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Duration: 7:44

Instructor:

Contributor: Interactive Brokers

Level: Intermediate

IBKR’s FXTrader combines quotes from 17 of the world’s largest interbank dealers and offers TWS users a dedicated and highly configurable forex trading resource.

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Study Notes:

TWS FXTrader is an order management tool that has been designed specifically for forex traders, with a world-class competitive platform and quality of market for your Forex trades.

Combining quotes from 17 of the world’s largest interbank liquidity providers, we use the same smart routing technology as for US stocks and options.

Access FXTrader from the New Window button to the top left in Mosaic and locate the General Tools > Forex expansion then FXTrader.

This completely customizable system provides an optimized trading interface that can be modified to suit your trading preferences. The grid-like workspace can be configured to suit a trader’s demands.

FXTrader opens with several default currency pairs.

You can edit the quotes by typing three letters separated by a period.

For example, the British pound against the US dollar is GBP.USD. Type this ticker into a cell and hit enter. The sterling dollar quote is displayed on screen. In another cell type EUR.CHF and hit enter. The quote immediately displays for the euro-dollar pair. The point to remember here is the ordering of the inputs.

FX market convention has the pound and euro quoted as the base currency and the US dollar is the conversion currency.

In another cell, I’ll type GBP and hit enter. This time the display reveals British pound – IDEALPRO – IBKR’s currency venue. By selecting Forex from the list the display will reveal all possible pair combinations where the British pound is considered the Underlying.

You may enter any type of ticker into a cell in the FXTrader display – not just those for spot forex currency pairs.

You may, for example, want to monitor a bond future or an index. You can also display and trade currency futures.

If you wish to compare the two quotes like for like, you can invert the display.

  • For spot forex quotes, each cell has an icon comprising two arrows, which when clicked will invert the quote.
  • When a quote is inverted, an asterisk appears next to the cell indicating that the price is inverted.
  • If I do this to the spot quote, it will represent the existing quote in the same way the futures contract displays the number of US dollars and cents one unit buys.
  • Please note that when a quote is inverted, it will not affect the default method of trading in the contract. To return to the spot quote for the currency pair, simply click on the arrows.

The main focus of the cell is the price quote – on the left is the Bid price and on the right is the Ask price with respect to the underlying currency – the base unit. Hovering your mouse above the Bid price causes the background to turn red, indicating a SELL of the base currency. If I hover the mouse above the ASK cell to the right, the blue background will appear indicating that this would generate an order to BUY the base unit.

The display is color coded so that rising values are displayed in green and falling values are shown in red font. Below the quote for the currency pair you can see associated volume, which again displays green and red arrows to depict changes in volume associated with the changing bid and ask prices.

Click the Bid quote to generate an order to SELL the currency pair.

Click the Ask price on the right of the individual cell to create an order to BUY the pair.

The order line is displayed in two places. It appears below the quote and immediately above the grid on the Orders tab. You can submit and change order attributes from either place. Time in Force, Quantity, Order Type and Price Limits can each be changed before the order is submitted to IDEALPRO.

Limit Orders allow the investor to set a buy order below the market or a sell order above the market. A Market Order is designed to execute at the price available at the moment the order is transmitted.

Over 20 order types including:

  • trailing stop limits,
  • brackets,
  • limit if touched,
  • OCA (one cancels all)
  • and scale are supported.

Notice that at the top of the FXTrader is a box, which when checked will allow instantaneous transmission of an order. Checking this box will display a warning to clients concerning the risks and responsibilities of using this feature.

  • The Cancel Orders icon in the top left of each cell will request cancellation for open orders for that specific contract.
  • Should you wish to request cancellation of all open orders simultaneously, click the Cancel All icon in the upper left of the FXTrader.

 

Once the order details are set click transmit to send the order.  You’ll see the order confirmation window display with details of the order, commission, total amount, margin balances and positions for both current and post trade.

At the bottom of each cell position information is displayed.

You can keep track of your orders, transactions and cancellations using the Log tab beneath the Quote Panel. Use the Trades tab to view status of completed and partially completed orders, price and commission.

FXTrader can be configured to enable you to determine the exact quantity for either currency. The default view is to set the quantity for the base currency only, such that if I create an order in a cell, you will see the size and limit price displayed below the quote.

However, if I access the Configure wrench at the top of the page, under the FXTrader Settings menu I can check the Allow numerator sizes box and click OK at the bottom of the window to return.

  • You can now see that a Currency column has been added to the working orders display.
  • It populates with the base currency next to the default amount in the adjoining Quantity field.
  • By clicking in the Currency field I can now choose the conversion currency or other side of the pair.
  • When I do so, the Quantity field calculates the quantity to be transacted at the prevailing limit price.
  • You can now enter the value for the non-base currency. Without configuring this way, you are limited to the base currency amount only.
  • Click transmit to see the order confirmation and preview the order details.
  • And then Transmit again to send the order.

FXTrader can be displayed as a standalone module on your desktop, but you can also access an FXTrading page from the Layout Library by clicking the + button along the bottom of the Mosaic tab. Click Open Layout Library and use the Forex filter on the left.

The FXTrading Layout can be added as a tab to your Mosaic view and will open whenever you log in to TWS. Enter or select a currency pair – see the charts display.  View an order entry window with active orders or trades. See latest economic events and filter news for a currency, as the Euro is shown here.  If I choose a different currency see the charts and order entry adjust automatically.

Back on FXTrader use the right click menu on the cell you want charted. Follow the expansion menu for Analysis and select New Chart. You can see your order displayed here as well and my choose to directly trade from the chart as well.

Additional Links

Spot Currencies

FXTrader User Guide

Disclosure: Interactive Brokers

The analysis in this material is provided for information only and is not and should not be construed as an offer to sell or the solicitation of an offer to buy any security. To the extent that this material discusses general market activity, industry or sector trends or other broad-based economic or political conditions, it should not be construed as research or investment advice. To the extent that it includes references to specific securities, commodities, currencies, or other instruments, those references do not constitute a recommendation by IBKR to buy, sell or hold such investments. This material does not and is not intended to take into account the particular financial conditions, investment objectives or requirements of individual customers. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Supporting documentation for any claims and statistical information will be provided upon request.

Any stock, options or futures symbols displayed are for illustrative purposes only and are not intended to portray recommendations.

Disclosure: Forex

There is a substantial risk of loss in foreign exchange trading. The settlement date of foreign exchange trades can vary due to time zone differences and bank holidays. When trading across foreign exchange markets, this may necessitate borrowing funds to settle foreign exchange trades. The interest rate on borrowed funds must be considered when computing the cost of trades across multiple markets.

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