the broker's strange condition to prohibit certain strategies - page 5
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The catch is that on ECN brokers all this alleged "arbitrage" will not work, precisely because they are brokers and not dealers. The speed of transmission of the quote stream is irrelevant, because trades on the exchange can only be executed at current market prices. And your earnings are based only on the lag in the transmission of quotes. The market has nothing to do with it. Will you please stop being silly already.
Blah, blah, blah, maybe you should stop being jealous, or just be quietly jealous. We should not count other people's earnings.
About arbitrage on the ECN is a separate and very long conversation.
Well, it's not complicated at all if every millisecond you, as a broker, have a collective buy or sell order on each instrument general of at least 100,000 quid..
What if as a broker at 14:31:59 you have a buy order in Eurodollar with a total value of $900 at 1.09304? And in the next millisecond you have another 1500 quid at 1.09291?
And what will you do? Withdraw what and at what price?
And who will compensate for the difference in price?
All this is mythology - an aggregate bid, withdrawal to interbank etc.
As far as I understand, participants (brokers) create pools of bids at each price. We should understand that we are not the only ones who trade there with our 100$ on the deposit and 0,01 lot, there are also clients - legal entities - so brokers have no problems with withdrawal of our rubbish to ECN-trading and our orders are not executed every second, they may hang for a day or two, depending on how the price behaves. I do not see any problems with the fact that an honest broker can really make money on commissions - in fact, this is a priori his earnings. That's why everybody, even crazy traders like me, run from kitchens and more and more brokers open ECN-trading with prices according to the market. I even have a demo ECN account! How about that! I don't know why I'm going to swear at the broker not knowing the reasons of such delays in executing orders from the terminal - and it's very rare - the most important thing is that the quotes are fair.
As far as I understand, participants (brokers) create order pools for each price. We should understand that not only we are not trading there with our 100$ on deposit and 0,01 lot, there are also clients - legal entities - therefore brokers have no normal problems with outputting our rubbish to ECN trading, and in fact our orders are not executed every second and may hang for a day or two as the price behaves. I do not see any problems with the fact that an honest broker can really earn on commissions - in fact, this is a priori his earnings. That's why everybody, even crazy traders like me, run from kitchens and more and more brokers open ECN-trading with prices according to the market. I even have a demo ECN account! How about that! I don't know why I should swear at the broker not knowing reasons of such delays in order execution from the terminal and it's really rare - the main thing is that the quotes are fair.
I don't know the reasons for such delays in order execution.
It does not matter whether it is an ECN or a kitchen. It is physically impossible for a broker to take small orders to the interbank market.
The best thing is that it really has something to do with anything even slightly profitable... news, scalps, or anything else... They need an ideal trader - he came, took the money, poured it out, poured it again and again poured it out and so on in a circle... Whose rights are you defending here....DC - a business even more evil than slot machines... and originally built on a false scheme... and always hostile to the customer...
Pc: I'm very happy genuinely if information appears that someone has managed to bend a broker ...
When you think about arbitrage, scalping, etc. ... If the company is working honestly, if it is really a BROKER ... then these methods will always be available and legal ... always have been and there are arbitrators ... this is the norm ...
if a broker prohibits these methods it's like saying they are working on a rotten scheme ...
All brokers have restrictions.
So?
What kind of orders may be hanging around - pending?
It does not matter whether it is an ECN or a kitchen. It is physically impossible for a broker to enter small orders on the interbank market.
Pricing Engine
It's like a proper honest ECN, which he has been talking about for several pages, and which you cannot arbitrage on.
Some brokers give access to currenex as well, min lot 0.01. The only reason why it's hard to arbitrage there is the high commissions if you trade via intermediaries, and the high cost of getting in directly.
It's as if all you started to say here is nonsense or partial nonsense.)
Roughly speaking, if you have money for all infrastructure of arbitrage on ECN or even worse for interchange, it's easier to open your own broker or some white label :) Because there's no guarantee they won't get sick of it too.
There may be some pending orders.
It does not matter whether it is an ECN or a kitchen. It is physically impossible for a broker to take small orders to the interbank market.
How do you think ECN infrastructure works? Since you know about it... tell me... what is the difference between real ECN and a Forex billing system...
Forum on trading, automated trading systems and strategy testing
Broker's strange condition to ban certain strategies
Dmitry, 2017.05.15 17:14
All brokers have restrictions.
So?
we are talking here about what: what is fair play and what is not fair play... that's it... just 2 options... and here's my definition:
1. if there is restriction There may be some arbitrage requests hanging around. 1. if there are pending requests, it means that the broker is playing unfairly. otherwise there is no reason to forbid the arbitrage... If there is no arbitrage, it's not fair.
arbitrage is prohibited by brokers because of conflict of interest... there are several ways to limit arbitrage... and it is my definition: Limiting arbitrage is prohibited by brokers ...but the conflict of interest is nonsense... it should not be in the honest conduct of business ... otherwise the brokerage firm turns into a casino and cannot be called a broker
By the way comrades, a thought occurred to me... nowadays modern trading technologies have gone simply to a distant land... there are many new concepts which did not exist before...
ECN, liquidity providers, Dealing Desk and NDD, STP, Direkt Market Access, Currenex, Integral, hedging, netting...aggregate delta, cluster analysis, types of order execution and so on.
I have read so many books on trading and as a rule not a single word about the technological side of the issue, how the whole infrastructure of exchange and over-the-counter trading is set up... But so many things have appeared and they are 1000 times more relevant and far more urgent than MA.... crossings.
but all the books focus on all kinds of nonsense... until now all this crap... first, trend lines, then figures, then stochastic, macd.
You see, when a newcomer enters this field, he gets all sorts of rubbish instead of sensible information... and then many years later he starts to learn all these terms and concepts that are so important to understand... but one learns all this exclusively from forums and rare useful pages... I learned all this from the internet... and 90% of it from forum communication...
like hrenfx was... he posted a lot of stuff... and so on.
i.e. if you have great knowledge in modern trading techniques, like a detailed description of all the nuances and differences between ECN and DD, then write a book this person will really get rich ... such a book would just go straight to market, because there are millions of books on trading, but none of them exist in Russian at least!
So: if someone has enough knowledge in modern trading technologies, like a detailed description of all the nianzas and differences between ECN and DD, then write a book this person will really make a fortune ... this book will be just a selling point, because books about trading millions, but such books do not have any!
https://habrahabr.ru/post/202402/
Only professionals will read it, others will not be interested in it.
Just a little more to finish off the self-righteous wunderkinds :) And leave this topic alone. I've got it from the website of a major broker, it just came across, since they don't believe my words, I have to quote them (no links allowed):
FIX (Financial Information Exchange) API (Application Programming Interface) is an electronic communications protocol for financial information exchange.
Trading Behaviors are evolving. High frequency trading and latency arbitrage is vastly becoming popular. Speed is very essential for these new emerging strategies. Changes demand new advanced technologies.
The FIX API allows any trader to connect directly to our liquidity pool with a minimized latency and cost. Minimized latency allows the trader to realize their unique trading strategies.