A Market Maker with VIP membership for more stable EA trading... Serious discussion!

[Abdulisback]

Hello Everyone

 

I am wondering what needs to be done exactly to open a Market Maker broker like the FXPro broker and such.

 

If we can get this to happen, we can execute trade very fast and accurately while trading on extremely low pipspread. This will truly help to make a lot of EAs out there very profitable and successful.

 

Thousands of EAs and trading systems has been shared on this forum and almost not a single guaranteed EA has been found. Every profitable EA we have found turns out to be distant to an immanent blow up!

 

I think we should all get together and move forward with our research, I truly believe that we are missing here is a broker were we can trade our EAs through on much lower risk. That should help to lower down the EA blow-up exposure and make it a lot more profitable. Especially for scalpers.

 

I know that this kind of idea has already been introduced, and the out come was opening an ECN brokers with very low pipspread and paying a subscription fees instead of commissions on every trade being taken.

 

But what if I tell you that we can open a Market Maker (Project funds can be available) and not ECN broker.

 

What does that mean,, it means we get much lower spread offer with much lower slippage risk and a lot faster execution especially for low contract trades.

 

those who help with my research will be entitled for VIP account were Zero broker commissions (spreads that is) are being paid. So you end up trading with a Market Maker without paying anything to the broker, you will only pay for trade cost which could be much cheaper than the spreads you pay to an ECN broker (without the commissions)!

 

please let me know If I am making any sense, and your input is very much appreciated.

 

Those who want to be entitled for a VIP account need to PM me to have their forum ID written down and they must participate in this discussion.

 

Looking forward to your replies

[Papa4x]

market maker = our own market consist of buyer and seller

if the proportion of winner bigger than loser.. who is going to pay the winner?

the owner?

[forexi]

market maker = our own market consist of buyer and seller

if the proportion of winner bigger than loser.. who is going to pay the winner?

the owner?

 

This is the reason why progressapama started JadeFX, an ECN broker specifically to be able to run an EA like ISEA. To put it simply the only one that made anything out of that was Progress. He now owns a quite successful brokerage called JadeFX and makes a crap load of money from trader commissions and guess what the EA's still do not work.

 

Nuff Said.

[Abdulisback]

This is the reason why progressapama started JadeFX, an ECN broker specifically to be able to run an EA like ISEA. To put it simply the only one that made anything out of that was Progress. He now owns a quite successful brokerage called JadeFX and makes a crap load of money from trader commissions and guess what the EA's still do not work.

 

Nuff Said.

 

ISEA is just a scam crap EA,, I was there when members were calling for buying it and I was about to pay for it but our Dr. insisted on taking care of the payment. One the EA trading style was presented less than 24 hours after purchase I jumped and asked members not to waiste their time with it but no one has listened.

 

I am not talking about an ECN Crap broker, What I am looking for openning is a Market Maker.

 

Progressapama was talking about a 50,000$ project and did not even have half of that, and was asking members to throw in their money.

 

What I am talking about is around 20 Million Dollar project. If you're EA is a sclaper then you may diffenately want to trade the GbpUsd for example at 1.0 pips (at most) or even less with a VIP account.

[Abdulisback]

market maker = our own market consist of buyer and seller

if the proportion of winner bigger than loser.. who is going to pay the winner?

the owner?

 

I think you're reffering to scam brokers which operates on Bogus accounts.

 

FXPro.com diffenately do not pay winners from their own pockets no matter what... This is not how things work.

 

We are not talking about an ECN broker were an order gets passed through multiple liquidity providers.

 

Trades taken through ECN has bigger lattency and slippage exposure than Market Makers do (as far as I understand). You have different banks sitting on the other side of the ECN and you never know how long it will take for them to reply. For instance, once an ECN deal gets sent to a bank, the bank will have to check the credit limits of the counterparty Eg. GoMarkets, which means another hop.

 

A GoMarkets deal might go from

a MT4 client in the USA,

to the GoMarket MT4 server in Sydney,

back to the Currenex ECN server in the USA,

across to a European bank Eg. DB in Berlin,

across to DB in London to check credit limits and market risk

and then all the way back.

 

You might have 6 internet hops and 6 database queries.

 

If you use a market maker for a small deal it might just hit their local liquidity pool and come back to you after one hop and one database query.

 

 

Please note: some of my reply I just wrote I copied and pasted off from a public Forum.

 

Hope that helped clear things out

[jackdan]

Salam Abdul,

 

As you know, i was very much part of the beginning of the jadefx project. I will enter this discussion too, not for the vip purpose, but, for learning and bringing my experience.

 

But i think this thread ought to be moved from here. I maight also invite other poeple to this thread if

the discussion is consistent.

 

regards,

 

Jackdan

[Sneed]

I would like to be kept updated on this project if the thread is moved. I also tried JadeFx and the "Collective", and things just didn't work out. So, I am always looking for ways to get an EA to work better. :-bd

 

Ultimately, there is always overhead costs to consider, and if we want reliable customer service, the staff needs to be reasonably paid. But, the monthly fees required by the "Collective" just didn't work out too well, because you have to pay "a monthly fee" whether you trade or not.

 

I know that IamFx, basically was created over night by getting a franchise (white wrapper) brokerage IB (introducing broker) "arrangement" where you basically get Gallant FX with higher spreads (and commissions). So, the customer service is not so great, their "free VPS" isn't really free ($35 per month deducted from your trading account). For such a high cost, the VPS is junk, since it only links you with "their" brokerage. While a regular (less expensive) VPS allows you to install "multiple" brokerages of your own choice. Why pay $35 per month for a VPS that you have no "true" access to. You don't even get a "trader's desktop" which allows you store other applications on it (which other, lower cost VPS providers DO include with their basic service).

 

So, depending on how much money is available for your project, a "white wrapper" is probably the cheapest way to go, but you don't necessarily have to be as "money hungry" as IamFx. The problem with "white wrapper" is that you would have to find a better brokerage than "Gallant" to clone. Maybe a brokerage like Dukascopy. But, I don't think that Dukascopy actually offers "white wrapper" franchises.

 

But, to create a brokerage from scratch is close to impossible without a lot of money and attorneys. That is why I believe that both JadeFx and the Collective, had some relationship with "Boston Technologies" when they first launched their brokerages, rather than "reinvent the wheel" by forming a brokerage from scratch. Just my personal opinion and experience, but, as technology continues, opening your own brokerage gets easier every day, as long as you don't try to be regulated in US, where there is an additional $50K fee, per year, which basically gives you nothing, and restricts your customers from "hedging". ;))

 

 

 

 

Salam Abdul,

 

As you know, i was very much part of the beginning of the jadefx project. I will enter this discussion too, not for the vip purpose, but, for learning and bringing my experience.

 

But i think this thread ought to be moved from here. I maight also invite other poeple to this thread if

the discussion is consistent.

 

regards,

 

Jackdan

[Abdulisback]

Salam Abdul,

 

As you know, i was very much part of the beginning of the jadefx project. I will enter this discussion too, not for the vip purpose, but, for learning and bringing my experience.

 

But i think this thread ought to be moved from here. I maight also invite other poeple to this thread if

the discussion is consistent.

 

regards,

 

Jackdan

 

Hello jackdan

 

Thank you for Participating, we can all make this discussion with very valuable info if we all work together.

 

You can still PM me to have your ID written down

 

Cheers

[Abdulisback]

I would like to be kept updated on this project if the thread is moved. I also tried JadeFx and the "Collective", and things just didn't work out. So, I am always looking for ways to get an EA to work better. :-bd

 

Ultimately, there is always overhead costs to consider, and if we want reliable customer service, the staff needs to be reasonably paid.

 

So, depending on how much money is available for your project, a "white wrapper" is probably the cheapest way to go, but you don't necessarily have to be as "money hungry" as IamFx. The problem with "white wrapper" is that you would have to find a better brokerage than "Gallant" to clone. Maybe a brokerage like Dukascopy. But, I don't think that Dukascopy actually offers "white wrapper" franchises.

 

But, to create a brokerage from scratch is close to impossible without a lot of money and attorneys. That is why I believe that both JadeFx and the Collective, had some relationship with "Boston Technologies" when they first launched their brokerages, rather than "reinvent the wheel" by forming a brokerage from scratch. Just my personal opinion and experience, but, as technology continues, opening your own brokerage gets easier every day, as long as you don't try to be regulated in US, where there is an additional $50K fee, per year, which basically gives you nothing, and restricts your customers from "hedging". ;))

 

I am budgeting 20 Mil Dollars for this, which I think is more than enough.

 

I keep reading on the Internet that Boston Technology has the most crappy market data feed, but if that is the case then JadeFX, GoMarkets, collective and many other brokers wont have become so successful.

 

I am not sure what you mean by regulated in the US, if you mean to get my self registered with the NFA, then 50K is diffenately not enough.

 

The best thing to do in order to operate on a global scale is to have 20 Mil as a registered Capital and to be regulated in the US, Britain and Australia.

What I am trying to do here is to open something decent and expand over the years.

 

The question is, how could one open a broker like FXPro.com? How could one become a Market Maker broker? these guys have great data feed and cheap spreads. And I believe that I can open my broker with even cheaper spreads than the ones they offer. with better price data and trade execution and a much higher customer service. These guys make a lot of money and dont even have a chat application on their website for immediate help!

Edited July 16, 2010 by Abdulisback

[Sneed]

Yes, what I meant is NFA. I remember that JadeFX had mentioned that an annual membership fee with NFA is approximately $50K. This cost would be in addition to required funds needed to meet eligibility requirements, such as reserve capital to cover liquidity, etc. So, that was just one of the reasons they avoided membership, in addition to not wanting to deny hedging to its customers.

 

I believe that you will have no problem getting customers from this Forum when it is ready. I know that JadeFx instantly got many customers from this Forum "before" they were even ready to launch.

 

Many people are not happy with their current brokers. And even people who "are" happy with their current brokers, sometimes would like to add another broker anyway.

 

 

I am not sure what you mean by regulated in the US, if you mean to get my self registered with the NFA, then 50K is diffenately not enough.

 

Edited July 16, 2010 by Sneed
Additional info

[hyperdimension]

I am budgeting 20 Mil Dollars for this, which I think is more than enough.

Do you already have the 20M?

 

If you don't hedge exposure into the real market, what would happen if there are big profitable traders? e.g. someone who might make 1M per month? How would you pay the profits that are due to them?

[Abdulisback]

Do you already have the 20M?

 

If you don't hedge exposure into the real market, what would happen if there are big profitable traders? e.g. someone who might make 1M per month? How would you pay the profits that are due to them?

 

Please read over this thread, brokers are not supposed to lose or win when the client gets a profitable or losing trade. Unless its a scam broker which hooks people up with a bogus account.

 

The 20M are not mine.

[jackdan]

Talking about registering the broker, there are plenty of places to register that aren't NFA. Actually CYSEC, from cyprus, is becomming little by little a pretty good registerer. they have throw out some important broker, like prime4x, or other, like gigfx...

 

i also believe a market maker does not habe to scam a client as a rule, you can be very good market maker and honest too, these are compatible. You just need to find a liquidity provider that would offer you fix low spreads and start to work from there.

[Abdulisback]

Talking about registering the broker, there are plenty of places to register that aren't NFA. Actually CYSEC, from cyprus, is becomming little by little a pretty good registerer. they have throw out some important broker, like prime4x, or other, like gigfx...

 

i also believe a market maker does not habe to scam a client as a rule, you can be very good market maker and honest too, these are compatible. You just need to find a liquidity provider that would offer you fix low spreads and start to work from there.

 

good point, but what would a good liquidity provider be? how can I know which one is being used by FXPro for example?

 

Is there a website that provided comprehensive study and compression between each one of them?

[jackdan]

Let's ask. But now, it's too late, but Monday. I don't think it is a secret not to tell who's the liquidity provider.

 

I am sure that if we (I, you) send an email requesting that information telling them we would maybe be interested

to open a big account with them, And you request some info, they'll tell you the info. Or is it that secret?

 

Maybe, also sending an email to the well knowned provider, like deutshe bank, requesting the info, you'll maybe

get an answer, and if the answer does not satisfy, like if they say they only offer ecn, the next question is,

obviously, "¿could you tell me then, who does it on fix spreads?"....

 

As i use to say, the answer "No" we already have it, so whatever we ask and been answered, can't be worse

than the "NO"...

 

Salaam Abdul, have a good week end...

[expat1967]

I recall that ABN AMRO stands behind FXPro. I am not sure about their further structure as brokers might have more than one Liquidity Provider...

 

It guess, it will be an individual research and negotiation required to get the best deals out of them...

 

e.g. Dresdner, Standard Chartered, Currenex, JPMorgan, Morgan Stanley, DB AG, RBS, Citi, UBS...

 

I understand that we are doing a brainstorming here, but how do intend to get such a project moving? Do you have any timelines or more specific plans in queue already?

[Abdulisback]

I recall that ABN AMRO stands behind FXPro. I am not sure about their further structure as brokers might have more than one Liquidity Provider...

 

It guess, it will be an individual research and negotiation required to get the best deals out of them...

 

e.g. Dresdner, Standard Chartered, Currenex, JPMorgan, Morgan Stanley, DB AG, RBS, Citi, UBS...

 

I understand that we are doing a brainstorming here, but how do intend to get such a project moving? Do you have any timelines or more specific plans in queue already?

 

What I am trying to do here is get to build up some info on what needs to be done to creat the best forex broker in the industry and decide what to do inorder to start a case study and get it submited. the first brokerage branch will be opened in United Emarates. The case study must be ready in September. So I think I got plenty of time.

[hyperdimension]

brokers are not supposed to lose or win when the client gets a profitable or losing trade. Unless its a scam broker which hooks people up with a bogus account.

My current understanding is that you don't want to hedge every single clients' order as done in STP or ECN execution, but you would hedge net aggregated exposure. Then you have to decide when and how to hedge the aggregated exposure. This implies speculation, which then means you need to be a profitable trader (or hire consistently profitable traders) to know the right moments to hedge the net exposure of all clients open trades. Just like normal trading, sometimes you'd lose, sometimes you'd win with a hedge or absence of hedge, so there is risk involved, especially as trading strategies can weaken or die as time goes by. You also have the additional problem of net aggregated exposure constantly changing, especially due to big scalpers, which can make the hedge trading much more difficult.

[Abdulisback]

No, there is no such thing as hedging against the client in Forex. This may apply in stocks or other Markets but not Forex.

 

I have just been informed that openning a forex broker in UAE is not allowed. But after researching on google I found two that are based in Dubai.

 

www.fxcbs.com ,, and http://integrityfx.com/

 

So not sure how accurate that info is,, Will ask next week

 

cheers

[jackdan]

Abdul, Prime4x also is now based in Dubai. I think a couple of them more.

[lerxst]

@Abdul,

 

Boston technologies is the front platform software solution and they don't actually have their own market data/feed, but hook you up with their connections of liquidity providers. In the beginning stages of Collective, JadeFx, they gone through several liquidity providers in the initial testing stages before settling on one that is suitable. This makes the solution quite easy to start up and if I recall, there are other firms that provide the same service.

[Abdulisback]

Abdul, Prime4x also is now based in Dubai. I think a couple of them more.

 

Yeah, the guy told me that you may open a branch of your broker in Dubai, but the actual dealing branch cant be opened in UAE.

 

Not sure what he meant by dealing, Since the actual dealing will always go to a certain bank in say Europe and not UAE regardless. I dont think I have understood him

[hitescape]

New to the thread but I too am interested. For a price feed have you thought of Currinex? As I understand it, they offer a combined feed from several liquidity providers thus giving more depth. What I don't know is whether BT supports Currinex with their bridge.

[hyperdimension]

No, there is no such thing as hedging against the client in Forex. This may apply in stocks or other Markets but not Forex.

Then what goes on in the pure STP or ECN execution model in which every order is passed onto a liquidity provider? That certainly is hedging, so I'm not sure why you say "there is no such thing as hedging against the client in Forex". Other brokers, instead of passing off every single order to a third party, they may hedge based on their aggregate exposure (across their entire client base), i.e. in big blocks, as I explained in my previous message. If you don't hedge exposure in any way at all, you would be a pure bucket shop market maker broker, in which case you always profit from client's losses.

[Abdulisback]

Then what goes on in the pure STP or ECN execution model in which every order is passed onto a liquidity provider? That certainly is hedging, so I'm not sure why you say "there is no such thing as hedging against the client in Forex". Other brokers, instead of passing off every single order to a third party, they may hedge based on their aggregate exposure (across their entire client base), i.e. in big blocks, as I explained in my previous message. If you don't hedge exposure in any way at all, you would be a pure bucket shop market maker broker, in which case you always profit from client's losses.

 

Oh, very sorry... Now I see what you're talking about, and started to make sense.

 

I think I will leave the hedging part to the liquidity provider and I will make sure to mention on my website that we never hedge against our clients. Maybe that would give us some credibility? Since we show no interest in hunting clients down?