How to prevent brokers from knowing your strategy?

southbeach4me · Jun 1, 2011

You ppl fail to see who the real Goliath is: its the big banks NOT your broker !

Do you really think your broker gives a shit about your strategy?....I guarantee you they have black box systems more sophisticated than your lil homegrown strategy.

Stop living in a paranoid world, it might improve your trading.

trend2009 · Jun 1, 2011

Can you explain a little bit about "using a custom index that you create containing only the currency pairs that want to trade - as just one idea"? this looks like the most effective way to hide the trading strategy.

thanks.

Quote from Veyron 16.4:

No one has answered the OP's question yet.

To the OP:

The only way I know how to do this, is to trade your way out of Retail Hell, and then move to a real institutional platform. If the platform is truly institutional, it will offer the Iceberg Order Type, along with several other Order Types, to help you conceal your true position size, timing, and critical execution levels.

Here is a good place to start learning about it:

http://vcapfx.com/

If you don't want to use an EA (many people don't like them) and you are still in Retail Hell with no other alternative to trade on an Institutional Platfrom, then the only other viable option I know of, would be to find a Retail trading platform similar to ProTader, or something that will enable you to connect to multiple brokers through the same platform, and that enables you to build your own Currency Instrument to trade.

With this strategy, you can do a couple of things:

a) Distribute your margin across multiple Retail FX Brokers/Intermediaries.

b) Correctly match-up margin account types: $1k, $10k and $100k accordingly.

c) Create a single trading strategy to be executed across one or more of your FX accounts, using a custom index that you create containing only the currency pairs that want to trade - as just one idea.

When you submit a Pending Order this way, your broker cannot see it. I'm not quite sure if NinjaTrader also allows for this, but I'm sure that somebody with NinjaTrader experience can jump in from here.

Of course, you can always go the Excel/MT4 route with FXDialogue's Mexel Trader, where all of your trades are executed from within Excel, against your Retail MT4 account - of course, you have to learn how to use Excel.

Other than that, you are just going to have to pull yourself out of Retail Hell, or fund your way out of Retail Hell. Either way, you've got to get out of Retail Hell, as soon as practicable.

If you can go Institutional right now, I would always recommend the FXAll Trading Platform (you can see it from the link I provide above). If you are not planning a hedge fund and you don't want the hassles of Retail Hell, the FXAll is simply the place to be right now using a Prime Brokerage account.

There's one last option. You can also use Barclays BARX Trading Platform (this is also what I use). You'll need about $300k minimum to start, and you can also use Excel to place your orders through the platform. You can also execute on FX Vanilla Options as well, so you have a bigger range of flexibility when it comes to creating Defensive Trading Strategies. When coming in through Excel, your orders will be hidden as well.

Your concerns are very valid and I hope this helps a bit.

zdreg · Jun 1, 2011

Quote from trend2009:

Can you explain a little bit about "using a custom index that you create containing only the currency pairs that want to trade - as just one idea"? this looks like the most effective way to hide the trading strategy.

thanks.

"southbeach4me

Registered: Jun 2009
Posts: 547

06-01-11 07:30 AM
You ppl fail to see who the real Goliath is: its the big banks NOT your broker !

Do you really think your broker gives a shit about your strategy?....I guarantee you they have black box systems more sophisticated than your lil homegrown strategy.

Stop living in a paranoid world, it might improve your trading."

subsume your ego and you might trade successfully.
these kind of threads are the biggest jokes on ET.

mcgene4xpro · Jun 1, 2011

Quote from southbeach4me:

You ppl fail to see who the real Goliath is: its the big banks NOT your broker !

Do you really think your broker gives a shit about your strategy?....I guarantee you they have black box systems more sophisticated than your lil homegrown strategy.

Stop living in a paranoid world, it might improve your trading.

Objectively thinking, you might be dead right. I have a strong feeling that brokers/big guys have much more sophisticated algo than i have. No doubt about it. But i still do not like the idea to give them a piece of logic even they already have. It is something i dont like to give those guys any.

Subsequently, if i could do some minor changes in my code to make it difficult to be deciphered. This actually will not harm me.

mcgene4xpro · Jun 1, 2011

Big guys are using DMA, broker neutrality and many other techniques to trade anonymously. Do you think why they are doing this?

Quote from zdreg:

"southbeach4me

Registered: Jun 2009
Posts: 547

06-01-11 07:30 AM
You ppl fail to see who the real Goliath is: its the big banks NOT your broker !

Do you really think your broker gives a shit about your strategy?....I guarantee you they have black box systems more sophisticated than your lil homegrown strategy.

Stop living in a paranoid world, it might improve your trading."

subsume your ego and you might trade successfully.
these kind of threads are the biggest jokes on ET.

atticus · Jun 1, 2011

Quote from trend2009:

Can you explain a little bit about "using a custom index that you create containing only the currency pairs that want to trade - as just one idea"? this looks like the most effective way to hide the trading strategy.

thanks.

It's BS, monumental bullshit. The custom index dissects to a few natural pairs. If you like to pay the vig to prove you're ignorance, then I suggest the custom index as recommended by Veyron.

Of course, he will not allude to the constituents of stated "custom index" as it would pop his BS bubble.

This is the same guy that was adamant that you could not close a Euro-style FX option prior to expiration.

He's wearing big clown shoes.

zdreg · Jun 1, 2011

Quote from mcgene4xpro:

Big guys are using DMA, broker neutrality and many other techniques to trade anonymously. Do you think why they are doing this?

they don't want to be accused of rape.

Rickshaw Man · Jun 1, 2011

Quote from mcgene4xpro:

Hi,

You play certain strategy and submit orders. Brokers see your prints and they could conclude/reverse engineer your strategy. If this true and you agree, how could you reduce this possibility?

What are the tactics you will use to prevent brokers?

Thanks

This type of thinking is very dangerous. You can and will blame others for your mistakes.

rdg · Jun 1, 2011

If you assume that it is possible to reverse your logic from your trades, why not spend some time working on how you would do that? Play the part of the 3rd party, take a list of trades, and think critically about what needs to be done. That might give you some insight to answer the question. Wouldn't it be a shame if you spent a bunch of time worrying about this and a bunch of energy implementing countermeasures, and at the end of the day found that your countermeasures cost you money while simultaneously making the reversing job easier?

How about this: I've come across several accounts of edges being placed in the public domain, and they continue to be viable for a few year after being made public. If it takes a liquid market on the order of years to adjust to PUBLIC information, how long is it going to take a single 3rd party to wear out your edge?

Veyron 16.4 · Jun 1, 2011

Quote from atticus:

PFGBest: http://www.elitetrader.com/vb/showt...52&perpage=10&highlight=options&pagenumber=17

You recall? The thread in which you stated that you cannot close a Euro-style option prior to expiration?

The likelihood of you having the capacity to pay off on a $1MM bet is about as likely as your owning a Veyron. That would be nil.

But just in case... I'll send wire instructions for the mil.

And, where in that thread does it state that Peregrine was MY ACCOUNT, Einstein?

You were the one claiming that Vanilla FX Options were not available as stated in a previous post by me. I merely took the time (as you could have) to post a link to a pic of a Platform where they indeed were being traded. I could have also posted a pick of the CitiFx, or Saxo Bank platform as well, that DOES NOT MEAN that the account belongs to me, oh ye, Wise One.

How foolish can a human being be on a public forum, that would in anyway approximate your level of foolishness.