Does IB trade against our orders?

[gaj]

i trade almost exclusively nasdaq...and buy / sell positions out into price/volume explosions.

there have been times that i've gotten immediate and very nice fills from TMBR (that's IB) on these explosions.

the rationale i see? they're looking to establish a larger position, and have a much longer time frame than i do. therefore, they're willing to take the reversion (to the mean) small hit, in terms of a much larger, longer period gain.

the paranoia i see....

 

[cvds16]

Quote from Lobster:



Now, the other thing is, once your order has been routed to the exchange, it is (usually) visible to anyone, therefore it is still possible that TMBR trades against it or makes other trading decisions based on the information contained in your order, just like thousands of other market participants, isn't it? [/B]

imho this is just called reading the order flow, no law against that i think otherwise a lot of daytraders would be out of a job. Or am i missing something here.

 

[spyderman]

You pick the price you wish to participate....what difference is it who is on the other side?

 

[astocktr8r]

It is easier for people to believe that their broker is working against them then to believe that they made a bad trade. I have seen the same conspiracy theories said about other brokers and it just isn't so. Your broker isn't going to buy/sell thousands if not tens of thousands of shares just to try and move the market against you.

 

[vanilla2]

my concerns are more along the lines of the reverse engineering thread that came up a few weeks ago. does IB research customer equity curves, and take system ideas from the best ones. i sincerely doubt it, but yes i can fess up to a little paranoia.

i trade commodities so my knowledge of the specialist system is vague at best, but what my specialist friend basically said was that they tracked a portfolio of their highest volume customers, and mimicked the trades of the best performers in the group. i assume this was in a long term scenario, and not some sort of frontrunning situation.

 

[def]

Quote from vanilla2:

my concerns are more along the lines of the reverse engineering thread that came up a few weeks ago. does IB research customer equity curves, and take system ideas from the best ones. i sincerely doubt it, but yes i can fess up to a little paranoia.

i trade commodities so my knowledge of the specialist system is vague at best, but what my specialist friend basically said was that they tracked a portfolio of their highest volume customers, and mimicked the trades of the best performers in the group. i assume this was in a long term scenario, and not some sort of frontrunning situation.

vanilla, I can assure you that none of IB's affiliates do that or would even consider "reverse engineering" client flow. Keep in mind IB's proprietary trading affiliates are doing somewhere on the order of a couple of hundred thousand trades per day around the world. Not only is such a practice unethical and probably illegal, given our scope and scale of trading it is completely impractical.

 

[newestmember]

I'm happy with the answers I've received, not only from def, but from the other participants on this board....the fact is, sometimes it seems almost uncanny at how ill-timed my orders can be, as if someone was simply working exactly against me....so, this has been a question that has lingered in my mind for some time, and I'm glad we've discussed it...now hopefully I can leave my paranoia behind, once and for all.....

 

[dloomis514]

If you think you are parnoid, think how i feel when I am papertrading a system and they trade against me right after a fill!!

 

[newestmember]

!!

 

[Lobster]

Quote from newestmember:

I'm happy with the answers I've received, not only from def, but from the other participants on this board....the fact is, sometimes it seems almost uncanny at how ill-timed my orders can be, as if someone was simply working exactly against me....so, this has been a question that has lingered in my mind for some time, and I'm glad we've discussed it...now hopefully I can leave my paranoia behind, once and for all.....

My opinion is this: If you feel like every time you enter a trade it goes against you right away, the next step in improving your trading would be to try and recognize situations where you would likely enter and have the trade go against you. Then you just take the other side. When I had these feelings of all my trades going against me the second after I entered them, it was because I was trading against the trend, and I was basically doing the exact opposite of what I should have done: Whenever there was a retracement, I got in on the wrong side, thinking (hoping) it would turn out to be a reversal.