Hello. I want to start discussion on the obvious signs that a broker is a market maker model b-book type. As far as I know, majority of fx brokers operate in this way. And I want to discuss a very recent experience.
Popular broker had the server down dues to some problem, so the quotes were frozen for like maybe 2 hours. Same as a platform freeze. Explanation was that the "prime broker aggregator bridge"or something like that (which sounds very cool but does not mean anything to me) has been broken and they are trying to fix it asap. In the meantime, I asked, what happens if i want to make trades. Since I have a small test account with the broker, and my exposure was quite negligible, I don't have any other connections with the broker apart from the regular chat support (whcih btw is qutie good compared to most of what ive seen). I tried to ask if they have a phone delaing line or something similar, the answer was not difinitive, but they told me that if I want to modify a trade, I should e-mail the specific time and modification and when the server goes up again, they will "retroactively" modify the trade, but while the server is down they cannot do anything. Now I am not sure how does that relate to the brokers model, but it really does not seem reliable and serious that I am not able to act in real time and will just wait for my stops to be hit or whatever happening. If the exposure is quite significant, say 10-20 lots, you can potentially lose many thousands and sit there and do nothing for 2 hours, like a dumb ass and if you e-mail the support with your case, they can magically modify a trade in the past. I am not really sure if that is the exact term, since the support guy told me they would actually cover if I experience a loss dues to the issue. So maybe they are not actually modifying my trade, but after they will arrange the profit/loss afterwards? On the other hand, if the broker is a b-book broker, shouldnt they actually have some dealer that we can call and they would be able to manage the exposure in real time and "trade" from our behalf on the brokers server? Also, the mae/mfe would be known after the fact, when I write to the support, so it will be obvious I will chose the most profiutable price to "retroactively exit" the trade, disregarding any of my system logic. So that is a very obvious conflict of interest between you and the broker, which should imo happen only with b book. In any case, I am a bit confused, maybe my logic is betraying me, so I want to make sure what is opinion of other people here. And of course that could lead to discussion of different signs of a broker being a market maker or not. Stay safe.
Popular broker had the server down dues to some problem, so the quotes were frozen for like maybe 2 hours. Same as a platform freeze. Explanation was that the "prime broker aggregator bridge"or something like that (which sounds very cool but does not mean anything to me) has been broken and they are trying to fix it asap. In the meantime, I asked, what happens if i want to make trades. Since I have a small test account with the broker, and my exposure was quite negligible, I don't have any other connections with the broker apart from the regular chat support (whcih btw is qutie good compared to most of what ive seen). I tried to ask if they have a phone delaing line or something similar, the answer was not difinitive, but they told me that if I want to modify a trade, I should e-mail the specific time and modification and when the server goes up again, they will "retroactively" modify the trade, but while the server is down they cannot do anything. Now I am not sure how does that relate to the brokers model, but it really does not seem reliable and serious that I am not able to act in real time and will just wait for my stops to be hit or whatever happening. If the exposure is quite significant, say 10-20 lots, you can potentially lose many thousands and sit there and do nothing for 2 hours, like a dumb ass and if you e-mail the support with your case, they can magically modify a trade in the past. I am not really sure if that is the exact term, since the support guy told me they would actually cover if I experience a loss dues to the issue. So maybe they are not actually modifying my trade, but after they will arrange the profit/loss afterwards? On the other hand, if the broker is a b-book broker, shouldnt they actually have some dealer that we can call and they would be able to manage the exposure in real time and "trade" from our behalf on the brokers server? Also, the mae/mfe would be known after the fact, when I write to the support, so it will be obvious I will chose the most profiutable price to "retroactively exit" the trade, disregarding any of my system logic. So that is a very obvious conflict of interest between you and the broker, which should imo happen only with b book. In any case, I am a bit confused, maybe my logic is betraying me, so I want to make sure what is opinion of other people here. And of course that could lead to discussion of different signs of a broker being a market maker or not. Stay safe.