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Hi Kevin,
I agree with virtually all of your points. However, I've definitely had a
bad experience with a broker "enjoying slippage". When I was a newbie
trading options, I had a broker send the order to his friendly floor broker
in a way that purposely allowed substantial slippage. Possible reasons for
this:
1. The broker may get better fills for his more experienced clients by
giving the floor broker an occasional chance to make money from a newbie who
was likely to flame out anyway.
2. The broker may have some kind of deal with the floor broker to get a
kickback of some form. Maybe it was only the floor broker buying drinks
since there wasn't that much money involved .
I don't think that #2 occurred in this case, I think it was #1. But it did
occur, and I'm sure it still does occur to the unwary. Regardless, the
brokerage firm (Lafferty) switched my account to another broker.
Ross Kovacs
> ----------
> From: Kevin Morgan[SMTP:kmorgan@xxxxxxxxxx]
> Sent: Monday, August 17, 1998 5:08 PM
> To: REALTRADERS@xxxxxxxxxxxxxx
> Subject: GEN: Re: Enter on Stops?
>
> I didn't mean to start a debate about Larry Williams!!! Just
> clarify how I have interpreted his remarks about entry techniques
> and trader success. But since I seemed to have initiated such disparaging
> and inaccurate remarks about Larry (who I highly respect), here are a few
> facts:
>
> - Larry did take $10,000 to 1.1 mill. The results were audited, and are
> in the public record. Actually, he took it to over 2 mil...but took a
> big
> hit prior to the end of the 12 month period. The joy of fixed
> fractional
> trading; big peaks, big valleys!
>
> - Larry trades! It's his life (well, a big chunk of it, anyway).
>
> - Larry took one account of $70,000 up to over $700,000 in 12 months in
> 1997,
> trading only tbonds.
>
> - Larry's daughter won the 1997 Robbins World Cup of trading, trading
> only tbonds, and only using Larry's own daily bond phone "hot line"
> and fixed fractional trade size management.
>
> - Larry teaches his techniques to the public. This makes him a major
> target
> for many. Hence, I have no doubt that "people hear" lots of bs about
> him
> and his history.
>
> - A broker doesn't make a penny more, or less, based on actual fill
> prices
> (unless I am really confused about how this whole thing works!).
> Broker
> glee at substantial slippage suffered by a customer would not make any
> sense.
>
> - Many exceptional traders, including many who teach in one way or
> another,
> use stop entries. It's a perfectly reasonable approach.
>
>
> -k
>
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