MT4 + ECN - page 4

I received this from HotSpot. In a subsequent email, he said the minimum account is $3,500. So it isn't that grim for us small fish.

Have you done a recent search for Mt4 ECN on google. I know that there are a few ECN MT4 brokers

I am one of the founders of TheCollectiveFX.com we created our own brokerage to overcome the problems we were experiencing elsewhere.

Whilst not an ECN in the true sense of the word we do in fact behave very similarly.

I really don't want to go into a full advertising rant here, but rest assured that MT4 can and does provide all the functionality that a trader needs to trade in a 'fair' market, subject to who the broker is that is driving the back end.

Please remove my post if it infringes any advertising rules, it really wasn't my intention, in fact commercial advertising isn't something that you will ever see us do. We'll rely solely on our reputation and word of mouth, so don't flame me please.

4of7.

Flame! Just kidding : - )

In our personal search for a trading environment (since especially I am an extreme high-frequency scalper, in the worst sense of the word) is an environment where the orders are passed through without being altered.

What killed us in the past was when our statistical back testing didn't match live trading, especially when they were side-by-side!

We would run one EA on a demo account, and the exact same EA on a live account and compare. Quite shocking. The live account orders (even on some slower EAs) would perform completely different from the demo account orders (and with some brokers, even the quotes started to drift on the live account).

If you do this experiment for yourself, you will notice the spreads begin to change depending if you are in a position or flat, then change again if you were in a winning position verses a losing position.

So if you base your expectation on statistical back testing, you need to have a solid basis to move forward from. If the demo/backtesting results are changed outside the market/or your control, then there is no point of testing.

So what you need is a clean quote to trade from that is independent of your position and your win/loss. An ECN can provide that, but is not always a guarantee. The BIG question is whether your broker is a counterparty. Counterparty simply means that the broker is taking the other side of your trade. You say "Go Long" and the broker takes your position, and you aren't in the "real" market. Now if you show a loss, they show a profit.

US Law states that anyone that is a counterparty must be a registered firm. The reason for this is that if they are taking the opposite side of your trade, and you hit a BIG BIG winner, the broker has to pay you out of their pocket since you were never in the real market! Hence the funds set aside, etc. to cover your trades. Of course, if you take a loser, or get stopped out, then the entire loss goes to their profits. This is where client funds are at risk, because if the guy next to you hits a giant winner, and the broker doesn't have funds to cover his winnings, the funds come from your account. That's why there is pending legislation to cover these situations more specifically. But that is the reality currently.

So you need to ask your broker if they are EVER a counterparty to your trades. If they are, then your loss is to their advantage, and there is a motive for hanky-panky.

If your ECN is NEVER a counterparty, then there is no motive at all, and you can feel safe.

In defense of brokers who are counterparties, they provide a role in the world, and stop-hunting and stuff like that should not be ascribed as evil or bad. Their role is to provide liquidity, and in exchange they need to take on risk (the opposite side of your trade). In exchange for taking on that risk, they price the market (spike and shift quotes) to lay off that risk into the market, and make profit at the same time.

Stock Specialists who control the "book" of stocks do it every morning. They see all the orders and decide whether to gap the market. So IBM and DELL gap up at the opening of the market, "stealing" millions in profits, or inflicting millions of losses on traders who put their market orders in for the open. No one calls them evil. It's their job. They are "market makers". Forex brokers are no different. They see all the clients orders and stops (the book), then they look at the true market price, and quote accordingly for the least risk, and maximum profit.

The problem comes into play when the "trader" is "battling" the "market maker". Someone loses, and someone wins. It's the business model of the market maker, and the business model of the broker to make money through the volume/pricing/order dynamic.

Your mission as a trader is to find a broker who has a different business model. A business model that doesn't require you to take a loss -- in order for them to make a profit.

Trader 5of7 @ TheCollectiveFX.com

Rous Technology has successfully created a MT 4 bridge to an ECN platform such as currenex, integral and hotspot. The bridge has been working to currenex since 2004. The website is www.roustech.com

Hello. PFGBEST which is based in the US has a true MT4 Forex ECN. They have 9 banks that are providing their bids and offers on currency pairs. The best bid and offer is aggregated and posted for the client. The bridge that has been created to do this does not allow the banks to see any pending orders, thus EAs work and there is no dealing desk.. they charge a commission of $5 per standard to make money. mt4 ECN Broker

Hey 4 of 7 and 5 of 7,

Took a look at your site and I'm going to give your service a GO...I want to Thank You and your Team for desiging this trading opportunity, as I AM really in hope to Experience that your service is as good as it sounds...The Only ? that remains to me is How do you Seperate yourself from being a True ECN MT$ Broker? Is it for the fact you charge a monthly service fee and Not a commission? What is the differnce and Why is it your choice Not to be a True ECn when your are soooo similar? Again, I Thank You fro your service and time. peace out!

Interested: What is are the details of the order processing - STP? how much does your liquidity partner take? In what way do the interact and effect the trading and pricing?

Why are they doing this?

Thank you.