the broker's strange condition to prohibit certain strategies - page 7
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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, just came across, since you 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.
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.
Oh, I'm looking at you guys.......... This is some kind of pointless discussion. Is there life on Mars?! Brokers don't cheat! Brokers cheat!
Don't cheat because they can't? Or because they don't want to?
I saw a sign on a fence... but there was firewood on it. We're both adults, we understand that a broker can write anything on their website. For example, on the FXTM website, in the "Why FXTM?" section, it says, among other things, Fast execution. When asked about execution speed, they proudly say: 200-300 msec...
Now tell me, is it a lot or a little? Or ask algotraders at any exchange, how many clients they can technically otfrontranchise in the betting market during this time.
FIX is just a protocol for transferring orders. I don't understand in any way how it guarantees against broker cheating? What difference does it make which system delivers your order to the broker, MT5 or FIX? Or do FIX messages somehow bypass the broker and go straight to the interbank market? (Even if they get in immediately, you will be defronted... but already there, hehe)
A forex broker has 100500 ways to milk you for a bit. Which ones will be involved depends only on his greed. No ECN/STP/DMA will guarantee you from that. Those same 200-300 ms give the broker the ability to use last-look plugins to decide whether to execute your order, or send a reject, even in DMA/STP mode. And how do you stop or monitor it? You won't even know about it.
Finally, even if your broker is being completely honest, your order will still get to the LP, which also has 100500 ways to make a killing from you. How much he gets, again depends on his greed, and also on his mood, and also on the current P&L of the dealer... He may also have a last-look plugin. And if LP says - I won't take that order... or even just executes it, for example in 500 ms, your broker will not fight with him, but will say to you: "This is a market execution, there may be local liquidity dips!"... So what do you do? Technically the broker has done everything honestly. He may even promise you to remove the LP from the pool. And he might even remove it. He can't remove all of them. He will have to keep the majority. And how many LPs are there in the forex market? On the fingers you can count.
For those who rely on ECN.
Tell me, who does your order get on the "other end" of the ECN? Well, if there is a hapless trader like you ... But the probability is 0.000000001. Most likely it will go back to your old friend LP. Name me one ECN that requires a participant to execute on a firm quote! This is not an exchange with a clearing house where trades are executed on the basis of (a) a CENTRALIZED (b) PUBLIC ledger, also known as a book. Centralisation ensures that the trades of different clients cannot be arbitrated, whereas publicity guarantees execution according to the quoted price. There, the price put into the system is firm. No one can "think" during the execution of an order for 200 ms if they have an order in the book. It will be executed immediately as soon as the first client order arrives there. You know better than me how much money any smart guy can earn if he has 200 ms to "think" before executing a trade in the market window.
But in ECN it is ("think about it") in the order of things. There is no obligation to execute the trade at the given quote!
Once again, any broker has 100500 ways to take a penny from you, not the broker, but his LPs... Whether they do or not is not even a question of honesty, it's a question of current P&L... If all is well, they won't touch you. As long as it doesn't get bad.
There was a question here, "If you don't believe in the integrity of brokers, why are you trading?"...
Well, so everyone knows that on average only casinos win at roulette, that doesn't stop some lucky individual from sometimes snatching a nice winnings. It's the same in forex. Brokers don't chip away at everyone. Someone from time to time manages to get a jackpot, so why not try. That is the essence of this profession - to monetise the risks taken. It's just that there's another added risk here.
Oh, I'm looking at you guys.......... This is some kind of pointless discussion. Is there life on Mars?! Brokers don't cheat! Brokers cheat!
Don't cheat because they can't? Or because they don't want to?
I saw a sign on a fence... but there was firewood on it. We're both adults, we understand that a broker can write anything on their website. For example, on the FXTM website, in the "Why FXTM?" section, it says, among other things, Fast execution. When asked about execution speed, they proudly say: 200-300 msec...
Now tell me, is it a lot or a little? Or ask algotraders at any exchange, how many clients they can technically otfrontranchise in the betting market during this time.
FIX is just a protocol for transferring orders. I don't understand in any way how it guarantees against broker cheating? What difference does it make which system delivers your order to the broker, MT5 or FIX? Or do FIX messages somehow bypass the broker and go straight to the interbank market? (Even if they get in immediately, you will be defronted... but already there, hehe)
A forex broker has 100500 ways to milk you for a bit. Which ones will be involved depends only on his greed. No ECN/STP/DMA will guarantee you from that. Those same 200-300 ms give the broker the ability to use last-look plugins to decide whether to execute your order, or send a reject, even in DMA/STP mode. And how do you stop or monitor it? You won't even know about it.
Finally, even if your broker is being completely honest, your order will still get to the LP, which also has 100500 ways to make a killing from you. How much he gets, again depends on his greed, and also on his mood, and also on the current P&L of the dealer... He may also have a last-look plugin. And if LP says - I won't take that order... or even just executes it, for example in 500 ms, your broker will not fight with him, but will say to you: "This is a market execution, there may be local liquidity dips!"... So what do you do? Technically the broker has done everything honestly. He may even promise you to remove the LP from the pool. And he might even remove it. He can't remove all of them. He will have to keep the majority. And how many LPs are there in the forex market? On the fingers you can count.
For those who rely on ECN.
Tell me, who does your order get on the "other end" of the ECN? Well, if there is a hapless trader like you ... But the probability is 0.000000001. Most likely it will go back to your old friend LP. Name me one ECN that requires a participant to execute on a firm quote! This is not an exchange with a clearing house where trades are executed on the basis of (a) a CENTRALIZED (b) PUBLIC ledger, also known as a book. Centralisation ensures that the trades of different clients cannot be arbitrated, whereas publicity guarantees execution on the basis of the quoted price. There, the price put into the system is firm. No one can "think" during the execution of an order for 200 ms if they have an order in the book. It will be executed immediately as soon as the first client order arrives there. You know better than me how much money any smart guy can earn if he has 200 ms to "think" before executing a trade in the market window.
But in ECN it is ("think about it") in the order of things. There is no obligation to execute the trade at the given quote!
Once again, any broker has 100500 ways to take a penny from you, not the broker, but his LPs... Whether they do or not is not even a question of honesty, it's a question of current P&L... If all is well, they won't touch you. As long as it doesn't get bad.
There was a question here, "If you don't believe in the integrity of brokers, why are you trading?"...
Well, so everyone knows that on average only casinos win at roulette, that doesn't stop some lucky individual from sometimes snatching a nice winnings. It's the same in forex. Brokers don't chip away at everyone. Someone from time to time manages to get a jackpot, so why not try. That is the essence of this profession - to monetise the risks taken. It's just that there's an added risk.
I'm too lazy to read a sheet, sorry, is there anything laconic on the subject without emotion? )
I'm too lazy to read a sheet, sorry, do you have anything terse to say on the subject without emotion? )
You don't want to read it, don't read it. :)
You don't want to read it, don't read it. :)
i remember, i was talking about one guy who said that arbitrage is cheating ... i told him he was wrong - brokers cheat even worse than arbitrage and some allow arbitrage, so what kind of cheating could there be from a trader
All brokers talk about their "main" source of income - the difference between their rate to the client and the rate to the "liquidity provider" in the form of a markup (or commission). Why should their work on this spatial rate differential not be considered fraud, but should their work on this spatial differential be considered fraud if it is done by the client?
Back in the day, if I am not mistaken, the Rockefellers used this technology: In the days before telecommunications, Rockefeller couriers on horseback delivered important economic news for literally hours (days), not importantly, than others received it. This gave them a chance to play the stock market and make fortunes. Why do I bring this up?
So called "arbitrage", arbitrage advisors are just programs which allow to get rate data from "fast brokers" and use this data with slow brokers. The difference there is literally on the order of 10 seconds, but if you correctly place VPS with ping at 10 milliseconds and take the final broker of the standard type with a fixed fleet from a slow broker, it is real stupid scalping with good profits of 100% and above per month.
However in essence this is just a high-tech scam. Such programs become quickly known and a number of VPS on their home page are warning about a ban on placing the program. By the way, the idea might have worked well about ten years ago, now the difference in the speed of quotes from brokers is getting smaller and smaller.
Oh!!! 10 sec That's an eternity Tell me where there is such a broker
Usually it is a matter of 1-2 sec. in which the broker with a kitchen protects itself, roughly through requotesMaxim, you're right, as far as I remember it was one guy who said that arbitrage in Forex is cheating ... I wrote him that he kind of deluded brokers cheat even worse than arbitrageurs and some allow arbitrage, so what kind of fraud can we talk about a trader
Maxim you're right
Arbitrage in the Forex market is not cheating but just a natural reaction of cheating brokers because emit quotes with a delay and win from the difference in the Forex market, is that not cheatingI was writing to him about how he was delusional and that brokers cheat even worse than arbitrageurs and some officially allow arbitrage, so what kind of fraud can a trader be talking about?
There was a lot to talk about. Many above have claimed that only DD brokers cheat, but that ECN/STP are white and fluffy. But the FIX thing stuck with me - like another guarantee. I personally called many brokers who give FIX API and many of them are worried about Latency Arbitrage. Can you imagine, for some reason they think it's cheating. They certainly don't think so, but they can't tell the truth what they really think!!!
there is nothing fair and just in this world, there is only profit. fx is not a guarantee, fx is just faster. For instance, if you do not know how to make a profit, you should not care about the profit, as long as you make it as an honest trade, and arbitrage is that).
Of course arbitrage is not cheating. But calling it "trading" is a bit of a misnomer. Well, you won't deny that Latency Arbitrage is a way to take money directly from a broker, not from the market, which is what traders are supposed to do. I think it won't be long before brokers who ban latency will be gone from the scene... But then the latency itself will also die (those who don't ban it are fast, you can't get money from them).