Broker against profitable strategies

S

shh

Hi Guys, I am a new member but I have been reading the forums for over 5-6 years, and I appreciate anyone who has constructively participated and shared info.

My questions:

1-Would brokers such as IB identify consistently profitable traders, and eventually trade against them or at least lift liquidity ahead of them?

2-What markets could be safe from the practice above? Could I assume that in deep markets such as ES/CL and major forex pairs IB cannot move the market much to shake me out or to jump-in in advance?

3- Could I eliminate the issue by not using limit orders? This way I can cut off their front running, but still they are able to move a thin market against me to shake me out, but could they do it in deep markets also?

4- What practical solutions do you recommend? For instance, should I avoid overnight ES/CL due to lower volume or would you suggest letting go of intraday and focusing on swing trading instead since the broker has less power to shake those?

5-Is the ultimate solution renting a seat at the exchange? Or even there the mechanics are designed such that a central hub can monitor and take advantage of the orders/strategies.

Best Regards,
shh
 
shh said:
Hi Guys, I am a new member but I have been reading the forums for over 5-6 years, and I appreciate anyone who has constructively participated and shared info.

My questions:

1-Would brokers such as IB identify consistently profitable traders, and eventually trade against them or at least lift liquidity ahead of them?
More...

I'm more interested in knowing if brokers mirror the trades of successful traders. Why wouldn't they?
 
Risepoint1879 said:
If they are profitable, the Broker shouldn't be trading against them. And why would they care if someone's profitable or not? They make guaranteed money on commissions.
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Your argument (valid or invalid) has been mentioned many times before. By law and ethics the broker should not do it. By profit motive, I assume they (their employees) could. If you were a real estate agent and you had market insights by tracking the profitable property investors would you not mirror their investments? If market was tight, would you not jump in ahead of them?
 
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shh said:
Hi Guys, I am a new member but I have been reading the forums for over 5-6 years, and I appreciate anyone who has constructively participated and shared info.

My questions:

1-Would brokers such as IB identify consistently profitable traders, and eventually trade against them or at least lift liquidity ahead of them?

2-What markets could be safe from the practice above? Could I assume that in deep markets such as ES/CL and major forex pairs IB cannot move the market much to shake me out or to jump-in in advance?

3- Could I eliminate the issue by not using limit orders? This way I can cut off their front running, but still they are able to move a thin market against me to shake me out, but could they do it in deep markets also?

4- What practical solutions do you recommend? For instance, should I avoid overnight ES/CL due to lower volume or would you suggest letting go of intraday and focusing on swing trading instead since the broker has less power to shake those?

5-Is the ultimate solution renting a seat at the exchange? Or even there the mechanics are designed such that a central hub can monitor and take advantage of the orders/strategies.

Best Regards,
shh
More...

Sorry but I think your question is too long.
I will tell you what brokers do in the market. They don't know how to trade either. But they may know when traders can lose money most of time. For example, In investing.com, many brokers actively post and make fake calls to ensure retail traders lose money.

Whether you focus on scalping or long term trading, you need to be able to identify whether the primary trend is bullish or bearish.
 
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Can broker also be market maker?
I doubt so.

Market makers are not people with a pair of goat horns on their head and
arrow tail on their back.
Their main purpose is not only to provide liquidity to the market but also
to earn as much money as possible for themselves and also
for their companies they work for.
If market maker performs badly, he will be fired.


Similarly we traders trade so as to earn as much money as possible.
If trader performs badly, he ought to be fired.

Avoid trading illiquid market. Its bid offer spread is horrible.
 
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shh said:
Your argument (valid or invalid) has been mentioned many times before. By law and ethics the broker should not do it. By profit motive, I assume they (their employees) could. If you were a real estate agent and you had market insights by tracking the profitable property investors would you not mirror their investments? If market was tight, would you not jump in ahead of them?
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He said trading against, not mirroring their trades. I personally don't care what they do. My strategy is my responsibility.
 
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Risepoint1879 said:
He said trading against, not mirroring their trades. I personally don't care what they do. My strategy is my responsibility.
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Hey thanks. Yes you are right I mistook the "trade against" part as "mirror trading".

Assuming the worst, and considering that my paranoia has some merit, would you suggest to complement one's strategies (ideas) with noise-making algos?

May I private message you, because probably the followup questions will get out of the context of this particular thread?
 
Risepoint1879 said:
If they are profitable, the Broker shouldn't be trading against them. And why would they care if someone's profitable or not? They make guaranteed money on commissions.
More...

Wouldn't the broker want the trader to be profitable so that the in theory eventually trade a larger account and more likely generate more commissions in the future.
 
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