Trading Monitoring of Customer Base and Overlapping the Transactions in the Market
The trader’s path is not simple at all and consists in a constant struggle with the market and the broker. And if in the fight against the former we are helped by a ready trading strategy with effective risk and money management, the traders remain unarmed against the broker. Our profitability depends entirely on the quality of our forecasts. However, we do not take into account the half-received profit that arises in the consequence of commissions on the part of the broker. If you take into account not only swaps and commissions for opening a deal, but spreads and slippage also, then the commission you pay to the broker increases in 2-3 times. And this is not a small percentage of the yield.
In order for a trader to fully trade in market conditions, his broker should provide them. No matter how simple and logical it may sound, not every broker gives this banal opportunity, but only 2-3% of the forex brokers that are on the market.
This simple condition is not implemented by brokers for several reasons:
- In the market, there are many “kitchens” that are interested in earning on the “plums” of their customers. Therefore, transactions are not executed on the market, but on internal overlap. The trading operations are processed directly on the broker’s server. It’s clear that the broker is not interested in trading at real prices and commissions.
- The second point is that the delivery of trade signals directly to the market costs quite a lot to the broker and small-volume transactions are not cost-effective at all for market execution. The matter is that the broker is obliged to pay to the clearing center for execution of the transaction for the trading account, which is connected to the market system. And if you want to trade at favorable terms, but your capital is less than $10,000, the broker will not deliver your trades to the market.
In the process of searching for a possibility of realizing trade by the market conditions, I first of all pushed myself from these two limitations. I can safely say that these two problems are solved by additional programs that directly connect your account to the prime broker. However, your broker may not like this, and there may be restrictions on his part. But do not rush to look for more money immediately. After all, the broker himself can solve this problem.
While I was looking for a ready solution for us, traders, I ran into the solutions for brokers. Today, there are a lot of auxiliary software on the market for brokers, which helps in controlling the risks, track the trading results, flexibly manage the trading positions, and most importantly – to deliver transactions to the market! I had a simple question: why doesn’t the broker use this opportunity?
In the brokerage arsenal, there are programs that allow you to track the entire client base, not only in the context of the trading accounts, but also in the context of all trading operations. Thus, there is a possibility of overlapping the transactions directly on the market, when it determines a certain “threat” for stable functioning of the company. Such excesses are rarely used in the brokerage companies. Again, while I was looking for the opportunity to implement market trading, there was a lot of information on the Internet, so I will not repeat it to you, as you will be able to get acquainted with it yourself.
But the question remains open: if there is an opportunity to implement transactions on the market, why not put it on the flow?
It is necessary to connect to the FiX financial protocol through the fix api solution to trade in the market and on the market execution. If you want to know whether the broker trades only on the server or if he has an access to this protocol, you just have to ask him about it. If the answer is negative, you are dealing with an ordinary “cuisine”, but if there is an access, you should agree on these conditions.
Also, there are various fix api splitters on the market that connect the clients’ accounts to a single fix api broker account and all the transactions are processed through the clearing center. Thus, the broker does not have to pay a commission for each account. Such software is a kind of funnel for the customers. All the transactions are processed in this program, and are delivered to the market on a behalf of the broker. Thus, the trader receives the market execution, and the broker raises his profitability due to the fact that he does not pay over the commission of clearing, but also earns from the operations of his clients, thus, with commissions. This is a very real opportunity for the first and second ones. So why should we look for opportunities to get a quality service? Why does not a broker do what we actually pay for?
Given this, we can draw a simple conclusion, which is that the broker, even if that is not every broker, can execute transactions on the market. Moreover, you can customize the market execution of transactions with the help of auxiliary software. You have to only agree on the conditions, what I will do in the future with my broker and I propose you to do the same, because the amount of commissions can increase intensively. I advise everyone to make this issue a priority. It is clear that this applies to those traders who wish to improve their positive result. As I wrote above, the problem of loss of capital does not depend on the broker, but on your trading style, psychological control and risk/money management. However, the problem of transactions execution is also important for those who are already trading. Therefore, you need to require a high-quality execution from your broker in order to improve your trading result.