I feel compelled to respond to the posts on this thread attacking MB Trading, the ARCA ECN, and suggesting that traders are bailing on MBT and going to CyberCorp. I'm a very-experienced (plenty of tire tracks over 5+ years) private stock trader with no affiliation to either, except as a customer, and what follows are some of my observations about MBT and ARCA, after reading this thread.
As background, I've traded stocks, options, S&P Futures contracts extensively, have been to about every brokerage you would want to try, and have attended almost every technical-analysis / trading seminar you can imagine (not recommended, BTW;). For the past two years I've traded exclusively in stocks, finding them to be the best vehicle. I'm a fan of simple, sound, unsophisticated trading methodologies that WORK (trends/moving averages/stops/etc; no Prechter), e.g. as preached by Oliver and Greg out at Pristine Capital, another classy, substantive outfit IMHO.
I traded at CyberCorp for about two months, and have been at MB Trading for over six months, where I'm very satisfied and plan to stay. Before that I traded at Broadway trading on the Watcher, and on ATTN for a few months; and I've day-traded / swing-traded stocks at a half-dozen web-brokers including Schwab/ETrade/etc.
First, it's ridiculous to suggest that ARCA isn't anything but a terrific, unique resource as an ECN. Goldman-Sachs recently invested in Terranova (the creator of ARCA) valuing the company at over $100M. Do you think those guys don't know what they're doing, and what's coming? That NY Times article had it all wrong; someone that didn't understand trading at all got the main facts way wrong. ARCA is simply the first ECN system to use algorithmic software technology to go out and work the inside market in an automatic fashion, at high speeds, to get the best fill. The Terranova server farm that implements this capability (up in Chicago) is like a football field size operation; there is nothing else like it, on that scale, anywhere (Oliver Velez at Pristine Capital first educated me on these facts).
The first implementations of computerized ECN's like ARCA and ISLD aren't perfect, but they do work, and are very powerful; and computer-aided inside-market fills are the way of the future. But, you still have to understand how to properly use ARCA to get the greatest benefit. ISLD is, of course more manually-intensive and is still better in many circumstances; it is very fast but there are liquidity issues, especially for larger lot sizes. But especially if you're trading large, multi-000 share lots, ARCA is wonderful. Often I use it to buy several thousand shares on the Bid, and sell them on they way up on the Offer. You have to understand how to time the orders to catch the momentum, and where to set your limit prices, in order to get the most out of it. It is a work in process, but there is nothing like it at this time.
Which is why, when I went to Cyber to trade for a while, I was disappointed. Trying to scalp stocks with only partial-fills on ISLD, typically sluggish Selectnet, and the 5-min rules of SOES, after having MB Trading's ARCA access, is like trading with a hand tied behind your back! Once you have come to learn and use the ARCA ECN, there is nothing like it! Cyber runs a good customer service operation, and their software is better than Realtick III in many ways (e.g. it can emulate automatically-adjusting trailing stops on your workstation), but they need a direct deal with Terranova. I also had trouble getting my funds transferred out of Cyber (it took over a month) but that was partly Penson's problem (their clearing firm) and I think it was a one-time kind of deal (they got confused about whether to use DVPs, DTCs, ACATs etc and kept dropping the ball). But it wasn't very fun having my trading capital tied up unnecessarily. I was left with the impression that Cyber isn't very good at BROKERAGING, which is not the case at MBT.
The other thing to know about MBT is they are a large operation, with very good customer service ethics. You can call them up and reach someone quickly, they have a very positive attitude routinely, consistently. It is a class operation, I like trading there because you can always pick up the phone and get cheery, helpful service; and I have pretty much seen it all when it comes to brokers (right up to and including daytrading the S&P's & Bonds, calling right to the floor). I am happy to dialog/debate furhter based on FACTS with reasonable people trying to sort things out. Don't want to get involved (may not respond to) the vendetta-style exchanges or mud-slinging stuff as seen on this thread, though.
Good trading,
-Steve Bell, Private Stock Trader
Palo Alto, CA |
