Wall Street = Casino. Minus Sum Game.

[DionysusToast]

Trader333, Timsk - for sure, the volume on this stock is not at AIG levels but over 1,000,000 per day. Just that everyone stood to one side when they saw the open. It's certainly tradeable BUT on this day I passed because my guess is was that it'd probably move sideways considering that the open more or less took care of any momentum the news would have created.

In terms of being a 'scalper' - I wouldn't see it that way necessarily. Momentum can carry a move $1 or more. Sure, if it moves 5c & then stops - you can call the trader who bites that chunk a scalper. If it moves $1 and the same trader gets it - do you have to call him something else ?

This was a prospect for a swing trade, I was only there at the open because I don't put in orders to fire off at the open as there's too much slippage. I'd rather it blew past the entry and then came back to it for me to enter. If it blows past, I pass on the trade.As it was, I passed because it opened way above the price I was prepared to pay.

Now - sometimes, there will be a stock that looks swingable but I don't 'like' (sorry for not being mechanical) the fundamentals of the stock enough to trust money on it for days or weeks. In that case, I may put it on my list as a potential candidate for having momentum when the technical swing traders jump on it. I guess that makes me a day trader to some extent.

In all cases, there has to be some sort of trigger to get into the trade. How you actually trade based on that trigger is up to you. I am not sure what benefit there is in pigeon-holing yourself into one specific 'style' of trader.

Each situation can be traded on it's merits - after all, you can only buy or sell, whichever type of trader you are.

In terms of the edge & how long it lasts - it depends on the situations you are looking for. The opening print is just one of lots of pieces of information that start to make sense when you stop looking at squiggly charts and start looking at who the players are & what they do.I would not necessarily equate that with being able to read LII/T&S all of the time.

As another example, let's say a company for some reason created a new instrument which went to it's existing shareholders but the existing shareholders (because of their nature) had to sell that new instrument, then it makes sense to buy it when they sell it - that would something you'd hold onto for much longer. This is a situation that occurs from time to time, it's not hard to find, it's not hard to trade and it requires holding for weeks or months, during which time, you don't want to be sitting on your hands. Much better to give it all back day trading

 

[DionysusToast]

oildaytrader
Yes I do. I have to, otherwise I might as well give up now. However, my belief is fuelled by the traders I've met who are living proof that making a consistent profit in this game is indeed possible. You're among them, assuming your claims are to be believed!

Tim.

Timsk - then you need to understand what these guys running the markets do & find a way to catch them with their pants down.

 

[temporarilylight]

Tim

Do you seriously believe the small guy has a chance against Wall street's finest brains?You really believe one has a chance against the mega computers , analysts and brains working against the ordinary trader. Wall street is institutionalised fraud against the common man.

http://www.huffingtonpost.com/jeff-schweitzer/the-big-lie-exposed-wall_b_154225.html

Im confused.
I thought that you said that you traded? So Surely you also believe that the small guy (you) has a chance against wallstreets finest brains?

 

[oildaytrader]

Im confused.
I thought that you said that you traded? So Surely you also believe that the small guy (you) has a chance against wallstreets finest brains?

I only trade currencies,oil and Dax index at present.The counterparty is not wall street on these instruments.

O D T

 

[temporarilylight]

I only trade currencies,oil and Dax index at present.The counterparty is not wall street on these instruments.

O D T

I see. thanks. (although I guess it kind of depends on ones definition of 'wall street'.)

 

[DionysusToast]

I only trade currencies,oil and Dax index at present.The counterparty is not wall street on these instruments.

O D T

The counterparty is largely irrelevant.

The instruments you trade are all brought to you by the Financial Services industry.

Someone is taking a fee/spread for every trade you place.

It's the same game, just different instruments. Wall St is sucking pennies on every trade you make, the more you trade, the more money they make.

Like I say, minus sum game. All markets.

 

[oildaytrader]

The counterparty is largely irrelevant.

The instruments you trade are all brought to you by the Financial Services industry.

Someone is taking a fee/spread for every trade you place.

It's the same game, just different instruments. Wall St is sucking pennies on every trade you make, the more you trade, the more money they make.

Like I say, minus sum game. All markets.

Explain to me how Wall street makes money on my currency pairs and Dax trades.I use a broker ,which uses Deutsche bank and other banks.

 

[robster970]

Explain to me how Wall street makes money on my currency pairs and Dax trades.I use a broker ,which uses Deutsche bank and other banks.

Do you get the basic premise that the market and associated trading activity is a -ve sum game? Do you know what that means? I'm not trying to patronise you here but it's really self evident if you know what a -ve sum game is dude.

 

[oildaytrader]

Do you get the basic premise that the market and associated trading activity is a -ve sum game? Do you know what that means? I'm not trying to patronise you here but it's really self evident if you know what a -ve sum game is dude.

Spread and counter party = minus sum game?

http://247wallst.com/2007/03/08/why_trading_is_/

Is it really applicable to currencies?

Currency traders make $100m profit in the morning open on euro /usd, price of Euro/usd goes up by 1 cent.People, businesses, governments and instituitions around the world open at 8 a m and pay 1 cent extra for euro /usd.Which traders lost that one cent?The way I see it, we made money from the non speculative trading (and some traders)related outfits.

Is it a minus sum game?

 

[oildaytrader]

Tim - DT will do - no need to type that in Doiwhatever....

It is indeed a gloomy picture. Painting it rosy is what the financial industry does to part you with your money.

Today one of the stocks I was looking at had some good news. It opened up $1.50 - which for this stock was a fair jump. The open was a single trade of 100 shares. No other trades followed for 3 minutes. This was WITHOUT DOUBT the market maker buying share off himself to set the tone of the market. The news was good but the market maker set the tone of the market by opening high. No doubt the MMs intention was to stop a flood of buying at those prices as there were few people lined up to sell and the MM would have had to be seller of last resort in a rising market.

Now - with this information in hand. How would such a situation be played (if at all) in comparison with the statistics found in the much mystified Tony Crabel Orb book ? How would some guy using pure technicals have intepreted this move ? As a strong open ? A breakout of previous resistance ? A trend continuation ?

There could be many ways that a TA purist would have interpreted this in part based on what had happened on prior days. If there was resistance on the chart where the MM decided to open the stock - then it may have been a breakout.

Obviously, in many cases, there is a healthy order book on both sides at the open, the MM doesn't always set the open - the inside bid/ask does. In this case though - the MM dictated the open and a TA purist would not have seen this at all. This is all about understanding the players & the game IMO.

Ever hear about the big institutional trades being filled at day's highs,if mm could show a ticket of higher price , he could offload 1m shares on fund in AUM @ $1.50 higher .There was a bonus trade of 1m , traded not on exchange , but the back door netting $1,500,000 in bonus for the crooks.They might have bought the 1m off the exchange and waited to screw your pension kitty.

 

[robster970]

Spread as an example is exactly what makes it a -ve sum game. Counter-party doesn't come into it.

 

[oildaytrader]

Spread as an example is exactly what makes it a -ve sum game. Counter-party doesn't come into it.

Nothing new there to many of us.There is always going to be some cost of doing business.My trades make me 10 point profit after paying spread of 4 , do I really care?
As long as I make my money , I don't care what they make.

If you go for a programming job and get $1m , and have to pay $200k in commissions ,do you really mind?

 

[DionysusToast]

Ever hear about the big institutional trades being filled at day's highs,if mm could show a ticket of higher price , he could offload 1m shares on fund in AUM @ $1.50 higher .There was a bonus trade of 1m , traded not on exchange , but the back door netting $1,500,000 in bonus for the crooks.They might have bought the 1m off the exchange and waited to screw your pension kitty.

Yes - that's a block trade.

If you hold a million shares & have a buyer for that million, you can sell that person your shares. There is no reason you have to use the ever-changing market price for those shares, in fact it's not possible that you will. Just by the fact the negotiation will take time means the market price will probably be elsewhere when the trade is executed.

There is nothing criminal about this -it's a buyer and a seller agreeing on a price.

Now - the exchanges exist for when the buyers need to be matched with a seller. In both cases, the laws of capitalism dictate that the buyer and seller will both be looking to get the best price they can.

 

[DionysusToast]

Explain to me how Wall street makes money on my currency pairs and Dax trades.I use a broker ,which uses Deutsche bank and other banks.

As per the OP - for Wall St read "The financial services industry". I think Banks qualify as being in that industry.

And yes - they don't let you trade those things for free or does your broker give you free trades with no spread ? If so, you need to ask yourself what's in it for him.

 

[DionysusToast]

Spread and counter party = minus sum game?

http://247wallst.com/2007/03/08/why_trading_is_/

Is it really applicable to currencies?

Currency traders make $100m profit in the morning open on euro /usd, price of Euro/usd goes up by 1 cent.People, businesses, governments and instituitions around the world open at 8 a m and pay 1 cent extra for euro /usd.Which traders lost that one cent?The way I see it, we made money from the non speculative trading (and some traders)related outfits.

Is it a minus sum game?

That article misses the point. All of the money that the Financial Services Industry pays itself does not come from thin air.

Currency brokers are there to make money. It must come from somewhere & it comes from their customers.

 

[oildaytrader]

Yes - that's a block trade.

If you hold a million shares & have a buyer for that million, you can sell that person your shares. There is no reason you have to use the ever-changing market price for those shares, in fact it's not possible that you will. Just by the fact the negotiation will take time means the market price will probably be elsewhere when the trade is executed.

There is nothing criminal about this -it's a buyer and a seller agreeing on a price.

Now - the exchanges exist for when the buyers need to be matched with a seller. In both cases, the laws of capitalism dictate that the buyer and seller will both be looking to get the best price they can.

Did you see the reason why the MM tried to raise the price by $1.50?There are funds with Assets under management requiring proof of market price.These funds are offloaded with 1m shares at an inflated price, the $1.50 on the exchange is cover up for charging fund extra $1.5m.The fund does not have to agree any price , as it is left to the manager but manager must show proof of of higher market price.

 

[robster970]

Nothing new there to many of us.There is always going to be some cost of doing business.

It's that cost of doing business that makes it a -ve sum game and why the big boys always make money. As there always has to be an inflow of money to maintain the status quo it has to come from somewhere. They always win. QED.

 

[oildaytrader]

It's that cost of doing business that makes it a -ve sum game and why the big boys always make money. As there always has to be an inflow of money to maintain the status quo it has to come from somewhere. They always win. QED.

If you trade euro usd the only advantage the big boys have is about 1 pip, no more.

 

[DionysusToast]

Did you see the reason why the MM tried to raise the price by $1.50?There are funds with Assets under management requiring proof of market price.These funds are offloaded with 1m shares at an inflated price, the $1.50 on the exchange is cover up for charging fund extra $1.5m.The fund does not have to agree any price , as it is left to the manager but manager must show proof of of higher market price.

A fund cannot agree a price. A fund is not a person. The would agree a price on behalf of a fund.

There is something called 'Fiducary duty' and another thing called 'profit related bonus' bith cause the manager to get the best price.

If you are saying that a fund manager will purposely sell something below it's market value to benefit the buyer at the detriment of his employer, I think you have been misled. This would be a form of embezzlement.

You have to understand that if you are offloading 1,000,000 shares and the normal daily volume is 3,000,000, then the price you get will naturally be below the price the market was at when you initiated the trade. If you attempted to dump all 1,000,000 shares on the market at once. So - for a block sell like this - you cannot reasonably expect to get current market price either.

Of course, if your buyer is more desperate than you - you could get above the market price.

 

[robster970]

A good example of a highly visible block trade and the effects is when Abu Dhabi dumped their Barclay's holding mid last year when it was trading close to £4 - look at the price they paid and how the market behaved that day. The price drops because they are demanding liquidity from the market and there is a price to pay for this.