FX Intelligence gets on MB Trading webpage, signals new trend for US brokers

MB has low spreads because they charge a commission. The others do not, its comparing apples and oranges.

FXIntel is a great tool. Its biggest contribution is increasing spread awareness. Its been my experience that the more experienced the trader the more he cares about spread and execution and I applaud FXIntel for making information available for comparison.

I would suggest than in the interest of fair comparison they would make a distinction between: “Spread only” Brokers and “Spread + Commission” Brokers.

@Paul-

It’s true that it doesn’t include their commissions, but this article just pulled the FX Intel component of MB Trading’s site out and showed it. If you look at the actual pages on their site, it is very clear, especially in the fourth tab, what their total costs are (and depending on your trading style, it could blow away all of the competition, including Oanda).

Michael linked to the full set of pages on the site, make sure you check it out.

Michael, Thank you for the article mention & comments. To clarify the commission aspect, it’s an important issue that we’ve discussed with our partners and users for quite some time. Ultimately, we’re looking at ways to address the differences on our site, at least so users are aware there are extra costs involved with certain brokers. We’ve tested the addition of commissions directly into the displayed spreads, but that proved too problematic, given a multitude of varying factors. For instance, some commission-based brokers charge a variable rate based upon trader account size and/or volume traded. Thus, a one-size-fits-all approach would… Read more »

Which begs the question of why does MBT has a lower profitability results than most of the broker they claim to have better spreads then.

— Asaf.

Asaf: one possible reason could be different methods of calculating ‘profitable traders’.

Hopefully the next quarterly data will be more comparative, given the recent NFA clarification …

Asaf-

One thing I would consider…MB Trading allows people to fund with just $400, which not all brokers do. I bet that means that a lot of little players that really have no idea what they are doing (less than the rest of us) drop in $400 and “roll the dice.” I agree with Trader that the numbers will be more interesting after next quarter, and also this Pay for Limits item of theirs might have an impact over time, but I still feel that the reporting numbers don’t really paint a clear picture of anything.

Glad the industry is recognizing the efforts of brokerages focusing on transparency—some more than others. Interbank FX has been publishing our performance metrics for 18 months now, allowing customers to see inside our engine at any time. Our ultimate goal is to challenge traders to ask the same of other brokers they work with. (BTW, we do not charge a commission—our spreads and execution are low as a result of our proprietary multi-bank order routing system and technology infrastructure).

I guess we can title that post…”How to ride someone else’s wave”

Thanks for the clarification Abby!

@Steve James

Fair comment but many forex dealers allow much smaller initial deposits than $400 to start trading. I expect most of the bigger players are lower but off the top of my head, three examples:
* FXCM Micro is $25
* GFT is $50
* OANDA is $1 (yes $1 is a tradable account because we offer no lots. People actually test out this is for real as well).

@ Abigail

OANDA has offered the level of transparency you are referring to since ~2001. Welcome to the club!

@abigail-

Do you really think the best plan in this day and age is to promote that you hide your fees in the spreads? Just curious.

I have to say that these prices don’t really mean anything – at the end of the day since the FX broker acts as the exchange and the market maker it doesn’t matter what is the prices that you see but what are the prices you can execute on. This is also not fair to show the spreads only when MBT also charges commission per trade. For me the final and most clear and transparent indication is the ability of traders to profit from trading – MBT despite their marketing effort are not presented as a broker where traders would… Read more »

“OANDA has offered the level of transparency you are referring to since ~2001. Welcome to the club!”

Weird, cause I look at MB Trading and see my order on the market depth window when posted, I do that same with my Oanda account and don’t. So whats the definition of transparency?

Further, I can trade $1 on MB Trading so again please elaborate?

I love discussion and personal failure its how I learn. So please tell me where I am wrong and educate me.

My apologies in advance.

Ray

@asaf I have to respectfully disagree with your entire statement. First of all, MBT is known as one of the brokers with the lowest minimum account size at $400. We have offered this for years when others were much higher. The idea that someone can open an account with $1 and trade at 50:1 and get anywhere is extremely misleading, and I won’t even comment further. To your other points, I have no idea what you are getting at. Our website pricing pages clearly identify our spreads versus other brokers and then address the scenarios where you get a rebate… Read more »

.2 spread on MB Trading EURUSD, guess its working!

@Mike – that was simply the last tick we received from them at the 2200 GMT close on Friday.

An interesting conversation!

Insane spreads on a Sunday? Can you trade at those prices Mike, even if you wanted you?

At the end of the day the metric that matters is how much your account has gone up (or down!). It’s not a trivial problem to infer how that is affected from the headline spreads, commissions, rebates etc.

Cheers,

Jim

@Justin, If you want to compare cost then compare the cost don’t just compare the spreads and let everyone else figure out that there is an additional transaction cost to the price – you have to be transparent about trading with you if you want to be perceived as honest and fair. Paying people for limit and stop is still unclear to me. If I understood correctly you are showing the exact price that a trader placed the limit order and you are rebating him part of the transaction that you are charging – if this is the case than… Read more »

@mike – What symbol were you looking at when you came up with that? @raymond – Too funny. The idea that Oanda is transparent is a joke. They still don’t post Limit orders, as you pointed out, and I doubt that they will reply. Guess they think the fact that you can send them $1 is more important than truth in markets. @asaf – I couldn’t figure out why someone would think that MB Trading’s model (if it does what it says) would be a bad thing. Their site is the most comprehensive and transparent (as is their platform) about… Read more »

Justin, You are charging $2.9 on a $100,000 traded which is, if my math is right, $5.8 round trip which is 0.58 of pip. It is misleading to mix your spreads with all the others when you are the only one that charges extra for the trades even if you give that information in another window – if you want to be transparent you should have one tab called “cost of trading” and compare your cost to the others where your include spread + fee and for the other broker it’s just fee. Second – spreads don’t mean a thing… Read more »

@Jim – definitely not – haha. I was just looking and couldn’t believe what I was seeing. But, as Brian Johnson mentioned, it was just the last feed received at day end that skewed it. Reviewing the feed more today, I can see that while I’ve been very happy with my broker, their spreads are unnecessarily high. I’ve begun the process of reviewing ATC and MB Trading. I asked ATC for their swap rates, as well, since I hold trades open for quite awhile sometimes – and those are way better than Interbank, as well. May be switching in the… Read more »

@asaf- As a retail trader with about 15 years of trading experience in stocks, options, futures, and forex, I would have to respectfully say that you don’t appear to know what you are talking about. In order for any true market to function properly with the least waste given to the MMs, you need everyone’s limit orders displayed for all to hit as that is what provides the liquidity. When they are not displayed, it means that there is a desk or MM benefiting from the chance to get a better price before it fills the order. A limit order… Read more »

@asaf: Yes, that is what we are charging. Please again look at the fourth tab of our Pricing page that clearly states that if you place a trade with “Market and Market” orders both ways, you add that fee to our spread to get your total cost, and that is the apples to apples comparison against a deal desk. Likewise, if you use a “Market and Limit” roundtrip (Market one way, Limit the other), your net costs are substantially lower. And finally, if you use a “Limit and Limit” (Limits both ways so you get paid both ways), your net… Read more »

Steve, It sounds like you know more about MBT then they care to advertise so I am not sure if there is any hidden agenda here. The way markets usually work is that there is an exchange which anonymously aggregate liquidity from all market participants and market makers which make their money on the spread. In FX there is no exchange and every broker acts as it’s own exchange and most also act as the market maker. Regardless if the broker is the MM or not he does not have to comply to a fair exchange rule and usually enable… Read more »

The conversation gets even more interesting! @Mike – I’m not sure if you got my main point, which is how can you be sure (even when the markets are open!) that you can deal at the prices quoted on your brokers platform, or with the spreads quoted by FXIntel. In the real world I think you’ll find it’s actually pretty difficult. @Asaf – According to Steve “MB’s system doesn’t [display your stops]”. As Justin said “you should get a feel for how good a broker’s execution is in a Live environment for about 6 months”. Why don’t you go away… Read more »

@asaf – As I have said on this thread already, I’ll be interested to see if the MB system works as billed. If it appears that they are playing games, then it’s just another broker playing games. I currently have accounts with 5 FX brokers with my money spread about evenly across them all. However, if MB works as they say, which is something that I have been expecting one of the better FX brokers to do for some time, I will be most of my funds to them. Jury is still out since it just started Sunday. I will… Read more »

@Jim Hunt – I agree! Conversation gets more interesting! @Justin – Thanks for being available to answer questions. So far, I get what you guys are going for. Please don’t blow it. @asaf – You said “So when MBT is paying for limits you have to ask yourself what’s in it for them.” Isn’t the whole point that they are paying for tighter spreads that sit on their ECN for faster execution, which would mean more customers? Doesn’t seem like rocket science. I think Jim’s comment was more interesting: “Do you by any chance ever ask yourself what’s in retail… Read more »

Steve,

Time will tell if this was a good move from MBT – it sure is interesting approach and I wish they will be able to improve their profitability numbers and compete with the other brokers on business.

— Asaf.