Tips for new traders....

Discussion in 'Order Execution' started by qazmax, Jul 11, 2006.

  1. qazmax


    Helpful hints for new traders...

    Your broker does not conspire against you... they benefit when you trade succesfully. There is no benefit to the broker when you lose money or get a margin call.

    While trade errors happen the market does not conspire against you either. Sometimes information on the "superhighway" is delayed but mostly it is just that you are wrong. This may be hard for you to accept, but for the most part you do not exist to the rest of the trading world and the conspiracy is in your head.

    If I can be of further help please feel free to PM me.

    (Sorry for the sarcasm)

  2. The only one conspiring against you is Bill gates... you gotta watch out for that freak...
  3. This is very poor advice.

    Brokers and exchange personnel routinely steal from retail customers, and they routinely conspire to do so. This is confirmed by extensive regulatory history, including both civil and criminal matters. New traders do need to learn how to protect themselves from things like "payment for order flow" in stock trading, and "bucketshops" in so-called retail foreign exchange trading.

    It is also true, on the other hand, that new (and old) traders, because of ignorance on their part, often imagine that they have been victimized, when in fact, they have not been victimized. The remedy is to learn about how orders execute and how brokers operate.
  4. alanm


    I don't think it's poor advice at all, and you make the point in the last 'graph. Newbies routinely imagine all sorts of conspiracies against them. The first step, before learning what's really happening, is to acknowledge that it's almost never some personal attack on the individual trader. Only then you can proceed to objectively learn and understand what's really happening.
  5. Alanm,

    I must disagree. The vast majority of retail FX traders are victimized on every single transaction. I suspect you were thinking of futures and equities, in which order execution is far better regulated. I also suspect that you are so accustomed to dealing with quality equity brokers, who don't victimize you, that you forgot what it is like for most retail customers who don't have your expertise and have no idea how to protect themselves. Payment for order flow, internalization, poor executions, specialist misconduct, legalized frontrunning of booked public customer orders by exchange floorbrokers, and other ways of stealing from customers, etc., are the norm, not the exception, in the world of the newly minted, naive retail trader. His world is not your world. I suspect that you are forgetting the differences between those two worlds. The o.p. was specifically targeting new traders. I wonder what he will tell the newbies in his private responses to the PMs he has solicited from them?
  6. qazmax


    Payment for order flow is not stealing or hurting the customer. This is merely a way to offer lower commissions to the customer for possibly (not necessarily) lesser quality executions. It is law that this must be disclosed to the customer, so this should not surprise anyone.

    Internalization is arguably the fastest way to execute a customer order and firms have to prove to regulators that they have improved or matched the best market price in order to do this.

    Poor executions if a product of human error, and more commonly a fault of the client than the brokerage. It is not stealing in itself. Once again the broker has no benefit from a poor execution.

    Specialist misconduct is only in the mind of the conspirator. If they are acting illegally, they are not doing it to cheat the small trader, they are doing to make some real money to offset the high risk of being caught. It is worth noting that specialist misconduct is not the fault or within the control of the broker.

    Legalized front-running, has the word "legal" imbedded so I will not waste keystrokes on this one.

    No one has PMed me because I intentionally tried to sound sarcastic. But if they do I will gladly answer any questions and then tell them it is all in their head and do not blame the broker for your lack of understanding.

    PS Alan is never wrong....

  7. You are correct payment for order flow hurts no one. The price will always match the inside quote and often be between.
  8. cc2trade


    who is this guy kidding? Brokers are in it just to make money, period. Brokers sell out of their own inventory, brokers trade the spread, brokers push underwriting issues for commissions, brokers pump and churn the market, brokers have relationships with floor brokers......and on and on

    When was the last time your broker called you first with new news?

    How hard does your broker try to avoid split limit orders?

    Look at the broker ratings on theis site for customer opinions. There are some horror stories.

    it is, and always has been, buyer beware. I would be happy to see all of them buried and go to pure electronic trading.
  9. Man you don't know anything about the brokerage industry. The guy you are talking to is a saleman period, all he does is talk to clients. He hands your trade to a desk of pros and they have zero incentive to screw you.
  10. alanm


    Quote from qazmax:
    PS Alan is never wrong....

    Nice of you to notice. :)

    I stand by my statement. Newbies have far greater problems (in relative $ terms) than those cited.
    #10     Jul 12, 2006