Discussions on new traders

[Magos]

Question: What are new traders looking for in a BROKER/DEALER especially for FOREX and CFDs.


I would appreciate to get your inside on this guys.


Examples can vary such as: segregated accounts, margin, stop-out levels, education, etc.

 

[Liquid validity]

Question: What are new traders looking for in a BROKER/DEALER especially for FOREX and CFDs.


I would appreciate to get your inside on this guys.


Examples can vary such as: segregated accounts, margin, stop-out levels, education, etc.

For me, UK based - easier to deposit and withdraw, lower connection latency
as server is UK, low spreads, UK regulation (inc. FSCS).
Fast fill speed, little or no designer slippage, can connect a decent external platform.
For me that means LMAX.
Others would be EBS, CapMar and Currenex.

 

[Magos]

reply1

For me, UK based - easier to deposit and withdraw, lower connection latency
as server is UK, low spreads, UK regulation (inc. FSCS).
Fast fill speed, little or no designer slippage, can connect a decent external platform.
For me that means LMAX.
Others would be EBS, CapMar and Currenex.

Very nice reply; but still why UK/ FCA and not any other jurisdiction?

Let's share some insides to the guys seeing this post.

 

[Liquid validity]

Very nice reply; but still why UK/ FCA and not any other jurisdiction?

Let's share some insides to the guys seeing this post.

For me main reason is USA brokers generally mean wire transfer only for me.
My bank for some bizarre reason does not offer GBP wires to USA over internet,
phone only, and I don't want margin deposit in USD.
UK broker means debit card transfer and back to card or BACS to account.
Connection latency:
http://www.speedtest.net/

Check the ping (time lag) from same UK location to NY/ Chicago broker,
and a London broker.
Lower with a broker in London.
Not an issue for most maybe, but responsiveness of platform is certainly noticeable.

Thats just a personal thing.
Nothing whatsoever wrong with most decent regulated USA brokers (none bucketshop).

 

[Shakone]

Why the interest in 'new' traders?

For me it's everything that Liquid Validity said, plus reliability of connection (down for more than 5 minutes during the trading day is not really good enough - except at rollover), plus reasonable overnight financing, plus low commissions, plus accurate price

 

[Magos]

this is become a good discussion post; with highlights of:

- Cheap transfers
- Speed
- Reliability

 

[NVP]

this is become a good discussion post; with highlights of:

- Cheap transfers
- Speed
- Reliability

wait for the punchline..........its coming

 

[Magos]

reply2

wait for the punchline..........its coming

No punchline here, sorry!
just interested from a qualitative side of things to find out:

What in General new traders want and how I / we can help them get it!

 

[malaguti]

how I / we can help them get it!

..is the punchline

 

[Magos]

reply3

..is the punchline

nice

 

[Purple Brain]

Narrow spreads have been mentioned, but I'd be willing to pay slightly wider spreads for a broker with a reasonable policy with regard to spread differentials on increased volatility.

OANDA 2.4 spread on nzd/jpy is fine, but not when it hits 30 under stress. I'd be willing to pay say 5 pips for a fixed spread on that pair, for instance.

It would be one less issue to have to manage around and one less thing to have to think about when managing a live trade.

The extra income they made from taking double the normal spread on every trade I take would offset any exposure they took on during the infrequent exposures to high volatility events. Obviously they have the financial modelling to calculate just what they'd need to charge - wouldn't necessarily be double - to cover themselves, but you get my drift.

 

[Liquid validity]

Narrow spreads have been mentioned, but I'd be willing to pay slightly wider spreads for a broker with a reasonable policy with regard to spread differentials on increased volatility.

OANDA 2.4 spread on nzd/jpy is fine, but not when it hits 30 under stress. I'd be willing to pay say 5 pips for a fixed spread on that pair, for instance.

It would be one less issue to have to manage around and one less thing to have to think about when managing a live trade.

The extra income they made from taking double the normal spread on every trade I take would offset any exposure they took on during the infrequent exposures to high volatility events. Obviously they have the financial modelling to calculate just what they'd need to charge - wouldn't necessarily be double - to cover themselves, but you get my drift.

I've tested that with LMAX, not conclusively with a large sample size I have to say,
all the same, my observations were very encouraging.

I tested by trading news spikes (note - I don't generally recommend this, but its
probably the best way to test a broker for spread widening and slippage).
Spreads widened to about 0.5 at worst from typical 0.3 EU spread.
Slippage - zero, tested with 10 SL, verified with external feed as completely accurate at 1 tick level.
Not conclusive as I say, but so far LMAX seem extremely good on that front.

Spreads widening and slippage are unavoidable anyway, you just don't want
additional one sided manipulation from the broker.
manipulation by the broker.

 

[Purple Brain]

Had a quick look at LMAX yesterday when OANDA hit the skids and looks half decent. A little concerned I couldn't find out how to order the pairs list or add additional pairs. Even more concerned when their helpdesk didn't know either. But if their spread action is as you say, that would be a minor inconvenience I'd be willing to put up with.

 

[Liquid validity]

Had a quick look at LMAX yesterday when OANDA hit the skids and looks half decent. A little concerned I couldn't find out how to order the pairs list or add additional pairs. Even more concerned when their helpdesk didn't know either. But if their spread action is as you say, that would be a minor inconvenience I'd be willing to put up with.

If you mean web platform, add them to watchlist, don't think you can
sort by order though, think its just alphabetical, not sure.

Either of these will connect to LMAX, instead of using web platform.
http://www.multicharts.com/se/ - free, only 2 instruments though.
http://www.sierrachart.com/index.php?l=doc/Packages.php#Table - package 3 or 5
http://www.sierrachart.com/index.php?l=doc/LMAX.php

 

[Magos]

From some conferences I have been personally LMAX was suffering on the following statment:

Now they even have it in the website:
Firm limit order liquidity with no ‘last look’ rejections more
LMAX Professional runs an open order book (up to 20 levels of depth via FIX), driven by streaming no ‘last look’ limit orders supplied by liquidity providers, ensuring transparent price discovery and true cost of trade for every matched order.
Market participants are free to enter their interest to be worked in the market. close

Overall LMAX idea is a very good idea, but the MT4 domination on retail is another thing to factor in.
I guess that is why OANDA moved towards MT. Traded before with OANDA, slippage on execution (I can say), not the best trading experience but very good brand name (especially in academia).

This brings us to another topic for our audience: Instant Execution Vs. Market execution; does it matter ?

Instant Execution: Re-quotes and price guaranteed up to a certain level.
Market Execution: Swiping the limit order book (slippage on order usually above 2 Million i.e. 20 lots).

 

[Shakone]

From some conferences I have been personally LMAX was suffering on the following statment:

Now they even have it in the website:
Firm limit order liquidity with no ‘last look’ rejections more
LMAX Professional runs an open order book (up to 20 levels of depth via FIX), driven by streaming no ‘last look’ limit orders supplied by liquidity providers, ensuring transparent price discovery and true cost of trade for every matched order.
Market participants are free to enter their interest to be worked in the market. close

Overall LMAX idea is a very good idea, but the MT4 domination on retail is another thing to factor in.
I guess that is why OANDA moved towards MT. Traded before with OANDA, slippage on execution (I can say), not the best trading experience but very good brand name (especially in academia).

This brings us to another topic for our audience: Instant Execution Vs. Market execution; does it matter ?

Instant Execution: Re-quotes and price guaranteed up to a certain level.
Market Execution: Swiping the limit order book (slippage on order usually above 2 Million i.e. 20 lots).

When are you going to recommend some unregulated broker (or one that is regulated in Mauritius or Estonia or something)? The forum seems to be crawling with that at the moment.

 

[Magos]

When are you going to recommend some unregulated broker (or one that is regulated in Mauritius or Estonia or something)? The forum seems to be crawling with that at the moment.

I am not planning to recommend any broker - Shakone

 

[Magos]

Day 1 - Summary

retail traders care mostly about:

1. Easy/friendly interface for deposits and withdrawals
2. Cheap payment systems, with flexibility i.e. cards, paypal as an alternative to wire transfers
3. Speed in connection and execution
4. Regulation is vital, unregulated brokers causes concerns (!)
5. Execution without slippage is an advantage (having people not understanding the difference between market and instant execution)
6. Fix spreads are good, but in case of dynamic/variable spreads a policy should state what are spikes
7. Help desk ability to understand the trader, people who answer calls do not do their homework and do not follow up on traders

Very interesting results, looking forward for day 2.

 

[Purple Brain]

Day 1 - Summary

retail traders care mostly about:

6. Fix spreads are good, but in case of dynamic/variable spreads a policy should state what are spikes

I think something got lost in your summary.

OANDA have a clear policy backed up with historical data to fully illustrate what spreads are likely to max out at - a very clear policy. One I don't like.

My preference was as stated in an earlier post - to have fixed spreads at ALL times, acknowledging they would have to be larger to compensate the broker for increased exposure during periods of higher volatility.

 

[DitterPD]

Day 1 - Summary

retail traders care mostly about:

1. Easy/friendly interface for deposits and withdrawals
2. Cheap payment systems, with flexibility i.e. cards, paypal as an alternative to wire transfers
3. Speed in connection and execution
4. Regulation is vital, unregulated brokers causes concerns (!)
5. Execution without slippage is an advantage (having people not understanding the difference between market and instant execution)
6. Fix spreads are good, but in case of dynamic/variable spreads a policy should state what are spikes
7. Help desk ability to understand the trader, people who answer calls do not do their homework and do not follow up on traders

Very interesting results, looking forward for day 2.

What about free candy being sent to your address right after your first deposit?