How does a broker work? - the thread
True ECN Broker vs Not True ECN Broker - the thread
Forum on trading, automated trading systems and testing trading strategies
Something Interesting in Financial Video August 2013
Sergey Golubev, 2013.08.25 15:16
Sergey Golubev, 2013.07.01 06:59
Just something about ECN and STP - The Truth about Currenex Brokers :
What is an ECN?
ECN is a term often used when referring to Currenex. ECN stands for
Electronic Communication Network and it eliminates the function of a
third party in the execution of orders. Without the intercession of a
third party, market participants of any size can interact directly for
Bid and Offer prices posted by other market participants. This leads to
greater transparency and narrower spreads. ARCHIPELAGO, purchased by
the NYSE in 2006, and ISLAND are two well known ECNs.
What is an ESP?
ESP™ means Executable Streaming Prices and is offered through the
Currenex system. Currenex connects to multiple sources of liquidity,
primarily banks, who offer "pools of liquidity". This expansiveness
from the multiple pools of liquidity, available through Currenex’s ESP,
provides better price discovery and narrower spreads for traders.
The prices that are offered via Currenex are executed directly within
these various pools of liquidity. Whereas in the past, a trader would
be required to obtain a Prime Brokerage relationship with one or more of
the major liquidity providers which required a very high threshold and
associated high expenses.
Not all Currenex Brokers are the same.
It is important to remember that a broker’s Currenex offering is only as
good as the liquidity sources that are linked to the platform. The
quantity and quality of liquidity sources can lead to dramatic
differences in price spreads. For instance, a broker offering 1-2 banks
versus a broker offering 8-10 banks will have a dramatic difference in
pricing and liquidity.
What is STP?
STP, or Straight Through Processing, is a term commonly used among Forex
brokers.Many Forex brokers state they use "interbank pricing" but act
as a counter party to their customers’ trades. They take the other side
of the trade, going against the client’s best interest, and make money
on a client’s losing trade.
Conversely, a true STP setup passes the order in an automated way to all
liquidity sources. With a true STP broker, there is not the
possibility of any adversarial relationship between the broker and
client as the broker only generates revenue in the form of a commission
per trade rather than the dealing desk model of capturing client losses.
Something Interesting in Financial Video October 2014
Sergey Golubev, 2014.10.17 20:03
Difference between ECN, market makers and STP brokers
In a perfect world the cost of buying and selling currencies would be
the same, no matter which Forex broker you use. Unlike the stock market
where we get heavy regulation and where stock prices are derived from a
single exchange, prices vary from different Forex broker platforms. The
reason why is because currency prices are derived from the Interbank
market which is a conglomerate of banks and hedge funds that provide
prices to various Forex brokers around the world. The better the
relationship between the Interbank market participants and the broker
means that the prices are cheaper.
We expand on this in the video
tutorial whilst also describing the main difference between ECN, market
makers and STP Forex brokers.
Sergey Golubev, 2013.08.24 08:28
More video lessons -
Where Do I start from?
Sergey Golubev, 2018.07.26 12:08
Some more about brokers and more (for newbies) -
How to Choose an Islamic Forex Broker
How Money is Made by Trading Forex
Stock Market Tutorial - The Only Video You'll Ever Need
Forex vs Futures vs CFDs - What to Trade?
Sorry, I must be explaining myself poorly as these videos are explaining differences between brokers. THIS IS NOT what I need help with.
One Broker offers 3 different platforms they own and all data is 100% the same but when MT4 is used with that same broker, the data is not the same as the broker's other platforms.
This is as simple as I can explain it. It really isn't anymore complicated then trying to understand why manual traders get one set of data and MT4 algorithmic traders get another.
One can assume that the data is different and more accurate because MT4 users are algorithmic but one could also assume the opposite. I want to hear from other traders with other brokers if they experience the same data inconsistencies.
I wanted MQL5 to reassure me that this is not scam and provide me with a viable explanation.
So far I have gotten neither. Can you provide me any education on why a single broker can have data consistency across all of their platforms but when MT4 is used by that broker there is data integrity issues?
I understood your point.I just provided the information (for everybody) about the brokers.Yes, the data/quotes are not centralized (they are not centralized for the Metatrader brokers which are not directly connected to the stock exchange).And there are some (many) brokers with "decentralized data" (we call them "kitchens" in Russia).Example:
There are some people who are selecting the brokers (to trade) based on good data/quotes, some other people prefer to use regulated brokers, others prefer to use the broker which is having the office near their home ... and so on ..And when someone told: "I have EA which was profitable for the last year" so the experience traders will ask: "profitable EA? Which broker for?"Because if EA is profitable for any broker (for any data/quotes) so this EA is trading on daily/weekly timeframe.:)
Can you provide me any education on why a single broker can have data consistency across all of their platforms but when MT4 is used by that broker there is data integrity issues?
Different brokers, different data providers (the companies who are providing/selling the data for the brokers), different habits, different place of registration (Belize, or Russia, or the US, the UK, and so on), different regulation/law, different government regulations, and so on ...
Everything is different ... life is different, the countries are the different, and people are different ... and the opinion of the people is different for same problems/issues.For example, what you consider as a scam - I can consider as a normal traditional behaviour.
Based on what you are saying then Sergey, is that this can happen with any broker and cannot be controlled whether it is fair or not, beneficial or not, and that you have already accepted this as a reality and so should everyone else. Robots cannot be purchased here with the expectations of success until they are proven on each individual broker which is not possible because most demos only work on a tester.
Maybe not a scam but certainly takes me away from purchasing any robot on MQL5 without it being tested individually with each of my brokers. Which cannot be done. This means I have wasted about 2 thousand dollars purchasing and renting robots that may or may not ever work because the broker does not have data integrity.
Thanks for clarifying. I wont be spending another cent on any robots here.
Demo data and real data should be same for one broker.
If you are talking about backtesting so it is related to the following: do you believe in it or not ... and it is related to the person you are buying EA from.Many sellers are the active members of this forum, and some of them are publishing the articles, some of them are well-known members here and everywhere ... besides, the coders are having coding specialization ...
So, it is better to buy something from the person you know.
As to the data so it depends on the data providers .. some brokers are using one data provider, some of the brokers are using the other one (I am not connected with the brokers so I do not know the particularities sorry).And if the seller is professional coder/trader so he will tell the settings his EA for one broker, and to the other one, and so on.
No I am not talking about backtesting.
If what you said is accurate then no EA sold here will work unless as you said, you know the developer and he has tested it on the specific broker you plan to use.
Oh and broker has several law suits against them for this very topic. I just missed the settlement with one group but I will get in another as they are very corrupt. Don't ever use them.