Broker against profitable strategies

Specterx said:
Why would any broker want to trade against a profitable trader? That wouldn't make any sense, if anything they would trade with a profitable trader.

Let's assume that (hypothetically) your broker identifies you as a profitable trader, and creates an algo to track your activity and buy/sell for their own account immediately after you do. (I'm going to discount front-running here as it's blatantly illegal, and unlikely to be something a legit broker would dare attempt). This can't possibly be anything but beneficial to you: when you buy the broker is buying right behind you thus pushing the market in your direction, and they aren't selling until you've already sold. It would actually amount to a free guaranteed edge for the trader.

Now, in theory a broker could try and run your stops or force you out of your positions at a loss, but if you're a profitable trader then it would be stupid to attempt this. Since you are right in your positioning more often than not, by definition they'd be fighting against the whole market.
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Thanks, logical and clear
 
Gasparov said:
They don't need a lot of capital to mirror futures traders. They could do it with a thousand or even less. There's no reason not to do it with daytraders IMO
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Why do they want to mirror trades when most futures traders lose?
 
I think the biggest threat are employees of the broker who have access to the trading data and can easily identify such profitable traders, reverse engineer and then mirror entries/exits on their own, taking away the liquidity the original trader counts on. Until proven otherwise, this possibility is always there.
 
Sort of but anyone who has worked in a bank or broker will tell you it's not that easy to do. Systems are locked down pretty tight these days. Ports are closed. You can't just tunnel out over ssh to do whatever you like either. Https won't help. People track what's happening on your PC. People get fired for stuff that looks dodgy whether there was intent to harm or not.

So yeah try and scrape a few dollars doing something deeply unethical and highly risky for your career or if you're that good that you could pull it off why not just do your job and earn the easy 100, 200k++++ that your skills can achieve.

How many times has a bank employee emptied an account or maxed someone's credit card. Very rare right?
This is not the attack vector you should worry about.
 
Quiet1 said:
How many times has a bank employee emptied an account or maxed someone's credit card. Very rare right?
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Here it is different in a sense that the broker's employee doesn't need to empty anything, making visible actions, but he just needs to observe. Then replicate in his free time outside work. A free source of trading ideas.
I get your point about stuff being regulated and audited, but I wouldn't rely much on that. Somebody manages these production databases after all, having open access to the data...
 
Right but where every query can easily be tracked. Anyway, people don't have permissions to prod databases per se. For example it's typical if you really need access to prod in an emergency to have to get higher up approval for a one time access that expires. Both you and your manager's involvement are tracked and reported and questioned.

People aren't just sitting around at IB in their lunch hour doing SQL queries on your trading for fun. It would be literally impossible because no person actually has read access to the database. Client apps do have access but their functionality is limited.
 
I say this in general for bank level IT. I expect IB is exactly like this and given how <cough> paranoid Mr Petterfy is about margined accounts I expect they are pretty hot on IT security.
 
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Quiet1 said:
People aren't just sitting around at IB in their lunch hour doing SQL queries on your trading for fun.
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:)

An idea for the OP: you can record stats/metrics of your trading and especially slippage/missed volume, if there's intervention/mirroring, you'll notice these stats deteriorate.
 
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boba15 said:
:)

An idea for the OP: you can record stats/metrics of your trading and especially slippage/missed volume, if there's intervention/mirroring, you'll notice these stats deteriorate.
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Thanks for the suggestion
 
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