Hi, i was wondering if the liquidity that is shown in the active trader platform is the TOTAL liquidity available in the market OR the available liquidity to the particular trader of the account ?
The reason i ask is because i would hate to have my trades split up. Oanda has told me that they can take 10,000,000 notional without spliting trades. Whats the situation with FXCM ?
No matter what platform you’re looking at you will NEVER be seeing the total liquidity available in the market. No single platform covers anything more than a fraction.
As to whether you’re going to have trades split, that will depend on who you’re dealing with. If you’re transaction with a dealing broker who is making the market for you (like Oanda) then you need only worry about their trade size caps. In an ECN situation it will depend on what the market will currently bear.
Hey, thanks for the help. I would like to use OANDA but as they are a broker i dont benefit from the tax advantages from using a spreadbetting company like FXCM (they do spread betting accounts for UK residents). FXCM have told me that they have a limit of 50,000,000 notional which is alot, but alot of people have been telling me that they just split up trades even at low levels below 1,000,000
What happens if i open up two seperate accounts …may be i could get around the problem of them splitting up trades .
Jason - whats the situation ?
Why does it matter if the trade’s split - at least as long as the entry price is the same or very close?
Actually, if you have an ECN account, and a platform that allows you to combine them (Fast Broker’s Trading Platform and the Interceptor platform for ECN’s and MM’s), you can see a greater range of liquidity. There are 3 major ECN feeds I think, Currenex, Ecry, and Integral.
If you use their platform, Dukascopy, or MB, you will see a trade book to view the orders so you can see whats available…
Hi Dan,
It’s important to remember that there is not unlimited liquidity at every price. When the banks send through a quote for a price, they also specify the amount they are willing to buy or sell at that price. Here’s a picture from the Active Trader platform to give an example of the liquidity behind the pricing:
There are 3 separate quotes from banks offering to sell at the price 1.45905. If I place an order to buy 6 million, the ticket has to be broken into 3 separate orders since one bank is not offering to sell 6 million or more at 1.45905. If the ticket is not broken up, your order would be slipped to 1.45916 where 10 million is being offered. Breaking up the ticket allows orders to be filled with less slippage.
From my experience, orders below 1 million are rarely split into multiple tickets. FXCM uses No Dealing Desk (STP) forex execution and every order is offset back to back with a bank or financial institution. This means when you buy or sell, there has to be liquidity available from the banks to execute straight through to the banks. A broker acting as a market maker is creating the market and managing that risk, therefore they can arbitrarily decide what amounts to accept or reject. It also means they could flag trades that exceed certain amounts to manually confirm execution.
-Jason
Hey Jason, thanks for explanation,
So in that example i could buy 5 Million at x905 WITHOUT the trade being split up ?
Dan
hang on … if a total of 6million is being offered by 3 banks at 905. then why would my trade be split at different levels/prices ?
In the example I mentioned, your trade would be filled at the same price, but you would have 3 separate tickets for that fill since the entire amount of your order is not available with one liquidity provider.