Trading system used by Banks

Guys, do you know any trading systems that are used by Banks/Brokerages etc?

Of course they don't use those 99 USD commercial stuffs, but what are they using?

Do you have any informations on this?

Thank you for your help!

bobai

Yeah... Its called my dick is bigger than your dick

on a more serious note - I think banks are more in the business of risk management. They collect and provide liquidity at wholesale prices and sell them on at retail prices. Overall completely different ball game but speculation still plays a role.

hi,

if you mean automated systems, they are mostly using high frequency machines opening and closing the trades in a second...

when you have bid/ask on EU - 1.4009/1.4008 it just take advantage of arbitrage....have seen a lot of such situations yesterday on matching(reuters), it's not so common ussually and it happens in certain circumstances, for example when bank with not much counterparties is placing orders.

Market makers are using mostly their flows and bias nothing more needed to make money, prop traders are using i don't know what...i know only few of them on the HF level, one is using S/R levels(idk how he is calculating them) with small SL(max 20 pips for EU) and another one i know is going shorterm - 10/20 trades for a day, using fixed SL and TP and just buying dips selling rallies on intraday trends and I don't know how he is determining trend so i probably didn't help you that much. Such guys who spent many years in front of screens ussually are not so eager to tell you much and i completely understand, it's hard work and everybody should make the same way to get there (or maybe less if you are genius )

mike.

Hi,

very good point,

overall trend in today's trading(in banks) and treasury department is to collect margins spreads flow and whatever else and not to take a risk

Thank you for your answer, Mike. It is what I was looking for. I know that some banks are using high-frequency EAs, and other stuffs, but I also know that there are bank traders who are trading on the 15M-Daily charts with their own "secret" methods. Of course it is understandable that they don't share these methods, but I was wondering if some of you has any idea about these.

Thank you for your kind help!

I'm still interested to know what banks do myself.. my research has turned up that they are on an entirely different level.. I've found even if you did know there methods it really wouldn't work for us as individual traders

first off they don't pay spreads like us and usually they can make good money off the fact we have to pay that spread..

second they have tons and tons of money.. you don't trade billions of dollars the same way you trade a $10,000 account.

there main secret if you can call it that is always having room for error.. they scale in and out and pyramid.

lastly there final secret that may offer some profitable points is they use vwap to place trades.. its kinda like the industry standard of how to play trades.. its the volume weighted average price.. pretty much if they have decided to go long over the next few months they are scaling into positions at the VWAP to ensure they are getting a better than average price compared to the competition

those are my findings.. overall as an individual you should embrace your abilities of high liquidity trading for the most part.. not much of learning about how banks trade has helped me yet.. but its smart of you to learn unlike most people who trade blindly..

hopefully one day I will make the right connect and he will whisper some classified banking system into my ear.. Im sure there is one out there but its probably not "enter on the wackey dot indicator and..." .. its probably some huge scheme to manipulate the entire economy like goldman sachs recently did

hope this helps

newyear check out Darkstars "Structure of Forex Brokers" thread... Provides a bit of insight into the 3 tier market structure (unless you already have!)

I think the Vwap would be a liquidity finding mechanism. But I'm only guessing

Well I'll probably get shit since people are going to say "you don't know volume in forex"

so its harder to understand Vwap in context of forex rather than stocks

I suppose you could use Vwap in that manner(liquidity), I probably lack the full knowledge or experience of Vwap to go to into depth


as far as liquidity what I do when I want to have a general idea is just look at the spreads as well as price movement

lower spreads and lower price swings indicate high liquidity

while higher spreads and higher price swings indicate low liquidity

you certainly would have to go into depth to draw a full picture such as interbank stack of open bid ask volumes and central bank policies.. but I rarely ever go that far (for better or worse)

no secrets it's not about that.....just to describe the job : 5-days in a week 10 hours at least or even more, in touch with market every minute, with bloomberg and other tools for professional analysis, views, news feeds and with skilled colleagues with experience.....do this for 10 years and imagine the result...that's why traders after 10-15 years are managing directors and are paid awesome and are satisfied or they are leaving and starting own HFs...

there is the same market same S/R, same pullbacks, same patterns it's just the way how one trades it and not the secret method he knows

Its just SR and level II/order book. But its easier said than done