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Minime
Registered: Jul 2002
Posts: 184 |
07-21-02 03:42 PM
Interesting points, but I'm more concerned about a well known direct access brokerage which also trades its own account, not a human broker employee who might piggy back, etc. Most brokerages do survive off commissions, but this one also trades its own accounts as well as makes markets (diversified). So my concern is an institutional size firm could reverse engineer my system (if possible?) and trade large size in front of me, destroying my entry and exit points.
I could switch brokers, or maybe go straight to a Globex terminal, but I'm not interested in higher commissions or fixed costs yet if doing this would be unnecessary. Thanks for the input so far.
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lescor
Registered: Aug 2001
Posts: 2838 |
07-21-02 03:46 PM
I'd be surprised if a retail broker would do this, because of the sheer volume of trades. They would probably have to appoint someone to look for the patterns of their most profitable traders. But if they trade their own account as well, I guess you can't discount it.
I have however heard of it happening at professional firms. In fact I know of one trader who had developed a detailed system that was giving him very good money and he actually left the firm he was at because he was worried it would be figured out and then taught at the firm's training course. Apperently it was not unheard of for the systems of their top traders to end up as course content.
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CoolTrader
Registered: Mar 2002
Posts: 449 |
07-21-02 04:29 PM
Originally posted by Minime
I could switch brokers, or maybe go straight to a Globex terminal, but I'm not interested in higher commissions or fixed costs yet if doing this would be unnecessary. Thanks for the input so far.
How to connect to Globex directly? The ideal situation would be no one else can see your orders unless you request assistance.
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theprophe
Registered: Jun 2002
Posts: 46 |
07-21-02 05:25 PM
Originally posted by Minime
I could switch brokers, or maybe go straight to a Globex terminal, but I'm not interested in higher commissions or fixed costs yet if doing this would be unnecessary. Thanks for the input so far.
If your not willing to pay fixed costs for a globex terminal for your system that you developed, I don't think you have to worry about brokers reverse engineering your trades.
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bungrider
Moderator
Registered: Dec 2001
Posts: 3396 |
07-21-02 05:35 PM
The opposite is more likely true.
Most retail brokers make money by taking the opposite side of your trades, ie IB TMBR executions.
Also, frontrunners usually get caught, which is why it would be difficult for your broker to step in front of you. Don't you think Stockwatch has gotten pretty good at looking for two or more traders that always make the same trades in the same stocks?
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Minime
Registered: Jul 2002
Posts: 184 |
07-21-02 05:53 PM
Originally posted by theprophe
If your not willing to pay fixed costs for a globex terminal for your system that you developed, I don't think you have to worry about brokers reverse engineering your trades.
I knew somebody would say something like that.  I just may go that route, but want to spend 6 more months trading it first.
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