Why don’t all the scalpers get together and build a brokerage for themelves
I spoke with Boston technologies today.
It costs $50K to get an interbank bridge and $3k per month to keep it connected.
They run everything for you right down to the phones.
Essentially you could set up a brokerage ‘for the people by the people’ with;
STP for every account no matter what its deposit size
Transparent pricing and no spread mark up (great for scalpers and EAs)
Trust that slippage is not dealing desk induced
No dodgy dealer plug ins that delay trade execution etc
Depth of market analysis from interbanks (no in house brokerage crap that has depth of all amateur traders like me)
Run your MT4 expert advisor at maximum efficiency
Create statistical reports for all our shareholders on; interbank slippage, fill rates, market depth.
This alone will improve your EA outcomes.
I have £18k savings from trading, any one want to build a bridge with me, we could have a people’s brokerage - non for profit interbank portal with a little profit fromn advertising ice cream or something.
We could have a membership fee per month and nothing else.
Then the whole world will have access to interbank rates and no more manipulative brokers with their excessive slippage, widening spreads, memory shortage on servers for EAs etc.
Unless of course this exists already and I need to do more research.
It can be done a non for profit brokerage with 100% transparency, plus members would learn a hell of a lot how the fx hierarchy ascends!
I think baby pips should run a poll, see how many members are willing to do it - if 800 are willing thats an initial outlay of $62 each and a monthly membership of $3.75 for transparant interbank trading!
While this is an interesting idea, it probably wouldn’t be worth it from a trading perspective. Now if you were looking into starting your own business, that’d be a different story. But it will cost you a lot of money to become registered and licensed in the US/UK than just the 50k you give to Boston and the 3k monthly fees… You also have to have quite a bit of capital in the bank as well as employees to run your website, service customers, run your finances, and an employee or consultant for all of the legal setup.
Liquidity feed each $3K per month - how many brokers boast more than 1 liquidity feed?
Legal entities (inclusive in 50K)
Compliance (inclusive in 50K)
Back office ops including the simple Know your customer checks (inclusive with liability in 50K)
Telephone customer support (inclusive in 50K)
FSA/series 7 license to practise not required by ourselves as BT handle compliance.
The whole operation is white labelled.
Remember a big operation like Alpari UK were fined 200K for lack of KYC checks.
It doesn’t cost that much! 100 traders paying each $30 per month = interbank feed with pip spread of 0.5!
Send me questions and I’ll send them on to BT.
If anyone can talk me out of it then please do otherwise lets unify and beat the broker.
Okay tomorrow I’ll let you know how much it costs to setup with the FSA. My bothers a certified chartered accountant at KPMG, he’ll know all that stuff.
Okay so I found out about the FSA requirements, the FSA say:
Trading for own account, or for the account of customers, in certain
financial instruments
The financial products in question are: money market instruments; foreign
exchange; financial futures and options; exchange and interest-rate
instruments and transferable securities. The Regulations confirm that, where a
business trades for its own account and does not have a customer (other than
a member of the same group) it will not need to register. Where a business
trades in these products for customers, it will usually need to be authorised by
us. The main exception to this is businesses that buy and sell spot and
forward foreign exchange. However, businesses that trade foreign exchange
for a customer are likely either to be authorised by us (as banks) or will be
registered with HMRC as bureaux de change. As such, we anticipate that very
few, if any, businesses will need to register with us under this category.
Money broking
This is acting as broker in the wholesale foreign exchange and money
markets. We believe that, in practice, all or almost all firms undertaking this
activity will be authorised by us. As such, we anticipate that very few, if any,
businesses will need to register with us under this category.
Regarding Fees
Financial Services Authority 17
4.1 Fees and penalties
We are using this document to set out our plans for raising fees. The Money
Laundering Regulations do not require us to formally consult on this. We
believe, however, that this document is the most effective way to communicate
our intentions.
The Money Laundering Regulations give us the power to:
• charge fees to registered businesses to recover the cost of carrying out our
functions under the regulations; and
• levy penalties on registered businesses that are in breach of the Regulations.
The FSA intends to recover the costs of the registration process through a
registration fee. The costs of setting up our regime, as well as the costs of our
on-going supervisory work, will be recovered through an ongoing annual fee.
4.2 A registration fee
The registration fee will be payable when the registration form is submitted. If
the payment is not made then the registration will not be processed.
The fee for registering a business will be £100. This is regardless of how large
the business is or what activities it undertakes.
Payment should be made by cheque, payable to the Financial Services Authority.
If you would prefer to make payment by another method please contact us.
4.3 An annual fee
We will charge registered businesses an ongoing annual fee. This fee will cover
the costs we incur in monitoring these businesses. The annual fee for the first
three years after the implementation of the Money Laundering Regulations
will also include the costs of setting up this new regime.
Is my logic correct?
STP or ECN claims to put your order out onto the IB market place where the most liquid environment exists.
Thus your orders will be filled pretty much instantly if they relatively are not too massive.
Now what I don’t understand is that to ‘be seen’ by the IB you have to buy/sell mega money or they won’t even bat an eyelid. I understand that these huge volumes are leveraged and you have to have a big account to put up margin requirements.
Alpari pro request £20K minimum balance and min lot size of 3 and the maximum leverage is 1:100
They require 20% of margin
The maximum opening size of one single trade with a £20K account is £10 million = 100 lots.
£20 000 x leverage factor of 100 = 2 000 000
Only 20% of margin is required thus we can multiple £20 000 x 5
So I can imagine 100 lots are very tradable on the interbank market as I once saw a youtube clip of London Deutsche trader fussing over £2 million.
Now if we setup a brokerage with a leverage of 1:100
A trader with a 10K account (and 20% margin) would be able to get IB access.
£10 000 x leverage factor of 100 = £1 million (10 lots)
Only 20% margin is required this raises a potential single max position size of £5 million (50 lots)
If you straddle the market a 10K account could keep your account safe, especially with a well designed hedging EA.
I can scale it down right to a 5K account to get IB market access
£5 000 x 100 = £500 000 (5 lots)
Only 20% margin is required this raises a potential single max position size of 2.5 million (25 lots)
Is this correct? Why can’t a 5K account get IB access (albeit position sizing would be extremely risky)
I’m very interested in scalping technique. I must say that it’s difficult to find a good broker who is for scalping. Now I’m taking part in Master scalper contest held by accentForex. It is held on a demo account and there’s no need in depositing. No limits for scalping, I use also EA and I can receive $1000 on a real account.
Yes, it is opened right now for new entries!All you have to do is to open a demo-account,no depositing,and show off you scalping techniques on it.Here you can find detailed information: Master Scalper
Wow!!!
This is exactly what I’ve been looking for.
So cool.
Thank you very much for posting the link.
I’ve had a lot of emails from members from different forums with interest in this brokerge idea thing.
Someone has clearly had the same brainwave to start their own with a membership fee rather than a spread.
The membership appears to be far less per month than the cost on spreads.
If I don’t detect a dealer plug in or any order handling mischief I have completed my quest to find a non biased liquidity feed.
The Boston Technologies brokerage setup looks like it is just a white label brokerage. There are a few like this around.
Axicorp had a lot of info on their web about this. AxiTrader - White Label Partnerships
Pepperstone is good for scalping. They are expensive, but they have a lot more ticks then other brokers. The extra tick make a big difference.
FinFx and The Collective also.
FX collective (60 market square) have a warning from the Belize financial regulatory body filed against them.
Office of the International Financial Services Commission,
Sir Edney Cain Building,
Belmopan,
Belize, C.A.
23 June 2011
WARNING NOTICE AND CEASE AND DESIST ORDER
BFX CAPITAL INC.
It has come to the notice of the International Financial Services Commission of Belize (IFSC) that BFX CAPITAL INC., of 60 Market Square, Belize City, Belize, which is no longer licensed by the International Financial Services Commission of Belize (IFSC) for Trading in Securities is still holding itself out as providing such services on its website www.baronforex.com. This is a serious offence under the laws of Belize.
BFX CAPITAL INC. is therefore directed to cease and desist from carrying on the said activities forthwith.
All persons concerned are asked to take note and exercise extreme caution.
GIAN C. GANDHI
DIRECTOR GENERAL
International Financial Services Commission of Belize
I think this is because they have not paid the sheriff of belize a license to operate in that town (anti free market corrupt bull****). There are no actual claims or lawsuits against them historically or presently.
