Scalpers Using Direct Access Trading?

Scalpa · Sep 20, 2002

I'm new to the whole direct access trading gig, but how can any of these direct access trading outfits be attractive to the scalper? Take MB Trading for example: $9.99 a ticket plus ECN fees? If you make 2000 trades a month, that would be $20,000 in commissions alone! You'd need to win on almost all of your trades just to break even or make little profits. It just doesn't seem like a scalper could make money at any of these DAT firms. Interactive Brokers, Cybertrader, and every other one I checked out seem to have similarly high commissions and ECN fees.

Am I missing something here? If I am, "tell me where I'm wrong" (like Bill O'Reilly would say)!

-Scalpa

daniel_m · Sep 20, 2002

Originally posted by Scalpa

I think a huge key to this new wave of "liquidity trading" is finding the right broker. I average over 100 trades a day, so using a broker with little to no commissions is an absolute must for me.

who the fuck are you using that gives you these near zero commissions?

hans130 · Sep 20, 2002

try www.pointdirex.com

daniel_m · Sep 20, 2002

well hans, if IB is way too expensive for scalpa, i don't see how poindirex is gonna offer him much advantage

(do you have some stake in that firm or something? seems like you mention them in every other post....could be just me though)

cornholetrading · Sep 20, 2002

I don't know what pointdirex office you are at, but the one I know of in my area just lost all of their traders because the software was so unreliable. I am not saying the firm is good or bad but when you lose a whole office due to them being unhappy then a red flag should go up. Pointdirex bought Chicago EXT a few months ago and I think they are suing each other now.

hans130 · Sep 20, 2002

Originally posted by daniel_m
well hans, if IB is way too expensive for scalpa, i don't see how poindirex is gonna offer him much advantage

(do you have some stake in that firm or something? seems like you mention them in every other post....could be just me though)

I did not see that he had interactive brokers in the list above, now that i see it in the list, i dont understand what his point was. if you think the IB commissions take too much out your trading profits then obviouly you could be wrong unless you trade for a firm that has no commission, but that does not mean that you will make money either.

Hans

Sarasota · Sep 20, 2002

Originally posted by daniel_m
well hans, if IB is way too expensive for scalpa, i don't see how poindirex is gonna offer him much advantage

(do you have some stake in that firm or something? seems like you mention them in every other post....could be just me though)

It is probably just you and your cynical, something constantly up my ass attitude towards everyone on this board.

thunderbolt · Sep 20, 2002

IB is as low as it goes. I scalp and IB works great for the bottom line.

Sarasota · Sep 20, 2002

Originally posted by Scalpa
I'm new to the whole direct access trading gig, but how can any of these direct access trading outfits be attractive to the scalper? Take MB Trading for example: $9.99 a ticket plus ECN fees? If you make 2000 trades a month, that would be $20,000 in commissions alone! You'd need to win on almost all of your trades just to break even or make little profits. It just doesn't seem like a scalper could make money at any of these DAT firms. Interactive Brokers, Cybertrader, and every other one I checked out seem to have similarly high commissions and ECN fees.

Am I missing something here? If I am, "tell me where I'm wrong" (like Bill O'Reilly would say)!

-Scalpa

Could someone explain to me why so many traders love scalping? Is this a whole new craze, or has it been going on a while? I don't have the heart to trade that way. 8 to 12 round turns a day for me on the ES, and anything more and I know I am over trading.

cornholetrading · Sep 20, 2002

Originally posted by Sarasota

Could someone explain to me why so many traders love scalping? Is this a whole new craze, or has it been going on a while? I don't have the heart to trade that way. 8 to 12 round turns a day for me on the ES, and anything more and I know I am over trading.

I think most talk about it in the context of scalping stocks. Part of it is that for years almost all retail/prop shops promoted scalping so that is what a lot of traders were introduced too. Most promoted no overnights and be in and out of the market It is good for the firm because lots of commissions are generated and the risk is fairly low. At worst the trader burns himself up in churning. Prop shops like it because if a trader burns himself up they are not really losing money because they are paying themselves back with commission rates.

The advantages for the trader are supposed lower market risk and consistence although for most traders I don't know if it turns out like that. Most still lose a lot of money churning up and are consistent at losing.