Going offshore to escape the CFTC

Broker Discussion Forex Brokers
4698

Well, it’s just a “Pure ECN” FinProTrading ECN account,
but we’re measuring from Amsterdam, where our MT4
servers report less than 2 milliseconds to the servers,
which are using TurnkeyFX-Live.srv server connection file.

And FinProTrading claims they service our requests in
50 milliseconds, so we’re seeing an additional 100
milliseconds in overhead from beginning to end of each
Market Order request.

We are using the amazing NJ4X.com API which allows
us to have a “pool” of MT4 server processes, each of which
can deliver turnaround time in that range. So this means
if we have a dozen individual positions in a Forex symbol,
at differing prices and lot sizes; and we want to close them
simultaneously, then (with a pool size of 4) we can do
that in roughly 3 x 150 milliseconds, concurrently with the
other 3 of 4 server processes which execute “in parallel”.

MT4 is “synchronous” in its executions, and so having multiple
terminal.exe processes in a “pool” managed by NJ4X allows
us maximum throughput. Using 6 CPU’s with plenty of free
memory in a “dedicated VPS” we get great performance.

Obviously, it’s possible through other connection technologies,
other than MT4, to get much faster times; but we are not
playing the game of “fast”, preferring to play the game of
“smart” and consistency is one link in the chain.

hyperscalper

4699

Oanda got this new V20 execution engine with supposly 1 ms fills. (That is what they advertise, we did not confirm it)
Our news Ea works great on that engine.
Right now we run our EA on TW and Oanda only.
Today Oanda got better fills than TW.
(We got really bad experience with Oanda in the past, so we are not sure what to think).

I know Oanda is market maker, we also think all the brokers take opposite side of your trades especially on small accounts. We do not care as longest we get decent fills. Our Ea is not a scalper so we do not care about occasional slippage.

The freezes we had with FinProTrading we did not investigate too much, maybe there was some other factor that was causing that. We did not want to waste too much time.
We might try using FinPro in the future.

:grinning:

4700

I am having difficulty with your story, but more details please. The devil is in the details, as they say… What is your typical lot size since you talk about getting good fills ?

1 Like
4701

First of all. Have ever released what lot size do
you trade? Never. All you have been doing is testing for years. Have you made any money trading?

But if you need to know we trade from 1-5 Lots, sometimes less during tests of course.
You need confirmation. You want us to send you private myfxbook link. We can do it.

I do not know what is your problem?

What story you have difficulties?

4702

Don’t get the wrong idea here. I’m just wanting to learn more about
your criteria for a good fill. So with 1-5 Lot Size positions, are you
experiencing significant “slippage” from the Fill Prices you are
expecting?

Depending on time of day, a Market Depth on a Forex ECN could be
fairly “thin” at the inside Bid/Ask. Significant size could result in either
requotes from the Liquiditiy Provider, or just require “nibbling” many
levels of the underlying Depth to get the Volume you require for your
position.

I’m not picking a fight here. Just wanting to learn something.
EDIT: Just trying to get the definition of a “good fill”. Is it a fast
fill, a low slippage fill, a non-requoted fill? A fill which actually
gives you positive slippage (in your favor) sometimes? (I like
those !!!)
EDIT2: Are you using Market Orders, or Limit Orders which
could protect you from negative slippage?

When I use larger Lot Sizes, often I go for tighter Target distances.
Is that the strategy your EA is using, i.e. larger lot sizes and shorter
targets for scalping?

hyperscalper

4703

We do use Market Orders only and good fill to us during news is instant fill with max 5 pips negetive slippage.
Occasionally we get 5-10 pips negative slippage.
Since we are not scalpers that is fine. We rather be in a trade with 10pips negative slippage that no trade at all.

So far TW never rejected our market order within last six months. Oanda same but we used only small orders up to 1Lot and we tested for 2 months.

LMFX rejected our orders almost 50% of the time with off quotes error.

Finpro was good to us at first. But then we started
missing trades do to lack of ticks. We think Finpro was freezing but we are not 100% sure.

4704

Thanks. Personally I don’t see how you could tolerate such large negative slippages ! I wouldn’t accept that… If the slippage were lot size related, related to thin inside tier liquidity, I would use multiple orders at smaller lot sizes to bring slippages to within 1 pip. Unless you are chasing fast markets or something like that, in which case that’s just not something I would do. If slippages we’re that high, I would be using limits and cancelling unfilled ones… wow. Thx for the info.

EDIT: I think I see what you are doing during News Events. You are chasing price during those events; which is the worst case scenario. It’s no surprise that there are issues with fills or rejections by liquidity providers, due to latencies, if not for the other reasons, like Bid/Ask spread, etc. I don’t experience issues like that because I don’t try to enter positions, chasing a fast moving price. I prefer to get into positions ahead of News Events, or to use Limit Orders to protect against negative slippage. So, to me, it seems that is why you are so critical of FinProTrading, for example, which otherwise provides accurate fills with very little slippage. It is very difficult to get “instantaneous” latencies or reaction times, due to the “slow retail” nature of MT4. I mean, it isn’t a FIX connection with direct access to liquidity providers. During non-news-event periods, latencies in reaction times of 100 milliseconds doesn’t make much difference. But during high volatility News Events, 100 msecs can be 10 PIPs in market movement; hence the appearance of “slippage” from the moment your system makes the decision to strike. It makes perfect sense to me. Now, if you’re getting no rejections from the system during high volatility, then that means you’re dealing “locally” with the broker, operating somewhat as an old-style Market Maker. If your orders are being sent to external liquidity providers, then they may have the option to reject the pricing which is being presented to them, due to latencies of a couple of hundred milliseconds. The key is trading during very high volatility with wide spreads, I’d say.

This is no criticism of what you’re doing, or the strategy of chasing during high volatility periods. It’s just me trying to understand how a 10 PIP slippage could happen at a brokerage as good as FinProTrading… I see their Bid/Ask spreads widen, especially in the secondary Pairs, and don’t like it; but it represents what the LP’s feel is a much higher uncertainty during volatility…

EDIT2: Just wondering, are you using Buy Stops or Sell Stops to trigger your entries? In those cases, they should be faster than placing a new Market Order from the client side, as Buy/Sell Stops should be triggered on the server… (not sure about that in every case…)

hyperscalper

4705

Hi guys, anyone here trading using FXChoice? and trading gold? If there is, how is your swap rate? because i am seeing something unusual here, normally the swap is -6 for long position, and on thursday to friday, the swap is triple, and on friday closed, the swap is triple again, at -18.

Does swap for gold works the same with currencies, if it’s the same then it should be triple at wednesday to thursday, right?

And how come they charge triple twice? is it because it’s gold? i don’t have a lot experience trading gold

4706

In my opinion every broker ECN or non ECN takes opposite side of your trades especially accounts under 5K.
Most of those small accounts loose like over 95% of the times or more. So why would any broker not take opposite side of your trades.
As longest we traders can get decent trading condition, we should not worry about it.
Who cares if there is conflict of interest.
Do you really think that chances of you making money are better when they send your orders to LP?
:grinning:

I do not think any broker would surive now w/o taking opposite side of trades.

Brokers make money 90% of the times plus commission by taking opposites sides of your trades.
Its the best business in the world 90% or more winning ratio. INSANE.
Why do you think there is so many brokers?
Casino is like 60% win ratio or less.

We have been around for a long time. and what we have noticed trading conditions got much better over the years. The spreads and commissions came down a lot even during the news.
The brokers are desperate, and will do everything now so you can send them your money. Finpro will give you tight spreads + $2 per 1LOT round trip commission. Wow.
They know the chance of you making money consistently is getting closer to 0.

The volatility came down a lot over the years though. Its so much harder to make money them ever before.
We used to have like 300 pips moves within 5 minutes. You do not see that anymore.

Yes. You can still make money! It is just TOUGH.

4707

I just don’t buy that story. Brokers traded against clients before ECN’s
rationalized all of that.

Liquidity Providers take the opposite side of the Retail population 100%
of the time, and they win 100% of the time.

But how does that disadvantage the trader ? Unless the trader is scalping
for very small targets…

Effectively, Market Makers (in the modern sense of Liquidity Providers)
say to the ENTIRE RETAIL MARKET. Come what may, I will defeat all of you
in the short term for small scalps. But I cannot defeat those of you who
hold positions longer term, of which 50% will be winners, and 50% will
be losers. That’s how it works.

Retail short term traders are not given enough upside for Longs to profit,
and not given enough downside for Shorts to profit; for the average trader.

Those of us who do small scalps, with enough specialization and precision,
can be winners; but that is very difficult, both automation and data intensive.

Anybody else dare to chime in on this one?

hyperscalper

4708

Regarding LMFX, I had a take profit market order set and even tho chart showed clearly the price going below the take profit point. The trade was not closed and I woke to see the position in the red. I WILL speak to LMFX about this, as I have screenshots of everything. Will let everyone know how that goes.

1 Like
4709

Hello @HyperScalper , I totally disagree with Marcin infact I disagree with a lot of things that he has been saying over last few threads. For example the so called V20 engine that trades under 1 MS because its technically Not possible, unless Oanda has found a way to send orders at a speed faster than light and have the communication messages processed at a speed even faster than that :open_mouth:

He is claiming that brokers can NOT survuve unless they take the opposite side of the trades, so essentially that means ALL the surviving brokers take opposite side of the trades (which would mean a cummulative opposite trades of over $4 trillion per day across all the broker community combined !!! ). Lets assume that IT IS TRUE for a minute , So where is the volume on all these dark pools and exchanges coming from ??? if that is not coming from traders, is it coming from outer space ? (sorry to be so extreme, but how else do we understand or critically reason extreme assertion ? ).

I can go on an on about how each one of marcin’s statements did not make any sense from any angle, but IM NOT WILLING TO SHARE MY PRIVATE MYFXBOOK PERFORMANCE with him to gain his respect.

4710

Thanks @HyperScalper , this is very good piece of information you shared in here, much appreciate such technical details. I have never used NJ4X but Im a hard core programmer and the way I get around limitations of MT4 is by using Node.JS , its async and Node 8 has the ability to call C++ DLL files directly just as its native classes. Which means that you can interact directly with MT4 manager using MT4 native Manager API and hence can send trades across 100’s of MT4 accounts with just using a single instance of Manager API (written in C++).

You can obviously also write a .net wrapper around C++ or use some CLI (common language interface) but I find Node + Mt4 Manager as a very good combination unless you are super serious about speed and want to write a FIX (Financial Information Exchange Protocol) engine cross connected with the broker or LP directly over a LAN (which obviouly is faster than anything else you can try)

4712

First of all, if you read my previous post, I said oanda got new engine V20 and, they are advertising 1 ms fills NOT ME. I also said this needs to be confirmed.

We decided to give that engine a try and so far with size under 1LOT during tests, our ea performs better with Oanda then LMFX and FinPRo. TW perfoms just slightly better than Oanda.
I NEVER SAID OUR FILLS ARE UNDER 1 MS WITH OANDA.

Second of all, I Never said brokers take opposite side of all their retail accounts. They probably run some algorithms and chose some accounts that have high probability of loss. I am pretty sure ECN brokers do that too. This is just my opinion. Not a fact.
I never worked for a broker.

Maybe someone on this blog worked or know somebody that works for an ECN broker.
I think we all should know 100% facts how an ECN broker makes money.

What else does not make sense to you?
Please go on how every statement of mine does not make any sense to you.
I think we all very interested to hear your expert opinion on this matter.

I told you my definition of good fill.
Now you tell us what is your definition of scalp. Are you willing to share at least that information with us.
I think we would be very interested.

You do not need to again any respect with me.
I am here to learn and maybe share some of my expertise, but according to you nothing makes sense.

4713

Sorry that relply was to Hyperscalper

4714

Here is an excerpt from forex-central that gives details about all different types of broker types. FYI… An ECN broker makes money on commissions only. What you are refering to is a Dealing Desk Broker not an ECN broker.

DD - Dealing Desk: A dealing desk broker is a market maker. Market makers typically offer fixed spreads and may elect to quote above or below actual market prices at any time. Market makers are always the counterparty of the trader, who doesn’t trade directly with the liquidity providers. Market makers get paid through the spreads, and they usually also take the opposite trades of their clients prior to covering themselves (or not) with regards to the liquidity providers.

NDD - No Dealing Desk: An NDD forex broker provides direct access to the interbank market; it can be an STP or STP+ECN broker (see below for STP and ECN broker definitions). With a genuine No Dealing Desk broker, there is no requoting of prices, which means that you can trade during economic announcements without any restrictions. The spreads offered are lower, but they are not fixed, so they can increase significantly when volatility is increasing during major economic announcements. An NDD broker can either charge a commission on each trade or choose to increase the spread.

STP - Straight Through Processing: In STP mode, transactions are fully computerised and are immediately processed on the interbank market without any broker intervention.

ECN - Electronic Communication Network: ECN brokers provide and display real-time order book information (featuring the orders that were processed and the prices offered by banks on the interbank market). They thereby improve market transparency by providing information to all market participants. ECN brokers usually make their money by charging a commission on the traded volume. With ECN brokers, all transactions are directly processed on the interbank market in No Dealing Desk mode.

MTF (Multilateral Trading Facilities): An MTF exchange ensures that buyers and sellers of financial instruments can come together according to non-discretionary rules. An MTF is not a regulated exchange, but it operates under the same rules. MTF rules are transparent and ensure a fair trading system. The broker guarantees price efficiency and the clearing of transactions. Compared to a traditional exchange, a multilateral trading facility provides greater discretion, faster order execution speed and reduced brokerage fees.

Hope this helps :pray:

4715

Very interesting.

Yes, I am using NJ4X.com from Java, but it also has a
C-Sharp API . It is compatible with the ubiquitous MT4
but somewhat “future proof” with an MT5 implementation
also. By creating local “pools” of MT4 terminal.exe
processes on Windows (or under WINE on Linux), it
uses fast interprocess communication to distribute
requests to the “servers” (each of which is an actual
MT4 terminal, whose user interface can be exposed,
but is normally hidden).

NJ4X is “thread safe” and very high performance, so
if you are looking for an infrastructure other than the one
you’re using now, I can’t think of a better one; if you
want to stay in the MT4/5 brokerage space, and are
not looking at FIX or other much more difficult and
expensive techiques.

NJ4X support is good, very responsive, and I have been
able to get quick answers to all of my questions. License
fees are very reasonable, when you consider the value.
Lifetime personal licenses are only $149, and “Pro”
licenses at $500 including source code access. Great.

hyperscalper

4716

No offense but I was not looking for a text book definition.

I think, most of the ECN brokers are HYBRID BROKERS.

​The brokers who directly pass on orders to the liquidity providers or to the real market are considered as A-booking (NDD Model) and when the trading orders of the customer are managed internally - this is known as B-booking (Dealing Desk – market making). The hybrid model is simply used as a tool in order to manage the risk of trading through traders’ classification. The hybrid model used to serve as hedging tool by placing certain traders in A-Book and placing the others on B-Book in order to minimize the risk and increasing the profit of brokers. The fact is that the vast majority of today’s brokers are hybrids – they can promote their “fair ECN / STP” pricing, while still performing dirty practices at their b-books (Dealing Desks).

This is just my option.

Anybody besides HYPERSCALPER can comment on this. ( this would not make any sense to him, so no point of having his opinion on this matter)

I bet Paul from Tallinex would know, and he would not have any problems giving us 100% truth w/o omitting
any details.

4717

MarcinFX,

Let’s just stipulate that the entire market is "legally dishonest"
since markets are manipulated. It is the job of the trader to
predict the direction and timing of that manipulation.

But the brokers themselves are not the primary source of
this dishonesty and manipulation. Having said that, I do think
you’ve got a good point distinguishing these so-called A and
B book approaches. The broker does a great service to smaller
traders by “bridging the gap” between the penny ante traders
with lotsize 0.01 and those who can trade 1.0 and higher.

It may be the case that brokers make a relatively small amount
aggregating small trades. If they did not do that, then smaller
traders would have no market.

My point of view is that brokers perform a great service to
traders, and they are certainly not the enemy. The enemy is,
of course, the “800 pound gorillas” which are the Banks
and other Liquidity Providers. They most definitely move the
markets against Retail players; and they are the entities who
are the real enemies, who definltely take the opposite side of
every Retail trade, and who can move markets according
to a plan, which guarantees their profits.

Get inside their heads, and you are a Winning Trader !

hyperscalper

4718

We found the answer. Great video about brokers.

Former city trader reveals TRUTH behind Forex brokers.

Ok Mr HyperScalper, is there a chance you will agree with this video. I doubt it.