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Forex Forum → Premium Club → ECN and Non ECN Brokers. Monte Carlo use

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Posts: 5

1 (edited by GD 2015-11-20 04:02:53)

Topic: ECN and Non ECN Brokers. Monte Carlo use

Dear Mr. Popov

How can I have to treat randomization of spread parameter in ECN and non ECN brokers inside Monte Carlo calculation, in order to receive results of strategies for comparison?

I used same strategy for ECN and non ECN broker and there is big difference if I use this parameter.
I there some error in values used?
Do I need to take care of something?
Do I have to change ECN spread parameter inside Monte Carlo Options to a smaller value for ECN broker?

What tricks do you recommend?

Thanks in advance.

Re: ECN and Non ECN Brokers. Monte Carlo use

I used same strategy for ECN and non ECN broker and there is big difference if I use this parameter.
I there some error in values used?

There are two important settings - Spread and Commission.
The ECN brokers (by definition) have to provide the best prices from the Liquidity Providers they use and to charge the traders with a commission. However, most of the brokers sets the commission in the prices lifting the real spread (Lowest LP Ask - Higher LP Bid). As a result, there is no difference for the traders.

No matter how the brokers defined his policy, the true effect for the traders is the spread and the commission they charge.

Other effects come from the MT plugins and settings they use.  It reflects on the market dynamic and the slippage. As you know, for example FXCM was found guilty for slippage manipulations. Be sure they are not the only broker trying to steal from his traders.

Do I have to change ECN spread parameter inside Monte Carlo Options to a smaller value for ECN broker?

See what is their spreads for your type of account and set a little higher value in FSB, no matter if the broker calls himself ECN or something other.

The  ECN license is much cheaper (more than two times) than the Market Maker license, so many brokers has an ECN license. However, MT is designed to provide various manipulations for the brokers and despite the ECN license, they do what they want.

3 (edited by GD 2015-11-21 04:00:40)

Re: ECN and Non ECN Brokers. Monte Carlo use

Dear Mr. Popov

I think under these circumstances we need to add an indicator like the SET TIME one to specify under which conditions to trade relative to spread etc. I mean when EA will decide the exact moment of entrance in order to keep compatibility with the results of FSB, supposing all other conditions to trade used in FSB that they exist.

Can you recommend a custom indicator or something more permanent inside FSB?

I think this solution can give better results with FSB and make it more reliable in combination with Monte Carlo Analysis

I would like to hear your opinion.


Thanks in advance.

Re: ECN and Non ECN Brokers. Monte Carlo use

GD wrote:

Dear Mr. Popov

How can I have to treat randomization of spread parameter in ECN and non ECN brokers inside Monte Carlo calculation, in order to receive results of strategies for comparison?

I used same strategy for ECN and non ECN broker and there is big difference if I use this parameter.
I there some error in values used?
Do I need to take care of something?
Do I have to change ECN spread parameter inside Monte Carlo Options to a smaller value for ECN broker?

What tricks do you recommend?

Thanks in advance.

You should use the average spread of the ECN broker. If they don't publish such info you can calculate it. Of course you have to add the commissions to the equation

5

Re: ECN and Non ECN Brokers. Monte Carlo use

Thanks

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