As most of my readers know, my blog and the NDD Forum have been inactive the past few months largely because I came to the conclusion several months ago that they had pretty much outlived their central purpose - to educate traders and help bring about much needed industry reform. In the past year and a half we’ve witnessed a great deal of change. A number of forex dealers have moved to at lease claim that they offer non-dealing desk trading, reorders have been virtually eliminated though I’m not sure that’s really in the trader’s best interests, slippage has been reduced, the NFA is now monitoring pricing exceptions, and, of course, the industry has undergone much needed consolidation.
One problem, however, still haunts the retail trader – stop hunting – and until recently, I’d pretty much resigned myself to think that the problem was an insurmountable one. The good news is that it appears that soon that may no longer be the case.
Several months ago it was brought to my attention that historically traders hands have been tied when it comes to addressing that problem because as long as traders use the dealer’s resident trading platform, stop losses will forever be displayed on the dealer’s computer screen. Obviously, this puts the dealer at a distinct advantage because he can use that advanced knowledge to trade against you. After all is said and done, who can really compete if one of the rules of the game requires you to tell your opponent what you’re going to do before you do it?
So what is the solution? API Trading.
I believe the solution may well lie in the introduction and use of API trading platforms like FxSpyder, an independent trading platform specifically designed for traders, not brokers. The first platform of its type, it is certainly a step in the right direction. .
The concept is simple enough.
The trading platform itself is maintained on an independent server so stop loss orders are not revealed to the participating broker until the price the trader has specified has been reached. Masking the trader’s intentions and, thereby, depriving the broker advanced notice of pending orders, the platform goes a long way then in leveling the playing field. The broker obviously cannot target an individual trader’s stops for takeout because he cannot target what he cannot see.
If you're like me, you'll probably have a bizillion questions. A visit to Fxspyder's online helpdesk will answer most of them.
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