As a retail trader the only real ECN access you really have is to trade FX futures. Everything else is just a lie.
HI
If you are worried about this ECN non ECN ( conflict of interest / transparency etc) why not consider EXCHANGE TRADED currency futures!Leverage 1:20 ( or more if day trading) / True Exchange / Availability of other currency derivatives like Option on Currency futures / Currency ETF s etc / Normal 100K and mini 10K contracts much better than OTC FX riddled with all these issues and dodgy operators
The trading environment and market participants can be very different when comparing the futures market to FXCM's No Dealing Desk (NDD) forex execution, and it's important to understand how that could impact your trading.
Market participants in futures such as high frequency trading and similar highly sophisticated market makers are acting as both price makers and price takers. This can negatively impact quality of execution for a retail trader. That's because it's a speed race at the institutional level. If you break up the trading steps, at a very basic level, from receiving market data, making a trading decision and then placing the trade, institutional participants are trading in speeds measured in microseconds and even nanoseconds compared to a retail trader making trading decisions that take at least a few seconds.
HFTs on exchange spend millions of dollars on the fastest access to market data, customized computer systems for fast algo processing, and collocated servers to transmit trades as quickly as possible. You can read about the lengths institutional participants will go to by reading Flash Boys by Michael Lewis or take a look at the amounts of money being spent on telecommunications and collocation services by publicly traded market making firms such as Virtu. Institutional participants at the futures level put such a high priority on speed because in a trading venue filled with these super‐fast traders, the slowest person loses the race to be the first to trade.
Therefore, a safer route for institutional liquidity providers to take is to quote smaller sizes at wider prices to minimize margin of error of being picked off. Mistakes are very costly. If your algorithm is wrong, it's better to be wrong at a smaller amount and wider price. The risks involved make market making a fishing expedition based on speed where quality pricing and liquidity could be punished. The competition in the highly sophisticated institutional market is too great to provide the best pricing possible along with deep liquidity if the institution is exposed to the risk of being picked off by other fast and sophisticated market participants.
So if you're the average retail trader likely receiving information from a website or TV channel, over a regular cable internet line, manually placing trades from your average desktop computer, back over our internet connection with any latency involved, do you think you're going to beat the Virtu's of the world for the best price available?
How is FXCM's trading environment different?
On our NDD model for Standard and Active Trader accounts, liquidity providers are only allowed to be price makers and not price takers. Only retail clients are allowed to take pricing. The liquidity providers do not have to constantly watch their back, worrying about predatory high frequency trading because the liquidity providers are only allowed to be price makers for our retail clients. They know that liquidity provider A (who may be a predatory liquidity provider on the futures market) is not allowed to crossover and take a price from liquidity provider B. This gives our liquidity providers the ability to make a market based on quality of price and liquidity rather than speed to protect against being picked off by predatory trading from other liquidity providers.
FXCM also provides Mini accounts with a dealing desk (DD) offering in which we act as the liquidity provider. This execution option is offered on smaller accounts in order to manage the risk. It's worth noting the base price used for DD execution on Mini accounts before adding the spread markup is the same base price used for NDD forex execution with the spread + commission pricing model. That's a key reason you can have confidence trading with FXCM regardless of the account type you choose.
