Do you think this happens ?

V

volente_00

Many future brokers offer account management where they trade for you. Do you think any brokers have in the past or currently use their profitable retail clients to get trading signals from ? In theory it would be pretty easy to do, but do you think it actually happens ? Has anyone ever heard of it happening ? They obviously know who is consistently profitable, but would there be any laws broken if they did this ? How would a retail trader prove they did it in a court of law ?
 
If a broker trades ahead of his client, it is called "front running" and is indeed illegal. If a broker were to tail a profitable client, it would be very much to the client's benefit. I would love to find some way to get my broker or anybody else to tail me.
 
Quote from rwk:

If a broker were to tail a profitable client, it would be very much to the client's benefit.
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Not necesserily. If you are a swingtrader holding it for a few days, you might not get any lift from your broker tailgating you. He can even get a better price if you have a wide stop.

If I were a broker, that's what I would do. Looking for profitable traders who trade not very often, but with a very high win%....

Does that happen? I am no expert on it, but I assume it does....
 
Quote from volente_00:

Many future brokers offer account management where they trade for you. Do you think any brokers have in the past or currently use their profitable retail clients to get trading signals from ? In theory it would be pretty easy to do, but do you think it actually happens ? Has anyone ever heard of it happening ? They obviously know who is consistently profitable, but would there be any laws broken if they did this ? How would a retail trader prove they did it in a court of law ?
More...

certainly
 
Quote from rwk:

If a broker trades ahead of his client, it is called "front running" and is indeed illegal. If a broker were to tail a profitable client, it would be very much to the client's benefit. I would love to find some way to get my broker or anybody else to tail me.
More...
I think what VOLENTE is trying to say is that some brokers might use their profitable clients signals and pass them off as their own managed program. I don't believe he was refering to front running. I believe it does go on alot and it is FRAUD.
 
This is the very reason I purposely mix my winning trades with losing trades. My broker thinks I'm just a breakeven trader, but he doesn't know that my losers are just there to keep him from knowing that my trades are always winners.
 
Not only do they do it but they sell the data. It's called "Commitment of Traders." I get reports everyday showing the total long and short positions of the aggregate clientele of various brokerage houses. Also, I get commentary on "special flows"
 
I have wondered this often myself. As long as my order is executed first then what they do after that doesn't much concern me.

But if they see the order a trader they are tracking places and place their order in the queue first then that is a problem because I may not get the fill I should have.

If I had to bet I would say it happens all the time. There is a lot of slime in this business.
 
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