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Refco/PMB
- Thread starter trader777
- Start date
This actually is an interesting argument for a few different reasons...While one might assume that a larger account is safer from liquidation or overleverage AND that it might generate higher commissions, I would not say this is a certainty...
From my experience and my exposure to other traders, the less liquid(i.e. smaller accounts) will tend to do alot of trading with a 10k account because they believe that more is better and that they need to catch every 2 pt blip or wave or retracement in the market...Sometimes they use leverage, but most of the time they are just going up or down around the 10k level...
The more dangerous accounts are the ones who have maybe 50-100k, little futures trading experience and $1500(ES/NQ margins)...I routinely hear of traders, with little feel or mechanical efficiency in the index futures, leveraging 30 lots with a 50k account...These are the guys who are the biggest risk, IMO...They are hugely leveraged and they really do not have any idea about what happens when a price shock hits the markets...
It appears to me that the entire retail futures broker business model is coming closer and closer to annihilation...The big "elephants" that they want to land are not out there, they are going directly thru the clearing firms...Anyone who has experience and will be around for more than a few months already has the inside scoop and is very cost conscious...THe only thing that is out there are the smaller accounts because 9/10 the guy who is going to pay 10-20 per r/t on a futures account is a guy who just got started in this side of the industry...
From my experience and my exposure to other traders, the less liquid(i.e. smaller accounts) will tend to do alot of trading with a 10k account because they believe that more is better and that they need to catch every 2 pt blip or wave or retracement in the market...Sometimes they use leverage, but most of the time they are just going up or down around the 10k level...
The more dangerous accounts are the ones who have maybe 50-100k, little futures trading experience and $1500(ES/NQ margins)...I routinely hear of traders, with little feel or mechanical efficiency in the index futures, leveraging 30 lots with a 50k account...These are the guys who are the biggest risk, IMO...They are hugely leveraged and they really do not have any idea about what happens when a price shock hits the markets...
It appears to me that the entire retail futures broker business model is coming closer and closer to annihilation...The big "elephants" that they want to land are not out there, they are going directly thru the clearing firms...Anyone who has experience and will be around for more than a few months already has the inside scoop and is very cost conscious...THe only thing that is out there are the smaller accounts because 9/10 the guy who is going to pay 10-20 per r/t on a futures account is a guy who just got started in this side of the industry...
It appears to me that the entire retail futures broker business model is coming closer and closer to annihilation...The big "elephants" that they want to land are not out there, they are going directly thru the clearing firms...Anyone who has experience and will be around for more than a few months already has the inside scoop and is very cost conscious...THe only thing that is out there are the smaller accounts because 9/10 the guy who is going to pay 10-20 per r/t on a futures account is a guy who just got started in this side of the industry... [/B][/QUOTE]
So true Vulture. The overriding reason why such a high % of traders historically have lost is commission payouts. As rates decrease profitably across all spectrum of account sizes will increase. The success of the floor trader over non members was never due to technique or information, but due to paying 10 CENTS to scratch a trade through a clearing firm.
So true Vulture. The overriding reason why such a high % of traders historically have lost is commission payouts. As rates decrease profitably across all spectrum of account sizes will increase. The success of the floor trader over non members was never due to technique or information, but due to paying 10 CENTS to scratch a trade through a clearing firm.
Real Trader
Guest
I agree, thanks for the feedback guys.
RT
RT