Best Thread Other Side of the Screen

BSD

Veteren member
3,819 985
Guys, can only comment on what I've seen on the marketindex platform that used to be run by ABN AMro, they sold that on to the Royal Bank of Scotland, they both decided to get out of that business because of the finacial problems they had and have.

But even if you're firms aren't skewing prices too far away from the real market, where do you guys place your stops and when that stop gets hit have trust that that wasn't just your marketmaker gunning you down ?

Often doesn't take more than a few points here or there to accomplish that.

Of course stops get hit in the real market as well, but at least there you know that everybody saw the same price move, whereas it's easy for a marketmaker to show individual prices to individual clients.

Bloomberg:

Traders Said to Rig Currency Rates to Profit Off Clients

Traders at some of the world’s biggest banks manipulated benchmark foreign-exchange rates used to set the value of trillions of dollars of investments, according to five dealers with knowledge of the practice.

Employees have been front-running client orders and rigging WM/Reuters rates by pushing through trades before and during the 60-second windows when the benchmarks are set, said the current and former traders, who requested anonymity because the practice is controversial. Dealers colluded with counterparts to boost chances of moving the rates, said two of the people, who worked in the industry for a total of more than 20 years.

“The FX market is like the Wild West,” said James McGeehan, who spent 12 years at banks before co-founding Framingham, Massachusetts-based FX Transparency LLC, which advises companies on foreign-exchange trading, in 2009. “It’s buyer beware.”


Photographer: Noriko Hayashi/Bloomberg
A boy adjusts number tiles displaying the exchange rate on a currency exchange board at... Read More
The $4.7-trillion-a-day currency market, the biggest in the financial system, is one of the least regulated. The inherent conflict banks face between executing client orders and profiting from their own trades is exacerbated because most currency trading takes place away from exchanges.


---

The foreign exchange market (forex or FX) is an unregulated global market in which trading does not occur on an exchange and does not have a physical address of doing business. Unlike equities, which are traded through exchanges worldwide, such as the New York Stock Exchange or the London Stock Exchange, foreign exchange transactions take place over-the-counter (OTC) between agreeable buyers and sellers from all over the world. This network of market participants is not centralized, therefore, the exchange rate of any currency pair at any one time can vary from one broker to another.

It is possible for market makers to manipulate currency prices to run their customers' stops or not let customers' trades reach profit objectives. Market makers may also move their currency quotes 10 to 15 pips away from other market rates.



---

The Business Trial Group of Morgan & Morgan, P.A. filed a class action lawsuit today against Forex Capital Markets, LLC (FXCM) (NYSE:FXCM) alleging fraud and racketeering by the nation's largest Forex dealer.

The lawsuit, filed in the United States District Court for the Southern District of New York (Manhattan Division), alleges that FXCM has bilked thousands of customers out of hundreds of millions of dollars using deceptive and unfair trade practices, including falsely portraying its Forex trading platform as a fair, transparent and true foreign currency exchange, when instead it is a "rigged game" designed to systematically separate customers from their money.

Sanders alleges, FXCM uses a number of devices and tricks, including software applications, designed specifically to interfere with customers' trades.

The Complaint further alleges that FXCM engaged in a pattern of racketeering activity by collaborating with its software developers and programmers to develop a "diabolical" software application that provides FXCM with a myriad of tools and system commands with which to interfere with customers' trades


I mean, trading is tough enough as it is, so why on earth not trade on a real exchange, not like direct access brokers require huge margins to open an account.
 

tar

Legendary member
10,443 1,313
Perfect arbing opps then.
Please, if anyone is currently seeing prices skewed miles away from the underlying let me know as id like some free money! :p

Sometimes they dont mind you take advantage as long as they are making more from the other side , check the FTSE screenshot i just gave back ...
 

Splitlink

Legendary member
10,850 1,234
I mean, trading is tough enough as it is, so why on earth not trade on a real exchange, not like direct access brokers require huge margins to open an account.

Not everyone has the kind of money to want to trade full contracts, or, if they have, wants to.

I have had accounts with both and, TBH, I did not like the heat of the kitchen when with a broker. Of course, to be fair to myself, I did not have the experience to be with a broker in those days, Even though I have more, today, I don't believe that my SB dealer is unfair and would not change without good reason.

On a more humorous note, I have actually, been credited with the same payment twice and, after seeing that they did not appear to have spotted it, I rang them up. I was thanked for my honesty. :innocent:
 
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tar

Legendary member
10,443 1,313
I mean, trading is tough enough as it is, so why on earth not trade on a real exchange, not like direct access brokers require huge margins to open an account.

There are many advantages for OTC products , it depends on your trading style afterall , but if you are a scalper or a an autotrader ... etc then Futures would be a much better choice .
 

barjon

Legendary member
10,705 1,809
Well, we all know brokers can play tricks and that some do, but I do think all that's incidental compared to what LLSS is telling us what it looks like from the inside so far as losers and winners are concerned.


The biggest mistakes I see are people who cannot accept a loss. Honestly this is how we make 75% of our money.

Now that's no surprise is it :LOL: Maybe the surprise is that everyone hears it but few take notice.

The best traders I have seen often have a strong knowledge of their market. You will see them time their entries well and cash in on decent moves. They will rarely look for the big ones where they can make a fortune, they often just ride a small, decent wave up/down and then exit the trade. Their timing is usually their greatest asset and often they will close a trade quite quickly if it doesn’t work out. Of course there are many ways to trade well, but I would say timing and understanding a specific market’s behaviour is key.

My bold - supports my own prejudice that so I love it to bits :LOL:
 

BSD

Veteren member
3,819 985
Hi mate I respect that.

One alternative might be exchange traded fund traded on exchanges that would allow you to trade smaller size than full contracts.

http://en.wikipedia.org/wiki/Exchange-traded_fund

They aslo let you track pretty much every instrument under the sun out there.

But haha, that's hilarious with that double payment you received from your broker.

Wouldn't have expected any different from you though than being honest and ringing em up.

Good karma will always come round again, so good tradin Split !

:)

That said it's not just spreadbetters or CFD or FX brokers, Wallstreet is no different where over the counter products are concerned:

How Wall Street Manipulates Everything: The Infographics

Courtesy of the revelations over the past year, one thing has been settled: the statement "Wall Street Manipulated Everything" is no longer in the conspiracy theorist's arsenal: it is now part of the factually accepted vernacular. And to summarize just how, who and where this manipulation takes places is the following series of charts from Bloomberg demonstrating Wall Street at its best - breaking the rules and making a killing.


Edit: if you didn't click the links ya wouldn't have seen what markets they're on about:

FX
Foreign-Exchange_rev1_0_0.jpg


Energy Trading
Energy-Trading_rev1_0_0.jpg


Libor
Libor_rev1_0_0.jpg


Mortgages
Mortgages_rev1_0_0.jpg


C ourtesy of:

http://www.zerohedge.com/news/2013-11-18/how-wall-street-manipulates-everything-infographics

Of course,none of which should come as news if you've read, and one really must, the excellent and simultaneously hilariously written

Liar's Poker: Rising through the Wreckage of Wallstreet


that explains in in great detail how they were ripping clients of left and right with OTC products.

;)
 
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BSD

Veteren member
3,819 985
Well, we all know brokers can play tricks and that some do, but I do think all that's incidental compared to what LLSS is telling us what it looks like from the inside so far as losers and winners are concerned.




Now that's no surprise is it :LOL: Maybe the surprise is that everyone hears it but few take notice.

Ain't that the truth !!!

An Analysis of the Profiles and Motivations of Habitual Commodity Speculators

The focus of this study is the habitual speculator in commodity futures markets. The speculator's activity broadens a market, creates essential liquidity, and performs an irreplaceable pricing function. Working knowledge of the profiles and motivations of habitual speculators is essential to both market theorist and policy makers. Responses to a 73 question survey were collected directly from retail commodity brokers with offices in Alabama. Each questionnaire recorded information on an individual commodity client who had traded for an extended period of time.

The typical trader studied is a married, white male, age 52. He is affluent and well educated. He is a self-employed business owner who can recover from financial setbacks. He is a politically right wing conservative involved in the political process.

He assumes a good deal of risk in most phases of his life. He is both an aggressive investor and an active gambler.

This trader does not consider preservation of his commodity capital to be a very high trading priority.

As a result, he rarely uses stop loss orders.

He wins more frequently than he loses (over 51% of the time) but is an overall net loser in dollar terms.

In spite of recurring trading losses, he has never made any substantial change in his basic trading style.


To this trader, whether he won or lost on a particular trade is more important than the size of the win or loss.

Thus he consistently cuts his profits short while letting his losses run.


He also worries more about missing a move in the market by being on the sidelines than about losing by being on the wrong side of a market move; i.e., being in the action is more important than the financial consequences.

Participating brokers confirmed that for the majority of the speculators studied, the primary motivation for continuous trading is the recreational utility derived largely from having a market position.



:LOL::LOL::LOL:
 

darktone

Veteren member
4,016 1,084
Haha well to be honest it will depend on the firm and I can't speak for everyone but I would view you as a bit of a cheeky sod but also with some form of admiration. I think you're an t*t because you make my life/job harder as I have to trawl through loads of your data to find out what you're up to but admire your efforts for finding a loophole. It's also the fact that I know that you know what you're doing is taking the mick a bit.
:LOL: so would I, but ive been cheekier. See below :cheesy:
Yeah was defo taking the mick, although i didnt manage to capitalize on it very well tbh. Was going through one of those 'how can i be right and nail down risk' type times, net result was a whole lot a -1.1/be and not enough pay.

At the end of the day though we try to mimic the real underlying market environment as closely as possible, and you and I both know (I presume from your wording) that in real market conditions these tactics simply don't work.
Totally agree

In a related example, we faced a similar thing previously where a client would try to place a buy and sell stop each side of the market during big data. Fine, but when he got slipped as the price thundered one way or another he would then ring up to complain when he got slipped. Even after showing screenshots of the underlying market at 1 second before/during/1 sec after where price had gone from 1250 to 1247 (Gold) in a split second, he wouldn't understand why he couldn't get filled at 1249. So in his case we simply widened the price he was allowed to place his orders at to negate slippage. Imo it's a worse deal but he was happy with it :confused:
I did that for while back in the day. In 04-05ish iirc, GFT amongst others started offering 'guaranteed fills' to get the punters in. New fish me saw the obvious NFPR opp :cheesy:. Opens the acc and fills it with all had spare. Fast forward to 'the' friday at 1.29pm (full margin at 25ppp ish, kings ransom to me att)
1) P sell at x /C stop -4, check! P buy at x/C stop -4, check!
2) 1.30pm platform freezes.
3) 1,35pm platform unfreezes and eurusd is 150 lower.
4) Check balance.
5) "Wohoo! Im a trader!! :LOL:.
Closed out for around +6.5k a bit hour later, thought i was amazing! :LOL:
Went on to do this a couple more times and made a good whack, but the views of the older hands (youre an idiot!) id had shared the idea with were starting to get to me.
Eventually i got spanked on one for around 5k when i got jumpy and went to cancel the orders, dunno what i did but i left something out there, it got filled alright, pinpoint! :LOL:. No amount of complaining was getting me my dough back so i called time.
A little while after, GFT (and others) changed their t&c, no more guaranteed fills. I rang them up just to check.
Me "Hi, just wana check smthing, are you no longer offering guaranteed stops?"
GFT "No, weve stopped doing that."
Me "Got you, whys that then?"
GFT "Were getting killed!"
Me "Really" (no sh1t!) :p

Fun times :)
I got a couple of other questions when you have time.
1) Why do non DMA brokers generally dislike scalpers?
2) The folks who do do well, is there any pattern to how they trade? ie do they generally use limits,trade with/against major trend, big stops, little stops, no stops etc

Again, a big thanks for coming on here and doing this. Please dont be put off posting by the handbag swingers who dont realize the opportunity they are being given! ;)
Cheers
D
 
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tar

Legendary member
10,443 1,313
I got a couple of other questions when you have time.
1) Why do non DMA brokers generally dislike scalpers?
2) The folks who do do well, is there any pattern to how they trade? ie do they generally use limits,trade with/against major trend, big stops, little stops, no stops etc

Again, a big thanks for coming on here and doing this. Please dont be put off posting by the handbag swingers who dont realize the opportunity they are being given! ;)
Cheers
D

Well we had this opportunity in the past in 2 threads : Capitalspreads Simon , and Peter Cruddas the CEO of CMC ...
 

darktone

Veteren member
4,016 1,084
Sometimes they dont mind you take advantage as long as they are making more from the other side , check the FTSE screenshot i just gave back ...
Granted tar, i comprendie.
This kind of stuff doesnt bother me tbh. If u use stops, ouch. If u use limits, thankyou very much. Surely, being able to use the tools at hand has got to be high on a traders list of priorities.

Re the slippage thread.
http://www.trade2win.com/boards/spread-betting-cfds/70236-ig-index-huge-gbpusd-slippage.html
I bet there wouldnt have been a thread if her limit order was slipped and filled 120 to the good now would there. :LOL:
 

darktone

Veteren member
4,016 1,084
On a more humorous note, I have actually, been credited with the same payment twice and, after seeing that they did not appear to have spotted it, I rang them up. I was thanked for my honesty. :innocent:
I bet you were! :LOL:
Just kidding split, ur top notch! ;)
 

tar

Legendary member
10,443 1,313
Well, we all know brokers can play tricks and that some do, but I do think all that's incidental compared to what LLSS is telling us what it looks like from the inside so far as losers and winners are concerned.

I wouldn't call it tricks nor incidental it is a systemic approach used by SB brokers to balance their books or enhance their odds , example : check all the brokers fined by the NFA for slippage practices ...
 
 
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