New (enhanced) approach to Trader-Client Negotiation
process.
Purpose: To make Negotiation process more flexible; to
automate the Negotiation process and to provide dealers with option to
eliminate significant amount of manual negotiation operations.
Negotiation can be set for every individual Instrument
(currency pair)
Possible setting values for each Instrument:
FULL : All orders processed manually by Dealer;
AUTO: All orders processed by the system;
VALUE (=Autolimit): sets maximum number of lots, allowed
to be processed by the system without dealer’s intervention.
(Orders with #of lots larger then the Value are
processed manually by the Dealer;
Orders with #of lots lesser then the Value are
processed by the System )
Value set at zero = Full Negotiation
Negotiation can be set for the Instruments from ‘Currency
reference rate’ window on the Dealer’s screen
Negotiation can also be set for individual Accounts.
Negotiation set at individual Account level can be
adjusted from ‘Account Information’ window on the Dealer’s screen.
In case the Account is set for Negotiation, and
Instrument is not (Auto or # of lots in order is below Value), order is still
processed manually by the Dealer (order is Negotiated)
In case Account is set for non- Negotiation, and
Instrument is set for Negotiation (Full or # of lots in order is larger then
Value), order is still processed manually by Dealer (order is Negotiated)
The following settings are now available:
Negotiation for an individual Account :Yes/No (“Y”/”N”)
- at the account level dealer specifies if manual (Y) or automated (N) order
processing is selected at the current moment
Dealer's Range (DR) - [Acceptable Rate Range (in pips)] -
- within this range trader's orders will be executed at the trader's price
Trader's Range (TR) - for the particular order - within
this range (in pips) system is allowed to automatically open a position at the
dealer's price
Instrument Negotiable (IN) (Y/N) - negotiation flag on
the instrument
Dealer's Price (DP) – CURRENT DEALER’S PRICE
Trader’s Price (TP) – the price in trader’s I or C order
to open (I order) or close (C order) position
The following logic is being used:
Procedure:
IF Negotiation on individual Account = No And IN = NO --
all orders are processed by the system. Below is the procedure for I and C
orders:
If TP is
‘worse’ for the trader then DP, or TP is ‘better’ for the trader but within
the DR, then
position
is being opened at TP
example1 : Trader attempts to buy
at 05, Dealer’s price is 03;
TP of 05 is ‘worse’ for the trader
then DP of 03 – position is being opened at Trader’s Price at 05;
example2 : Trader
attempts to buy at 05, Dealer’s price is 07, Dealer’s range is 05;
TP of 05 is’ better’
for the trader then DP of 07, but within the DR – position is being opened at
Trader’s Price of 05)
else (If
TP is better for the trader then DP And TP is outside the DR),
If DP is within the TR, then
position
is being opened at DP
example3 : Trader attempts to buy
at 05, Dealer’s price is 08, Dealer’s range is 02;Trader’s range is 05: TP is’
better’ for the trader then DP and outside the DR, but Dealer’s price is
within the Trader’s range – position is being opened
at Dealer’s Price at 08)
else (If
TP is better for the trader then DP And TP is outside the DR;
And DP is
outside the TR):
example4 : Trader attempts to buy
at 05, Dealer’s price is 08, Dealer’s range is 02;Trader’s range is 01: TP is’
better’ for the trader then DP and outside the DR and Dealer’s price is
outside the Trader’s range
System rejects the Trader’s request
with the new DP and starts the Timers (System timer and User’s timer)
(recommended that System timer is larger then User’s timer; example: System
timer=20 sec; User’s timer =10 sec)
then
If user
Cancels [presses ‘Remove Order’ or does not Accept New Price within the
User’s timer]
then
end
operation [order removed]
else: If
user Accepts the new price [meaning: trader clicked on Accept New Price
within the User’s Timer],
then
If TP[newly accepted by
trader] is worse for the trader then current** DP, **[meaning:
Dealer’s Price changed before newly accepted Trader’s Price arrived]
(condition 1)
Or TP[newly accepted by
trader] is within the DR (condition 2),
Or system timer OK[the newly
accepted Trader’s Price arrived within the system timer] (condition 3)
in ANY of these three
conditions: position is being opened at TP [newly accepted by trader]
example4, continued : Trader attempts to buy
at 05, Dealer’s price is 08, Dealer’s range is 02;Trader’s range is 01: TP
is’ better’ for the trader then DP and outside the DR and Dealer’s price is
outside the Trader’s range
System rejects the Trader’s request with the new
DP of 08; Trader Accepts the new price of 08
Condition 1: newly accepted TP is 08, but
Dealer’s Price already changed from 08 to 07;
-
price of 08 is worst for trader then 07;
-
position is being opened at newly accepted TP of 08
Condition 2: newly accepted TP is 08, Dealer’s
Price already changed from 08 to 09, but Dealer’s range is 02
-
price of 08 is ‘better’ for Trader then 09, but it is within the
Dealer’s Range of 02;
-
position is being opened at newly accepted TP of 08
Condition 3: newly accepted TP is 08, Dealer’s
Price already changed from 08 to 12, Dealer’s range is 02, but the newly
accepted Trader’s Price arrived within the system timer of 20 sec.
-
price of 08 is ‘better’ for Trader then 12, and it is ‘outside’
the Dealer’s Range of 02, but the newly accepted Trader’s Price arrived within
the system timer of 20 sec.
-
position is being opened at newly accepted TP of 08
else (Neither of above three conditions met)
[TP[newly accepted by
trader] is better for the trader then current DP
And TP[newly accepted by
trader] is outside the DR
And TP[newly accepted by
trader] arrived too late for the system timer]
Then:
if current DP is within the TR, then
position is being opened on DP
example4, continued : newly
accepted TP is 08, Dealer’s Price already changed from 08 to 12, Dealer’s
range is 02, the newly accepted Trader’s Price arrived later then 20 sec., but
Trader’s range is 05
-
price of 08 is
‘better’ for Trader then 12, and it is ‘outside’ the Dealer’s Range of 02,and
arrived later then 20 sec. ,but the Dealer’s price of 12 is within Trader’s
range of 05 from newly accepted TP of 08
-
position is being
opened at DP of 12
else (If current DP is outside the TR)
[Another Reject]: System rejects the
Trader’s request with
the new DP and starts the Timers (System
timer and User’s
timer) until:
Position is opened
OR
user Cancels[presses
‘Remove Order’ or does not Accept New Price within the User’s timer]
(Note: it trader’s
attempts to open/close position are being continuously rejected by system due
to fast market or trader’s slow connection:
it is recommended that
either the dealer widens the Dealer’s Range
or the Trader widens the
Trader’s range)
------------------
IF Negotiation on individual Account = Yes And IN = NO
order is sent to dealer for manual processing.
-----------------
IF Negotiation on individual Account = No, then
if IN = Y, then orders are still sent to
dealer for manual processing
if MARGIN CALLECEXUTION*
in the system is AUTOMATIC, then
if
CONDITION ORDERS EXECUTION* is
AUTOMATIC, then
only I and C orders (only
orders for manual opening /closing positions from trader) are sent to dealer
for manual processing
else (if
CONDITION ORDERS EXECUTION* is
MANUAL)
I, C, E,
S, L orders (orders for manual opening /closing positions; entry orders, stops
and limits) are sent to dealer for manual processing
else (if MARGIN CALL ECEXUTION*
is MANUAL)
if
CONDITION ORDERS EXECUTION* is
AUTOMATIC, then
I, C, M orders (orders for
manual opening /closing positions from trader and Margin Call orders) are sent
to dealer for manual processing
Else (if
CONDITION_ORDERS_EXECUTION*=manual)
I, C, E,
S, L, M orders (orders for manual opening /closing positions; entry orders,
stops, limits, Margin Call orders) are sent to dealer for manual processing
*Setting
in made in ‘Rules’ by ActForex specialist in accordance with the System
Administrator’s request