Dear clients and future clients of Global Prime Forex,
I'd like to inform you that Global Prime Forex has undergone a management change. Elan Bension, Alex Neo and I have teamed up with Global Prime with the aim to redevelop the way a traditional broker is run. We look forward to working closely with our clients and our intent is to effectively manage Global Prime in a completely transparent way by providing our clients with honest answers to anything they ask of us as well as providing a brokerage service that is second to none.
Global Prime is an ECN only MetaTrader 4 forex broker offering some of the tightest spreads across 42 currencies through tier-1 liquidity providers. To see how we are interacting with the forex community please visit the Steve Hopwood Forex forum:
I also wrote a review which would be helpful for other users but it hasn't been published yet. So writing my experience here-
Excellent - You can contact GP and their response is fast. You can contact them regarding anything to your account and they reply fast. It is very important that you can communicate easily with speed to your broker.
Bad - Most of my Stop Loss orders were executed with negative slippage of few pips during normal trading hours. This results in a bad risk reward ratio. At the end of the day those few pips of negative slippage adds up to your losses. Take profit orders were mostly executed on price set with very few having positive slippage. But the number of time negative slippage occurs is a way lot more than positive slippage.
Bad - I was charged £12 each for two withdrawals and £6 for another. As per GP these fees are charged by intermediary banks.
Finally I am sharing this so that prospective traders can make informed decisions. Now different traders have different needs which they look for in a broker. Always do your own research thoroughly and extensively to see what clicks for you before putting money to any broker.
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!
I forgot to add to my previous post... to be fair, as long as clients don't get requoted, can keep their profits, get fast withdrawals no questions asked, and also get fast trade execution in all market conditions (including news time), then why not open an account as they are not cheating you. My only concern is: they are not doing it yet. Or if the parent company, Gleneagle, runs into trouble, all your money will be gone before you know it since client funds are not properly segregated.
But personally, I prefer brokers that give me a platform and backend infrastructure that allows me to both provide and consume liquidity from the ECN. That is the best way to trade IMO. And Global Prime does not offer this.
If you want broker recommendations that do offer such, ask here if the moderator will allow me to provide such info or just PM me (private message).
It is so unbelievable that here we are in 2016, and retail traders still have all this obstacles to overcome before they can even concentrate on trading alone. It is disgraceful and puts this whole industry to shame. I have heard of only 1 outfit trying to change this situation, and that is LMAX. One! And how many FX brokers are out there? That only 1 is vocal about all this speaks volume about the rest of the industry and speaks in very bad terms, if you catch my drift.
Anyhow. Hope this helps. Educate yourselves, keep giving those bast@rds a hard time, and eventually you'll get real prime service without the need for a huge starting account.
Hi outofphase firstly please accept my apology for writing back to your post almost a year later. I appreciate the efforts you went through and also wanted to say that it seems you have a really good grasp on how trade executions work in the FX market.
To address your concerns - Gleneagle is the parent company of Global Prime and holds the multiple Prime Broker relationships which enables us to access direct bank liquidity as well as pricing from non-bank and ECNs. We offer a true Prime of Prime setup to our clients, banks and other brokers that use our pricing for their clients. The main point I'd like to address that the assumption that we run a b-book is not correct. Here are a few points that might help to show that we do send our clients trades to liquidity providers.
There would be no need for us to use an expensive multiple Prime Broker setup if we were taking the other side of trades. We could simply get liquidity from an LMAX, Sucden or IS Prime and deposit margin there for a much cheaper $ pm setup.
Our standard leverage is 1:100 and we only offer up to 1:200 after the client answers a detailed questionnaire and we are comfortable that they will not overexpose their accounts. The client agrees to not open more than X lots per Y balance and we actively contact them if their exposure goes above and beyond what was agreed in the questionnaire. If we were profiting from the losses of our clients we would be offering much higher leverage with no questions asked as in most retail traders cases this would lead to them overexposing and losing their balance. As we are holding real exposure with our Prime Broker we are very conservative with the leverage offered.
We are not your typical retail broker. We provide prime of prime services to other brokers, hedge funds and have a thriving institutional business through FIX API connectivity on margin or giveup basis. Our approach of not b-booking has really helped us to focus on liquidity and helped us become one of Asia Pacific's best choices for a proper Prime of Prime relationship. We put out over 26bn in volume to the street in Sep 17.
The trade receipts we offer show the bank or liquidity provider that filled the clients trades and our clients can request these at any time from us. It really helps our clients know that we are sending their trades to be filled by our liquidity providers. I've attached a couple of recent trades from MT4 clients that show even $1,000 (.01 lot) tickets being filled by banks. Note that on the USDCAD trades there were LP rejections on both the open and close - if we were booking trades the banks wouldn't even have the chance to reject those trades as they wouldn't see them.
Our aim is to provide our retail clients with the same liquidity and execution that our institutional and Prime of Prime clients receive. I completely agree that MT4 is not the right platform to realise this goal which is why are implementing a new institutional platform which will be offered to our retail clients with the same minimum deposit of $500. Retail traders still predominantly use MT4, mostly for the aftermarket indicators and EA they can pop on. I still don't see MT4 disappearing any time soon although we have no inclination to offer MT5.
When retail clients ask their broker if they are STP, ECN, DMA etc they are really asking if the broker is sending trades to market or not. These acronyms have become catch phrases used by brokers to say they don't take B-book but in actuality pretty much every retail broker runs an A and B book. When we speak to other brokers they think we are crazy for keeping things A-book only but it's really helped us to grow our institutional profile and set us off in a very different direction to them. It let's us sleep easy at night and has helped us build a great business with a long term focus. Hopefully our rating of 4.7 out of 5 stars from over 190 reviews here on Forex Peace Army show that we do a pretty good job of looking after our clients (like you mentioned) and that we are on the right track.
Again, I appreciate your depth of understanding but all I politely ask is to not lump us in the 'definitely b-booking' basket for the reasons you mentioned as I can assure you that we are not. If you have some time it would be great to jump on a call and chat liquidity / execution / brokerage. I feel that if we took the time to communicate it would give us more of a chance to show you how we are doing things differently. You can email me direct at firstname.lastname@example.org