Exactly.
The combination of two things defines the level of risk:
- who is doing it?
- what is he doing?
A trader with a bad performing system will even have a huge risk without any leverage at all.
can i trust lightspeed with my money?
- Thread starter yamin2000
- Start date
The combination of two things defines the level of risk:
A trader with a bad performing system will even have a huge risk without any leverage at all.
Robert Morse
Sponsor
I would not describe it that way. You have a choice when you open an account. Go direct to the clearing broker or through an introducing broker. We offer choice of software and provide our own service and support. When you go direct to a clearing firm they only offer their services and often charge more.
I find it hard to believe that a trader would avoid blowing up if a 0.2% move in the wrong direction would wipe him out.
Depends on the stats about his trades. He should use a leverage that would not wipe him out, so if he is sure he can use leverage 500 it means that he never got caught in a 0.2% wrong direction. I don't say 500:1 is a good idea, but the assumption the poster was starting from is that it is a good idea as he will always make profits. Which is a hypothetical situation. But the logic remains logic.
The allowed leverage the broker will have an impact too on the level of leverage.
For example: in the ES the lowest margin you can get is around $400-500. It means that you will wipe out your account if the markets goes 8-10 points in the wrong direction. My stop is always at 3 points (that's a 0.12% move). So I cannot wipe out in 1 time, I need 3 consecutive stops in a row.
Except for a black swan. But if you take a black swan in consideration there is not a single system that can safe you with 100% certainty. Theoretically markets can go 100% in the wrong direction before you can get out. So you are never sure.
First of all, congratulations that a thread discussing your services has reached 12 pages!! LOL
Second, I think you misunderstood what I was asking. I was trying to find out how much service you cover in terms of brokerage comparing to another firm like IB which also provides customer service (not to be desired), platform and order-matching plus custodian of funds and clearing. But anyway, you answered my questions.
Well everybody's trading system is different. With effective loss-control mechanism, it is possible to survive even in the face of huge losses with high leverage. And plus, if you read his posts, it's NOT him that had his account wiped out. It's the prop trading firm that he put in his capital with that went under and got liquidated by the firm's bank. And it's during liquidation, the owner of the firm just grabbed everything that's still left in the account and took off. So chances are, if it's not him who lost on trades, it might be the ppl that he was trading with (he said there was a group of them that all put their money with that firm) that lost big or the firm's other clients.
Anyway, learned something new. Never knew that when you sign up with a prop trading firm, your money is mixed in with everyone else's and you are not only responsible for your own losses but for others' as well like you are basically lending money to others, ppl that you have no idea about. That's ridiculous. I signed up with a prop trading firm once and they didn't take me. LOL Looking from hindsight, if this is something that can happen when you are with a prop trading firm, that was a blessing in disguise. LOL
Well there is one system: AVOID TRADING!!! You are NOT supposed to trade before a possible Black Swan event. That's why the market volume is so thin before any major events. WHY would you bet when you know if you are wrong, you can lose all the money that you have, not just made, but have?
Robert Morse
Sponsor
Not 100% sure what you are asking maybe this helps.
We are Introducing Brokers to Wedbush Securities and provide a variety of solutions for small and medium-sized Hedge Funds, CTAs, CPOs, Trading Groups and Active Traders. We offer both futures and securities accounts. We focus on US listed equities, options and futures. We don't offer global access to other markets. We don't do much bonds and no FX-except FX futures. We offer a wide selection of trading platforms, many that we own, including Lightspeed Trader, Sterling Trader Pro and LVX. The 3rd party software for equities and options are Silexx and Real Tick.
We have a full support team in NYC and Chicago. We have a Gateway for low latency equity trading and a number of APIs. Our Gateway is a hosted solution. Our target market are active retail and institutional trades. We can support a $30K day trader and a $250 mm Hedge fund.
I work for the Institutional side of the business but also have many small retail accounts. I'm able to give them the same attention.
I hope this helps.
Bob
A black swan is an event that comes as a surprise.
Problem with surprises is that you never know when they can happen, if not it would not be a surprise. There is never a sign before it will happen. So you can never know when a possible black Swan event can happen.
If you should not trade before a possible black swan event, you should never trade as it can happen anytime.
In +20 years of daytrading I never encountered a black swan event.
But I already meet real black swans.
