Best Thread Other Side of the Screen

[LLSS]

surely by the same token...it's understood that *most* sb firms tolerate 'winners' precisely because the majority regularly lose more than enough to more than cover any regular/irregular gains made by the minority of 'winners'.

BTW, when you say "Someone with a small account balance (up to $10,000.00)", *if* I may assume you worked for a UK outfit, did you mean up to 10K GBP?

Hi,

Yes from my experience meeting others in the business most clients lose money. Clients come from all walks of life, whether its a bloke punting a few hundred dollars on FX after reading it's 'easy money' online. Then there are the wealthy guys who just like to gamble and have a punt here and there. There are very few who are genuinely good though and who have the time and resources to make a go of it seriously. Hence why it really doesn't matter to us in the long term if you are a winner or loser, sure our strategy will vary, but we will always want you on board.

As for the $/£ question. Yes we are UK based but the majority of our clients are based outside the UK so we offer $/£/€ with USD being the most popular choice so often we refer to everything in USD.

 

[LLSS]

If you are a market maker how exactly does it 'cost' you to move the price your quoting up. It doesn't cost a man on a market stall any more to shout Bananas £2 a bunch rather than Bananas £1 per bunch. In fact if he owns a lot of said Bananas he's actually making MORE money from other people buying while he's shafting you for having bought the option (from him) to sell them @ £1.50.
To continue the analogy if he changes the price overnight when no other 'Barrow boys' are around and your pregnant wife needs a Banana NOW! your screwed.
Now take a look at the Dow!

Hi Postman,

To answer your question as best as I can I should clarify what I meant. I meant quite literally moving the underlying market by trading on it. EG a client of ours is short and has a stop close by, I go in and start bidding the price up during out of session hours to hit his stop. This would be totally pointless and very risky seeing as the capital required (market depending ofc) would be huge, probably many times more than I would make from his trade.

I also was referring to a strictly regulated broker/MM (UK - FCA). If we ever pulled a stunt like that where we moved the markets to a price they never reached (taking spread into account) then we would have our a**e handed to us, that just wouldn't happen, especially as it's easy to prove.

If you are a broker/MM in a part of the world were regulation means little then perhaps this takes place, but people should think carefully when making decision to trust their money in the hands of unregulated firms. You basically give up your rights for a sweeter looking deal.

 

[LLSS]

Are you seriously suggesting that after the markets closed last night that normal market behavior made the prices go to above 16,030 cash equivalent value then everyone realised they'd pressed the Buy button instead of the Sell button and quickly reversed their trades bringing the price down to 15,800 now.

Market makers just kept changing the numbers on the screen until it was up where they made most money from 'punters' and then changed those prices again until they are at current levels.
When the markets are open Arbitrage can keep futures trading under control but when the markets are closed you are at the mercy of the greediest ugliest bunch of sharks in the world.
If you dont think prices are manipulated to take out stops you are deluded in my humble opinion.

Are you trading Dow Cash or Futures? I can try and get a screenshot for you if you give me a specific time (nearest 5mins) but from trying to guess what you mean I would say yes, it is possible. Bloomberg shows movement ranging from 15818 to 15982 between 21:30 and 23:02 overnight last night.

As for this statement "when the markets are closed you are at the mercy of the greediest ugliest bunch of sharks in the world." I agree, though I'd say they are present both night and day!

 

[tar]

I also was referring to a strictly regulated broker/MM (UK - FCA). If we ever pulled a stunt like that where we moved the markets to a price they never reached (taking spread into account) then we would have our a**e handed to us, that just wouldn't happen, especially as it's easy to prove.
.

I don't think thats totally true , its not illegal to quote the price you want on a SB market , after all we're trading your market not the DOW cash , there is no such market as DOW cash anyway , not to mention the after-hours markets quoted by SB brokers like the DAX and FTSE , i have seen questionable moves in the FTSE after the futures close while there was no such move in the US futures , check attachment ...

 

[tar]

What about slippage practices after all this is not really considered cheating , check this thread , a 120 pips slippage after news by IG on Cable , although there was many better price ticks available but his stop was filled at -120 pips

http://www.trade2win.com/boards/spread-betting-cfds/70236-ig-index-huge-gbpusd-slippage.html

 

[tar]

What about slippage practices after all this is not really considered cheating , check this thread , a 120 pips slippage after news by IG on Cable , although there was many better price ticks available but he was filled at -120 pips

http://www.trade2win.com/boards/spread-betting-cfds/70236-ig-index-huge-gbpusd-slippage.html

Ticks :

 

[BSD]

If we ever pulled a stunt like that where we moved the markets to a price they never reached (taking spread into account) then we would have our a**e handed to us, that just wouldn't happen, especially as it's easy to prove.

Isn't the Royal Bank of Scotland regulated in Great Britain ?

I know for a fact that the prices they were quoting on their marketindex platform they've since closed down had absolutley nothing to do with reality and the underlying real futures markets.

Some guy I met on a forum was trading there and asking me what real prices were, they were off on the Bund by as much as 100 points at times.

It's no wonder all these bucket shops are illegal in the USA since Livermores days and for a very good reason.

Anyone trading over the counter products, no matter if Goldman Sachs is oyur counterparty or a regular bucket shop, anyway, anyone trading products not traded on a regulated exchange, is never going going to get the real prices others get who trade on real markets, that's because OTC providers don't make their money from commissions like real brokers, they make it from having more losing than winning clients.

 

[BSD]

I don't think thats totally true , its not illegal to quote the price you want on a SB market , after all we're trading your market not the DOW cash , there is no such market as DOW cash anyway , not to mention the after-hours markets quoted by SB brokers like the DAX and FTSE , i have seen questionable moves in the FTSE after the futures close while there was no such move in the US futures , check attachment ...

That's it in a nutshell.

Trading with a spreadbetter or CFD provider you are NOT trading any real market.

You're trading some derivative market they pretty freely make up as they go along with only the broadest connect with the real product.

As per also my example of the Royal Bank of Scotland, their prices on pretty much everything even during the day where always totally skewed away from anything even close to the realites of the real market.

I'm looking at the FDAX and FGBL Bund on Eurex in realtime with live prices and am willing to give the real prices at any time if anyone is interested.

 

[peakoil]

That's it in a nutshell.

Trading with a spreadbetter or CFD provider you are NOT trading any real market.

You're trading some derivative market they pretty freely make up as they go along with only the broadest connect with the real product.

As per also my example of the Royal Bank of Scotland, their prices on pretty much everything even during the day where always totally skewed away from anything even close to the realites of the real market.

I'm looking at the FDAX and FGBL Bund on Eurex in realtime with live prices and am willing to give the real prices at any time if anyone is interested.

With all respect, when you argue that spread-betting isn't trading the real market, it could also be counter-argued that those of us who spreadbet have no problem with that fact - i.e., 'of course it's a made up market' - that is the very nature of speculating with derivatives; for which, spreadbetting could indeed be argued as just another form of derivative speculation, albeit one with certain advantages & disadvantages too. Though, for me personally, as things currently are, the advantages outweigh the disadvantages.

But I would submit this point: what usually keeps spreadbetting firms prices as close as possible to the real market is (1) competition among firms, and (2) arbitrage opportunities if prices get too out of line. They may be technically able to "freely make it up as they go along" as you argue, but the day to day reality is, and I've plenty of years seeing that very reality, they almost always don't stray far from a given underlying instrument. Still, if ever such has happened to me (& rare has it been) then a simple phone call to question any 'wild pricing' has usually resolved matters. Meanwhile, the usual initial (or first point of contact) 'price to pay', in today's competitive marketplace, for the advantages of spread-betting is - wider spreads.

LLSS your view on this argument would much be appreciated please. Thank you.

 

[darktone]

That's it in a nutshell.

Trading with a spreadbetter or CFD provider you are NOT trading any real market.

You're trading some derivative market they pretty freely make up as they go along with only the broadest connect with the real product.

As per also my example of the Royal Bank of Scotland, their prices on pretty much everything even during the day where always totally skewed away from anything even close to the realites of the real market.

I'm looking at the FDAX and FGBL Bund on Eurex in realtime with live prices and am willing to give the real prices at any time if anyone is interested.

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!

 

[BSD]

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]

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!

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]

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:

 

[tar]

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]

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 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

 

[BSD]

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

Energy Trading

Libor

Mortgages

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.

 

[BSD]

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 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.

 

[darktone]

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.
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
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!! .
Closed out for around +6.5k a bit hour later, thought i was amazing!
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! . 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!)

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

 

[tar]

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]

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.