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MT4 Expert Advisors = good business model?

10 March 2015

Mt4 Expert Advisors are wildly popular. They let investors trade the intellectual property in an algorithm, and provide developers with revenues. Are they a good business model for algorithm developers? Here’s our take (hint, they’re effective but inefficient). The MT4 EA business model EAs are effective: there is a market for them. Metaquotes, Myfxbook, etc., are active communities where some […]

The House Always Wins #2: Information Asymmetry

9 March 2015

If you trade and/or generally like games involving a risk/return component, The Sting (1973) featuring Robert Redford & Paul Newman is a movie you’ll enjoy.   The movie just turned 43, but the plot is timeless – its ingredients are as old as humanity. Why? Because for as long as people have been around, some have always […]

Inside forex – broker incentives

5 March 2015

DMA, STP, NDD – if you trade forex, you know the broker choice alphabet soup. Our take? Don’t miss the wood for trees: ignore acronyms and focus on incentives instead. (If you’re feeling like a more in depth session on this, our FXStreet Brokernomics webinar that’s gotten quite a few hits). Broker incentives You go long […]

The House Always Wins #1: Loss Aversion

2 March 2015

Scores of retail traders lose money systematically – i.e. strategies replicating exactly their opposite trades, offer guaranteed pay-offs, given a statistically speaking representative time horizon, and sufficient capital to withstand the occasional loss. The question is: how does this come about? The answer is a cornerstone of behavioral economics. To understand the mechanics in detail, please refer to a fantastic […]

Inside Forex – MT4 and Interbank Liquidity

10 February 2015

A bit of background 10 years ago independent traders could not trade Interbank Liquidity. Just as ALCOA doesn’t sell aluminum by the gram, Goldman Sachs doesn’t make markets in micro-lots! But then, some smart Russian engineers realised: sure, GS won’t do it, but how about we: Observe the price at which GS and say, UBS, trade EURUSD […]

Inside Forex – Darwinex DMA explained

28 January 2015

As a trader, you can choose to place your bets with: A broker – who trades with you, against an independent 3rd party (“the market”). This is what Darwinex does and always will do. In brokerage jargon, brokers operate an A-Book A dealer – who trades against you and thus plays the role of “the market” A broker-dealer, […]