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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: funk who wrote (4086)	9/16/1999 5:47:00 PM
From: Matthew L. Jones	Read Replies (4) \| Respond to of 18137

It never ceases to amaze me how people who have obviously never used a good trading platform with a direct access brokerage continue to criticize it as costly. If the only advantage is getting you away from a broker with a conflict of interest (receiving payment for orderflow and hence working harder for the contra party to your trade than for you) it is worth the added expense. Assume you trade 1000 lots and further assume that you have virtually no chance of beating the spread in a market that is going in your direction with an order flow broker. Now assume that with direct access broker or access directly to the ECN's you have a 50/50 chance of beating the spread (and with experience, the odds are better than that), that $10 you saved at Ameri-whoever just cost you $31.25! What a deal! The commission is not what beats the average scalper or short move momentum trader, it is the spread (or house advantage). If one trades with sufficient volume the round trip commission should cost less than a teenie. It is worth the investment if you trade two round trips a week. Otherwise, it probably isn't. But to try and compare the average online broker to direct access is laughable. In terms of execution, it's like kissing through a screen door to use a typical online brokerage. IMHO. Matt