A colleague here tried to break into the trading world as an adult. He had a reference to be a member with a small cozy firm where his accounts could be held. He got "direct market access" (?) with a trading terminal that he said was good quality. Yet when I watched him work for several weeks each day, he was locked out of a SELL order more than once.. it didn't go through in any reasonable amount of time and he ended up losing some client's money and that was sort of the end. I don't know enough to know what happened, but it seemed like he was just pushed aside somehow, despite the cautious and reputable (?) parts he used. SF in the oughts iir
The article isn't about discretionary trading. It's about algorithmic trading, which is a bit like the word 'hacking' in that it means one thing to practitioners and another to the general public.
To practitioners it refers to the use of algorithms to trade large quantities of stocks or futures or whatever. The goal is to reduce trading costs by executing small trades at the right time. This is distinct from and rather more common than quant trading where an algorithm actually decides what bet to make.
Your story doesn't make any sense. Was this guy trading his own account, or was he employed as a proprietary trader, or was he running his own little investment fund using another company's platform? In any case, a legitimate trader won't be "locked out".
it was years ago.. the man decided on trades and executed them using a kind of terminal and base account that enabled that. Yet, "front running" is commonplace at all levels, in many forms. This man was a legitimate trader with credentials and ID, and when a SELL order was issued (get your money) the order did execute.. but how long did it take ? what prices changed while the order was being queued ?
That still doesn't make any sense. Do you mean he had passed the FINRA Series 7 Exam? Anyone with money can trade, with or without a Bloomberg terminal. Order execution speed will depend on the exact type of order the trader puts in and where he directs it; there are multiple types other than simple market sell orders and there are trade-offs between speed and price. And if he had evidence of his dealer engaging in illegal front running then he should have reported that to the regulators.
Anyway, it sounds like your colleague was just an idiot who didn't understand the basics of professional trading and got in over his head. He should have stuck with buying index funds on a Vanguard account.
> didn't understand the basics of professional trading
I don't know why you are so quick to assume that.. that guy did a year with some large firm before breaking out on his own.. a YEAR of full time I think
> it sounds like your colleague was just an idiot
oh I see, you want to call people that name.. got it
A YEAR of full time means nothing. The big financial services firms hire thousands of entry level brokers and traders. Spending a year in that type of job is not even remotely adequate preparation for setting out on your own. At that point you don't know what you don't know. But there are a lot of overconfident idiots out there, and the real professional traders love to take advantage of them for an easy profit. The Dunning–Kruger effect strikes again.
yes, that is what I thought about it.. that someone was taking advantage of him.. and yes, I agree that a year in a sophisticated environment is not necessarily enough.. You know and I know that people in that field don't need a sophisticated analogy in order to rationalize just .. cheating someone to get more money that day.
I can do a lot more math than the guy I knew in that story, but I would not call him an idiot lightly
You haven't provided evidence of front running or any other form of cheating. Idiots lose money on bad trades every day with no cheating involved, and then they try to excuse their failures by falsely claiming that someone took advantage of them. Math skills alone are only a minor factor in trading.
