Financial trading professionals and their trading style!

Hi.

I hope everyone is well.

I have a question for everyone which is what do the guys who work for trading firms use to make their money? I'm sure it's not spread betting so is it options, buying the stock for real? What is it? The reason I ask is id like to trade properly without the fear that comes with spread betting for example when they play tricks to wipe your account.

Also my deposit is 1k so interactive broker isn't a possibility

BennyC said:

what do the guys who work for trading firms use to make their money?

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I think all the professional, instutitonal traders I know (quite a few, actually, because my father's "in the trade") have some kind of "personal account" for their own trades, and to my slight surprise this seems widely to be allowed and accepted, wherever they work. I know at least a couple who spread-bet, but mostly they'll be using real brokers, who execute trades on their behalf in the underlying market rather than counterparty market-makers who hold the other sides of their positions.

BennyC said:

The reason I ask is id like to trade properly without the fear that comes with spread betting for example when they play tricks to wipe your account.

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I suspect, Benny, that some of your impressions of spreadbetting may be rather out-of-date. These days, in my opinion, retail forex "brokers" (for example) are far more likely to be doing that than spreadbetting firms. There are a lot of misapprehensions circulating about spreadbetting, many of which I think had far more validity a decade ago than they do now (and some of which were inaccurate even as long ago as that).

BennyC said:

Also my deposit is 1k so interactive broker isn't a possibility

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I hear you; but be aware that the people whose trading habits you're asking about, here, are in a different position.

alexaherself said:

I think all the professional, instutitonal traders I know (quite a few, actually, because my father's "in the trade") have some kind of "personal account" for their own trades, and to my slight surprise this seems widely to be allowed and accepted, wherever they work. I know at least a couple who spread-bet, but mostly they'll be using real brokers, who execute trades on their behalf in the underlying market rather than counterparty market-makers who hold the other sides of their positions.



I suspect, Benny, that some of your impressions of spreadbetting may be rather out-of-date. These days, in my opinion, retail forex "brokers" (for example) are far more likely to be doing that than spreadbetting firms. There are a lot of misapprehensions circulating about spreadbetting, many of which I think had far more validity a decade ago than they do now (and some of which were inaccurate even as long ago as that).



I hear you; but be aware that the people whose trading habits you're asking about, here, are in a different position.

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Amazing feedback thank you. The thing that concerns me is that Spread betting firms can choose not to execute your stop loss meaning you spend years upping your account to have 90% taken by some scumbag spread betting company. I would feel a lot more comfortable using a broker because they don't lose when you win but every time you trade with a broker you have to pay 1% just to place the trade. What if I want to just ride a few pips?

BennyC said:

The thing that concerns me is that Spread betting firms can choose not to execute your stop loss

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So can a non-spreadbetting retail broker. That's not a peculiarity of spreadbetting at all. Far from it.

Besides which, you can pay extra for guaranteed stop-losses, if you want. If you do that, they undertake to close your position at the requested level, whether they can close their own positions at that level or not. It's like paying a premium for insurance: it transfers the financial risks of fast markets from the client to the broker.

BennyC said:

I would feel a lot more comfortable using a broker

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Again, that's true if you use a real broker, not someone pretending to be a broker who actually holds the other side of your positions.

The only way I know of, of achieving that, is through an account somewhere like Interactive Brokers ($10,000 minimum, I think). But there may also be others with lower minimums of which I'm unaware, and hopefully other members will comment.

But (a) don't imagine that the risks you're referring to are specific to the spreadbetting industry, because they're not, and (b) have a look at guaranteed stops, which I'm sure you'll be able to get at places like "IG" and "City".

But overall, the combination of having only a very small account and wanting to trade regularly for small numbers of pips, if that's your position, is not one that's likely to have a very happy outcome at all, I'm afraid, because of exactly the problems that you're already aware of.

These are superb responses BennyC, do listen to alexaherself.

Really amazing advice yes thank you. I guess I don't feel good trading a large amount of money through a spread better.

BennyC said:

Really amazing advice yes thank you. I guess I don't feel good trading a large amount of money through a spread better.

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god advice here given............but regardless of the brokers the first rule of successful trading is have a successful system ..........we are talking a few pips here and the icing on the cake

N

Hi BennyC,
As others have commented, excellent posts by alexaherself.

In addition to alexa's comments, I think it's worth underlining the point made by NVP. Spread betting (SB) brokers really aren't the big foe that you (and many others) make out to be. Unless you're wanting to trade in a style that the SB firm specifically mentions in their T&Cs as being unacceptable (typically 'scalping', which tends to mean trades that last less than 3 minutes), then your biggest foe isn't the broker, but one much closer to home: you! All other things being equal, without the a well prepared, tested and executable trading methodology, you won't make a bean no matter which broker you are with. In fact, you'll probably lose all your money. So, if you're not wanting, willing or able to develop said methodology, then I recommend that you specifically choose a spread betting 'counterparty market-maker who holds the other sides of your positions'. That way, when everything turns pair shaped (which it surely will), you'll have someone other than yourself to blame!


If you decide to take the road less travelled, there are good people her to help you. For now, I wouldn't concern yourself too much about brokers, as they're the least of your worries.
Tim.

Hi BennyC just to add a little to the decent posts above. Please dont get offended as that would not be my intention. If you ever get a chance have a look at how the orders in a live market are filled. You will gain a better understanding of why stops sometimes dont get a look in and whoever you'd be using, even yourself with direct acces to the exchange, could have you in tears if the price gaps.

Theres no one out there that will be willing to put their neck on the line to guarantee you a price without a premium. So the question is, how much are you willing to pay for that? I was an equity derivatives broker for a long time and can honestly say at least half the guys used spread betting accounts for their PA trades. Most of the bad reviews come from ages ago when it was all a wild west or from people that dont have a full understanding of what volume and at best orders can do to prices.

English is my second language so sorry for mistakes.

The way I see it is the only way to effectively get into the market as a retail trader is to build up some funds (10kish) and get into some DMA markets such as futures & options where room for manipulation and broker misrepresentation is minimal.

Due to the fact that the live market is infront of your eyes you are only subject to the reaction of other traders, meaning the scale isn't lopsided and to a degree (i say this loosely) the market is fairer for you and there is more of a chance, given a reasonable strategy, for you to make consistent profits.

My 2 cents

Surely someone like lmax worth considering ?.......they just place your trade ....no sides taken

N

The 'pros' (I use the term loosely) usually trade CFDs and/or (to a lesser extent) Options. Some of them even buy real shares too

jsc said:

The 'pros' (I use the term loosely) usually trade CFDs and/or (to a lesser extent) Options. Some of them even buy real shares too

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Said no one in the actual professional trading industry, ever

Who's the ****? Anybody know?

No we all spreadbet on IG you ****ing moron.

You're calling me a moron when you think we use CFDS in a professional environment and believe we only use options partially. You need to stop spreading bad advice if you dont know what you're talking about

Dont get so emotional

That must be why I suggested equity. Buy and hold.

I am kind of busy here doing an Investment Report, when you get to Chartered status you might understand what that means...but then you'll never get there. Trust me, the city was a very different place when I used to work there. You'd already be hanging out a window with a hand round your neck. Keep shooting your mouth off at random people you don't know. Watch what happens.

Ignored. Permanently.

Making investment reports for others because you don't believe enough in your projections to put your own money behind it.

Don't worry as the saying goes in the city, money talks, bull**** walks.

You're the personification of this very statement, peace out failure

LOL just got myself a load of emails to highlight your fight ..... just unsubscribed so get it off your chest lads.