dbfx - Market maker or ECN?

[GammaJammer]

Well I always thought DBFX was a white label of FXCMs liquidity. You trying to tell me this isn't so? Just because it has the DB badge on it, doesn't mean it's guaranteed to be the same as autobahn but in miniature. It doesn't really matter to me as I don't trade retail FX but you may want to check your facts. Alternatively, if I'm demonstrably wrong I apologise.

 

[oildaytrader]

Well I always thought DBFX was a white label of FXCMs liquidity. You trying to tell me this isn't so? Just because it has the DB badge on it, doesn't mean it's guaranteed to be the same as autobahn but in miniature. It doesn't really matter to me as I don't trade retail FX but you may want to check your facts. Alternatively, if I'm demonstrably wrong I apologise.

GJ


DBFX started using the same platform and online chat services as FXCM .It is owned by Deutsche Bank .There is no evidence on the net to suggest DBFX is owned by FXCM or a white label of FXCM.It is like all the brokers using metatrader and metatrader programmers, does it make a new broker using Metatrader /metatrader programmers a white label of existing brokers? No it does not.

Deutsche bank realised the increase in volume on FX trading profits and put emphasis on FX .DBFX orignally started with minimum full lots , at a time when FXCM was trading mini and micro.The daily volumes have increased from $1tn to $3 tn.

Spreads on FXCM are wider

I would like to see some proof of white label.

ODT

 

[GammaJammer]

I'm not saying DBFX is owned by FXCM. That's not what white labelling means. I'm saying that as far as I was aware DBFX didn't derive either it's liquidity or it's infrastructure from Deutsche Bank, and instead Deutsche had effectively bought itself a retail 'out of the box' solution, effectively outsourcing the management of that business to FXCM whilst badging it as their own.

That was my understanding anyway. But as I don't trade on either venue for obvious reasons, I can't say I paid it all that much attention.

GJ

 

[oildaytrader]

G J

It is unlikely Deutsche bank is a white label with its $600bn a day volume ,and DBFX is deutsche bank .Just go on this its site and read the details on preferred brokers

If anything FXCM could be a white label with its lower volumes, but it isn't

O D T

 

[GammaJammer]

Unlilely, so why would I say it then? Maybe, just maybe, there's something in it........

 

[oildaytrader]

Unlilely, so why would I say it then? Maybe, just maybe, there's something in it........

Download both demo platforms, each one on a separate computer and open the screens side by side and see for yourself.Notice the volatility, spreads,test them both out on pending limit orders, gaps in prices , execution on live accounts,slippage,stop hunting (if any),load a special software to test delibrate slippage infliction strategy (if any).

Report back and post your findings .Interesting thing here is to look for who ,if anyone is using a custom virtual dealer plug in and who (if anyone) is aiming to fill in price gaps.

After these observations , we will know the answers

O D T

 

[GammaJammer]

No thanks - I think I'll just get on with some work this morning. Feel free to do so if you like and report back. But having actully taken a quick squint at the website, I notice they offer 'hedging'. Oh dear. Real low end stuff that. Plus the look and feel is nothing like what the Autobahn front end looks like.

White label I say. What I don't quite get is why. Speed to go to market I guess.

 

[oildaytrader]

White label I say. What I don't quite get is why.

G J

Shame if it is true , ,because she would be another of Refco's little daughters.

Now I wouldn't be able to sleep at night, should have told me that.The Germans must be beserk guaranteeing Refco's blood.

On a more serious note , those who do not understand how successful mechanical strategies work will look down on hedging. Successful sophisticated Multiple Mechanical strategies working together produce long and short orders on fx accounts.When putting on the trades , automated systems do not know the outcome of any trade and have limited criteria per system/trade.

I can understand why manual traders would be clueless if they traded longs and shorts.
If trader's are dealing with Refco's shining , and god forbid "HERE IS YOUR JOHNNY REFCO", they have to guard against stop hunting.One way scalpers protect their interest against stop hunting ,in ranging markets, is to place longs and shorts at the same time.
They really need the hedging to gaurd against bucket shop tactics against scalpers.

O D T

 

[GammaJammer]

http://www.trade2win.com/boards/forex-strategies-systems/33087-hedging.html

It really is that simple. If you simultaneously go long and short you are FLAT. You have no position. End of story, no debate here. Everything else is merely how you account for P+L.

But those who can't see that maybe should consider another career. No offence.

 

[Jemima]

FXCM bought the retail arm of Hotspot fwiw

 

[oildaytrader]

http://www.trade2win.com/boards/forex-strategies-systems/33087-hedging.html

It really is that simple. If you simultaneously go long and short you are FLAT. You have no position. End of story, no debate here. Everything else is merely how you account for P+L.

But those who can't see that maybe should consider another career. No offence.

G J

No discussion , but explain to me what is wrong if anything.

Two different automated systems are at work on same currency pair, one system is a contrarian system and another system is a trending system, both are intraday systems and both are triggered at different levels and times.The net effect is zero.

There is no way to close one system and decide which system should remain open, since we are trading probabilities , both have equal probabilities.Without human intervention , we let BOTH the systems keep trading against those daft rules by nfa.

Fortunately this is working very well for me, and my actual returns are in line with the most successful hedge fund manager, simulated returns over 8 years are twice those of the best performing hedge fund managers.

Why should I listen to the hedge fund managers who are possibly looking to be members of the 5% club?

O D T

 

[GammaJammer]

There's nothing wrong with doing it, it's when people start ascribing a 'technical' term to it and claiming this stuff is a strategy in and of itself. If you have two systems and once sends out a buy signal and one a sell signal then by all means trade them. But usually when people talk about this stuff they start blabbering on about risk management and how hedging is guaranteeing that 'one leg of the trade will be in profit, just close the leg that isn't' etc. An awful lot of guff basically.

And as with many other things, when the uninformed retail crowd appropriate a piece of market terminology ('hedging') and use it incorrectly to describe something completely different, very rarely does anything productive come of it.

That's why I am really surprised DB chose to lower themselves this way. I personally think it devalues an excellent brand, but then again I don't get to decide DB's commercial strategy for them

 

[oildaytrader]

That's why I am really surprised DB chose to lower themselves this way. I personally think it devalues an excellent brand, but then again I don't get to decide DB's commercial strategy for them

The idea behind hedging capabilities is to allow traders as much flexibility as they want to trade multi strategies.The NFA rules class holding long and short positions as hedging, although the trader may be operating sophisticated multiple strategies AND NOT HEDGING ANYTHING.

O D T

 

[lurkerlurker]

You cannot hold simultaneous long and short positions in the same instrument, settlement, and value. You are not hedged, you are flat. You have no position. This "hedging" is nonsense invented by disreputable brokers so they can charge you even when you have no position. The NFA have banned it because it is fraudulent.

Pay attention to what GammaJammer is saying. He is correct, and he is trying to help you. I would respectfully suggest that if you are operating multiple strategies that are so "sophisticated" you do not know your net position you ought to stop.

(Or you could get a job at an IB repackaging and selling debt instruments - you don't need to know the net exposure there either. Or you could go work for Moodys and rate products without understanding what they are exposed to. I hear that job isn't as secure as it used to be though...)

 

[GammaJammer]

I didn't say people shouldn't do it, just don't bother thinking it's something it isn't. If it's the best way to achieve what you want to achieve then cool. Just eb under no illusions that you are anything other than flat at that point.

 

[oildaytrader]

I would respectfully suggest that if you are operating multiple strategies that are so "sophisticated" you do not know your net position you ought to stop.

L L

I know what G J is saying and he is correct , but we are not hedging either by using multiple strategies.

We always know what our net positions are and what our gross and net risk exposures are .We are not hedging , because all our trades have stops.In an ideal hedging situation no stops are used, one position hedges the other.

Maybe using multiple strategies should be classed as hedgingI am applying to the NFA for job of implementing and educating on hedging cum multiple strategies

O D T

 

[GammaJammer]

Well if your strategies show some sort of a correlation it's some sort of a hedge I suppose.

 

[oildaytrader]

Well if your strategies show some sort of a correlation it's some sort of a hedge I suppose.

I agree with you .

Each of our 12 main strategies has no correlation to any of the other strategies, they are all independent,and strategy order has its own risk of loss ,fixed by stop losses.

Hedging is management of trades used in limiting or offsetting probability of loss .Each strategy does not attempt to reduce or offset risk ,of any of the other strategies.

We do try and spread the risk by trading a portfolio of strategies, but it isn't hedging.It is called diversifying risks to many systemsYou could argue investing my shares in one company and diversifying them is called hedging.

Now why am I accused of hedging , when I am not hedging ?

O D T

 

[GammaJammer]

Read the posts - Im not sure anyone is accusing you of hedging. I know I mentioned hedging, but only in the context of how amateurish and low-end it made Deutsche Bank look in my opinion to even be talking like that on their website. Made the worlds top FX bank look like a bunch of two bit clowns, which, based on all the people I know there, some of whom are VERY smart, I assure you they're not.

 

[oildaytrader]

Read the posts - Im not sure anyone is accusing you of hedging. I know I mentioned hedging, but only in the context of how amateurish and low-end it made Deutsche Bank look in my opinion to even be talking like that on their website. Made the worlds top FX bank look like a bunch of two bit clowns, which, based on all the people I know there, some of whom are VERY smart, I assure you they're not.

G J

I am not sure it looks amateurish because they are looking at providing traders what they want.They call it hedging because the bureaucrats have labelled simultaneous long and short trades as hedging , when not all such positions are for hedging.

They are not the two bit clowns from Harvard business school ,who blew up Merril Lynch,Bear Stearns ,Citi , Lehman leaving Goldman and J P for tax payer saviours.At least Deutsche did not need those saviours like Hank Poulson an old boy of Goldman.

They are smarter than the rest

O D T