Ecn Brokers List and Advantages

ECN BROKER LIST
Updated March 2011

This is an update to my old post called ECN FOREX BROKERS because I see many traders come searching for the reasons to use an ECN broker or not when trading Forex, truthfully an ECN broker, a true ECN broker that is, may not be right for you and your particular situation. Moreover, an broker may claim to be an ECN but how do we know they are truly an ECN broker or not? This has been a question posed to me many times and I never really took the time to write it all out, why an ECN broker is better to use or not.  Generally speaking, there are many that argue whether correct or not that there are two opposing forces in the Forex Market when it comes to brokers, those that are market makers legally but artificially creating a sub market of sorts (their own pool of liquidity) that you are trading into that does or does not necessarily even reach the real interbank market where the world is trading; rather a market maker requires for you to win on a trade (and them to win as well) someone else in their pool of liquidity (i.e. their own brokerage) to enter into a position that loses, paying you and the brokerage, in other words, they win only if someone loses just like you do.  On ECN Brokers, this is not the case since you are putting your orders through directly to the market.  Therefore a dealing desk forex broker generally does not have any quotes from banks (the interbank market) to match the the quote for we their clients, simply put they are the one’s creating the matching quotes even if there are not traders at that instant in their pool looking to trade against your position.  Remember, someone wins, someone loses the essence of speculatory risk based trading, but using a market maker seems less and less attractive does it not? Read more

Currenex Forex Brokers

Let me start out by saying that generally speaking, if you are in the market for a Currenex Forex broker, or more specifically a broker that offers Currenex liquidity, you are seeking to invest a much larger amount than a beginner might expect. FXDD is currently offering on their Power Trader Platform a “tap” into the Currenex market but with as little as $1000 deposit. Now, this is the lowest amount I’ve ever seen advertised for an Institutional/Currenex account, but I will let each of you make up your own decisions whether or not this is a good fit for you considering your investment goals, leverage, and capital invested.

But back to Currenex in Forex. I first started seeking out what CURRENEX is a few years ago when it came to my attention that all of the pro’s above me were on this platform in some way. In reality, it is not much different from any other broker platform you may be used to except for it being more advanced, no quick enter and exiting of trades. In fact, Currenex, you can argue, is more geared for longer term traders than scalpers even though the spreads are so low due to the fact you can trade nothing less than 1 lot at a time (when I was using it at least). So, I can not tell you if a CURRENEX platform or CURRENEX Broker is right for you, you need to take a look at the entire picture of your own trading situation and what currenex can provide for you.

Currenex, Inc. is a corporation based in New York City company that provides a platform for FX traders throughFX Dealers like FXCM, FXDD, and others. It is unique and covetted by many professionals because it is designed to provide low latency (lowest arguably) to provide fastest trade executions, connecting buy and sell side forex traders using a multitude of application programming interfaces.  Namely the FIX protocol (Financial Information eXchange) which in short as traders do not need to concern ourselves with the workings of because it is our dealers (brokers) who deal with this primarily.   You will see Currenex offered as a white label solution by brokers and fx dealers as well, this is still employing the Currenex technology and should not be ill considered not to offer the same advantages.

Many brokers will offer Currenex connectivity to the marketplace, London Capital Group has a great explanation on how trades are executed and put through in the Currenex platform.  Here we provide some examples:

http://www.currenex.com/

FXCM LAWSUIT?

I can’t recall the amount of times I’ve heard of a retail FX dealer in the United States being sued by a client who lost it all and wants to blame someone other than themselves.   But this recent FXCM lawsuit against the biggest FX Dealer in the USA alleges much more than the usual market manipulation, it alleges fraud, deceptive marketing practices, and the kicker is racketeering! Basically on the forums we’ve heard of it all besides the racketeering charge, I’m wondering what exactly the structure of this charge looks like against FXCM in this lawsuit to begin with.  I know the many details that are publicly available but I won’t repeat them over and over, a discussion on the class action lawsuit against FXCM can be found here.

As far as I can tell FXCM is not in danger of violating any major NFA or CFTC regulation except the charge of there being software manipulations which is somewhat hard to prove unless you have someone on the inside of FXCM. So I’m interested to see just how far this lawsuit against FXCM can get, how much a judge is willing to let an attorney or investigator reach into the back end of FXCM and see if the lawsuit has any teeth.

There’s a great discussion on the FXCM LAWSUIT over at these forums, let’s try to get to the bottom of this best we can from the public view.  I wanted to say class action but this is literally being called a class action lawsuit with all of one plaintiff so far hoping more will come aboard, it should be interesting to watch and see if any of these allegations can be founded.  I’d expect a large migration out of FXCM coffers as a result of any proof of racketeering at the most!

Is Forex.com A scam?

This question has been asked to me many times because of Forex.com (or GAIN CAPITAL GROUP) notariatey in the public domain, people often wonder if Forex.com is a scam or is a legitimate broker.

There have been many things said about Forex.com that are very serious blows to their credibility.

# no end of problems with stopouts
# large out of nowhere spikes
# news constantly arriving late
# graphs freezing right before big announcements
# Manual rate execution is awful
# they use thier massive bank credits and connections to pile one against thier “clients” trade and clean you out.
# They pick your stops and buffer your profit targets.
# It seems about 30% of the time it will take a dive on you.
# The more you place an order the more you will loose your money!!!
# the charts don’t correlate very will with the current bid/ask
# they are taking back a pip when I exit a profitable trade
# I dont get the price that I click on to exit the trade but I get one pip less
# NFA’s disciplinary case against them in early 2007 for compliance violations
# disabled my account
# Gain Capital of New Jersey and New York City, and Forex.com are one and the same shyster outfit.
# SEEMS LIKE THEY ARE WORKING A SKIM OVER THERE.

To me all of these allegations are such ludicrous complaints that you as a trader are at fault for. One guy actually says “30% of the time, it seems like it takes a dive on you?” Is he out of his mind? That means you have 70% winning trades and you still are not profitable? Many of the allegations about Forex.com being a scam are just so out there that they can not be believed.

Forex Rebates Cash Back for Trades

Rebates on your Forex Trades?  Many people I talk to don’t know that there are services out there that will give you money back for every trade you make.  Since most brokers make their money by charging their traders X amount of pips in the spread, they leave it open to Introducing Brokers (I.B.’s for short) to earn a part of that spread just for referring you to the broker.  Basically, website owner A has a link on his website to Broker A, Broker A charges you 3 Pip spread on EUR/USD, but .3 pips go to website owner A simply because you found Broker A via his website.  Nothing new of course, but now you may also cash in on this Introducing Broker income by signing up to Broker A, B, C, or D via sites like Cash Back forex, making Cash Back forex your Introducing Broker.  Cash Back Forex gets a cut of your spread and gives it back to you.  If you pay 2 pip spread on EUR/USD, you might get a nice portion of that back instead of seeing it all go to your broker.

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