Accessing Dark Pools for More Liquidity

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naifwonder

So here is the situation.. I am trading my system, which tells me at what price to enter and what what prices to exit. The issue is that very often, the entry prices are on the exact tick where the market reverses or moves to the system's predicted direction and I miss the fill. I do not want to adjust the systems entry prices to maintain a more desirable profit target to stop loss ratio. At the same time, I am missing profitable trades meaning, of course, missed profits.

I am aware of dark pools, and that there is hidden liquidity on them. I am curious as to who here has experience trading through these pockets of hidden liquidity and whether or not you think they can help me get the fills I need.

If so, does anyone have any recommendations about how to go about accessing these dark pools? I know that they are more utilized by institutions and not retail traders. I have been looking into prop firms that offer platforms which access dark pools, but they all seem to only trade equities whereas I trade index futures. Does anyone have any suggestions for prop firms or platforms that would make it possible for me to access these pools?
 
Quote from naifwonder:

So here is the situation.. I am trading my system, which tells me at what price to enter and what what prices to exit. The issue is that very often, the entry prices are on the exact tick where the market reverses or moves to the system's predicted direction and I miss the fill. I do not want to adjust the systems entry prices to maintain a more desirable profit target to stop loss ratio. At the same time, I am missing profitable trades meaning, of course, missed profits.

I am aware of dark pools, and that there is hidden liquidity on them. I am curious as to who here has experience trading through these pockets of hidden liquidity and whether or not you think they can help me get the fills I need.

If so, does anyone have any recommendations about how to go about accessing these dark pools? I know that they are more utilized by institutions and not retail traders. I have been looking into prop firms that offer platforms which access dark pools, but they all seem to only trade equities whereas I trade index futures. Does anyone have any suggestions for prop firms or platforms that would make it possible for me to access these pools?
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As a retail trader that Thinkorswim does an excellent job in regards to getting such fills which includes price improvement. They use ATD (automated trading desk). If there are better ideas, I would like to know myself.
 
Quote from Option Trader:

As a retail trader that Thinkorswim does an excellent job in regards to getting such fills which includes price improvement. They use ATD (automated trading desk). If there are better ideas, I would like to know myself.
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ATD is for equities, I don't believe they work with futures. I don't trade futures so am not sure if there are dark pools for futures, I only know of them for equities.

Did your system work in backtesting or in paper trading, and now that you went Live you realized you can't get the fill when you need it? That is a common problem with backtesting and paper trading systems, they don't actually perform in a real market environment because of slippage.
 

Did your system work in backtesting or in paper trading, and now that you went Live you realized you can't get the fill when you need it? That is a common problem with backtesting and paper trading systems, they don't actually perform in a real market environment because of slippage.
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I realized that the fills would be a problem early on in the development phase. The system is still profitable without getting filled on those trades, and realistically, I could enter one tick earlier and get the guaranteed fill. However, this would increase my stop loss by 1 tick and decrease my profit target by one tick meaning a 2 tick overall loss. Worst case scenario, I will enter one tick earlier, but I just want to explore my options before doing so.

I believe that Think or Swim does support futures, but I am not sure if they give access to dark pools. I am looking at REDIPlus right now, but that looks like its geared more towards institutions, bringing me back to considering trading through a prop firm that supports it. More information on REDIPlus can be found at the link below:

http://gset.goldmansachs.wallst.com/offering/execution.asp
 
Quote from naifwonder:

I realized that the fills would be a problem early on in the development phase. The system is still profitable without getting filled on those trades, and realistically, I could enter one tick earlier and get the guaranteed fill. However, this would increase my stop loss by 1 tick and decrease my profit target by one tick meaning a 2 tick overall loss. Worst case scenario, I will enter one tick earlier, but I just want to explore my options before doing so.

I believe that Think or Swim does support futures, but I am not sure if they give access to dark pools. I am looking at REDIPlus right now, but that looks like its geared more towards institutions, bringing me back to considering trading through a prop firm that supports it. More information on REDIPlus can be found at the link below:

http://gset.goldmansachs.wallst.com/offering/execution.asp
More...

You are not understanding me, I didn't say Think or Swim doesn't support futures, I said ATD doesn't as far as I know. I also said I don't think there are dark pools for futures, dark pools are for equities. Goldman's Sigma X is for Equities trading.

The first thing you need to ask and find out is if there are Dark Pools for Futures? That should be the name of your next thread.
 
You are not understanding me, I didn't say Think or Swim doesn't support futures, I said ATD doesn't as far as I know. I also said I don't think there are dark pools for futures, dark pools are for equities. Goldman's Sigma X is for Equities trading.

The first thing you need to ask and find out is if there are Dark Pools for Futures? That should be the name of your next thread.
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Regarding the ATD matter, my apologies.. I misread your post. I am also not sure if ATD supports futures.

As for the matter of whether or not dark pools for futures exist, here is a quote from REDIPlus' product page..

"Goldman Sachs offers a global, multi-asset suite of algorithms, which includes equities, futures, synthetics and options. The goal of each algorithm is to seek optimal execution based on user-specified trading parameters. To do so, the algorithms access both displayed and non-displayed sources of liquidity via our SIGMASM smart router. US clients can also cross their orders with non-displayed liquidity through our SIGMA X crossing network."

"non-displayed sources of liquidity" would be the dark pools. I am fairly sure this also applies to futures, although admittedly, I am not certain.
 
Sigma X is Goldman's equity dark book. I have never heard of dark books in futures. I could be wrong though.
 
Quote from naifwonder:

If so, does anyone have any recommendations about how to go about accessing these dark pools? I know that they are more utilized by institutions and not retail traders.
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Everyone has access to hidden liquidity on index futures (i.e. ES). It's not like equities with there are many different markets. The index's are trading on 1 exchange (i.e. CME).
 
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