Can we build a better broker?

[seravitae]

Regarding extra symbols, that's good if it is just a one time fee..

I am not too worried about this becoming serious (just yet) either - I live a very busy life and having customers you manage is difficult and time consuming, so just keep on staying alive.. if the brokerage happens, it happens.. I am just excited about the thought, even if it doesnt happen

I will delete my email now if I can..

Indigestion? Unless this is a market term, I hope you are suggesting that sometime the markets crashed due to someone having a sore stomach, because that would be awesome (in a terrible way)

 

[Pharaoh]

I'm thrilled to see a BT rep in this thread. I'll try to restrain my huge list of questions and just focus on the ones I brought up before.

Under what circumstances can trades be canceled retroactively?

In the event that a bad tick costs a client money (for example, by taking out the SL of an otherwise profitable position), how will this be dealt with?

Are there any possible issues with traders taking advantage of a faster data feed?

 

[f-man]

A few basics first

Hello ladies and gentlemen. My name is Ian Danielson, and I am a Business Intelligence Specialist at Boston Technologies.

Damon has invited me to participate in this thread, and I am pleased to do so. I will review the full content and post a reply shortly.

Thanks for the interest, this is a great topic and I look forward to discussing what I've seen as well as to discuss what BT has been doing along this front.

Best regards,

Ian

Hi Ian,

We are glad that you joined the forum.

This is an interesting thread for many of the members of the FPA and we look forward to see how this case will continue.

Pharaoh went straight to the point with his questions and we look forward for your answer.

I will take another route and I will kindly ask you to tell us a few things about your organization, so that all the members can follow what we are talking about. Who exactly is BT and what can you offer to Damon.
I am sure that once the members get to know a few things about BT from an insider, the discussion will be more interesting for everyone reading it.

 

[f-man]

Due Diligence Report for Damon

Hi Guys,

Sorry, no update. I tried to meet with Ian (BT contact) on Friday he was only available before 2 and I woke up after 2 so no meeting (I got very little sleep while away)

I will try to meet with him Monday, I did send him a link to this thread, I guess he is not game to come and discuss this with us. But I will try and convince him when I am on the horn with him.

How goes the check on me? Am I a criminal or lunatic?

Talk to you guys soon,

Damon

Hi Damon,

We can confirm that you are not a criminal!

Your KYC report is attached. The final comment is the following:

In the course of our investigation a number of articles have been found in public databases for the subject under investigation. Please note that our investigation did not reveal any negative information or publications for the subject in question

 

[Pharaoh]

I'm glad to see that the DD report shows that Damon really is a forex account manager. I like it when independent reports confirm details.

One more crucial thing I forgot to ask Ian:

Can BT provide end user technical support (phone and live chat) under Damon's brand name?

 

[BT_Ian_Danielson]

Hello again from Boston Technologies’ HQ. I’ve reviewed again this post and I’d like to add a few comments about what we’ve done to help build better brokerages, and talk about an additional tool we have brought to the market to increase transparency for the trader.

To begin, Boston Technologies is a technology partner, we do not trade and only offer liquidity through our affiliate, BT Prime. We offer MT4 to brokers via an ASP delivery model, lowering the barriers to entry for individuals, like Damon, who desire to build better brokerages.

BT Prime was founded to provide a competitive source of liquidity for nascent brokerages. BT Prime uses a price aggregating software technology to monitor the best Bid and best Offer from 6 major banks that make markets in retail FX, and present this executable price to the brokers. As Damon pointed out, neither Boston Technologies nor BT Prime have any management interest in the brokerage that we help launch, so the type of business model they chose, market maker, pure STP or some hybrid, is their decision.

The advantages to the trader of a brokerage using a Prime Broker such as BT Prime are such:

1. The trades sent to the market from the broker completely hide the traders’ identity or strategy. BT Prime sends trades to the market from dozens of brokers and institutional trading accounts. Beyond the additional layer of anonymity, traders are opening positions with the best current Ask, and closing on the best current Offer (or vica-versa), as such, there is no way for the liquidity providers (LPs) to distinguish a “winning trade” and as such thwart it retroactively. It may be that Trader A from Brokerage 1 opened a position on EUR/USD and Trader B from Brokerage 2 closed it minutes later, as far as the LP is concerned. All the while, Trader A and Trader B are trading along according to their strategies, and as such, their positions may still be open.

2. The broker is empowered by its relationship with BT Prime to participate in tighter spreads, and should a bad tick occur, to request reconciliation from the bank with the leverage of 50 brokers on their side. In turn the broker can pass any benefits along to their traders.
Here at BT we also provide a product call Depth of Market plugin, as a trader you can ask your brokerage to provide this capability. And yes, they must be a client of BT Prime to use it, and here is why: the plugin shows all the bids and asks reaching the BBO system in real time, with the available liquidity at that price. For a broker, it enables them to prove that there are multiple sources of liquidity behind their quotes, and it eliminates the perception of slippage on large orders, as the “second book” price is clearly displayed, and the fill the trader receives is a straight forward average of the volume purchased at each level.

Finally, I would like to address the issue of disclosing the Terms of the Agreements with liquidity providers. Ultimately, online retail trading is inherently risky for the trader. Let’s have a look at the major players, leaving out utilities that keep the power on, and force major: Market Maker, Trade Server Application Provider, Prime Broker, Brokerage, Internet Service Provider, retail traders’ old laptop. Clearly there are many potential fail points, and each business along the chain is going to protect their business as best they can against risk. Ultimately, the trader is left with the most risk, as they are using a service that many other people are using, and that is being provided at great expense and risk by a number of companies. I suppose that’s why this string is titled, “Can we build a better broker?” and not “Can we build a perfect broker?”

Thanks for reading, please don’t hesitate to contact me offline if you have additional questions.

Ian Danielson
Business Intelligence
Boston Technologies
Skype: iandanielson
idanielson@bostontechnologies.com

 

[Damon]

I'm Clean !

Thanks F-man for the check, much more thorough than I was expecting.

Thanks Ian for the update. I will try to get a hold of you on Monday.

Damon

 

[Pharaoh]

The information from BT looks very promising. The one issue I don't see addressed is client support.

If BT doesn't support the users, then how will that be accomplished?

 

[Damon]

Support

Support issues go first through the support staff at the brokerage, there is a lot that can be seen from the brokers end on the trade. If they see that all was OK from the trader to the broker than I escalate the matter to BT, BT does the same thing, they will be able to see more than I can.

I have the option to cover bad trades, So does the banks if the problem goes up that high.

But I would need to see on a trade by trade basis what the proper handling is. For example, I have called in 4 trade related problems in execution in 4 years. 2 of those were faults in my own EA, 1 was because they were a hybrid and had themselves covered in fine print so I ate the loss (big loss!), and one was overturned by the broker (they had received the close order ticket from me but the server never acted on it) and I got my money back.

So it is a trade by trade basis. But as an STP broker I would be putting it through to the bank that was in error and hopefully because I am an anonymous part of BTs liquidity they would fix the error as BT is a BIG client. That is what IAN is trying to say: I have a much better chance as STP getting fair play from the banks being apart of BT, anonymously.

But I will not be able to guarantee all trades to all traders, there is inherent risk for the trader, just as there is for me and the banks themselves.

Does that satisfactorily answer this question of support?

 

[AsstModerator]

You are much more experienced than the average trader. This makes you less likely to need to talk to support. There is more to client support than only fixing those rare trades where something has gone wrong with the price feed...

Pre-sales inquiries.
Collection and verification of ID documents for AML purposes.
Hand holding for new traders who know very little about forex or who come from a non-MT4 background.
Dealing with traders who lost due to their own actions, but who are blaming your brokerage.

Would you like me to invite a broker rep or two into this thread to share some of what they deal with every day? I don't want to frighten you out of this project. I don't think you need 25 employees, but I do think there may be more demand for sales and technical support than one or two people can handle.