Information - Us v. Them

H

Here2learn

Obviously, there are some major differences between large institutional traders and the person who sits in a basement paying the mortgage with returns off the market.

Is available information (speed, accuracy, quantity) one of these differences?

In other words, with the current technology available, is the playing field level for both institutions as well as private investors?

If real time action and information is no longer the largest difference, what is? Where do the big boys get their advantage?

Other than a large staff of employees, what resources do trading institutions have that are not available to the home trader?

I welcome all responses, especially those with professional experience in firms such as mentioned above.
 
Quote from Here2learn:

Obviously, there are some major differences between large institutional traders and the person who sits in a basement paying the mortgage with returns off the market.

Is available information (speed, accuracy, quantity) one of these differences?

In other words, with the current technology available, is the playing field level for both institutions as well as private investors?

If real time action and information is no longer the largest difference, what is? Where do the big boys get their advantage?

Other than a large staff of employees, what resources do trading institutions have that are not available to the home trader?

I welcome all responses, especially those with professional experience in firms such as mentioned above.
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In a sentence...they have vast amounts of insider knowledge (some legal, some illegal) and the ability to trade in such a size that they can move the market.
 
There has been a recent thread that addresses this:

http://www.elitetrader.com/vb/showthread.php?s=&threadid=164148

Quote from Here2learn:

Obviously, there are some major differences between large institutional traders and the person who sits in a basement paying the mortgage with returns off the market.

Is available information (speed, accuracy, quantity) one of these differences?

In other words, with the current technology available, is the playing field level for both institutions as well as private investors?

If real time action and information is no longer the largest difference, what is? Where do the big boys get their advantage?

Other than a large staff of employees, what resources do trading institutions have that are not available to the home trader?

I welcome all responses, especially those with professional experience in firms such as mentioned above.
More...
 
Quote from Here2learn:

Obviously, there are some major differences between large institutional traders and the person who sits in a basement paying the mortgage with returns off the market.

Institutional trades have no housing advantages. The playing field isn't level in the sense of the two sets of constraints.

Trading is a half day experience if a person strings it out that long.

Is available information (speed, accuracy, quantity) one of these differences?

Platforms for trading did have to be repaired. Some platforms are now accurate. The computer a trader uses does have some capacity requirements.

In other words, with the current technology available, is the playing field level for both institutions as well as private investors?

It has never been level. Institutions are screwed.Read sjfan to find out the obvious disadvantages where he is sitting

If real time action and information is no longer the largest difference, what is?

Decision making. A simple paradigm composed of a hypothesis set and its parametric measure eliminates probability. With certainty, as the trading condition, trading is just the continuous extraction of capital from huge pools throughout the world. Institutions cannot fathom this or structure themselves to engage in this nimble process

Where do the big boys get their advantage?

Again read sjfan and how post secondary education stimulated him to his belief system all based upon myths in a mutual aid society.

Faculty members at schools do show in halls and classrooms as required; mostly, though, they have LLC consulting agregations that try to "fix" financial institutions. Grad students are paid zillions in these LLC's to grind out "fixes". Waiting lists are years long. It is all invitation only and no one goes to work at an institution.

Other than a large staff of employees, what resources do trading institutions have that are not available to the home trader?

NADA. Absolutely nada. If you plug in the numbers to the driving formula of making money, you see why these guys have nothing.

I welcome all responses, especially those with professional experience in firms such as mentioned above.

Try to connect with the guys who try to fix these outfits. Second, connect with the guys who left and took clients with them; there is a message for you
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Thanks, all.

I think the main answer I was after had to do with the decision making process and the availability of resources used in that:

"Other than a large staff of employees, what resources do trading institutions have that are not available to the home trader?

NADA. Absolutely nada. If you plug in the numbers to the driving formula of making money, you see why these guys have nothing."


So, are you to tell me that institutions base their buy/sell decisions off the same support/resistance, volume, price action, indicators, trendlines, etc. that we use at home???
 
you should read Trading with the Enemy by Nicholas Maier, some info from the book: Cramer having info on what stocks will be front page stories in next day's magazines, receiving calls about huge customer orders, IPO allocations, spreading rumors through CNBC, receiving analyst recommendations before they go out, marking up big positions in low volume stocks at the ends of quarters and year, pumping own positions through articles, and lots of other fun stuff

I also remember reading about a major hedge fund's natural gas trading desk, I think they had over 50 people, several Ph.Ds, tens of millions in computer equipment, and their own weather team, they would buy the weather info from the satellites and analyze it themselves in order not to depend on more conventional weather forecasts and reports
 
Thanks again.

I will definitely look into "Trading with the Enemy" by Nicholas Maier.

The truth is, I am sick of building wind turbines even if it pays the mortgage and for the kids.

Sure, I have a business degree and have developed certain trading systems that I feel can make me money, but I can't help but fear that major institutions (whom I've never worked for, and most of which are currently hurting for returns) have much more acces to money making knowledge than I do.

Tell me please, do institutional traders (however many definitions their may be of that) make their decisions to buy and sell off of the same Indicators, trendlines, volume, price movements, news, etc. that we do???

Or, is it that they operate on a whole diferent set of signals? If so, what please??? What is it that the big boys use to decide their buys and sells???
 
I don't know much about this Jack Hershey character, but now I see why he is so ridiculed on this site.

With that said, I can't speak to the advantages of major institutions extensively. As a trader, I can say that I can't count the number of times that I've seen a stock rise uncharacteristically or selloff uncharacteristically without any news that we can find until either the end or towards the end of the move and the news is finally released.

I learned my lesson about 2 years ago trying to buy a stock that was absolutely tanking into the close of the day. Some dental Nasdaq stock that just fell off of a cliff. The sellers of the stock were obviously very sophisticated in the way in which they used the ECNs to sell (I can't go into how they used the ECNs, either you know how this looks or you have to learn on your own). We found out about an hour after the close that there was a lawsuit that the company lost -- BUT the selling started an hour before the market closed!! It was about a 7 point selloff within an hour with no news. Anyone who saw DNDN recently during that particular day knows there are some institutional advantages to news flow out there -- in the case of DNDN it was WRONG however.

All the above considered, those instances won't prevent you from making a great living as a trader.
 
Quote from Here2learn:

Other than a large staff of employees, what resources do trading institutions have that are not available to the home trader?
More...

The ability to buy "someone" lunch and listen to the resulting conversation.
 
Quote from TrueProp:

I don't know much about this Jack Hershey character, but now I see why he is so ridiculed on this site.

With that said, I can't speak to the advantages of major institutions extensively. As a trader, I can say that I can't count the number of times that I've seen a stock rise uncharacteristically or selloff uncharacteristically without any news that we can find until either the end or towards the end of the move and the news is finally released.

I learned my lesson about 2 years ago trying to buy a stock that was absolutely tanking into the close of the day. Some dental Nasdaq stock that just fell off of a cliff. The sellers of the stock were obviously very sophisticated in the way in which they used the ECNs to sell (I can't go into how they used the ECNs, either you know how this looks or you have to learn on your own). We found out about an hour after the close that there was a lawsuit that the company lost -- BUT the selling started an hour before the market closed!! It was about a 7 point selloff within an hour with no news. Anyone who saw DNDN recently during that particular day knows there are some institutional advantages to news flow out there -- in the case of DNDN it was WRONG however.

All the above considered, those instances won't prevent you from making a great living as a trader.
More...

Regardless of the facts, all you've mentioned are just your imaginative guess based on you observation.

But I agree with your assessment towards hershey. He's very annoying.
 
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