Comission and Bullet Rates

Quote from TradeStocks149:
. TRY OFFERING GOOD TRAINING INSTEAD OF JUST RATES. That is what makes good traders. [/B]
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I agree with dgmodel. offer BOTH. First, there's only 1 firm that I know of that really trains people how to TRADE, they pay a decent salary so that you can go through a 1 year mentorship and learn how to really trade, not some lousy $2000/ month 'draw'. The other firms and LLCs that CLAIM to teach people how to trade do NOT GENERATE ANY GREAT TRADERS, THEY TEACH PEOPLE HOW TO WRITE TONS OF TICKETS AND BULLETS AND BECOME COMMISSION ROBOTS. True trading involves developing your own style and it takes a long time. These LLCs who train people to scalp for pennies are only interested in creating indentured servants to enrich themselves. Furthermore, they don't teach anything more than what you would read here on Elitetrader (there's a lot of good stuff here and a lot of friendly, experienced traders) Finally, on this topic, TRADESTOCKS149, GET REAL! To really get good at trading, it's a craft you largely develop yourself, not some stupid teacher or training seminar.

Second, in any business to determine net profits, you subtract out COSTS. so why the hell is TRADESTOCKS149 telling people to ignore costs? What kind of retarted theory is that? That's like telling a trader NOT TO WORRY ABOUT HIS ENTRY PRICE when getting into a trade. And in this environment, a trader who ignores costs is just plain stupid. I don't see anything wrong with telling my fellow traders who are already fighting against specialists and MMs to KEEP YOUR COSTS DOWN! screw these specialists, MMs and LLCs who don't do much for you but suck your blood. MINIMIZE SLIPPAGE in whatever form, fills, costs, % upside payout, stupid trades, etc.

And lastly, I don't know why you bash andover so much. I think there are many good firms to trade at, and andover is one of them. They offer great rates if you deal directly with them (not joining some stupid LLC) they have good software, and some offices have graybox packages too. I'm not promoting them since in my posts I've also mentioned that there are good deals at other places too like etrade pro, pointdirex, etc. and i suggested that everyone should check out those places to (and hopefully share with us what they learn)
 
Quote from I Missed Boat:



Using Andover and paying .0035? Umm, not unless you're trading like 250,000 each way every day, absolute minimum (and it likely would have to be more). Since you swing trade, I don't think you trade that much, so you wouldn't get a deal like that at Andover. Therefore, you are actually understating your point! :)
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I missed the boat, b4 saying something like that why don't you go to a firm and trade off a capitalized account of 500K and see what rate you get. You may be surprised.
 
Quote from sdtrader:





I missed the boat, b4 saying something like that why don't you go to a firm and trade off a capitalized account of 500K and see what rate you get. You may be surprised.
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agreed, most guys trading 50k a day are paying .005 all in, do slightly more and you're down to .004 and 100k puts you around .0035. if you're active like most people at the shops we mentioned, people put in 5-10k into a prop account (where the total pool might be 500k, btw, don't do stupid deals where you give away 5% of your upside) or open a retail account with 30k and you're set.
 
"Second, in any business to determine net profits, you subtract out COSTS. so why the hell is TRADESTOCKS149 telling people to ignore costs?"

I agree 200% why is it only this industry where cost don't matter ?

I will tell you, for me whenever you mention commission rates to the owners of the companies first thing you here is that you have to change style of trading and that it's not commissions but you need to become better, this makes many people shy away from fighting for their best deal.

It's all the owners of firms own interest nothing else, we should all fight to keep COST as low as possible like samba said in every business in the world it does matter
 
For me the ideal firm is the one that has good service and support. I feel that most of the big ones echo, bright and andover are very close in this regard. So how do you choose which one?

For me i then look for the one that gives me the best rates. The firm that understands that making a smaller amount of money per transaction off of me is fine. (Although this will be substantial over time) Why would a firm be willing to make a slightly smaller profit off of me? If the people running the firm have half a brain they will understand that by doing this i will probably trade through them for the next 20 or 30 years.

Don't forget everyone that if you are a profitable trader what will the firm have to do in the future? Not much. It is extremely rare that i have to call in or ask questions. They just sit back and collect profits. But once again as i said they don't have to do anything now except make money off of me for the next 20 or 30 years! And for me with a great rate i am really happy as well. My attitude towards them is awesome.

This situation is ideal for both of us. In this cutthroat market my rates are vital. They effect my bottom line dramatically!
 
Quote from wercurna:

I will tell you, for me whenever you mention commission rates to the owners of the companies first thing you here is that you have to change style of trading and that it's not commissions but you need to become better, this makes many people shy away from fighting for their best deal.

Well said! I remember those bullshit lines I was fed too! They always say that and in the beginning, I didn't know any better. (The other bullshit line they always feed you is about how much it costs them to keep a desk open, what a load of crap! one days profit on commissions covers every damm cost they have for the month) The day I found out how much the guys running the office were making off me was like an epiphany. These guys can easily cut a trader a break during rough times but the never do, because they don't want to lose such a cash cow franchise! And from my perspective, the office managers (casino) make a disproportionatly high percentage of the profits (risk adjusted, labor-adjusted, whatever-standard-you-use-to-compare-adjusted) compared to the trader. My buddy was the best trader in the office, trading a shitload of volume and took home almost 500k last year. When he found out how much the 2 office managers were making he flipped out and I couldnt understand why. Then when he told me how much they made I thought he was on drugs untill I worked out the math later. Once we found that out, it was total bullshit, a bunch of us just left and negotiated direct and cut our costs by more than 50%. Trader's Co-Operative! OK, so now you're probably wondering what could have gotten me and my friend so pissed. He told me the head of the LLC was making almost $350,000 PER MONTH!!!!!!!!!! Here my buddy was the top trader and that's what he makes in a year, slaving away, risking his own capital! So naturally I thought that was impossible, and that he was smoking crack. But then he went over the math with me and I was shocked. Figure the LLC charges .009 on average to idiots like us (highs .012, low .006), it costs them .002, the clearing firm makes from .0005 to .002. their net profit is .007, figure 80 traders doing on average 50k, that's $28,000 PER DAY profit. Subtract out rent on Park avenue, Aeron Chairs, Flatscreen monitors, gorgeous secretaries, generous health plans (hahahah), ok let's be generous and say $2000 PER DAY, that's $520,000 PER MONTH!!!!!!! AND THIS ISN"T even including the ridiculous money made on BULLETS!!!!!!!
After his partner's split of the profits he took home almost 350,000 per month.

The thing that pissed me off the most was once we found out, they were pissed that we were talking about our high costs and why we were unhappy. They were behaving like IT WAS OUR PURPOSE TO BE SCREWED and if we wanted to change our situation to NEGOTIATE for a better deal that WE were in the wrong!! I was like what the hell kinda attitude is that to take towards someone they've been milking for the past several years! And the only time their attitude changed was when they really thought we were going to leave. But by then, it was too late for them.

My advice, form trading co-operatives! Deal direct!

Would be interested in hearing other peoples stories on this.
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Quote from sambatrade:



agreed, most guys trading 50k a day are paying .005 all in, do slightly more and you're down to .004 and 100k puts you around .0035. if you're active like most people at the shops we mentioned, people put in 5-10k into a prop account (where the total pool might be 500k, btw, don't do stupid deals where you give away 5% of your upside) or open a retail account with 30k and you're set.
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I don't think the prop numbers is quite this good even at the better places for the sizes you are describing (although this can be fairly close if a trader is consistent, assuming these numbers are each way-ie 100k buy and 100k sell).
 
i say samba buddy why don't you open up your own prop firm and get sucked dry by personnel and technology expenses. do you think it all just happens by magic. if you can do it better and cheaper go for it. that how the free market works. quit bitchen', build it and we all will come.
 
Also the costs for trading on ECN's has gone way up -- take a trader who mostly takes liquidity are right there the cost is .003 to .004 (for Arca outbound and instinet outbound)
 
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