Info, I agree with you re: <<Furthermore, the uncertainty about the "operational risk", leads to a coward attitude, which is quite contraproductive in daytrading. ...>> Man, are you right!
In fact, I had a raging argument yesterday on the Cyber board, because some folks don't seem to understand this point. I had Cyber collapse on me yesterday in the middle of a critical trade (I was short a huge number of shares of a very volatile net stock) - and it took 10 minutes before I managed to raise anyone on the phone! Well, I was so PO'd, I wrote a short nasty post to the effect "not acceptable from a daytrading broker". Well, all hell broke lose - I was taken to task for complaining, and I was told that's part of the risk, and how I should actually trade smaller shares, and on a less volatile day! For the life of me I could not convince anyone, that if I have to limit myself that way, and I have to be extremely paranoid about the broker collapsing at any moment, that is NOT a daytrading broker (and what's the use of using such a broker if you have to use "small shares, on a slow day" in order to limit risk!). I accept market risks, and some risk associated with the internet traffic etc., but to count in a *high probability* risk from the *broker*, is really a bit much. But you put it very nicely - such considerations lead to a real crippling in trading performance... I now must reevaluate every trade with the thought in mind "what if the broker collapses!". That is extremely inhibitory, and the results on trading are not good.
That is in fact the case with Datek these days - trading is hard enough, without my having to go to outlandish lengths in order to secure my trades - I shouldn't have to think about how to enter an order before the market opens, because I can't be sure servers are available! And what a disadvantage that is, not to be able to monitor the market, and instead have to engage in a guessing game.
I can testify to the fact that this affects my trading. These days, I am for example, far less willing to buy at the close for a gap up the next day, and when I do, I do it with fewer shares - a real shame. This is just one of many ways in which an unreliable broker can cripple your performance. Trouble is, there are no brokers I'm aware of, who have *all* the right characteristics: reliability, good executions, short availability, instant portfolio updates, etc., etc. etc. Which is why I continue to have several brokers, and it's musical chairs - today this one craps out, the next day, that one. And that is how I'm still at Datek. The saga continues. Lets face it, one day we'll look back on all this and say: it truly was the Middle Ages of trading back in the 20th century. We are at the dawn of individual trading, and are paying the price of being 'early'. I myself remember the days when I traded without LII, without the ISLD book, heck, without streaming quotes! Unbelievable - I look back at those days, and I can't imagine how I somehow avoided bankruptcy! I'm sure 2 years from now I'll look back at today, and be equally amazed.
Morgan |
