Experience: Intermediate
Platform: NinjaTrader
Broker/Data: ATC/TT, AMP/Zen-Fire, AMP/CQG
Favorite Futures: TF
 
bluemele's Avatar
 
Posts: 2,547 since Jun 2010
Thanks: 3,806 given, 2,826 received


Big Mike View Post
Other than taking their word for it, or what others might say on the forum etc --- how can one be sure a forex broker is not taking the other side of your trade? Is there a list somewhere that can be trusted?

I believe it is in the documents as you dig deeper. Their filing with the CFTC designates what type of transactions they do...

I just typically found websites that showed what they were per STP/ECN, Dealing Desk etc..

So, I believe it is in the documentation somewhere that exposes what they do.

A lot of dealing desks offset though through like Deutschebank etc.. I believe Oanda does this...

Reply With Quote
 
  #10 (permalink)
Elite Member
Honolulu, Hawaii
 
Futures Experience: Intermediate
Platform: NinjaTrader
Broker/Data: ATC/TT, AMP/Zen-Fire, AMP/CQG
Favorite Futures: TF
 
bluemele's Avatar
 
Posts: 2,547 since Jun 2010
Thanks: 3,806 given, 2,826 received


I agree on lowering fee's for the smaller micro's. Otherwise they just won't compete.

Have you traded during a volitile time? Well, sometimes the other side becomes 'unplugged' a lot of times when things speed up. So, you will get a lot of 'error' messages, but that is using MT4.

If you do limit orders you are much better off! Slippage with buying market is HUGE but completely changes dependent upon the broker. Some brokers there will be 22 pips between bid/ask when things heat up! Others, they just disconnect.

I traded forex for probably 1.5 years and spent a lot of time evaluating. I had little success scalping and believe Futures to have many advantages over market maker types.

For instance, I have had orders closed out on me when the market reached my price (forex.com) but when I evaluated through other brokers, that price wasn't reached within 20 pips!!!!

If you trade long enough with the market makers, and you trade small timeframes, then I think most would agree not to do it. But, if you swing trade and you do limit orders then you are setting yourself up for much better success.

Reply With Quote
The following user says Thank You to bluemele for this post:

Reply



futures io > > > > How to know if a Forex dealer is taking the other side of your trade?

Thread Tools Search this Thread
Search this Thread:

Advanced Search



Upcoming Webinars and Events (4:30PM ET unless noted)

Linda Bradford Raschke: Reading The Tape

Elite only

Adam Grimes: TBA

Elite only

NinjaTrader: TBA

January

Ran Aroussi: TBA

Elite only
     

Similar Threads
Thread Thread Starter Forum Replies Last Post
Best Forex Market To Trade skyfly Currency Futures 17 September 26th, 2011 02:22 PM
Why do YOU trade commodity and index futures rather than forex? Arpad Psychology and Money Management 33 August 25th, 2011 06:25 AM
Forex: When to trade KL01 Currency Futures 20 April 27th, 2011 02:10 PM
Can the G20 Make Progress on Forex and Trade? Quick Summary News and Current Events 0 November 8th, 2010 02:30 AM
Install NT7 side by side with NT6.5? wuolong NinjaTrader 3 January 31st, 2010 02:26 PM


All times are GMT -4. The time now is 12:01 AM.

Copyright © 2017 by futures io, s.a., Av Ricardo J. Alfaro, Century Tower, Panama, +507 833-9432, info@futures.io
All information is for educational use only and is not investment advice.
There is a substantial risk of loss in trading commodity futures, stocks, options and foreign exchange products. Past performance is not indicative of future results.
no new posts
Page generated 2017-12-10 in 0.14 seconds with 38 queries on phoenix via your IP 54.90.207.75