First of all, what all you guys need to understand is this: abundancetradinggroup.com/what-is-the-difference-between-market-makers-vs-ecn-vs-stp-brokers and there are some more videos on youtube from Darwinex where Darwinex staff clearly explains the limitations of MT4 and why MT4 was designed like that: short answer: to benefit the brokers, not the traders.
Now, in the case of Global Prime, you have to read the legal documentation. If you do, you will find out that Global Prime's parent company if called Gleneagle Securities and this company has somewhat of a sketchy past which you can research through the Australian financial press. But more importantly, Gleneagle is the counterpart to all of Global Prime's clients AND Gleneagle alone, at its discretion, decides which client trade to internalize and which to flip over to the external market, that is, push out to a LP (liquidity provider). Remember: Global Prime never acts as an agent on behalf of its clients, ie they don't use the agency model, and there is no true DMA (Direct Market Access) with them.
In other words, Global Prime is just a legal entity in front of Gleneagle Securities passing all trades through to Gleneagle, which is why Global Prime can make the claims they make.
But at the end of the day, Gleneagle, like so many other brokers out there, uses a hybrid model of A-book/B-book.
Whether the prices you see on MT4 are ECN prices, whether they can produce a ticket and LP info that filled the ticket, all that is irrelevant and just more smoke. And here is why:
1- Any broker can hook up to an Integral price feed and show you these prices; BUT are these prices executable by you, the client? Not necessarily. So yes, on the page they have on their site they claim Global Prime has an ECN and gives you ECN pricing BUT what you must understand is that this DOES NOT mean that you are trading on an ECN.
Pay close attention to how the sentences are worded. They are very good at using semantics that if you read it too quickly, you come away with the wrong conclusion.
So, to summarize, you can only trade via MT4. And MT4 was not designed with the capability to see the ECN order book and place orders through a Level 2 window, meaning that as a trader you cannot place orders between the BID and OFFER prices you see. Another way of saying this, you can only consume liquidity, BUT you cannot add liquidity to the ECN book. Therefore you are not trading on an ECN. You might get prices sourced from other ECNs out there and Tier-1 banks and what not, but it still does not mean that your orders are executed on an ECN.
Therefore, your trades are not handled by an ECN execute engine. Your trades are handled by the MT4 server and execution engine which matches your positions against that of Gleneagle. You are still in a pen and Gleneagle can do whatever they want with those orders.
2- But surely, there are telling the truth because, look! here is the order ticket with LP info about who filled the order, when, and in what quantity.
OK, so let me explain something about the mechanics of trading: Yes, there is an order going out to the wider and real market, and that order gets filled by a LP. Can you guess whose order it is? It is Gleneagle's order, that is, the hedge order they have to issue to manage their risk when taking the other side of the orders Global Prime sends them. So those tickets clients get, only show that information, when in fact, the ticket info should show that the client entered a trade with Gleneagle as the counterpart. So, as you now understand, it is just another marketing smokescreen.
What does it all mean?
It means, that they use a hybrid model where their software identifies which traders have a higher probability of loss. These traders get automatically B-booked by Gleneagle, in other words, when lose, Gleneagle keeps the profit. This doesn't mean that Gleneagle will behave like a bucket shop. But they could if they wanted to. They do also send out a hedge order to their LP in case the trade profile shows a risk level they are not willing to take. That is the ticket info they will provide you with.
On the other hand, the orders from traders the system identifies has high probability winners are automatically A-booked by Gleneagle as principal, meaning Gleneagle is still your counterpart, but this time a real order is sent out to the real market to a real LP as an hedge order so that in case your position wins and therefore Gleneagle's position starts losing, the hedge order sent out to the LP cancels that loss thus minimizing the risk to Gleneagle. That is the ticket info they will provide you with.
So, in conclusion, if you understand the above, you should now understand that:
1- Global Prime is not giving you real DMA (Direct Market Access).
2- When you choose non-DMA account option, all you are telling them is that you like to trade with a Market Maker model.
3- When you choose their so-called DMA account option, you are telling them to use the hybrid A-book/B-book model.
4- In all cases, if Gleneagle wanted to, they can do whatever they want to the price feed and order fulfillment. So far, based on customer reviews, it appears they are playing honestly.
5- Finally, this matters because of counterparty risk: if you do not know how what kind of exposure Gleneagle has, what kind of dangerous situations Gleneagle put itself in, what could happen 1 day is a repeat of the MF Global debacle and you will have lost everything without any possibility or recourse (read Global Prime's legal doc: they say it black on white).
I suppose (5) doesn't matter so much for the small trader. But fu*$k! If you have 10M/USD in your account, then we are not talking peanuts anymore.
I guess they set up their retail FX business like because when you start out with such a small client base, you can't aggregate enough volume to make it worthwhile for interbank LPs to even connect you. Because technologically speaking, there is no reason why they could not have set up a real prime infrastructure, like BAXTER-FX, for example, or INVAST. The problem is not the IT--the problem is whether or not, as a broker, you receive, that is, generate enough transaction volume to make it worthwhile for LPs to do business with you. LPs make more money the more the volume is large. So small retail traders that don't know what they are doing, are not going to generate this kind of volume. And in the end, they just shortly blow up.
Hence MT4 and MT4 server is the logical choice.
I wouldn't be surprised if Gleneagle or even Global Prime has a trading department where their staff just places limit orders to be matched against their clients, thus making easy money all day long. Man, now that is a business model!