Journal - My Switch From IB to Velocity Futures

M

mBear

For those interested, I am starting this journal to chronicle my experience with IB and Velocity, especially during the first part of making the change. It is my intent to be as fair as possible (from my perspective, of course) in both the pros and cons of the two brokers.

Feel free to ask questions and we will discuss these pros and cons in this open forum. Many traders have helped me through their input on ET. My only purpose in this forum is to give something back.

Integrity
Above all, this is what I am looking for in a broker. Most of us have dealt with brokers that ooze slime. You ever have the urge to shower when you get off the phone with your broker? Then it is time to switch.

Velocity: Thus far, I have been very satisfied with the conduct of the people at Velocity. They all treat you with the respect you deserve as a customer. Friendly, supportive, happy to help. And get this: NO HOLD TIME! When you call, someone answers!

IB: No opinion. IB was a faceless, voiceless machine. I opened my account with IB on line, traded on line, closed it on line. In over a year and a half of trading with IB, never once did I speak to any IB personnel on the phone. (Not that I didn’t try, I just couldn’t get anyone and ended up using email.)

Commissions
Available on the Velocity Site, with a special first month discount made available to ET members per Mark Oryhon of Velocity. I have calculated that it takes about 42 CME Round Turns per day to break even with IB after the platform fee of $500 per month. I average a little more than that and plan to do more volume this year. More on the volume friendly aspect of X_Trader later. Note that Velocity is subsidizing the X_Trader platform and waiving the charge for your first month of trading. For me the lower commissions are a slam-dunk and I have to give the nod to Velocity on this. Velocity has said they are catering to the high volume trader. Once again their integrity comes through with the complete disclosure of their commission schedule on their website as well as a comparison with the cost of buying or leasing a CME seat. http://www.velocityfutures.com/pdf/leaseorbuy.pdf In my opinion, the lowest possible commissions are an essential part of day trading success.

Opening an Account
With IB and Velocity you can do this completely on line. I did the account application with both on-line and funded by wire transfer. While both claim the process can be done in as little as few hours, for me in took about 24 hours with both of them. With Velocity, you need to fill out a form to state what markets you want to trade. IB has similar permissions you apply for. I neglected to do this right away with Velocity and this contributed to the minor delay in setting up my account. As far as I was concerned this went similarly for the two firms. Key difference: Live phone support to discuss the process with Velocity.

Markets Traded
IB allows for a wide variety of trading instruments. I trade only futures, primarily on the CBOT and CME. See the Velocity website for the markets you can trade. http://www.velocityfutures.com/products_traded.html Obviously for most traders, the nod goes to IB. For me, it is a push. As a futures trader, if I were to add a second account, it would be to expand the number of open outcry markets I could trade and I would consider a firm like Global Futures -gfetc.com – however, I wonder about that slimy factor from my conversations with gfetc.

System Down!
What to do in this case? While I haven’t traded with Velocity long enough to validate a comparison, the description of uptime, redundancy and platform stability seems to be much better with Velocity than IB. At times I was frustrated with downtime with IB servers. Additionally, if your system (or theirs) goes down, call Velocity on the phone, and they will execute your orders for you. Globex down? Velocity can get your order to the pit! By all appearances, Velocity wins this one hands down. This doesn’t even take into account some of the weird fills I got with IB, but I will save those stories for another day.

In my next journal entry, I will discuss the differences between IB TWS and X_Trader. You can expect this Sunday evening after I get back from snowboarding for the weekend. :)

Hope everyone else has a great weekend also.
 
Just to be clear on this, I was not referring to IB when I was talking about "slimy" brokers.

When I was a new trader, there was no electronic order entry. I paid $75, then $50 RT. I have nothing bad to say about those brokers. I did not experience churning. I have nothing good to say about them either. They never put me in a good trade or kept me out of a bad trade.

My first discount broker with electronic order entry was Ira Epstein. I have heard other traders state that the Epstein philosophy matched the general description of brokers given in "Dancing with Lions" by Trader X. My experience with them was terrible, but it was a few years ago and there is no need to go into detail. Anyone using them, I will say, "Audit your account statements."
 
We can execute almost any pit traded contact over the phone for our customers. Its not our primary business, but we do have the ability and an excellent execution firm for pit traded contracts.
 
Quote from velocity_trader:

We can execute almost any pit traded contact over the phone for our customers. Its not our primary business, but we do have the ability and an excellent execution firm for pit traded contracts.
More...

Thnaks god that there is a Corportaion like velocity trader.

I B IMHO is over. The point is NOT how inexpensive is the RT , but the overall quality of the service , which means CUSTOMER SERVICE, Customer Relationship, Consistency of data, Acceptable Platform ( even if I Use a Wonderfull interface to place my orders so I do not even care how beautifull or ugly is the poor TWS). Security problem is Too an important issue. And a too much impersobnal relationship with the company.

If you put on top of that that I procured not less than 20 AFFLUENT customers to IB and I have received back not even a "warm "Thank you sir or " happy christmas" , you can understand that tehir period is over.

Furthermore, they "lock" the development of the plug in from ESIGNAL in order to fully and safely integrate into the ESIGNAL platform the IB trading. By this I mean - words from the forum- that they DO NOT COOPERATE with the wonderfull people of ESIGNAL in " adjusting" whatever problem can arise in the PLUG in, materially obliging ESIGNAL ENGENIEERS to do even the job that IB should do.

The bow-tie president of IB is certainly rich but little out of the time, as is his company mission , IMHO.

Their staff during a free seminar in Mialno DID NOT EVEN KNOW THAT THEIR PLATFORM HAD A 5 LEVEL BOOK . That happened in front of 20 people.

If you go to their server farm In ZUG ( CH) , well there is wires here and there. That is the reason why I do not choose the feed originated by EUROPE but the one FROM USA.

Furthermore you CANNOT , I REPEAT CANNOT OBLIGE BY CONTRACT A CUSTOMER TO HAVE ANOTHER BROKER IN ORDER TO CLOSE A POSITION ; EVENTUALLY THE CUSTOMER MUST HAVE A SECOND BROKER FOR 1000 REASON ebv4en more than 2, BUT IS INAPPLICABLE TO PUT SUCH A PROVISION IN A CONTRACT. THere is more things to tell about the IB agreement, but that will be in a second moment.

Conclusion: never commited very much money to them, never trusted them so much : consequently I will not be their customer for very much.........



Competition is tough now , and great companies like ELOCAL ( ROSENTHALL GROUP) Fasttrade ( have you vere tried their Citix system based? is scary how fast is) or REFCO, MAN FINANCIAL , etc even if more expensive offer interfaces like Strategy Runner and even if more expensive offers a much better and more "Human " level of service.

Bye Bye IB.
 
Quote from mBear:

I have calculated that it takes about 42 CME Round Turns per day to break even with IB after the platform fee of $500 per month.
More...

Yeah, great deal. Give me a f*ing break.

Mod - Please kill this obvious bash and spam thread and delete. IB doesn't deserve this hack job.

Thank you
 
Quote from pisspotpete:

Yeah, great deal. Give me a f*ing break.

Mod - Please kill this obvious bash and spam thread and delete. IB doesn't deserve this hack job.

Thank you
More...

Well, I can't control what others post. However, my intent is not to bash IB, but to give traders who are considering switching an honest comparison. I was an IB customer for over a year and a half. While I am now trading with Velocity, I have absolutely no other interest in the firm. So, the intent of the thread is not spam.

You may also note that both IB and Velocity are advertisers on this website.
 
BY TE WAY

I am an indipendent trader, I am paid by none , I trade only my money, and my opinion are addressed simply by experience and (legal) knowledge.
 
You must log in or register to reply here.
Back
Top