Comment by 2ndSkiesForex on September 17, 2012 at 10:55am

Hello Sarra,

Thanks for sharing.  

Being that I've worked for the broker, meet with chief dealers regularly in London, NY and HK, had a father who worked for the FED for 50yrs sitting next to Volker, Greenspan, etc., thus exposing me to all kinds of things in banking, it's good to have another from the institutional world share their experience as there has been a lot of confusion and 'mis-information' about the ibank market.

Two quotes I like that you said;
"It is time we all got real and realized that individual stop losses in the retail market do not even register on the radar of the interbank guys."

I can understand why many retail traders fall into the fallacy of thinking they, and all their friends micro/mini account stops are seen by every interbank player and trader.  Its convenient to have an enemy who is against them and someone to blame.

It really comes from the ego's big lie - that everything is about them.  Almost everyone in the world does this - thinks that everything is about them in one way or another - especially all the moves in trading.

Best is when they got stopped out by 1pip...its the broker taking out their stops or the interbank market.

Its amazing how many people think and believe this.  Of course it has nothing to do with where they placed their stop in relationship to buy and sell zones.

The other quote I liked is;

"The same thing happens when we copy each other! Social trading...bulks up our trades. 

I couldn't in all conscience recommend anyone to use social trading as a method of entering these markets. Interbank guys must just love watching everyone clubbing together."

Yep, have to agree with you here as well.  I never follow anyone else.  In fact, I never even want to know what other traders are doing.  And I never teach my traders to follow others as well.  

Always teach them to do their own analysis, take the trades that stand out to them, do not trade in groups because a) that doesn't help you learn to trade on your own which eventually you will be, and b) only causes you to take the same trades as everyone else in the group which leads to being exposed (i.e. clubbing together as you say).

Its refreshing to see these kinds of statements here with all the perceptions and ideas about how the ibank market works.  

Anyways, thank you for sharing your experience in the markets.

Kind Regards,
Chris

Comment by Peter jcp on September 17, 2012 at 11:37am

Hi Guys - come off it - about grouping together ?? You both seem to be conflicting your own comments here ?

We all agree the retail market is too small to count - ie less than 10% of the total currency market with top 5 banks having over 50% and the 10 -20 having another 20% +

So therefore is every retail trading social sites in the whole world had 100% of its retail guys selling the EU - it just would not count ??

So how can you both conclude social trading can effect the market - as we have all agree it is still too small a part to make a different?

Yes Sarra - retail trading and commercial interbank trading is different - its chalk and cheese

The big players set the market - ie command and lead and dictate 

The retail traders - have to follow - we cannot lead or dictate - our logistics of entering and exiting the market is different.

We - the retail traders - will always be abused and mislead by the commercial market #

Its a fact of life guys - you need not try to cover it up ;-)

Please dont try and make the interbank market sound a credible well run organisation - working to all the regulations and adhering to all the rules required etc

People will start to believe you ;-))

It part of this brilliant game - just like all the play in the news items - the setting of sentiment etc etc- all to mislead each other - so to try to all catch each other out for there to be winners and losers in this the largest money market - which is unregulated -(lol)

Chris - unscrupulous brokers for years have been taking traders out of stops by a few pips. The largest case in the UK - which i was involved with - was with CMC - owned by Peter Cruddas - who recently quit as a Tory Treasurer. 

CMC had rigged their platform up in 2005-7 to purposely catch out their traders - It was proved in court and they had to pay out massive compensation plans. As far as I know today - they are totally clean and respectable.

I am really lost why you are so much on the side of the industry?

It makes me money and I should not "bite the hand that feeds me" - but if something is wrong - its wrong and needs pointing out 

Regards 

Peter

Comment by Alan Hill From Sarrafx Trading on September 17, 2012 at 11:47am

Peter, you are confusing two very different things here. You talk about CMC rigging their platform which is a totally different discussion from what I am talking about.

I am talking about the interbank market where triggering stop losses is the name of one of the games. If you have the clout to move the market in the direction of where a number of stop losses are situated you will. Of course you have to remember that it isn't just the retail guys who get burned there are a number of other players in the market who trade in a similar manner and the retail guys at that point become collateral damage. 

My only points are fro retail traders not to become stereotyped and that social trading is a dangerous phenomenon

Comment by Peter jcp on September 17, 2012 at 12:02pm

I was actually referring to Chris's comment re Brokers with regards to CMC and many others brokers that have since been found out

I actually agree with the belief - if you have the money to move the market the opposite way and can gain from it - you will do it - we all would - so players are bound to do it.

The problem with social trading is unfortunately 80% of traders will not have enough experience and knowledge to be able to maintain a continual winning strategy.

I had not realised when I started that even if you had say a 70% success rate on 100 trades or even 500 trades - you could still have 10 -20 trades go wrong in a row. If you do not understand that and have poor MM you can get badly burnt and psychologically damaged.

Following traders individually - or in a group can be very damaging to traders accounts - if they are aware of all of this - then its up to themselves to decide

Enjoyed your article and look forward to more of your contributions 

Regards 

Peter

Comment by Alan Hill From Sarrafx Trading on September 17, 2012 at 12:04pm

Thanks Peter. 

Appreciate your thoughts

Comment by 2ndSkiesForex on September 17, 2012 at 12:24pm

@Peter,

First off, when did I ever say that brokers haven't been involved with unscrupulous activity?  I have never said that, nor am I trying to protect any industry, nor have I ever made any statements that all brokers are totally legit and never do that.

Are there brokers that have engaged in unscrupulous activity?  Sure there have.

Are some continuing today? Sure.

When did I ever state there weren't?  Interesting to hear though that you now say CMC is totally clean and legit.  So are you saying that is a broker retail traders now do not have to worry about being stopped out by?  If so, what happens if a trader gets stopped out by 1pip and blames the broker?  Then what?  

I think you misunderstood what I was trying to say, which was how retail traders as a whole will often look to blame other people, entities, etc. for getting stopped out.  This is a far more convenient way to approach trading then to actually take responsibility. 

When have you ever heard of me EVER complaining about being stopped out, about brokers taking me out by 1pip, that it was them?  Never!

Why, because a) I don't play the blame game when it comes to trading, b) I take full responsibility for the outcomes of my trading, and c) I make sure i'm involved with brokers where I do not have to worry about that kind of activity.

And go figure, its never been an issue for me and you never hear of me talking about.  The only time I ever mentioned this was with DB, when I found out they were the counter-party to any trades over 5MM.  Once I found this out, I never traded with them again.  

But did you ever hear of me blaming them for my losses or results prior?  No!

So hopefully you can realize i'm making a completely different point than what you are talking about.

Also, I never concluded social trading can 'effect' the market - they only effect the individuals involved in them.

Anyways, hopefully that clears up the misunderstanding.

Kind Regards,
Chris

Comment by 2ndSkiesForex on September 17, 2012 at 1:23pm

I would like to say one thing about social trading sites.

I think this site as a whole is very good for the trading and educational community.  I find its a great place to share ideas about trading, different methods/strategies, explore strengths and weaknesses of them, along with share market commentary.

I think this is separate from trading groups per se which you talked about Sarra and the challenges that go with trading groups, but in terms of providing information for those trying to learn how to trade successfully, or find new ideas - I think this site is a great place for traders to come and explore such ventures.

I think Francesc and the team have done a great job here and have really made this a nice community focused on learning so just want to give my support for that.

Kind Regards,
Chris

Comment by Alan Hill From Sarrafx Trading on September 17, 2012 at 1:30pm

I agree totally.The more people learn from each other in a community spirit the better

I really like FX Street. Francesc and I had a bit of a sticky start but think we are cool with each other now!

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