Lmax caveat emptor !

tar

tar

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This is from an interview with Lmax's CEO David Mercer :

"The way I look at markets is like a game of football. It’s fun for everyone, but if there is one guy going round kicking everyone – it’s not fun anymore. It’s no good for the spectators and no good for the participants. So you have this idea of yellow cards and red cards, so that no one can spoil the game.

In the FX market there are certain styles of trading that don’t benefit the marketplace and don’t serve any commercial value to us, as a venue. News traders for example, who only trade on news and probably trade quite rarely. I don’t think there is much value from people who only trade in that style though it must be said that we tend to do the most volume around news events, US non-farm payroll for example. I think that most venues should discourage news traders.

Likewise, there has been an evolution in the marketplace of people who look for arbitrage– technology arbitrage between different platforms. There is not much point in hitting banks on this venue or that venue because you have a minor technology advantage. We discourage that and we feel that there is an obligation in all venues to discourage that.

It’s about KYC. We know our clients and we speak to them. We ask them to fill out a simple questionnaire. And 99.95% of our clients are open and get on and trade. Every once in a while someone comes along and says “this is the way we trade,” and we say “well, this is probably not the best place for you.”

source : http://www.lmax.com/pdf/full-eforex-lmax-interview.pdf


For more confirmation check these recent reviews from traders having issues with Lmax while trading news ;) What an exchange !

http://www.donnaforex.com/forum/index.php?topic=5892.msg309186#msg309186
 
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I would take the CEO's own words over any opinion , everyone has one , and re opinions i would take a look at the horrible reviews - posted in the link above - from traders : emails , warnings , platform freezes .. etc , it all confirm the CEO's own words about news trading , anyway here's one of the reviews :
________
Anyone here trade the news with LMAX?

I was successfully trading until I got an email from them asking me to stop immediately or my account would be suspended. Take a look in what they wrote:

"...There has been news trading activity on your account and you have carried this out on quite a few occasions recently. You cannot carry on news trading, so please stop this immediately or your account will be suspended if this continues.

Here are a couple of the trades you have done, that are categorized as news trading:..."

Basically I was placing market orders (not straddling) during the first seconds the news were released.
I was not using MT4, but their C# API to do it. I wonder if using MT4 would be any different for them.

I would like to hear if others had the same problem with them. "
________
 
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The CEO did talk about arbitrage yes , but he did talk about news trading as well and he did separate between both issues , he was open and straightforward , so i dont know whats the discussion is all about its clear they dont like traders just trading news endex .
Another horrible review from another member :

________

i didn't get any warning email etc. i just couldn't enter the market by clicking a few times. i didn't write it here on my first experience on nfp. now today at cad news, it's third time i experienced this.

until the last month, i was seeing grayed feed, but it was accepting the orders even if the feed was grayed out. now they simply don't accept the orders around ten seconds or smt like that, they accept after prices arrive at the moon :)

i think i'll close my account next week, this is unacceptable for me. i cannot also trade technical with that kind of killing/manipulating approach..
_________
 
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DowJones said:
Still I know you don't do facts, just opinions...
Click to expand...

You didn't bring any facts to the table , just your own opinion/review , on the other hand i did quote the CEO himself it was clear and straightforward , and i did quote some bad reviews from others as a plus . You are wasting your time , no need to get tense because a certain broker or venue have been exposed , give your own review and move on .
 
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DowJones said:
Ok, I've just got back from the pub :) (hence the lack of replies to tar's posts)


Did you read my post above? No. Have you spoken to their risk manager? No. Do you know their exact policy on news trading? No. Have you traded multiple news events with them? No. Have you spoken to spot fx dealers at IB's & inter-dealer brokers regarding customer flow around major news events? No.
Well I fcking have. No doubt you know better tho...


Yes, you are fcking amazing - sorry I never saw it before. The CEO of LMAX clearly doesn't understand his own company. You are quite right, institutional FX is clueless. They must all be exposed - and you are the man to do it. Thank you.


I think everybody here knows I get personal whenever I read posts written by fckwits - it's not limited to you or topics involving LMAX. I'll be honest I don't like scammers or people who mislead others, and frankly that's why I don't like you.

However, please allow me to state this: I couldn't give a sh*t if anyone doesn't want to use LMAX or any other institutional quality broker. If you wish to lose more money, please carry on. Is that clear enough?

PS: For anyone who's still reading, I'd like to emphasise that I am trying to promote institutional quality brokers, of which LMAX is just one. I have also recommended Interactive Brokers and others (no doubt tar will tell us they're sh*t as well, because some tw*t on donnaforex said so).
Click to expand...

Just for balance, who do you like ? :LOL:
 
Personal , tense and wired up , i told you guys ;) .

And if we don't use LMAX he said we will lose ?! lol why ? What happened to trading futures with real legitimate exchanges like CME ... etc ? At least you wont face these shenanigans when you trade the futures - yes maybe if you trade the news some slippage and wider spreads but definitely no monkey business - .
 
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tar: can you tell more how exactly you traded? Did you wait for the first tick after the release and try to get a good fill? Or was the direction of your trade predetermined?

Wondering if they are ok with manual news traders. I suppose they woud be able to handle point&click flow? Then again you could also post stop orders ahead of the release.

It would be interesting to know their exact policy about this. If there is one, maybe they decide on a case to case basis, or only act when one of their lps complain.
 
DowJones said:
So tar's post here is a perfect example of someone who doesn't know what he's talking about. Basically he has taken LMAX's comments out of context - a classic case of "a little knowledge is a dangerous thing". How do I know? Because I've spoken to LMAX on this topic - in detail. (Also tar has posted much in the way of misleading info in other threads - which is a shame as I think he has an interest in trading topics, but seems more interested in trying to promote his own agenda than improving his own trading and/or helping others). Anyway onto the point in question..

No dealer in the FX world will want you to hit them fast and in size at a low liquidity period - like seconds prior to a news release. If anyone says differently they are lying. Period. So if that is all you do, you will be unwelcome at any venue.

Frankly, that is not how 99.9% of you trade. That is not the standard retail view of news trading. And that is why tar's post is misleading.

I have traded many news events with LMAX. It's been fine for me, them and their LPs. Do I try and screw the broker & banks - no. Do I trade properly, get 100% uptime, and instant execution (even at a high-impact time) yes. I'm happy to discuss further if anyone wants a sensible conversation.
Click to expand...

i traded the news tonight on LMAX. no problems experienced
 
DowJones said:
So tar's post here is a perfect example of someone who doesn't know what he's talking about. Basically he has taken LMAX's comments out of context - a classic case of "a little knowledge is a dangerous thing". How do I know? Because I've spoken to LMAX on this topic - in detail. (Also tar has posted much in the way of misleading info in other threads - which is a shame as I think he has an interest in trading topics, but seems more interested in trying to promote his own agenda than improving his own trading and/or helping others). Anyway onto the point in question..

No dealer in the FX world will want you to hit them fast and in size at a low liquidity period - like seconds prior to a news release. If anyone says differently they are lying. Period. So if that is all you do, you will be unwelcome at any venue.
H
Frankly, that is not how 99.9% of you trade. That is not the standard retail view of news trading. And that is why tar's post is misleading.

I have traded many news events with LMAX. It's been fine for me, them and their LPs. Do I try and screw the broker & banks - no. Do I trade properly, get 100% uptime, and instant execution (even at a high-impact time) yes. I'm happy to discuss further if anyone wants a sensible conversation.
Click to expand...

Hi,i fail to see how you are hitting the broker when the broker is there to pass on your trades to the liquity providers who then match your trades as you know there has to be a winnner and a loser it,s a negitive sum game.If any broker is refusing or not liking news trading then i suspect a Market Maker.Any decent ECN broker will just pass the trade.Mike
 
Has Anyone been Banned from LMAX for Trading Patterns ?

DowJones said:
So tar's post here is a perfect example of someone who doesn't know what he's talking about. Basically he has taken LMAX's comments out of context - a classic case of "a little knowledge is a dangerous thing". How do I know? Because I've spoken to LMAX on this topic - in detail. (Also tar has posted much in the way of misleading info in other threads - which is a shame as I think he has an interest in trading topics, but seems more interested in trying to promote his own agenda than improving his own trading and/or helping others). Anyway onto the point in question..

No dealer in the FX world will want you to hit them fast and in size at a low liquidity period - like seconds prior to a news release. If anyone says differently they are lying. Period. So if that is all you do, you will be unwelcome at any venue.

Frankly, that is not how 99.9% of you trade. That is not the standard retail view of news trading. And that is why tar's post is misleading.

I have traded many news events with LMAX. It's been fine for me, them and their LPs. Do I try and screw the broker & banks - no. Do I trade properly, get 100% uptime, and instant execution (even at a high-impact time) yes. I'm happy to discuss further if anyone wants a sensible conversation.
Click to expand...

HAS ANYONE ACTUALLY BEEN "BANNED" FROM LMAX FOR ANY SPECIFIC TRADING STYLE?

Two things, in particular, "News Events" and "Arbitrage" have been highlighted as candidates for suspending or banning accounts.

HAS ANYONE ACTUALLY BEEN BANNED?

HyperScalper
 
hyperscalper said:
HAS ANYONE ACTUALLY BEEN "BANNED" FROM LMAX FOR ANY SPECIFIC TRADING STYLE?

Two things, in particular, "News Events" and "Arbitrage" have been highlighted as candidates for suspending or banning accounts.

HAS ANYONE ACTUALLY BEEN BANNED?

HyperScalper
Click to expand...

Yes, there have been people who had their account closed. Their CEO said as much in interviews, its not a secret, and there were some complaining in forums about it.

They will give you one warning and close the account if you dont stop. However, they will not cancel any transactions.

Its my understanding that this pretty much only applies to pure automated latency arb tho. Trying to hit a LP who is a millisecond too late on a news release and such.
 
Pippi56 said:
Yes, there have been people who had their account closed. Their CEO said as much in interviews, its not a secret, and there were some complaining in forums about it.

They will give you one warning and close the account if you dont stop. However, they will not cancel any transactions.

Its my understanding that this pretty much only applies to pure automated latency arb tho. Trying to hit a LP who is a millisecond too late on a news release and such.
Click to expand...

I've spent more than 6 months on a specialist Java API app, and I am getting
paranoid that when we start trading with size; that we will violate one of the
"unwritten" rules and get booted. My fear sounds ridiculous, but there's no other
venue like LMAX and, as much as I hate being totally dependent on a single
brokerage source, there appears to be nothing comparable available anywhere
else... (not an advertisement, just a fact). It's likely to be a drug, and we don't
every want to get cut off. Wish other "real exchanges" would emerge.......

When we start doing hundreds of orders, with size; I wish there were some
guarantees we wouldn't be terminated for some arbitrary unwritten reason.

I said "arbitrary", not "arbitrage". We most certainly are not doing Arbitrage
and our latencies are in the 30 msec range; but we may do dozens of
simultaneous orders. So far, in testing only, there haven't been any problems.
They give us Wholesale fills, and it's amazing. JUST PARANOID that we might
lose this after putting so much effort into the platform.

Wish their "FCA regulation" had an appeals procedure to stop them from
unfairly terminating clients; but I understand the FCA doesn't work that
way.....

HyperScalper
 
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Pippi56 said:
Just give them a call..
Click to expand...

Who should I speak to who will give us a "guaranteed" and "real"
answer to the question of which client behaviors would be
undesirable to the point of banning that client?

Any others have real experiences, particularly with API trading
methods, where you were "warned" or banned ?

HyperScalper
 
Hyper, just trade futures via a real broker who doesn't care less what kind of a trading style you have.

Any broker telling ya what goes or doesn't go is just a clown masquerading as a bookie in a bucket shop.

I only trade futures and can do what I friggin like, when I friggin like, which is just the way it should be outsida loonie lala-land.
 
BSD said:
Hyper, just trade futures via a real broker who doesn't care less what kind of a trading style you have.

Any broker telling ya what goes or doesn't go is just a clown masquerading as a bookie in a bucket shop.

I only trade futures and can do what I friggin like, when I friggin like, which is just the way it should be outsida loonie lala-land.
Click to expand...

Yeah, thanks, been there and done that. I moved to Forex which has
100x the fine lot size granularity of FX Futures. What I mean is that the
minimum exposure on FX Futures 6E is $12.50 / tick . EUR/USD spot
minimum exposure is anywhere down to $0.10 / tick enabling multiple
entry, incremental trading to develop an equivalent position.

That's why I am in Forex, for Risk Exposure control, and Cost Basis
Averaging. In Futures, 1 contract is the lowest available transaction.
Effectively, theoretically Forex allows 0.01 equivalent futures contract
size or any level of exposure in the entire range.

HyperScalper
 
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THOSE WITH DIRECT EXPERIENCE, I'M STILL LOOKING
FOR ANYONE WHO HAS BEEN BANNED DUE TO NEWS,
ARBITRAGE OR OTHER ALLEGEDLY UNDESIRABLE
OR BANNED TRADING ACTIVITY, VIA API FOR RETAIL
CLIENTS.

LMAX posts documents such as this, indicating that
there is recourse to a Financial Ombudsman:

http://www.lmax.com/pdf/Complaints-Policy.pdf

As concerns News trading, I can't find a document which
expressly forbids either News or Arbitrage trading nor,
indeed, any specific trading activity. But, as these are not
part of my strategy, I guess I'll not worry about it.......

There is a vague reference to "activity which adversely
affects the orderliness or function of the MTF". As if
a small retail operation could affect the exchange adversely...

HyperScalper
 
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There is no such document. But lmax can decide to close your account without giving you a reason, just like you can close the account without needing to do any explaining.

Bottomline is that lmax had to agree to "police" their exchange for toxic flow, otherwise LPs would not have agreed to post firm quotes w/o last look. So if LPs start to complain you may have a problem.

But i doubt that you posting limits between the BBO can possibly be interpreted as toxic. On the contrary, adding liquidity benefits the marketplace (and lmax directly too, because for client to client orders lmax collects more fees. LPs dont pay fees to lmax for passive executions).
 
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