Spread betting as a full time occupation...

[ZondaMark]

marky1 said:

ZondaMark said:

marky1 said:

ZondaMark said:

marky1 said:

someone had a black box programmed that lifted a bid or hit an offer if some size came into the market.

Forgive my ignorance as I'm new to trading, but shouldn't that be the other way round?

Edited by ZondaMark on Monday 25th October 19:21

Indeed it should, got carried away telling the story - sorry!

Cheers.

So if I've understood correctly, the black box was programmed to 'jump in' ahead of large bids/offers, in the expectation said bids/offers would have to be revised up/down to get filled, and you tricked it into thinking this was happening?

Yes exactly, so if the market was 5001 at 5002, I would offer 20 at 5002 and then work 5001 for 120. The black box would buy my offer at 5002 (in anticipation the big order would push the market higher) I would then work 5001 for 20 and then offer 120 at 5002. The black box would sell into my 5001 bid.
In practice though I used to try and build up a position first, i.e buy 5001 buy 5002 buy 5003 and then bid the market in size whilst being offered at say 5004 (and then try and reverse the whole process)
FTSE trades in half ticks but these numbers are just to explain)

Edited by marky1 on Tuesday 26th October 14:47

Ah, clever. Very interesting indeed. Thanks for the help.

It's traders' own anecdotes and insights like this which get me really excited about (eventually) joining in (hopefully soon) and they're great to hear about and learn from, so seriously, thanks.

Just wondering though: are there any ramifications/problems from putting in 'false' orders? Did they ever get flled before the black box came in, or was the box always instantaneous?

[DonkeyApple]

ZondaMark said:

marky1 said:

ZondaMark said:

marky1 said:

ZondaMark said:

marky1 said:

someone had a black box programmed that lifted a bid or hit an offer if some size came into the market.

Forgive my ignorance as I'm new to trading, but shouldn't that be the other way round?

Edited by ZondaMark on Monday 25th October 19:21

Indeed it should, got carried away telling the story - sorry!

Cheers.

So if I've understood correctly, the black box was programmed to 'jump in' ahead of large bids/offers, in the expectation said bids/offers would have to be revised up/down to get filled, and you tricked it into thinking this was happening?

Yes exactly, so if the market was 5001 at 5002, I would offer 20 at 5002 and then work 5001 for 120. The black box would buy my offer at 5002 (in anticipation the big order would push the market higher) I would then work 5001 for 20 and then offer 120 at 5002. The black box would sell into my 5001 bid.
In practice though I used to try and build up a position first, i.e buy 5001 buy 5002 buy 5003 and then bid the market in size whilst being offered at say 5004 (and then try and reverse the whole process)
FTSE trades in half ticks but these numbers are just to explain)

Edited by marky1 on Tuesday 26th October 14:47

Ah, clever. Very interesting indeed. Thanks for the help.

It's traders' own anecdotes and insights like this which get me really excited about (eventually) joining in (hopefully soon) and they're great to hear about and learn from, so seriously, thanks.

Just wondering though: are there any ramifications/problems from putting in 'false' orders? Did they ever get flled before the black box came in, or was the box always instantaneous?

If it's with the intent of manipulating the market then it is rather illegal.

Several tales of woe, try googling Flaming Ferraris.

[marky1]

ZondaMark said:

marky1 said:

ZondaMark said:

marky1 said:

ZondaMark said:

marky1 said:

someone had a black box programmed that lifted a bid or hit an offer if some size came into the market.

Forgive my ignorance as I'm new to trading, but shouldn't that be the other way round?

Edited by ZondaMark on Monday 25th October 19:21

Indeed it should, got carried away telling the story - sorry!

Cheers.

So if I've understood correctly, the black box was programmed to 'jump in' ahead of large bids/offers, in the expectation said bids/offers would have to be revised up/down to get filled, and you tricked it into thinking this was happening?

Yes exactly, so if the market was 5001 at 5002, I would offer 20 at 5002 and then work 5001 for 120. The black box would buy my offer at 5002 (in anticipation the big order would push the market higher) I would then work 5001 for 20 and then offer 120 at 5002. The black box would sell into my 5001 bid.
In practice though I used to try and build up a position first, i.e buy 5001 buy 5002 buy 5003 and then bid the market in size whilst being offered at say 5004 (and then try and reverse the whole process)
FTSE trades in half ticks but these numbers are just to explain)

Edited by marky1 on Tuesday 26th October 14:47

Ah, clever. Very interesting indeed. Thanks for the help.

It's traders' own anecdotes and insights like this which get me really excited about (eventually) joining in (hopefully soon) and they're great to hear about and learn from, so seriously, thanks.

Just wondering though: are there any ramifications/problems from putting in 'false' orders? Did they ever get flled before the black box came in, or was the box always instantaneous?

You're welcome.
Yeah they could get filled before the black box came in but didn't matter really, would just do the other side then.
LIFFE did call me up to say my orders were not being left in the market long enough (I would blip the large order into the market for less than a second) but in reality there is no rule that says how long an order should be left. The reality is the order is there, if you want it hit it before I change my mind and pull it! I guess they could have tried to get me under a "bringing the market into disrepute" category but I think they would have struggled. The crap I see going on in these markets; what I was doing is nothing in comparison! Look up RSJ Invest, they essentially control Euribor.

Edited by marky1 on Tuesday 26th October 15:19

Edited by marky1 on Tuesday 26th October 15:20

[marky1]

Just to add, do you mean did my large order ever get hit? Yes, a couple of times (which basically means very very rarely!) A quick hedge with Eurostoxx which were much more liquid and then just work to get out of the position - I knew it would cost me a few grand but it was just the cost of doing what I was doing.

What surprised me is that of the thousands of people that must have been looking at FTSE futures no one jumped on board to tag along to what I was doing - it wasn't exactly hard to figure out!

[ZondaMark]

DonkeyApple said:

If it's with the intent of manipulating the market then it is rather illegal.

This I do know, but was wondering more where the line is.

marky1 said:

I guess they could have tried to get me under a "bringing the market into disrepute" category but I think they would have struggled.

Is the difference here that you were beating a black box at its own game for a tick here and there, rather than churning/wash trading to trick the market as a whole?

Edited by ZondaMark on Tuesday 26th October 16:03

[DonkeyApple]

ZondaMark said:

DonkeyApple said:

If it's with the intent of manipulating the market then it is rather illegal.

This I do know, but was wondering more where the line is. Is the difference here that you were beating a black box at its own game for a tick here and there, rather than churning/wash trading to trick the market as a whole?

The obvious one is placing orders with no direct intention of them being filled.

Creating synthetic volume etc.

Manipulation is messy to prove so an exchange would very rarely go down this route. What they will do instead is threaten the broker with cutting their line and then leave the broker to handle the offending client or clients.

[R11ysf]

DonkeyApple said:

ZondaMark said:

DonkeyApple said:

If it's with the intent of manipulating the market then it is rather illegal.

This I do know, but was wondering more where the line is. Is the difference here that you were beating a black box at its own game for a tick here and there, rather than churning/wash trading to trick the market as a whole?

The obvious one is placing orders with no direct intention of them being filled.

Creating synthetic volume etc.

Manipulation is messy to prove so an exchange would very rarely go down this route. What they will do instead is threaten the broker with cutting their line and then leave the broker to handle the offending client or clients.

Exactly. Manipulation and trading are a very fine line. What's to say you didn't want the trade immediately after you put the order in? Also for the entire time you are showing a bid/offer you are also able to be hit, so spoofing orders can work both ways - ask that particular front month local spoofer who got lifted for 120,000 Euribor lots!! Ouch, and there goes my account....


The only things exchanges get really pissed off at (and rightly so) is trading with yourself to create a false impression of what's trading (as in FLaming Ferraris) whereas putting in large bids and offers only help add liquidity. ( well it doesn't but at least you can argue that)

[marky1]

ZondaMark said:

DonkeyApple said:

If it's with the intent of manipulating the market then it is rather illegal.

This I do know, but was wondering more where the line is.

marky1 said:

I guess they could have tried to get me under a "bringing the market into disrepute" category but I think they would have struggled.

Is the difference here that you were beating a black box at its own game for a tick here and there, rather than churning/wash trading to trick the market as a whole?

Edited by ZondaMark on Tuesday 26th October 16:03

Honestly I don't think there was much they could do, this might have been a route for them but I don't know. They would have to prove I didn't want the order which would be hard to do. Maybe they were happy to have an additional 20-30k lots a day they would not otherwise have had.

[ATM]

DonkeyApple said:

NoelWatson said:

ATM said:

Yes it can be done and yes you can make money.

Who is the typical person on the other end of the trade that is losing?

Usually someone from Leicester, Birmingham or North London.

Noel

I've been thinking about this. It puzzles me a lot. I hear 'no trade exists if there is no one on the other side of the trade' and it makes me wander. I think the only real answer is who cares? Joke!

Seriously the way I think about it is this. Lets say the GDP results come out for UK as they did this week. And Sterling goes up against other currencies as it did. Now I dont imagine many traders would have been short Sterling. There will be some sure. But the majority would have been long which is why it went up.

So who was on the other end of the trades which were long?

I can only imagine its the millions of people who were holding the other currencies which went down against Sterling. So Joe Public with his money in the bank / in his house / in his other assets / anything other than GBP. They lost a percentage point or two.

I made a bit of money. A lot of Joe Public types lost a fraction of money.

[ShadownINja]

ATM said:

So who was on the other end of the trades which were long?

Stop orders and people thinking the move's run out of steam so picking tops.

[NoelWatson]

ATM said:

DonkeyApple said:

NoelWatson said:

ATM said:

Yes it can be done and yes you can make money.

Who is the typical person on the other end of the trade that is losing?

Usually someone from Leicester, Birmingham or North London.

Noel

I've been thinking about this. It puzzles me a lot. I hear 'no trade exists if there is no one on the other side of the trade' and it makes me wander. I think the only real answer is who cares? Joke!

Seriously the way I think about it is this. Lets say the GDP results come out for UK as they did this week. And Sterling goes up against other currencies as it did. Now I dont imagine many traders would have been short Sterling. There will be some sure. But the majority would have been long which is why it went up.

So who was on the other end of the trades which were long?

I can only imagine its the millions of people who were holding the other currencies which went down against Sterling. So Joe Public with his money in the bank / in his house / in his other assets / anything other than GBP. They lost a percentage point or two.

I made a bit of money. A lot of Joe Public types lost a fraction of money.

And my point was how are you able to be right more than 50% of the time. What is it that you have that the average player doesn't?

[ATM]

NoelWatson said:

ATM said:

DonkeyApple said:

NoelWatson said:

ATM said:

Yes it can be done and yes you can make money.

Who is the typical person on the other end of the trade that is losing?

Usually someone from Leicester, Birmingham or North London.

Noel

I've been thinking about this. It puzzles me a lot. I hear 'no trade exists if there is no one on the other side of the trade' and it makes me wander. I think the only real answer is who cares? Joke!

Seriously the way I think about it is this. Lets say the GDP results come out for UK as they did this week. And Sterling goes up against other currencies as it did. Now I dont imagine many traders would have been short Sterling. There will be some sure. But the majority would have been long which is why it went up.

So who was on the other end of the trades which were long?

I can only imagine its the millions of people who were holding the other currencies which went down against Sterling. So Joe Public with his money in the bank / in his house / in his other assets / anything other than GBP. They lost a percentage point or two.

I made a bit of money. A lot of Joe Public types lost a fraction of money.

And my point was how are you able to be right more than 50% of the time. What is it that you have that the average player doesn't?

I dont know. My point [I think] was this:

I was explaining that if trading is about following the herd. And the herd are all generally trading in one direction - lets say. That market will move in one direction. So all the traders in the herd will make money. Either there is an equal amount of money lost by other traders being wrong OR the people losing money are those Joe Public types who are not trading but holding the asset as it falls in value.

[ShadownINja]

See my reply?

[NoelWatson]

ATM said:

I dont know. My point [I think] was this:

I was explaining that if trading is about following the herd. And the herd are all generally trading in one direction - lets say. That market will move in one direction. So all the traders in the herd will make money. Either there is an equal amount of money lost by other traders being wrong OR the people losing money are those Joe Public types who are not trading but holding the asset as it falls in value.

I have yet to meet anyone that makes money by observing that the "twend is your fwend"

[ATM]

ShadownINja said:

See my reply?

Shadow

I accept there are people trading in the other direction to me all the time. Some will lose and some will win. I dont win all the time. But surely if GBP goes up 2% during a day then there must be more buyers than sellers. Therefore if there are more buyers than sellers then you could argue that there are more winners, because it went up and they won. However all too often I hear / read that for every trade there is someone on the loosing end of that trade. But as I have just explained more traders were winners. So maybe the people losing are those who are not trading. They are just holding the asset.

[ATM]

NoelWatson said:

ATM said:

I dont know. My point [I think] was this:

I was explaining that if trading is about following the herd. And the herd are all generally trading in one direction - lets say. That market will move in one direction. So all the traders in the herd will make money. Either there is an equal amount of money lost by other traders being wrong OR the people losing money are those Joe Public types who are not trading but holding the asset as it falls in value.

I have yet to meet anyone that makes money by observing that the "twend is your fwend"

Noel

I have also never met anyone who makes money trading. But I dont know any traders. I have met some people who have lost money trading. But they dont trade any more so they dont count.

There are a few characters on here you could guess make money trading. I dont really count as I'm only trading hundreds of pounds per position and not thousands.

I actually got into trading because I saw a thread on here about IG Index Gold Binary. That was well over 4 years ago. Some people may even remember it?

[ATM]

Here it is. OP you might find some useful info on here if you are still interested:

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

[redstu]

Does anyone here just trade solely in currencies or even just a single rate such as sterling/euro?

[ShadownINja]

ATM said:

Here it is. OP you might find some useful info on here if you are still interested:

http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Don't go there.

(If only because binaries have wider spreads than before AFAIK.)

[ShadownINja]

redstu said:

Does anyone here just trade solely in currencies or even just a single rate such as sterling/euro?

EURUSD, mainly, and sometimes, AUDUSD. Have flirted with EURGBP but still learning its "characteristics".