Irby, you and I go back a long way, and you know I respect everything you do and say up here, but as usual, I would take a contrary stance regarding "Putting the order in a trader's hands who knows how to handle execution problems is good idea for Positon Traders or Day Traders who make fewer intraday trades off technical/fundamental signals with ridged stops."
Clearly for a position trader or longer term investors, services like ours are more in line with your view of what is most appropriate and best served here. But let me pose the following, if you could call up, speak to a trader who could setup on our end the Soes or Snet or ECN or other proprietary system, who would hang on the phone with you whileyou were watching the stock develop, willing to hang no matter how long it took, who would then execute the order immeidately at your direction, and have the ability to give a report instantly, to tell you you missed it or give you partial fills, etc., are you saying that wouldnt be more suitable?
Lets start this way, I love technology and think some of the things that MBtrading and others have done is fantastic, absolutely incredible considering where we were two years ago. Nonetheless, few companies offer such great systems with the right number and type of execution systems, multiplied by the more limited number of traders who understand the benefits/disadvantages of certain execution systems.
Trading successfully requires a few components:
1. Proper timing, proper selection of issues (something noone other than yourself is going to help you with).
2. The right brokerage firm which offers you the all the fundamental execution systems, soes, snet, ecns, etc. and then hopefully proprietary, smart systems, as well as systems that take your complex orders such as limits/stops, etc.
3. The investor, if she is trading herself, or the brokerage firms (if they are executing for the client) must intuitively know how to use the execution systems that are available to get the best fill, to handle tough situtaions when 1000 zyx can cost you a grand real quick.
Ultimately, I feel trading should be broken into two components. I think Jim Cramer or other traders would consider themselves great stock pickers, market timers, intraday traders, yet I would guarantee you that many of them are not executing themselves. They understand that their own limitations, their lack of systems and understanding of those systems, and in leaving it to someone else, they are better able to move on to the next stock.
In my experience, anyone who has ever called a firm like ours has never been disappointed with the quality of execution or systems. For most, its commissions. If we charge $35 per trade, most traders say that that is XX (10 to 15) more than a cyber or abwatley or mbtrading (forget the rest because we all know what they offer and how they 'work your orders'). So, lets say you do 10 trades a day, 20?, whatever number you want. At 20 trades, thats $200 more a day. That is a lot of money. But you get what you pay for. All you need is to save an 1/8 or 1/4 in one or two of those trades and you've paid for the increase and then some, leaving yourself a lot of upside for improvements and quality of execution. As well, in a running stock, an order to buy stock could yield a wide price, all market orders, no per se improvement, bu tif you got 1/4 better at one firm than someone else did, entering it at the same time, at another, i think that has value also.
Just my opinion...a bit biased...but my sincere belief.
Regards,
steve@yamner.com |
