I kind of got lost in trying to understand the purpose of your note.
Are you trying to defend the MM's and their practices which they adopt to maximize a buck for themselves or was it a commentary on the purpose of soes trading itself.
I presume, most of the participants on this thread are seasoned investors or people who have made good money in trading generally
.
However, I see this thread to be specifically directed towards the SOES type of trading. Which, IMHO, is momemtum trading on a very S. T basis, sometimes only minutes, to turnaround.
It is in this very short term context, IMO, that the MM takes advantage of his position to the extent of manipulating market .
No MM is strong enough to set the direction of the market, when you look at long term ( Even more then 5 minutes) . Smart people like you and others in this thread have after all made our money this way. However, when you are primarily, acting and reacting to making 1/8 or 1/4 profits on instant movements in price, as most SOES traders try to do initially , then you get more vulnerable to this price manipulation. My comments as regards to MM's have been in that context only.
Others will have their own opinions, but IMO, without going into the right or wrong of things, (afterall everything is fair in love and war) we should not try to deny the fact that an MM due to his advantageous position, vis a vis liquidity, order flow etc, can and does manipulate that market to the disadvantage of a soes trader. The question is how can a soes trader overcome this handicap.
I want to use this argument to move the discussion forward to a point where people who are doing soes trading on a strictly moment by moment basis, can overcome this disadvantage, and to improve their ability to go beyond the 1/8th.
Merely denying the fact, that they do not have a disadvanatge
makes this an exercise in futility.
Looking Forward------- |
