Best Thread Other Side of the Screen

Splitlink

Legendary member
10,850 1,234
Jeez dont quit now V, its the only way you can truly fail.

Re dont trade news: Really? Im starting to wonder. what feelings do most traders experience around news time, fear > relief they didnt participate > regret they didnt participate. Well i do anyway :LOL:
Trading in the zone is a great read if you havent dont so already, link in sig

:LOL: I have been telling myself that for donkeys! Now, with 82 looming I, just, have to keep going. St. Peter might let me in if I have the Holy Grail tucked under my arm. However, if I do take it with me, how do I tell you lot to stop looking?

I'd like to add, though, that this is one of the best threads that I have come across in a, very, long time.
 
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tar

Legendary member
10,443 1,313
I just want to say that im not trying to burn anyone here. I have nothing but respect for BSD and tar (In fact anyone on here how has the balls to try and make a go of trading, with the possible exception of...him!:p), ive learnt lots from both. Its obvious to me that both of you have deep seated negative beliefs about OTC. In a 'Its not a fair market, there out to get you' kinda way. No doubt these views have been shaped by your personal experiences/what youve read/opinions and experiences of others you hold in high regard etc etc. Also, beyond doubt, theres some truth in those beliefs. :LOL:
My experience with OTC has been, different, not all negative, in fact in some areas at certain times. I consider you get a better deal trading OTC.

I didn't say i have a real problem with OTC markets , it is a huge market , its not just spread betting or CFD its much bigger , FX itself is considered OTC anyway , there are many sophisticated products traded OTC that we may never heard of like : CDS , CDO ... etc. Just was pointing to the fact that it is a MM market , its their quote their market .
 
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darktone

Veteren member
4,016 1,084
Yes, I'm not sure why there is any confusion about it. For example, spread betting is tax free because you are betting with a bookmaker, full stop. The clue is in the name - bookmaker means making the book, ie: creating the price for you to bet against.

SB companies are bookmakers and the counterparty to your bet, they are not agents (brokers) who pass on your order to find a counterparty for you in the "real" market.
Jon its not about it being tax free/dealing with a bookie etc imo. Its more to do with beliefs about what the 'real' market is.
Whether I bet via futures, cfd, sb. It all becomes very 'real' when im taking one.:LOL:
Im terming everything that isnt exchange traded as OTC/cash, whatever, including sb (please anyone correct me if you think me wrong). The OP iirc says he doesnt work for an sb, he works for a outfit that offers CFDs (OTC) and futures.
Id like to know (because I dont currently know) how the OPs outfit forms their price on anything they offer other than futures. Imo, the most qualified person to answer that question on this thread is the OP, bearing in mind its his job, that he does x days a week, x weeks a year.
 

tar

Legendary member
10,443 1,313
Jon its not about it being tax free/dealing with a bookie etc imo. Its more to do with beliefs about what the 'real' market is.
Whether I bet via futures, cfd, sb. It all becomes very 'real' when im taking one.:LOL:
Im terming everything that isnt exchange traded as OTC/cash, whatever, including sb (please anyone correct me if you think me wrong). The OP iirc says he doesnt work for an sb, he works for a outfit that offers CFDs (OTC) and futures.
Id like to know (because I dont currently know) how the OPs outfit forms their price on anything they offer other than futures. Imo, the most qualified person to answer that question on this thread is the OP, bearing in mind its his job, that he does x days a week, x weeks a year.

They don't offer futures , they offer CFDs on Futures , and they dont offer CFDs on cash indices , which means they are MM not a broker , thats why they don't hedge every bet and they dont have 2 , nothing wrong with that , it would make more sense if he mentions his firm name :p
 
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darktone

Veteren member
4,016 1,084
I didn't say i have a real problem with OTC markets , it is a huge market , its not just spread betting or CFD its much bigger , FX itself is considered OTC anyway , there are many sophisticated products traded OTC that we may never heard of like : CDS , CDO ... etc. Just was pointing to the fact that it is a MM market , its their quote their market .
LOL, I agree mate.
Right now im gona take this opportunity to Shut The F*** Up! :LOL::LOL::LOL:
 
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barjon

Legendary member
10,705 1,809
Jon its not about it being tax free/dealing with a bookie etc imo. Its more to do with beliefs about what the 'real' market is.
Whether I bet via futures, cfd, sb. It all becomes very 'real' when im taking one.:LOL:
Im terming everything that isnt exchange traded as OTC/cash, whatever, including sb (please anyone correct me if you think me wrong). The OP iirc says he doesnt work for an sb, he works for a outfit that offers CFDs (OTC) and futures.
Id like to know (because I dont currently know) how the OPs outfit forms their price on anything they offer other than futures. Imo, the most qualified person to answer that question on this thread is the OP, bearing in mind its his job, that he does x days a week, x weeks a year.


Darktone, you can tie yourself in knots with all this :LOL:

The most pertinent point you make is that whatever platform you're playing on is the real one for you. All the OTCs have their own algorithms fed in some shape or form from whats happening in the exchange markets or the big players where there is no such market. It follows that they can tinker with those algorithms to their own advantage if they are so minded. Some do - and have been caught at it - but the reputable and regulated ones have to be reasonably straight.

Anyway, it's not as if the "real" market is as pure as the driven snow, is it?

I still think it's mainly a red herring. Most people lose their shirts because they are bad traders, not because they have been shafted by their brokers.
 

darktone

Veteren member
4,016 1,084
They don't offer futures , they offer CFDs on Futures , and they dont offer CFDs on cash indices , which means they are MM not a broker , thats why they don't hedge every bet and they dont have 2 , nothing wrong with that , it would make more sense if he mentions his firm name :p
I thought from this they did.
"I got a couple of other questions when you have time.
1) Why do non DMA brokers generally dislike scalpers?

Hi Darktone,
1) It could be a combination of things. We offer both, but the allure of a normal client over one we have to place on DMA is that there are greater opportunities to make money from clients who are on our book that we can manually hedge. Making money from DMA requires large volumes per day. Another reason is that often clients demand low spreads and no comms but want to scalp, trying to take 2 pips every time. This is the reason why on DMA you are free to do it, but comms usually negate an 'easy' pickings.

Sorry, im back to ShutinTheFUp, promise, kinda :LOL: ;)
 

darktone

Veteren member
4,016 1,084
Darktone, you can tie yourself in knots with all this :LOL:

The most pertinent point you make is that whatever platform you're playing on is the real one for you. All the OTCs have their own algorithms fed in some shape or form from whats happening in the exchange markets or the big players where there is no such market. It follows that they can tinker with those algorithms to their own advantage if they are so minded. Some do - and have been caught at it - but the reputable and regulated ones have to be reasonably straight.

Anyway, it's not as if the "real" market is as pure as the driven snow, is it?

I still think it's mainly a red herring. Most people lose their shirts because they are bad traders, not because they have been shafted by their brokers.
Can agree with all of that Jon. Esp the 'bad traders' bit.
I just have an inbuilt desire to understand how things work, its torment! :LOL:
 

tar

Legendary member
10,443 1,313
I still think it's mainly a red herring. Most people lose their shirts because they are bad traders, not because they have been shafted by their brokers.

Bad trading ? Yes it may accelerate the process but i thought the main reason for losing is : A gambler with finite wealth, playing a fair game (that is, each bet has expected value zero to both sides) will eventually go broke against an opponent with infinite wealth.

http://en.wikipedia.org/wiki/Gambler's_ruin
 

Stargunner

Active member
127 19
How do SB firms feel about opening a buy and sell on a stock at the same time? The idea being to close the profitable position, then wait for the trend to end and close the other with minimal loss or break even, maybe even in profit too. I know the indices are so volatile you possibly couldn't open both positions fast enough, but on stocks this isn't a real problem.

Another idea would be to close one when the trend after a particular event has been established and keep open the profitable one.
 

peakoil

Well-known member
257 38
@tar - the most telling part of that 'gambler's ruin' definition is "expected value zero..."

Surely the minority, i.e., winners (viz. those who won't necessarily face 'gambler's ruin) won't OTOH place a bet without its ultimately being within a far greater frequency of +ev bets and will have no difficulty in cutting their losses long before they become damaging, thus giving himself repeated room for recovery. And repeated room for recovery = repeated distancing from 'gambler's ruin'.

The main (...packaged, wrapped with bells on) reason for repeatedly losing at spread betting remains poor timing, poor planning, impatience and/or frequent recklessness and a misuse or overall misunderstanding of leverage. AKA the ingredients for 'gambler's ruin' in this game.
 
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tar

Legendary member
10,443 1,313
@tar - the most telling part of that 'gambler's ruin' definition is "expected value zero..."

Surely the minority, i.e., winners (viz. those who won't necessarily face 'gambler's ruin) won't OTOH place a bet without its ultimately being within a far greater frequency of +ev bets and will have no difficulty in cutting their losses long before they become damaging, thus giving himself repeated room for recovery. And repeated room for recovery = repeated distancing from 'gambler's ruin'.

The main (...packaged, wrapped with bells on) reason for repeatedly losing at spread betting remains poor timing, poor planning, impatience and/or frequent recklessness and a misuse or overall misunderstanding of leverage. AKA the ingredients for 'gambler's ruin' in this game.

Well trading is a negative sum game because of spreads and costs . I don't want to change the thread's topic , but when you cut losses short you still are going to have consecutive losses or a prolonged period of severe DD which leads to an account ruin or staying underwater = unprofitable .
 
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peakoil

Well-known member
257 38
It's interesting that you argue trading is a negative sum game as opposed to the more usually understood zero sum game. Costs are just part of life, and all forms of trading include a 'spread' of or in some form, or fashion, so I would still, with no disrespect to you at all, choose the latter explanation/thesis.
 
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tar

Legendary member
10,443 1,313
It's interesting that you argue trading is a negative sum game as opposed to the more usually understood zero sum game. Costs are just part of life, and all forms of trading include a 'spread' of or in some form, or fashion, so I would still, with no disrespect to you at all, choose the latter explanation/thesis.

It is a negative sum game for the the trader as an individual , however it is a zero sum game for all traders as a group cuz what you pay in spread and commissions will go to someone's pocket . And if you're a MM or a local you can earn the spread and pay just a fraction of that to the exchange "positive sum game" .

Check the last few pages in this PDF :

http://www-bcf.usc.edu/~lharris/ACROBAT/Zerosum.pdf

Sorry to the OP .
 
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PieterSteidelmayer

Well-known member
283 54
First thread I have read since joining this site and if this is typical of the quality of content generally, I am annoyed I did not join sooner. Quite excellent.

Even if those on the other ends of our trades could conspire to move these markets to capture our risk on aggregate, it would not be in their financial interests to do so; the proverbial pennies in front of steam-rollers. Perhaps some off shore SB companies quoting synthetic prices could employ such tactics or even those on shore on an occasional basis, but their primary income is from the spread they take from the roughly equal numbers of clients in opposition to each other and hedge any delta when it exceeds limits. I like the A book and B book scenario; it sounds just like real life.

From my own experiences I have found placing stops at or close to the standard technical support and resistance levels is counterproductive in the long term as they are typically too close to price given the daily ranges when trading intraday.

Providing you are correct on the directional bias of an instrument, a wider stop will allow you to enter into profit at some point more often than not. Wider stops will mean smaller position sizes and taking profits at fractions of the risk employed does not offer itself superficially as an attractive strategy, but all you are really trading is definite full size losses with the occasional large win and eventual ruin for significantly higher win ratio but for small relative amounts and a gradually growing account.

This argument probably belongs on a thread devoted to risk and reward and would hopefully lay to rest one and for all the misguided and largely futile attempt to structure all trades to capture multiples of risk; it doesn’t happen in any financial undertaking and trading is no different. You don’t invest $100 in opening a coffee shop and expect to make $500 day every day from day one. You invest $750,000 in a coffee shop and your business model suggest you’ll make 18% profits on that starting in in year 2, 24% in year three building to an estimated maximum of 34% in year three and onward. A good return, eventually. But a return at fractions of the initial risk employed. That is in my view a perspective that many traders would perhaps benefit from considering. Home runs are rare, always welcome but rare. If I can get a return of 15% of my risk on 80% of my trades and lose a similar amount on the other 20% I am happy. Having a wider stop doesn’t mean you have to let it be taken, but if my trade goes against me by one or even two technical support/resistance levels, that’s typically just 15% of my risk. For most traders, that first level takes their full 100% risk.
 
 
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