Gft & Efx

[svt]

I recently left my previous broker for issues I was having with them and I am debating on opening an account with EFX. I currently have an account with GFT as I enjoy using the Dealbook software over other options. However, I am looking to get away from the market makers to trade with an ECN.

My two options are basically:

1) Just fund my account with GFT and trade with them as my main broker. Of course my issue with this is the market maker issues that tend to pop up. I have only traded a few times with GFT just to meet their trade requirements not to be charged money. Based on what I have seen some people praise them and others hate them. However, I love the Dealbook platform so I will be keeping them for that.

2) My other option is to sign on with EFX as I hear mainly good things about them and they are an ECN so I don't have to deal with the games market makers play. I would of course take trades off my GFT charts and excute them with EFX. My only concern with EFX is all of the talk about the NFA and congress looking to pass the $20 million in capital. Last time I checked EFX was not even close to this requirement.

Any feedback on the thoughts of this would be appreciated. If it were not for all this talk about the $20 million in capital my choice would be simple with EFX. But due to the fact EFX is not near that capital level it tends to be of concern if they are closed up.

Thanks for any assistance.

[hurriedcorgi]

I just switched to Gft (from forex.com) myself for their platform. I love it so far. What are the 'market maker' issues? I've never heard that before (still relatively new to forex).

-Matt

[svt]

Matt,

Glad you are enjoying the Dealbook software.

Market makers are known for the following based upon my research:

-Stop Hunting
-Trading against you on the opposite side that you traded
-They can manipulate the price by 10-20 pips
-Certain market makers don't like scalpers and will place you on manual execution, thus not getting you the price you wanted

Those are just some of the things I know of. This is not to say that they all do it but I know they all do at least some of the above.

I am probably going to open up an account with EFX also as they have stellar reviews from what I have seen. Hopefully not having the necessary capital at the moment won't be an issue in the future.

[TheRumpledOne]

MBT acquired EFX.

MBT is an ECN. THERE IS NO FIXED SPREAD IN FOREX.

You can google and find out what I really think about "FIXED SPREAD BANDITS".

I'll leave it at that so I don't get banned.

How do I avoid the spread?

I explained this to someone yesterday in an IM.

With MBT you pay a commission rather than having a "FIXED SPREAD".

It's "apples and oranges" so don't try to compare. "THE MATRIX HAS YOU" and you need to "FREE YOUR MIND" to understand what I am about to explain.

Let's say the current bid/ask is 1.5010 x 1.5015

The current spread is 5 pips.

You want to SHORT.

You SHORT at 1.5010.

You set a TP at 1.5005.

Bid/Ask becomes 1.5005 x 1.5009 and the current spread is 4 pips.

At MBT, you will get filled if the bid is 1.5005 and someone TAKES your offer.

Bid/Ask is now 1.5004 x 1.5009 and YOU HAVE YOUR PROFIT.

Note: the ASK never reached 1.5005. THIS IS IMPORTANT!

If you entered this order at a FIXED SPREAD BANDIT, whoops I mean broker, your order is STILL OPEN!!

The bid/ask must become 1.5000 x 1.5005 and your order HITS the Ask.

DO YOU GET IT?

If not, then read this over and over and over again until the LIGHT BULB goes off!!

The day I found out about MBT is the day I opened an account there and stopped trading with FIXED SPREAD BROKERS.

The simplest thing to do is to load up a demo account at MBT and see it with your own eyes.

When you place your TP Bid offer at 1.5005, your bid is displayed on Level II.

The point is with MBT your offer gets hit.

With FIXED SPREAD BROKERS you have to wait to hit their offer.

Maybe this might help:

First:

1.5010 x 1.5015

and price drops...

1.5009 x 1.5014

1.5008 x 1.5013

1.5007 x 1.5013

1.5006 x 1.5012

1.5006 x 1.5011

1.5005 x 1.5011 You may get hit

1.5005 x 1.5010 You may get hit

1.5004 x 1.5009 YOU COVERED 5 PIP GROSS PROFIT

AND LET'S CONTINUE

1.5003 x 1.5008

1.5002 x 1.5007

1.5001 x 1.5006

1.5000 x 1.5005 YOUR FIXED SPREAD BROKER FILLS YOUR ORDER.

Does that make it clearer??

What about the commission cost?

The commission varies depending on the pair trading.

It is $.50 per 10k minilot on USDJPY. So if I gross 2 pips, I am making money.

From the MBT site:


Commission Rates

Fixed spreads are a way for FCMs to markup or markdown the best bid or offer. FCMs do this to hide their fee into the price of the currency pair instead of displaying their best quote. Common sense tells you that no one works for free, so when you see an FCM claim they have “no commission”, that should be a red flag. So how are they getting paid? Its simple: they are making money with the built-in markup/markdown in the spread.

Our FCM, MB Trading Futures, has nothing to hide. They offer tighter spreads with no markups/markdowns and openly display a low commission rate.

Commissions are based on total dollar amount traded: $5 per $100,000 traded.

[svt]

TheRumpledOne,

What are your thoughts on all the talk if the NFA and Congress wanting brokers to have $20 million in capital? Last time I checked EFX/MBT was not even close to this.

Other than that they seem like the perfect group to go with.