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Brokers and Banks as an Institutional Trader 4 replies

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Attachments: Is anyone here an institutional trader?
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Is anyone here an institutional trader?

Quoting Ponzi Jr
{quote} The guy in the video here: https://www.youtube.com/watch?v=SK0FJfkWzyY is saying that 90% of what institutional traders do is market making; sitting and watching orders being executed. Has this been the case, in your experience?
That's the same guy who was in the BBC documentary running a fund .I cant remember the name of the program .anybody remember that .
Quoting JacobFordFX
{quote} Does this guy actually charge people to listen to him..I'm in the wrong business
I hear that Jason Belfort is expecting to make $100,000,000 this year from charging people to listen to his drivel...
Yeh seen a few videos from this guy.

Talks about the lifestyle of a trader, conflict of interest if your broker is a market maker. Goes quiet in depth.
I have seen on this video, very interesting to me.
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PROredart is not PRO trader
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Quoting driven18
jmn5611, the question was not directed to you and ..please pay attention and read carefully...I am not talking about $200 dollars...I am talking 50 -100 standard lots...
to give jmn5611 the benefit of the doubt, maybe he was talking about the size of the margin account and not the leveraged trading size. In any case, I think he answered quite well.

1. Institutional stop hunters don't go out of their way to target specific retail trades. They target clusters of other institutional orders; in fact, they don't even SEE any of the retail business. Regardless of what you may have read, my take is that the retail FX scene is just a parallel market using institutional prices as a pricing benchmark. (that last part is just my opinion. I honestly don't give a sh!te if I'm wrong, as long as I can still make money.)

2. Your example of 100 standard lots on EURJPY is 10 million EUR against JPY. 10 million of anything might have been a big deal in the 80's. But by the time I retired, 10 million had become (I'm sorry to say) a chicken-sh!t penny ante amount. I won't bother with single orders; I go after only the clusters without having to even see the whites of their eyes.

3. JacobFordFx has covered more ground on the "targeting" guidelines, so I don't have much to add to this.

4. re: your second question about how retail FX brokers run stops, to be honest, I'm only vaguely familiar with how retail brokers actually do this effectively. I imagine they are still constrained by activity in the REAL (i.e. institutional) FX market. Anyways, from my observation, they are no different than some institutional banks who run significant order book-running businesses and there's really no defense against such things.... which was why my hard stops (when I was still trading for Banks) were always 2 or 3 S/R zones away, and most times nowadays I only have mental stops. The difference between me and someone who might dismiss the concept of trading without stops is that I actually have the discipline to stop myself out without fuss.
I'm not trying to convince anyone. I'm not in the "convincing" business.
This is what I don't get about order flow info.

Most people when they describe order flow are really talking about limit orders on the book, but it's market orders that move price and for the most part the intentions of these orders are unknown in advance - correct?

Some people seem to think that knowledge of limit orders tells of where price is going, but in reality price moving into an s/r level with lots of limit orders simply means that price moves slower because limits prevent movement.

Ultimately since market orders move markets, and the intentions of markets order users cannot be known in advice that means that order flow info is therefore over rated?

Am I missing anything?
Quoting Ponzi Jr
... 90% of what institutional traders do is market making; sitting and watching orders being executed. Has this been the case, in your experience?
Quoting JacobFordFX
{quote} I think back in the day you may be able to say that because there wasn't the transparency through technology that you have today. The spreads are much tighter now because of that transparency so the amount of money you can make just on customer flow has been greatly diminished. Since I have been in the business that situation only became worse. So if you were to just make market 90% of the time then you probably wouldn't have made your budget and you would have ben fired. Yes, we were all market makers, BUT we also all put on discretionery...
Yup. As mentioned before earlier in the thread, all the prop guys had to wear the market makers hat. Probably true that 90% of the time we made markets, but the bulk of the prop trader's budget has to come from right proper trading.

Anyways, I don't think you can really draw a line on the trader's day and say this part of the day he made markets, and that part of the day he traded his charts. A trader really has to know to do 3-4 things all at once (preferably more). He has to be able to listen for price requests from his sales colleagues, listen to running prices from his broker squawk boxes, keep up with market chatter from his Reuters IM or Bloomberg chat rooms, input his trades into his treasury processing system, watch out for any signals from his charts.... etc etc
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting MCRotter
Some people seem to think that knowledge of limit orders tells of where price is going, but in reality price moving into an s/r level with lots of limit orders simply means that price moves slower because limits prevent movement.
"The Force is strong in this one."

Quoting MCRotter
Ultimately since market orders move markets, and the intentions of markets order users cannot be known in advice that means that order flow info is therefore over rated? Am I missing anything?
Something for y'all to consider: Whenever there are clusters of limit orders, clusters of stop orders are probably not that far away (in case the people who left the limit orders run out of bullets.) So market orders are probably not the only things that can move markets; stop runs can do that too.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
{quote} "The Force is strong in this one." {quote} Something for y'all to consider: Whenever there are clusters of limit orders, clusters of stop orders are probably not that far away (in case the people who left the limit orders run out of bullets.) So market orders are probably not the only things that can move markets; stop runs can do that too.
Thanks lol

There are implications by what you say, in your experience, is there a 'typical' distance for these stop orders... say 20 pips?
Quoting MCRotter
{quote} Thanks lol There are implications by what you say, in your experience, is there a 'typical' distance for these stop orders... say 20 pips?
huh? you mean the distance of stop clusters from their presumably-related limit orders?

No typical distance, mate. It can be 10 pips... can be 100 pips or more... You can use your S/R lines as a proxy.. most orders tend to cluster around them anyway.

You COULD research yourself if there is such a thing as a "typical" distance, for each specific timeframe and/or currency pair.

Me? I think I can live without that information, thank you very much.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
{quote} huh? you mean the distance of stop clusters from their presumably-related limit orders? No typical distance, mate. It can be 10 pips... can be 100 pips or more... You can use your S/R lines as a proxy.. most orders tend to cluster around them anyway. You COULD research yourself if there is such a thing as a "typical" distance, for each specific timeframe and/or currency pair. Me? I think I can live without that information, thank you very much.
Yep that is what I was asking, seems like a very complicated analysis, I don't think I could be bothered, my gut instinct says it wouldn't be worth it.

Thanks
Quoting skenobi
{quote} to give jmn5611 the benefit of the doubt, maybe he was talking about the size of the margin account and not the leveraged trading size. In any case, I think he answered quite well. 1. Institutional stop hunters don't go out of their way to target specific retail trades. They target clusters of other institutional orders; in fact, they don't even SEE any of the retail business. Regardless of what you may have read, my take is that the retail FX scene is just a parallel market using institutional prices as a pricing benchmark. (that last part...
Thanks skenobi, you understood what I was saying.

You and Jacob have cleared up so many questions about the nature of what we have in our favor and of what we are up against as retailers. Your time here is greatly appreciated.
If you are good at something, never do it for free--Joker
Appreciated your time here is ... /Yoda voice/



Yeah, deffinitely Thank You !
"Always be yourself " Batman
Quoting skyline
{quote} Hi Spieler , nice to see you back to FF Did you stopped trading EURCHF as you taught in your older thread (here) after SNB intervention ? Btw i was thinking at your latest *indicator* , wouldn't have much more significance to use for example Oanda long/short position since i guess there are much more active traders than what shown at FF ? Oanda stats are here : http://fxtrade.oanda.com/lang/it/ana...osition-ratios Regards, Skyline
Hello

This hedging strategy was only one of my system so i dont use it anymore on these pairs.

As for oanda sentiment open position it is usefull as well , note that everybody is long so i keep my short
Quoting spieler
{quote} Hello This hedging strategy was only one of my system so i dont use it anymore on these pairs. As for oanda sentiment open position it is usefull as well , note that everybody is long so i keep my short
Spieler, Do you ever hedge your positions or do you always use sl?
Quoting spieler
{quote} Hello This hedging strategy was only one of my system so i dont use it anymore on these pairs. As for oanda sentiment open position it is usefull as well , note that everybody is long so i keep my short
Hi Spieler, thx for your reply
Could you clarify a little bit how do you trade using those long/short position ? I mean , I don't know anything , today I open FF/Oanda traders position i see there's more long than short on EURUSD so i open a short order, what sl and tp should i have to use ? Did you set them or you simply close your short when there will be more short than long ?
Are you sure this kind of trading style doesn't produce a very deep drawdown before to go in positive territory ?

Any hint is appreciated

Regards,
Skyline
My system is not based on this indicator but it could
this is not the trigger .
what is important and I emphasize that is ;
you have to trade on a larger time frame like 4 hours and see the big picture
A moove of 30 pips means nothing at all.
my short long term position is backed by a solid system and seeing private traders long confirm to me that I am in the right direction nothing more.
when you play longer term your leverage is small because your stop is 100 pips away but you catch 90% of the long trends and get big rewards.
volatility is low these last weeks so it can be frustrated so you can play short term in between.

for people asking I never hedge I tried a couple of time and felt uncomfortable never knowing when closing one leg.
Do big boys follow each other's and respect their orders? Current money flow is mirror of future actions and Big money exit one and enter another currency. How can retailers diversify informed flow from mm tricks? Both have big size of money and move market for bla bla reasons.. Appreciate your thoughts..
I'll give you my two cents for what's worth. If you have a customer or dealer who has been Hot or who's market calls have been accurate you may pay attention, I personally did not. But that doesn't necessarily mean it's a big market moving order, that is different. For an order to make me or the market notice then it has to be in big enough size to move that market otherwise who cares, again unless you respect that customer's market calls.

If say for argument sake, Soros comes in to buy 250 million Eur/Usd and the market only moves 3 pips. The order as is didn't move the market and anyone who was long eurusd didn't really benefit BUT if you know it was Soros maybe you follow the trade. BUT then again you have no idea what his parameters are, he may have bought at 1.3600 and is looking for 1.6000 and stopping out at 1.2500 You may not have those deep of pockets to copy that trade.

I still believe unless you have the order in your hands as a dealer and it has to be a market order, it may not be a huge help to know. In my 12 years dealing FX I have never really seen anything amazing as far as trades go, it was always just a matter of degree (size). You can bet if Eur/Usd is trending trading lower the entire market will look to be short and vs versa. The Big funds made big money by being in big moves in big size. I'm sure most of you here can see that on your own. It's just matter of how big a stick you are willing to swing.
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