The "Best In FX" Awards: 2010!

[TraderNumber7]

I've just put together my annual (2010) "Worth a Second Look" list of FX Intermediaries for Retail and Institutional as well as Stand Alone Trading Platforms. I will also present my "Most Improved Intermediary" and the "Most Relevant Retail FX Technology" awards at the very end.

Comments welcome from all quarters - this is just for fun - not etched in stone, just my picks, that's all.

Disclaimer:


I do not profess to know all there is to know about trading, money management and/or the international currency markets.

I am not a guru - nor do I subscribe to guru status or lean on any other proclaimed guru.

I do not proclaim this list to be 100% accurate, all inclusive or indicative of what any singular or group of individuals should or would subscribe to.

I have no relationship (of any kind whatsoever) to any FX Intermediary contained within this list and have only on occasion downloaded and used the demonstration platform of one or more of the Intermediaries contained within this list.

I am not a paid actor, but I did once sleep at a Holiday Inn Express Hotel. And, there you have it - my disclaimer.


My Top Six (6) Picks for 2010 for Retail FX Intermediary:


6th Place:



5th Place:



4th Place:



3rd Place:



2nd Place:



1st Place:




My Top Five (5) Picks for 2010 for Institutional FX Intermediary:


5th Place:



4rd Place:



3rd Place:



2nd Place:



1st Place:



My Top Four (4) Picks for 2010 for Stand-Alone FX Trading Platform:


4th Place:


(Note: Just announced on January 5th, 2010, that FXall will buy Citi's LavaFX trading platform. The move being made by the Electronic side of the FX business are becoming more and more interesting by the month.)


3rd Place:



2nd Place:



1st Place:



So, there you have it. Just one man's opinion, of course and my criteria for selecting Intermediaries may not be yours, so results may indeed vary - as the saying goes.

A couple personal notes:

1) Though I did have to finally "get over" the whole dbFX/FXCM thing, I could not get over the fact that Deutsche Bank is still the 800lb. Gorilla in the entire world of FX right now. So, whether you trade on FXCM or dbFX, or anywhere else "Retail" for that matter, you are most likely running into at least some of the pricing and/or pool allocations from Deutsche Bank.

They are simply too big ignore at this point and I don't see that changing in the near term. Given that fact, I could not deny them the place they presently hold in the market - they are huge, plain and simple when you break down the numbers.

2) I have a personal bent towards working with banks on mission critical applications. That has a lot to do with my previous career. So, that is why I feature banks overall, more so than any other type of Intermediary. A personal choice.

3) Though I am a huge fan of Currenex and if forced to do it, I can find a way to get by with HotSpot's user interface, as far as the Stand-Alone Trading Platform award for 2010 goes, I simply could not ignore the amazing work that went into the ProTrader Multiple Broker AND Liquidity Provider platform, called PT Multistation! I've seen links to their sight but never bothered to look until I started to put together my "Top" list for 2010.

The irony to this pick is the fact that, just as I was doing my research on Stand-Alone Platforms, I asked myself the question of why nobody had thought of designing a Trading Platform that enabled live connections to any Broker or Intermediary of the Traders choosing! No sooner than I had the thought, I came across the link to ProTrader and their PTMultistation. If you are a Retail Trader, you might find this one pretty darn cool!

4) Regarding Saxo Bank.

I am reminded of the old commercials: "She's come a long way baby." Well, that pretty much sums it up for me on this pick. There is a ton of hype out there about Saxo and a fair amount of it is negative. But, I've had my eye on these guys ever since they became a bank and started offering FX. I always recognized them as a solid "concept" but lacking good execution for providing FX services. I thought they were trying to do too much at one time.

However, I must say that something has changed at Saxo in my opinion. They have re-tooled some of their back-end to improve multi-trader execution performance into the liquidity pool and they have finally included their relatively new FX Options Board, allowing for some fairly creative Spread Trades using either options alone or a combination of Spot and Option covers. So, given their forward momentum and an apparent desire to "do better," I thought that they deserved the number 1 spot this year.

Now, for special awards.


Most Improved FX Intermediary goes to:

SAXO Bank - for their back-end performance improvements and inclusion of interoperable options strategies within the same robust trading platform, while still maintain wide access to other trade-worthy instruments.



Most Relevant Retail FX Technology goes to:

ProTrader's PT Multistation - for their outstanding creativity, vision and strong sense of what traders needs are today and into the future, by improving freedom of access to broad liquidity, in a Broker and Intermediary agnostic platform that is very well appointed and functionally literate enough to serve the needs of both the Retail and the Institutional trader.


Well, that's it from the floor of my virtual convention center. Join me in 2011, for the next "Best in FX" awards!

TradeSMART by properly Managing your positions. :smart:


Oh! Sorry. I forgot to hand out the "Worst In FX" Award:

The CFTC - for absolutely having no clue about what the Forex is all about and for attempting to run a perfectly good Industry directly into the ground at Mach 1. Congratulations CFTC! You are a "Winner!"

 

[yakatan]

I was thinking of opening a mini account with dbfx would you say that saxo would be more suitable?

 

[neil]

DBFX

I confirm that I understand that:

The minimum amount required to open an account is $5,000.00 USD or foreign currency equivalent.

Arn't they using the FXCM platform ?

 

[TraderNumber7]

I was thinking of opening a mini account with dbfx would you say that saxo would be more suitable?

I don't like Saxo's past business dealings before it became Saxo Bank. However, that being said, I did indicate that I thought they had done a decent job of cleaning that up and setting the record straight. As far as I know, the issues revolving around both Kim Fournais and Lars Seier Christensen, under Midas (the mother company of Saxo Bank) have been forwardly resolved. Whether or not People change in their heart of hearts, is quite a different story.

Saxo Bank has come a long way according to my research. A very difficult to overlook past in the 90's to major business success, growth and development from 2000 through 2010, Saxo Bank seems to have gotten its act together in several different ways. A new CEO at the helm helps with credibility, given the self inflicted wounds of the 90's. Landing the Nordic division of E-Trade and the Citi Bank FX deal, were important credibility building points as well. Adding a full array of FX Pairs as well as the new FX Options Board, not to mention access to other trade-worthy items such as Precious Metals - including Gold and Gold Options; causes me to give the nod to Saxo Bank overall for Retail newbies and Commercial FX accounts.

I do not come to my decision about Saxo Bank lightly, given their very questionable past. However, People do deserve a second chance and the full details of exactly what happened are sketchy at best. Both Lars and Kim have had some questionable business connections almost two decades ago, but seem to have at least put up a good front for having turned the corner over the last decade and have attracted series business models such as Citi Bank and some sizable private equity buy-ins.

So, I feel confident in keeping them on my list of 2010 Best in FX Awards. However, like I always say, do your OWN homework. Study for yourself and make your OWN decisions. This is YOUR business and you have to live with it each day. Given the playing field that is out there and the players involved in the game, Saxo Bank sits atop my own personal list for Retailers in FX. If they change their tactics, then I will change my opinion.

Now, dbFX was listed in Second (2nd) Place in my list above, but someone decided to remove the link and I don't feel like hunting down the graphic file location again. So, yes, dbFX did make my list despite their lying to me about not using FXCM hardware. They are my #2 Retail FX Intermediary. They should be my #1, but they blew that by failing to tell me the truth about their business relationship with FXCM, an FX Broker that I don't like for a myriad of rock solid reasons.

The fact of the matter is that they (Deutsche Bank) are King Kong in FX liquidity and chances are that regardless of which platform you use, there is a very high degree of probability that many of your trades are being off-set with at least some Deutsche Bank liquidity or paired liquidity pool(s).

So, I held my nose and put them on the list in Second place, directly behind Saxo Bank, mostly because Saxo Bank offers a full spectrum of trade-able instruments that can compliment a wide range of Trading Strategies, not the least of which is using FX Pairs with FX Options for maximum Risk Mitigation. If Deutsche Bank offered FX Options, then dbFX would be my #1 and Saxo, my #2. But, that is not the case.

For Retail Newbies, the FXCM trading platform scores high in the ease of use category. However, it does have some stupid design characteristics as well, namely the Stop and Limit field decimal shift. I'm not sure if they have ever fixed this, but it used to be a pain in the rear-end, as the decimal location would "shift" on your during the entry of your Stop and/or Limit level. This slowed down the order entry process. Overall, dbFX is good for Retail FX and with either (Saxo Bank or dbFX) you will never have to worry about being hit by the CFTC 10:1 leverage restriction.

In fact, if you look at my list carefully you will note that none of them are going to impacted negatively by the CFTC decision to reduce leverage down to 10:1. That was one of the major criterion for making the list in the first place.

Hope that helps.

DBFX

I confirm that I understand that:

The minimum amount required to open an account is $5,000.00 USD or foreign currency equivalent.

Arn't they using the FXCM platform ?

Yes, see above, please.

 

[yakatan]

DBFX

I confirm that I understand that:

The minimum amount required to open an account is $5,000.00 USD or foreign currency equivalent.

Arn't they using the FXCM platform ?

I think they are using the FXCM platform. From my research i've gleaned a couple of things.
1. that they are a white lable for FXCM (which doesn't seem likely to me)

2. that they pass on your trades (or even account to FXCM perhaps depending on how big they think you are. So if you deal with millions or 100's of thousands you'll be with DBFX otherwise they'll pass you on to FXCM.

I don't know how much of this is true. The more."knowledgable" web reviewers on various sites seem to agree that DBFX are just using FXCM platform.

 

[yakatan]

@TraderNumber

Thanks for you research you must have spent ages on your list.

I haven't been impressed with saxo bank reviews. Reviewers at Forexpeacearmy.com and elitetrader.com have really lambasted them for 2009 and 2008.
After reading your review I checked out DBFX and found that they didn't fair much better because of their dubious association with FXCM.

My main worry is that if you read enough reviews they all end up being branded as bucket shops meaning they will always countertrade you so you don't stand a chance.

 

[TraderNumber7]

@TraderNumber

Thanks for you research you must have spent ages on your list.

I haven't been impressed with saxo bank reviews. Reviewers at Forexpeacearmy.com and elitetrader.com have really lambasted them for 2009 and 2008.
After reading your review I checked out DBFX and found that they didn't fair much better because of their dubious association with FXCM.

My main worry is that if you read enough reviews they all end up being branded as bucket shops meaning they will always countertrade you so you don't stand a chance.

I had to swallow my pride on dbFX and I gave the reasons why I left them on the list. I also had to swallow some pride on Saxo Bank, given the history of the two founders - however, the firm/bank seems to have turned corner with their relatively new CEO and they have attracted interest from Citi Bank, not to mention the fact that they have integrated their new Options Board into Saxo Trader. Davisa Capital is smaller (much smaller), but I like their approach, understanding of technology and their upfront attitude. They use a version of Currenex and the Viking platform. They have also built their solution around an ECN Hub model. They are straight up commission based and they tell you that front and center, so they have as close to "STP" as just about any "Retail Platform" out there.

I would also like to now include a new possible candidate to the list:



Do your own homework. They have a Spread Betting background, which does not impress me - in fact, it actually turns me off. But, what turns me on is the technology they use for trading platforms and the liquidity that such good choices gives them access to. For the U.S. based Retail Trader, here is another possibility (do your own research) to avoid the 10:1 issue here in the U.S. with the CFTC. If you like London based Intermediaries, then this is another to study. [if others have direct experience with them, post it would be good]

Regarding forums designed to give "reviews." Most of that stuff is sponsored, by those the reviews are made for and you will get sales pitches instead of reviews or targeted attacks, instead of reviews by people who are being compensated in some way, by those benefiting from either the sales pitch or the attack. I do not frequent Elite anymore as that site as turned into a complete snake pit. In fact, I am winding down my 2010 trading forum visit as I type. I only come out now, about once a year to chat, hopeful help and inspire some Newbie somewhere to reach for their goals and not give up on trading the currency markets, as long-term success is possible, but not if you give up, too soon.

Anyway, I hope this helps somewhat and thanks for your kinds words.

 

[yakatan]

@TraderNumber,

I think LCG licenses out whitelabels or their platform to spreadbetting bucketshops.

I'm thinking of maybe opening small accounts with both dbfx and saxo and see what happens. Dukascopy I've heard good things about but they are not in theUK.

 

[GammaJammer]

TN7 - what would be useful is if you lket people know which, out of all those platforms / ecns you 'reviewed' you have actual experience of using on a daily basis? Some of them? All of them? None of them?

Without this the ratings don't mean much.

GJ

 

[TraderNumber7]

TN7 - what would be useful is if you lket people know which, out of all those platforms / ecns you 'reviewed' you have actual experience of using on a daily basis? Some of them? All of them? None of them?

Without this the ratings don't mean much.

GJ

The ratings were listed as "just for fun" for those that actually read the thread. So, no empirical statistics were compiled, nor ever will be compiled by me. I also highlight the fact that I'm not the Newbies guru, have nothing to sell and that their homework was their own responsibility.

The list was my opinion based upon what comparable items that can be easily researched on the web, without any phone calls, interviews, actual usage of the platform or personal on-site office visits. People ask for either "Broker opinions" or "Ideas on Brokers" all the time, when they don't know how or where to look. My list is my own, not yours and not anyone else's I would guess. Just a brief look into those that I have looked at.

The actual platform(s) that I use, I won't be disclosing for some obvious and not so obvious reasons. At my level of trading, I would never disclose such information under any circumstances as that would not be very smart or wise - again, for some very obvious and some not so very obvious reasons.

The list gives Newbies a starting point - they are then told to do their own homework.

As a side note, I have demo'd just about everything that moves. Sort of like that line from the movie Predator: "If it bleeds, we can kill it." Well, if it exists and it is more than 5 years old, then I've probably demoed it and/or used it as a live test bed with a smaller amount of funds.

Typically, I like to test new additions to the system that I'm about to put into production with real cash but NOT on the platform that I plan to use in real production level trading. Real Cash testing provides me with the psychological edge that I like to have going forward with production trading.

 

[GammaJammer]

Fair enough - told me what I was after anyway...

 

[gc1]

Any particular reason why Interactive Brokers didn't make a placing on any of your lists ?

 

[TraderNumber7]

Any particular reason why Interactive Brokers didn't make a placing on any of your lists ?

One word: Leverage.

There are a couple of other reasons too, but I don't want to bash them (they have other "issues"). I did once use them for a live test account, however. I started to post that here, but decided not to, until you asked.

The way I trade, 200:1 is too much and 50:1 is too little. 100:1 or thereabout works out mathematically in my revenue model to be near optimum. Actually, 128.73:1 is optimal, but that's just academic for the most part.

 

[roger123doger]

what kindof liquidity is available using autobahn fx within normal spreads on eur/usd (during normal market hours)

 

[nine]

I don't care too much about high leverage and I pick interactive brokers for the honesty (ecn) and spreads.

The GU news last night (for me) left Oanda floating at 7.5 pips 3 minutes after the news but IB was in the 1.5 to 0.5 range (and you can be/split the bid or ask).

 

[TraderNumber7]

what kindof liquidity is available using autobahn fx within normal spreads on eur/usd (during normal market hours)

Roger,

Got the PM and saw this post as well. The list that I have compiled runs like this:

Deutsche Bank - AutobahnFX
Barclays Bank - BARX FX
HSBC - eFX Solutions Net FX
The Bank of New York Mellon - iFX Express
UBS Investment Bank - FX Trader & FX Options Trader
Standard Chartered Bank - FX and FXO

I've recently added Mellon Bank of New York to my personal list, given the strength of their offering. These are Institutional Platforms and you can expect to engage your attorney during the account opening and credit establishment process. You can trade the BARX platform with an opening under $400k, but they tell me that they don't like to go to much further below that level. Of course, you can open up with Deutsche Bank and trade on their AutobahnFX platform, in the neighborhood of $20 to $25 MM to start. Everyone else should fall somewhere between these levels, with most ranging well in excess of where Barclays is willing to establish you. The real issue here is credit, legal red tape and how much of a headache you want to endure to establish your "Institution."

I have come to the conclusion that the best solution for me, is to use a Prime Broker who can give me access to some of the exact same depth and breadth of liquidity, but without the hassles of establishing the traditional "Institutional" set-up necessary to trade directly as a Bank customer. In many cases, this will also offer you a wider selection of trading platforms and virtually guarantees that you will have the benefits of STP, ECN and some flavor of 'e'Matching on the back-end.

The matter of credit profiling is taken care of, as you will be using the credit profile of the PM that you select and you will have more flexibility on the limit side of the leverage range available to you. I don't know of many raw Banks that will arrange a final credit scenario that translates to greater than 10:1 leverage, once the math is all done. Going through an established (legit) PM, you should be able to do significantly better than 10:1 ultimately, without the "Institutional/Bank" headache.

In your private message, you asked about spreads. If you are trading the real Interbank market, there will be no such thing as a 'fixed' spread that guarantees you locked down pricing forever. The real Interbank market place is a very volatile environment with very dynamic pricing. Your Total Cost per Trade, if you are using a true Institutional Account through a real Bank or PM, will vary, depending on many different factors. One of the key factors that will determine that is the final credit arrangement that your firm signs, opening balance AND routine running balances - as well as a host of other factors. So, no one can give you an exact number to expect, like you find so often in the Retail market. A lot of this stuff is determined by how well you can cut a deal, as well.

As for the other part of your question - $1M is not a lot of money for opening a serious Bank held account for trading currencies. In fact, it is on the extremely low end and most banks that I know, won't even consider it. BARX, at $1M, might be a place to start looking, as they are good for "Commercial" type accounts (small fund/money managers, etc.)

This is by no means an exhaustive list - but it does represent some of my favorites for the Institutional and Commercial side. Whether an LLC, LLP, Corporation, NPC, Trust, etc., are best for you, is something that you, your attorney and your CPA will ultimately work out in the short run.

I hope this helps somewhat.

 

[tbj]

AGREE Absolutely - PT multistation platform is pretty nice except for the charting:
• virtually all markets covered: Forex, futures, CFDs, options, stocks;
• excellent autotrading fuctional: MQL4, Easy Language, VB.NET and C# supported (with back-testing, optimization and debugging);
• trading community inside platform;
• customizable interface, visual & automated trading, account grouping, etc...
concurrent multi-broker connections;