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Scott:
I just posted this on a different list, and most of it fits in this thread about
brokers and clients here:
The best thing about the markets, when you finally realize
it, is that it is so very democratic. There is always someone larger, better,
faster, smarter. We are all just a small portion of the huge mess that
moves as it wants to move. You can be just as right or just as wrong if you are
trading a one lot in the E*minis or trading a billion dollars in US Bonds. My
opinion
is that you will trade better than you have ever traded when you realize that
everyone loses money, everyone has good days and bad days, hot streaks and
cold streaks. Brokers don't giggle at your order when you put down the phone.
And most are so busy, they don't even know what you did last.
As for the stress of having to deal with another human, there are always
going to be a few rough days between any two humans that interact. But if you
don't also have some good days with your broker, ask yourself: When was the last
day you thanked them when you got a nice fill or a quick fill? How about
telling them to have a great weekend? Wish em a Happy Easter etc.?
I trade direct to the floor in every market I trade. And most of my pit
brokers know me by name. I am a total bastard when the fills are awful if I
think
the fills should have been better. I demand to talk to the filling broker [in
other words, grab the bastard out of the pit and get me on the phone. I want to
know what he has to say about this shitty fill...]. But I also am the first
person to thank that same broker, as well as the floor broker for a good fill.
I'll
ask to speak to that same pit broker and thank him if the fill is extra nice.
And
I *do* give my pit brokers discretion at times, and I'll often give them a
tick to fill my profit orders. I trust them and I let them know it.
I guess what I am saying is, part of the equation is dealing with humans.
My brokers like me. I like them. We're all professionals and we respect each
other. Sometimes I lose money and sometimes I make money [We all hope we make
more
money than we lose, but it is never one way]. Sometimes they fill orders
better than other times [We all hope they fill our orders great every fill, but
that isn't realistic]. But I'll tell you the one thing that can make me walk on
air for a weekend: Once in a while, one of my floor brokers will say to me,
after my trading day, "Hey...great trading today. It's really a pleasure to
watch
you trade." Life doesn't get much better than that. And no computer will ever
make you feel that way.
You wrote: "I wonder how big is big? Do you have to be doing 1K RTs per month?
Less? More? As in institutional trader, what was the range of lot size? Not just
the big orders, but what was the size of some of the smaller orders?"
Scott, I've done tens of thousands a RT in a day at times in my trading career
and I've also done singles and triples. When I was the biggest trader my broker
serviced, they were the same people they are now that I am now one of the
smallest clients they serve. When talking about some of us 'large institutional
guys,' they had good things to say about some of us, and bad things to say about
some of us. I'll say this right now: When I was a huge trader for a huge firm, I
*never* stuffed my floor brokers. I may have been angry about a fill or
disappointed, but I never made them eat the fill. I let them know how
disappointed I was. That hurt them much more then any cash I could have
extracted from them. And you, in all the years I did huge institutional size, I
never once had an out trade. Not one. Not a bad price or a reverse fill or a
missing contract. But some of my contemporaries had them constantly, and when
they were large institutional traders, they'd tell their brokers to sort it out
and make the brokers eat the out trade or bad price if it was against the
client. In my opinion, they were mis-treating their brokers most of the time.
I know someone is going to post saying I am just being too nice to brokers. You
pay commissions and from that, you get the right to treat a broker how ever you
want to. I'd say that if you treat brokers as people and with respect, you'll
get better treatment back. As for 'Not Held' and other phrases none of us
like...Different markets have different rules and customs and flavors. It's your
responsibility to know how those markets trade *before* you trade in them. Some
markets are rat holes. Honest!! But if you know that, why trade there? Or if you
do, go in knowing it's going to be a rough and dangerous ride and plan
accordingly. There are a zillion markets for us to trade. Trade the markets you
know and like and trust.
And if you hate your broker, find a new one. And start the new relationship out
by giving them mutual respect until they earn less.
Tim Morge
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