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RETAIL e-FX CLIENT<br />
in the retail forex world need to be <strong>com</strong>petitive or lose<br />
traders to the next forex dealer.<br />
However, the one aspect of trading that retail traders<br />
will never have is access to the interbank flows that can<br />
affect intraday movements, Michalowski adds. He says<br />
this is the advantage that the bank trader will always<br />
have, and deserves, by virtue of the customers they<br />
cater to on a daily basis for real currency transactions.<br />
“If there is an M & A flow into the Canadian dollar or<br />
British Pound, bank traders will be the first to know.<br />
Additionally, if a central bank is buying the EURUSD,<br />
or if there is a big repatriation of funds back to the US<br />
from a multi-national, the bank traders will also be the<br />
first to know,” states Michalowski.<br />
He continues: “However, all is not lost for the retail<br />
trader because he can still rely on the technical price<br />
action to tell customers what they don’t know. If the<br />
price moves above a shorter term moving average, retail<br />
traders don’t necessarily need to ask why; they just need<br />
their platform to give them a clue from the chart.”<br />
While Meier states: “Today small clients are often at a<br />
disadvantage. It is not unusual that retail clients trade<br />
with a price feed that is not always optimal, and can<br />
sometimes vary substantially from client to client.<br />
There is a need for more transparency and more<br />
uniform pricing. All traders should be able to trade<br />
on the best possible price, no matter what their<br />
trading style. As long as there is no ‘time and sales’<br />
available, as is the case with exchange traded products,<br />
clients will continue to depend on the level of<br />
transparency their broker provides in this respect.<br />
“The industry will need to provide their clients with<br />
more choices in general,” continues Meier. “These<br />
choices should not be limited to just providing a<br />
selection of different platforms, but should also provide<br />
added options in regards to account funding. Today for<br />
example, the client still has too limited choices<br />
regarding posting of collateral to their account. Few<br />
brokers accept bank guarantees or provide solutions for<br />
segregation or the use of external bank deposits.<br />
Increasing demand from retail investors for broker<br />
innovation and transparency can no longer be ignored.”<br />
Flexible to fit all<br />
McDonald states: “I think we, as brokers, are entering<br />
a new age of enabling traders. Retail traders don’t<br />
really want to be told Buy or Sell. They want to<br />
understand the market and make their own educated<br />
decisions. Retail traders have a thirst for knowledge<br />
and don’t always want to be led like sheep. I think<br />
150 | january 2010 e-FOREX<br />
Mario Persichino<br />
“the most important thing required by users is a<br />
very liquid market; they need to see all prices in real<br />
time and want their orders executed fast,”<br />
that the brokers that respect that and offer their<br />
customers the tools they need to make their own<br />
decisions will ultimate have better and happier<br />
traders.”<br />
In terms of flexible accounts, Interbank FX offers<br />
Standard accounts (where one lot = a $100,000<br />
contract) and Mini Accounts (where one lot = a<br />
$10,000 contract). However, traders can opt to trade<br />
0.01 of a contract. On a mini account this equates to<br />
a $100 notional value trade. McDonald <strong>com</strong>ments:<br />
“Our customers can also be set at our standard<br />
leverage (100:1) or choose a different level by<br />
requesting this at the account opening stage. We have<br />
traders at 20:1, 50:1 or a number of other different<br />
leverage levels. By allowing traders to choose a<br />
leverage level and then give them options on the trade<br />
size, our traders are able to really fine tune their<br />
trading strategy to suit their risk tolerance,” she adds.<br />
On flexible accounts, Michalowski states: “Our first<br />
tier is for new traders. This is our Mini Account. The<br />
contract size is 10,000 of the base currency. The value<br />
of a pip is $1 on a standard lot for the EURUSD. It is<br />
a great way for new traders to hone their skills<br />
without trading a demo, which, for some, does not<br />
give them enough incentive to trade seriously.<br />
“The next tier is our Standard Account which is for<br />
traders who opt for a contract size of 100,000 of the<br />
base currency which corresponds to $10 a pip on the<br />
EURUSD. In addition to the existing account types,
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