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Just a brokerage idea!

  • #1
  • First Post: Edited 9:59am Oct 13, 2016 8:31am | Edited 9:59am
Since we have a serious problem on the brokerage business around the world and especially here in America I'm wondering.

Who will be the first entrepreneur to capitalize on the situation.

And do it honestly !!!!!!!

One idea is for somebody to open a online gambling venture where bets would happen based on price.

Basically people would use charts just like in a regular broker.

Place bets (trades) just like in a regular broker, etc just like in a regular broker.

All trades ( bets) will be open to everybody to see as a real dept of the market.\

At certain intervals, 1H, 2H, 3H, 4H etc the money from the losers will be distributed among the winners.

The system will work as a MM where the only connection with the real Forex market is PRICE.

The website owners will make money on spreads or commissions and since traders will see all trades as a real market dept it would be 100% transparent.

I have no idea about the legal roadblocks for this proposition but since it will be under a gambling umbrella it may work.

I guess if people can do bingo, cards, horses, etc if you put price as the objective it works just fine.

Who knows......somebody should try it !!
So, you think you have rights? LOL
  • #2
  • Oct 13, 2016 10:07am Oct 13, 2016 10:07am
LOL !!!

FF moderators are really funny. I was thinking about posting this thread here in the trading discussion, because everything in FF is a trading discussion anyways.

But knowing their mods hissiness from years posting, I said, well, they will move it to the brokers thread so anyways let me post there.

The original title for the thread was " JUST AN IDEA"

Than they change the title from " just an idea" to " just a brokerage idea" and move it from the brokers thread to the trading discussion thread !!!

Go figure !!
So, you think you have rights? LOL
  • #3
  • Oct 13, 2016 10:36am Oct 13, 2016 10:36am
What you're describing is just a regular 'direct access' broker. It already exists. Yeah, there aren't as many as there were; TradeStation and MBTrading no longer offer Forex, but Interactive Brokers is one of the best if you don't need leverage. But just because a broker isn't routing your order directly to the market doesn't mean it's corrupt - TDAmeritrade is a very good Forex broker.

And by the way, it's pretty rare that a broker is 'out to get you' - they have thousands to tens of thousands of clients making it impossible to target each and every one. If you're taking unexpected losses and your broker's charts look pretty much identical to other, freely available charts on various websites like Forex Factory, then the problem is the trader, not the broker.
  • #4
  • Oct 13, 2016 10:50am Oct 13, 2016 10:50am
Quoting Rob Mondave
What you're describing is just a regular 'direct access' broker. It already exists. Yeah, there aren't as many as there were; TradeStation and MBTrading no longer offer Forex, but Interactive Brokers is one of the best if you don't need leverage. But just because a broker isn't routing your order directly to the market doesn't mean it's corrupt - TDAmeritrade is a very good Forex broker. And by the way, it's pretty rare that a broker is 'out to get you' - they have thousands to tens of thousands of clients making it impossible to target each and...


What I'm saying is that for example in America you are restricted to 3 brokers.

And on top of that, 2 of them are the worst kind, meaning oanda and Forex.com

FXCM is nota saint broker but in my opinion the only choice at the momemt.

Now if somebody opened a cooperative of traders, where things will go just like lets say a bingo.

The difference would be that instead of pulling numbers out of a bag they will use forex quotes.

As people would put their bets ( trades ) it will appear in a panel so everybody could see.

If you bet ( trade) right at the end of a certain timeframe you will be rewarded if not you lose.

That would be awesome !!

I had to go trade options and equities in general because of lack of a decent Forex broker option.
So, you think you have rights? LOL
  • #5
  • Oct 13, 2016 11:11am Oct 13, 2016 11:11am
Quoting ForexOracle
{quote} What I'm saying is that for example in America you are restricted to 3 brokers. And on top of that, 2 of them are the worst kind, meaning oanda and Forex.com FXCM is nota saint broker but in my opinion the only choice at the momemt. Now if somebody opened a cooperative of traders, where things will go just like lets say a bingo. The difference would be that instead of pulling numbers out of a bag they will use forex quotes. As people would put their bets ( trades ) it will appear in a panel so everybody could see. If you bet ( trade) right...
i trade with oanda, and i admit, it's bullshit that US traders have very few options to trade forex. I chose oanda, because they have 0 complaint filings since inception unlike other brokers. Also i just got notification they'll be doing rebate on account of 100k+,

But your idea is just basically nadax
  • #6
  • Oct 13, 2016 11:30am Oct 13, 2016 11:30am
Quoting ForexOracle
{quote} What I'm saying is that for example in America you are restricted to 3 brokers. And on top of that, 2 of them are the worst kind, meaning oanda and Forex.com FXCM is nota saint broker but in my opinion the only choice at the momemt. Now if somebody opened a cooperative of traders, where things will go just like lets say a bingo. The difference would be that instead of pulling numbers out of a bag they will use forex quotes. As people would put their bets ( trades ) it will appear in a panel so everybody could see. If you bet ( trade) right...
OK, I'm still not grasping what you have in mind, but that's OK. I actually left Forex for a while for Equity Options and am now back to Forex, I find it easier to trade - not because I don't understand Options, but rather because I don't 'feel' Equities - the gap, the way it trends, etc. I'm sure you know FXE has OK Options for the front couple of months. Give TDAmeritrade (Think or Swim) a try, you can do Equity, Futures, Equity Options, Futures Options and Forex all from the same account.

Rob M.
  • #7
  • Oct 13, 2016 11:36am Oct 13, 2016 11:36am
Maybe somebody could shed some light on the legal side of a model like this:

2 traders meet online and bet where the EUR/USD will be on the next hour above 1.10 or below 1.10

Lets say they bet 5 bucks each and at the end of 1 hour one of them wins.

Lets say they agree they only pay each other when the amount gets over 50 dollars.

Thats more of a binary trading because there is just 2 people.

The expenses are low because you can run it from a chat or forum.

Now lets say in a while more people join the cooperative and they now have 10 people or 50 or 100 people.

Now you have more liquidity where you may have the flexibility of breaking down price movements in four five or maybe more steps.

If in time you have lets say 1000 people or 10000 people participating.

The liquidity will be a lot bigger to maybe afford regular trading.

A spread can be agreed to pay for a dedicated server and members from the cooperative can be voted to run the whole operation.

I believe the possibilities are awesome.

Legally it may be possible to do something like that under the umbrella of " online gambling" where you can work under a big company license.
So, you think you have rights? LOL
  • #8
  • Oct 13, 2016 1:24pm Oct 13, 2016 1:24pm
Quoting ForexOracle
At certain intervals, 1H, 2H, 3H, 4H etc the money from the losers will be distributed among the winners.
Quoting ForexOracle
2 traders meet online and bet where the EUR/USD will be on the next hour above 1.10 or below 1.10
What if three traders meet. Two of them bet above and the last one bets below? How do you distribute the gains?
What if they all the three bet below?

That's not a faire game! To make it fair you have to take the bets as a bookmaker. That's just binary options.
No greed. No fear. Just maths.
  • #9
  • Oct 13, 2016 1:52pm Oct 13, 2016 1:52pm
If no body loses, no body wins, also when losers=winners, they don't pay/get anything (except for the spread which covers the operational cost).

If winners > losers, winners get less profit, because it was easier and less risky for them.
If winners < losers, winners get more profit, because it was harder and more risky for them.

I think it makes sense ...

bets should be of same value.
trader can bet on one side only, no hedging.
No guts, no glory
  • #10
  • Oct 13, 2016 2:50pm Oct 13, 2016 2:50pm
Quoting PipMeUp
What if three traders meet. Two of them bet above and the last one bets below? How do you distribute the gains?
If the 2 are right each one gets 2.5 dollars

If the other guy is right he gets 10 dollars


Quote
What if they all the three bet below? That's not a faire game! To make it fair you have to take the bets as a bookmaker. That's just binary options.

If the three bet in the same direction nobody wins.

In my opinion if 2 guys are betting in one direction I will take the other side of the trade.

I either lose a little or gain a lot.
So, you think you have rights? LOL
  • #11
  • Oct 13, 2016 5:12pm Oct 13, 2016 5:12pm
Quoting abokwaik
trader can bet on one side only, no hedging.
I would happily accept dual side betting! You don't care if the bulls and bears are two people or the same player. There is no risk for the house. It pockets the spread twice.

With no edge you have 50% chance winning. A rational gambler bets systematically against the biggest group to win from the R:R>1. A group of rational gamblers will soon distribute evenly because they see what the others have already bet and systematically bet against the largest group. So either the gambler loses $5 or he wins $5 times the number of opposite gamblers divided by the number of gamblers his side. Depending on if the total is odd (2N+1) or even (2N): 5xN / N = 5 or 5xN/(N+1) < 5. The expectancy was 0 it is now negative before the spread.

=> Each gambler has to be the last guy to put his stake on the table to try and be in the smaller group.

When you have an edge it may even be better to trade against your own strategy if your "team" is too much bigger in size. The ratio of long/short will always rebalance itself to 50-50.

Anyway free lunch for the house who pays the winners with the losers' money and keep the spread!
No greed. No fear. Just maths.
  • #12
  • Edited 5:45pm Oct 13, 2016 5:34pm | Edited 5:45pm
Quoting PipMeUp
{quote} I would happily accept dual side betting! You don't care if the bulls and bears are two people or the same player. There is no risk for the house. It pockets the spread twice. With no edge you have 50% chance winning. A rational gambler bets systematically against the biggest group to win from the R:R>1. A group of rational gamblers will soon distribute evenly because they see what the others have already bet and systematically bet against the largest group. So either the gambler loses $5 or he wins $5 times the number of opposite gamblers...


Very nice post !!

I wonder what kind of strategies would emerge.

Maybe it would be just like Ebay where everybody wait till the last second and the orders would happen in a burst...

But in my opinion the fun would really start when there is enough people togenerate enough liquidity so price can float and you trade just like in a regular broker.
So, you think you have rights? LOL
  • #13
  • Oct 13, 2016 6:07pm Oct 13, 2016 6:07pm
I have always wondered why the casinos in Vegas don't have FX slot machines or keno style monitors everywhere? If there was money to be made, I am sure they would have shown up in Vegas by now in some form or another. With that said, I would be very interested in starting a legit and 100% commission based transparent FX brokerage firm for real traders trading standard lots. If the folks at betterment and wealth front start-ups can do it, everything is possible. We just need a rock solid industry know how to go about doing this the right way.
Staying in my lane...
  • #14
  • Last Post: Oct 13, 2016 6:28pm Oct 13, 2016 6:28pm
Quoting VEEFX
I have always wondered why the casinos in Vegas don't have FX slot machines or keno style monitors everywhere? If there was money to be made, I am sure they would have shown up in Vegas by now in some form or another. With that said, I would be very interested in starting a legit and 100% commission based transparent FX brokerage firm for real traders trading standard lots. If the folks at betterment and wealth front start-ups can do it, everything is possible. We just need a rock solid industry know how to go about doing this the right way.
I think the legal part is the tricky one, which could be bypassed by a offshore website or something.

I believe the idea would only flourish if traders start it in a co-op like model so power could stay decentralized.

If the casino folks start something like that it will just be another Oanda....we don't need that
So, you think you have rights? LOL
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