Direct Access for Forex???

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belflan

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Is there a direct access type of trading for Forex & Commodities markets?

If there is, how does it work?

I understand there are direct access CFD’s for UK shares, and this takes away the opportunity for Spread Bet firms to rip you off (I’m a bit paranoid about this after reading a few other threads on T2W, should I be?)

Is it worth looking at “direct access”?

If you don’t know you don’t know :confused:
Glen
 
there is no central exchange for forex as such, although the CME is trying to launch something along those lines.

At the moment, the closest thing to direct access for Forex would be the ECN type wholesale currency systems as run by Lava, Hotspot and Currenex, to name a few of the bigger platforms.

They are not exactly geared up for retail traders however, unless you are a big player. The next best thing for retail access would probably be Interactive Brokers "ideal-Pro" currency ECN - although I had heard somewhere on this board that they may still requote you occasionally, if thats true then its not a true ECN by the strictest definition but probably about the closest thing to "direct access" as exists in the forex world if you dont have tons of cash.
 
Yes, there are direct access forex brokers. They are commonly referred to as being an "ECN type model" as opposed to being a market maker. They take the highest bid and the lowest ask price from several banks and combine them to give their clients the best possible price. These brokers typically charge a commission for their service, although there is one broker(PropFX) that adds one pip to the spread. I believe that most traders choose to trade with an ECN because the broker is not taking the other side of your trade, therefore there is no "conflict of interest" between the broker and the client. Here are some ECN brokers that I'm aware of.

coesfx
hotspotfx
interactivebrokers
mbtrading
propfx
 
Last edited:
Arbitrageur said:
there is no central exchange for forex as such, although the CME is trying to launch something along those lines.

At the moment, the closest thing to direct access for Forex would be the ECN type wholesale currency systems as run by Lava, Hotspot and Currenex, to name a few of the bigger platforms.

They are not exactly geared up for retail traders however, unless you are a big player. The next best thing for retail access would probably be Interactive Brokers "ideal-Pro" currency ECN - although I had heard somewhere on this board that they may still requote you occasionally, if thats true then its not a true ECN by the strictest definition but probably about the closest thing to "direct access" as exists in the forex world if you dont have tons of cash.
Click to expand...


Thanks for the post Arbitrageur

Looking at your photo on your profile how d’feck do you look at so many screens at the same time?!? :cheesy: :cheesy:

I’ve down loaded the hotspot demo platform and I’ll looking at the bid/offer spread with GBP/USD. Sometimes the spread on Hotspot is tighter than the spread on CMC sometimes the spread on CMC is tighter than Hotspot (mostly CMC is tighter than Hotspot.)

What’s this telling me?

Is ECN only worth looking at if you are going to trade within the spread?

Is ECN worth looking at for a beginner (account size approx 50K sterling?) or is spread betting the way forward for now? :rolleyes:

Thanks again
Glen
 
WaveMaster said:
Yes, their are direct access forex brokers. They are commonly referred to as being an "ECN type model" as opposed to being a market maker. They take the highest bid and the lowest ask price from several banks and combine them to give their clients the best possible price. These brokers typically charge a commission for their service, although there is one broker(PropFX) that adds one pip to the spread. I believe that most traders choose to trade with an ECN because the broker is not taking the other side of your trade, therefore there is no "conflict of interest" between the broker and the client. Here are some ECN brokers that I'm aware of.

coesfx
hotspotfx
interactivebrokers
mbtrading
propfx
Click to expand...

Thanks for the post WaveMaster

I’ve been looking at the Hotspots demo (for now), I will be checking out the rest in the next few weeks.

Are these ECN brokers you've stated all US brokers?

Do these brokers take on British customers? (If you can answer this great! If not I’ll look into it in the coming weeks)

Many Thanks again
Glen
 
belflan said:
Thanks for the post Arbitrageur

Looking at your photo on your profile how d’feck do you look at so many screens at the same time?!? :cheesy: :cheesy:

I’ve down loaded the hotspot demo platform and I’ll looking at the bid/offer spread with GBP/USD. Sometimes the spread on Hotspot is tighter than the spread on CMC sometimes the spread on CMC is tighter than Hotspot (mostly CMC is tighter than Hotspot.)

What’s this telling me?

Is ECN only worth looking at if you are going to trade within the spread?

Is ECN worth looking at for a beginner (account size approx 50K sterling?) or is spread betting the way forward for now? :rolleyes:

Thanks again
Glen
Click to expand...

I'm not a forex trader, so maybe others can help you better than I can.

My opinion would be that you are better trading on an open platform such as an ECN than you are trading against a spreadbet firm like CMC - simply because of the problems they will give you through the tricks these firms play to maximise their profits, such as market skew, requoting, not being able to enter orders in volatile fast markets, systems going down etc.

£50k is not a "small" account by most beginners measures. you might want to check out the Interactive Brokers IdealPro ECN for currencies as its simple getting an account open with them and they have a UK office. you can trade mini lots on there apparently and the spread is often only 1-2 pips, plus whatever commission IB levy.
 
CoesFX

Does anybody know anything about the brokers, CoesFX or have experience trading with them? I would like to hear your opinion. Thanks.
 
I'm actually not a big fan of them. After I posted their link, I thought that I probably shoudn't have done that. They were just one of the brokers I was doing some research on. From what I know it seems they might have the highest commissions out of all the brokers I listed. Also their web site seems to be partially inoperable (at least on my end). They also have some regulatory actions against them by the NFA and CFTC. And they don't respond to e-mails asking simple questions about trading conditions (I e-mailed them twice). Out of the brokers I listed Interactive Brokers is probably the best.
 
WaveMaster said:
I'm actually not a big fan of them. After I posted their link, I thought that I probably shoudn't have done that. They were just one of the brokers I was doing some research on. From what I know it seems they might have the highest commissions out of all the brokers I listed. Also their web site seems to be partially inoperable (at least on my end). They also have some regulatory actions against them by the NFA and CFTC. And they don't respond to e-mails asking simple questions about trading conditions (I e-mailed them twice). Out of the brokers I listed Interactive Brokers is probably the best.
Click to expand...

Thanks, WaveNaster. Your frank opinion has saved me some money. CoesFX caught my attention when I read that they were expanding into Asia where I am living. But I also read that they were having legal problems in June 2005, and I wondered about the outcome. Thnaks again for your input.

http://www.nfa.futures.org/basicnet/Case.aspx?entityid=0314715&case=CV+05+2547&contrib=CFTC
 
belflan said:
Is there a direct access type of trading for Forex & Commodities markets?
Click to expand...
For true direct access and ultimate transparency you might consider the fx futures markets, on GLOBEX. The major pairs trade with just a pip or 2 spread. Costs of trading compare well and the price you trade at moves almost tick for tick with the cash market.
 
Currency Futures

peto said:
For true direct access and ultimate transparency you might consider the fx futures markets, on GLOBEX. The major pairs trade with just a pip or 2 spread. Costs of trading compare well and the price you trade at moves almost tick for tick with the cash market.
Click to expand...

Here's an educational link re currency futures:

http://www.cme.com/edu/
 
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