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Strategies & Market Trends : Trading For A Living -- Ignore unavailable to you. Want to Upgrade?

To: Eric P who wrote (1556)	4/17/1999 9:43:00 AM
From: Mama Bear	Read Replies (1) \| Respond to of 1729

Eric, I am pleasantly surprised to find someone else who has come to the same conclusion concerning the advantages of auto execution as I did. It seems common wisdom to curse the brokers who take payment for order flow. A lot of folks will claim that you're getting 'ripped off' for 1/16'. Sometimes I think about that when a selling panic sets in and I see orders crossing on the ECN's 1/16, 1/8, even 1/4 under the inside bid. I know that if I were holding (I wouldn't be waxing philosophic if I had a position) I would have the luxury of executing a sell at the inside bid on my web based broker's system, and wonder who's really got the advantage. The only true advantage that I see in the direct entry based systems is the ability to execute pre and post market, and immediate confirmations of trades. Sometimes I have to wait a maddeningly long time to be confirmed, although after all this time I can bet with near 100% certainty that the order I placed was in fact auto executed. I believe that I will be setting up an account in the near future with Yamner & Co for the off hours trades. Barb

To: Eric P who wrote (1556)	4/17/1999 12:52:00 PM
From: Dave O.	Read Replies (3) \| Respond to of 1729

A lot of good points you mentioned. A few thoughts of mine having traded both at a day trading firm and through a discount broker (where I now trade). I never pay the ask, at worst I'll split the bid/ask, whether I'm saving 1/16 or even 1/32. Now, using an ECN at a day trading firm adds to commission costs. Yes, ISLD may be only $1 per fill but you can get multiple fills and INCA is (was) .015 ($15/1000 shares) where I formerly traded. So you could pay as much as $40 each way. With a discount broker I can buy at the bid, granted not in a fast moving stock, which I rarely play anyway, and I don't pay more than $19.95. Bottom line is more per trade goes into my pocket by not incurring the added ECN costs. Last, saving 1/16 by buying at the bid, usually pays for commissions unless it's a very small trade. And I don't feel the "need" to do 15-20 trades a day through a discounter as is often the case at day trading firms. Dave

To: Eric P who wrote (1556)	4/17/1999 1:24:00 PM
From: nextrade!	Respond to of 1729

Dan and Eric, excellent posts indeed!

To: Eric P who wrote (1556)	4/18/1999 1:13:00 PM
From: William W. Dwyer, Jr.	Read Replies (1) \| Respond to of 1729

"....Well, although the market makers don't get paid to execute daytraders orders daytraders are too smart, with Level II and all), market makers are paid to execute orders from the customers of discount brokers. It's called 'payment for order flow' and we're all probably familiar with it. Market making firms can afford to pay discount brokers for the priviledge of executing their orders since these orders are typically 'dumb' orders which are profitable for the firm. As a result, market makers have auto-execution systems which will quickly fill all orders from these discount brokers. As a whole, this is very profitable for them. Some daytraders have learned that, by placing market orders with their discount broker, they are able to get much better fills than they otherwise were able to get. In other words, the market maker will be much more likely to execute your order if it is coming from a discount broker (typically 'dumb' orders) versus coming from the SOES or SNET system (typically much 'smarter' orders). Anyway, this is the logic I attribute behind successful daytraders using discount brokers. As always, the key to success is just getting your orders filled." Eric, I agree totally with your analysis of routing orders. I usually get just as good results from orders I place with Fidelity as my orders through CyBerTrader. Often I get filled much faster with Fidelity. And, unlike with CyBerTrader, my Fidelity never goes down, never gives me trouble. Lot to be said for that. Bill