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Institutional vs Retail trading tools


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I've thinking lately, what do the Institutional guys sitting at these trading desks use as

their tools when trading. they always seem to have an edge compared to the normal retail guys.

 

is it that they are using different systems, tools, datafeeds, etc

it would be really great to get inside the head of these fellows, what makes them tick :-?

 

if you are a Institutional trading lets hear your thoughts, secrets ???

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Re: Institutional vs Retail trading tools

 

I worked in futures company recently. As a backoffice, yes they have secret trading interface to watch over your position, in my instance it called report center - back office.

 

Are you talking about virtual trader plugin for Metatrader ? Yes, such thing exists and it can manipulate various things, like stoplevel increase, artificial delay, requotes and so on. So unfair brokers are well equiped.

It can also filter datafeed by adding one-two pips to it, so if your performance differs from one broker to another (number of trades is not thesame), this is propably the reason.

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Re: Institutional vs Retail trading tools

 

Well first of all they have a level 2 system. Than they have a huge capital to invest which lets them take user money easily. Some of them have very advanced ea's and systems however with everything available today those tend to have very little edge. Another important factor is a lot of experience. Aside from that they are just traders like you and me. However because they have a large capital they can impact the market by A LOT! But they also have a high suicide rate and a turnover rate, very few can stay in this business from a long time they are either dead broke or promoted to being a full time golf and tennis player for their companies. Just my 2cents.

[spoiler:26ukmy10]Never trust, never fear, never beg[/spoiler:26ukmy10]
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  • 1 year later...

The edge institutional traders have over retail traders, just the same as if one was a stockbroker (institutional vs retail players) (I was once an institutional dealer in a major stockbroking house :-)) or an inter-bank forex dealer.

 

Institutional guys have much more advantages, namely ready and easy access to lots of capital (I had access to over $10m a day), and we don't have to pay brokerage/commissions/spreads. Commissions in stocks or spreads in FX alone can kill you.

 

We also have lots of back room support. Research, analysts, all sorts of goodies. And most importantly the network of associates in other firms, etc. Just like a forum but we have access to stuff most investors don't but that does not necessary mean it is 100% accurate. It's just an edge.

 

Having said that, let me assure you that with all that, the pressure is very high and burn out rate is high. In my opinion, given the amount of capital I now trade privately vs money thrown at me as an institutional dealer, I prefer it now as I get much better return on equity and very much less stress. Most times, capacity ($$$) can actually work against you. Ask Warren Buffet.

 

There is no grail. Just be sensible and disciplined. That's it. Hope that helps.

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