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Just a few musings...
> Data-on-demand would be ideal if it really worked. No one likes
> having to maintain their own data but there is now no choice if you
> want lots of accurate historical data for backtesting. An ideal model
> would let you collect real-time data for trading, store the data on
> your machine locally, fix bad ticks as they occur, and be able to
> download years of accurate historical data and store it on your
> machine for system development. The ability to download intraday data
> to fill holes is essential. The present combination of
> DynaStore/DynaLoader plus QFeed is close to this model and works very
> well.
>
I wonder about that data on demand also. If you're truly going to
grab a lot of data, can they pump enough to you over the internet?
And if they do, when do the ticks get cleaned up? If they're
cleaned on the way out, you have a slowdown for every tick you are
delivered. If they clean up later, when are those sent out? nightly
maintenance? next day? Will it just be clean on their server or
when it's clean will they clean what is stored on your hard drive?
In order to do a lot of backtesting that doesn't take centuries, you'll
need to have the data on your hard drive, so you'll want to set it to
always be going there. So, now you're saving a lot of data. What
with Best Buy selling a 100GB HD for $300 and giving you a $200
gift certificate, the storage space isn't really an issue. Bandwidth
is the issue and the last thing you want is your quotes being slow
on the open for the stocks you are trading so that you can get the
data you want for the stocks that you'll be backtesting after the
close. And you definitely can't backtest off their server data as that
is so slow going across the internet compared to directly from your
hard drive.
> Brokerage services are rapidly becoming a commodity
> and commission revenue is approaching zero. Before long, we will be
> placing orders directly with the ECN's. Why anyone would want to
> start a brokerage business today is beyond me. Ideally, TRAD will
> work with other firms to provide a direct order entry linkage into
> their order entry systems as well.
>
I agree that it's insane to start a brokerage biz today. But I do
believe that TRAD could have an advantage IF they cleaned up their
software. It's a product that I have not seen offered by any other
brokerage. But, their problems are many. One is obviously the
software problems that have been enumerated on this list (I don't
have TSPro). The other is the lack of customer service. If you take
48 hours to respond to someone's question (as they do with
TS2Ki), then your clients aren't going to be trading with much
frequency. Also, if you through newbies to TS a package without
adequate support and training and a good batch of initial systems,
then they're just going to be frustrated with it, not use it, and
realize they can pay less commission somewhere else.
Eventually, you are down to your hard core TS users and that's a
limited market. It's particularly limited if they can use TS2Ki and
trade with lower commissions elsewhere. Sincere service and
support is the answer to TRAD's problems and as you say Jim,
their track record does not reflect this.
Regarding ECN's eliminating brokerages, I can't see that
happening. Brokers are responsible for "monitoring" their
customers from a legal standpoint and they have a boatload of
legal issues to deal with and are very labor intensive operations.
They will always be needed for that. ECN's don't want to get into
that arena. What ECN's want to do is have as many orders plow
through their systems as possible to generate the most $$$
possible. They don't want to have to deal with the regulatory
issues brokers deal with. A broker could buy an ECN, but then
other brokers would shy away from directing their orders to that
ECN first. The best way for an ECN to get the most biz is to
remain equally available for as many as possible.
One thing I haven't seen mentioned is the possibility of lawsuits
against TRAD. By providing clients with sophisticated software
and including systems that can tell them when to buy and sell, are
they not "advising" their clients? And if so, how can they be sure
that the advice that the same software generates for everyone is
appropriate for each individual trader? One of the basic rules for
brokers is to "know your customer" and advise him based on this
knowledge. I doubt that TRAD is incorporating this knowledge into
each customer's system. At some point when one or more
customers blow up, TRAD could be facing some serious liability.
It's already happened with some of the big boys, why would TRAD
be any different?
>
> My thoughts.
>
Now you have mine FWTW.
Good Trading!
Cash
"Buy Low, Sell High"
(If this statment is used for financial gain, I am entitled to 10% of all profits. ;) )
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