IG Index "dealing desk" delays...

Fair enough, and thanks for the explanation.

One thing I still don't understand, though is this: What are they checking for? The guy that's manually checking your trades, presumably at some point he has the power to decline your trade, so under what circumstances does he do this?

Hi

Yes he has the authority to decline your trades and this will in the main be done for one of two reasons:

1. The client is categorised as 'A' book and the dealing desk are unable to get a hedge done in the market on his declined trade.

2. The dealing desk suspect he is dealing on latent prices and reject his trade because it's outside their accepted tolerance from the underlying market price.

If it's number 2 it's personal!

Hope that helps.
 
Hi

Yes he has the authority to decline your trades and this will in the main be done for one of two reasons:

1. The client is categorised as 'A' book and the dealing desk are unable to get a hedge done in the market on his declined trade.

2. The dealing desk suspect he is dealing on latent prices and reject his trade because it's outside their accepted tolerance from the underlying market price.

If it's number 2 it's personal!

Hope that helps.

Thanks for the explanation, I really appreciate it.

What qualifies you to join the 'A' book? Is it based on how much money you've made, how frequently you trade, or return ratio, or do they have some computation for risk?

My trading sizes are fairly small; I'm rarely going about £5/point, which is why I wonder if they would bother caring about how I'm hedged.

I have been doing a lot of trading from my mobile phone and I get terrible signal so the latency might be a problem.

Is there any long-term risk to my account? Can they close my account or just start refusing to open/close trades all the time?
 
Hi Mrbrilliant, firstly, as I don't know the ins and outs of your strategy, I'll just stymie my immediate scepticism, & assume that yours was a legitimate strategy, in which case, you'd certainly deserve a "very, very well done, sir" from this poster.

Secondly, you should find that the answers to at least some of your latter questions to him are in at least one of Highburyfx's most interesting earlier posts. Though, I must add, with all respect, if you're usually betting under £5 pp and your win rate has really meant that you've turned 2k into 10K - effectively quintupling your money - in only a matter of months, then your win rate could also be described as 'near otherworldly'. Because, no matter how you did it, you've still allegedly done something which the vast, vast, vast majority could not do - so it's little wonder, at all, that you've been... noticed. For starters - how far back into the posts here, over the years, do you need to look, before you'll find even one other who's sincerely claimed to quintuple his money in "a few months"?

It's far more usual for people to turn mountains into molehills in months, but you're telling us that you've done the absolute reverse, turning a molehill into a mountain, in only months! That's why methinks they're more than just 'interested'.

Frankly, and with the benefit of the doubt (that is, if this is a sign of success to come) you will most likely need far more than just one s/b co, to have any chance of continuing success like that!

However, I noticed you've mentioned 'binary bets', and now this one's left pondering - excuse me, but what percentage of your winning strategy, is down to your binaries? I'm considering too (and Highburyfx is welcome to set me straight on this) that it may well be harder to offset usually hedged winning clients (the so called 'A book'), when it comes to binary bets - particularly when clients are deploying certain (shall we say...) 'unwelcomed strategies' - such as, & with all credit to Highburyfx, one based upon price latency, and I can think of another questionable one, outed during the winter here - i.e. - client waits until the binary passes e.g., ~ 90% in the last few mins of trading, then hammers it - all in - which is (I must hastily add) a 'strategy' that's definitely *not* recommended - as it *will* get your a/c closed, after one too many (cough) 'successes'. There is, in other words, precedent for an account being closed - where the client gets a little 'too crafty' with how he binary bets. Your being put on manual, is at the very least, surely a sign, that all is not being taken lightly from their end. And I can speculate no more.

In fact, all we can do here - without possession of all the facts - is speculate (...while giving you the benefit of any doubt, or not) so please DYOR and read into that, what you will. Because, ATEOTD, you and only you, can assess the long term risk to your account, as you are arguably the only one here, who is privy to your methods.

Lastly, as far as the rest of us are concerned, *if* yours was truly a legitimate strategy then you've also actually, and somewhat inadvertently, done us all a great favour, in laying out where the goalposts stand as far as winning is concerned; because people often wonder "how much, and within what time-frame, do I need to win, before I get placed on manual execution?" And, *if* IG's unofficial (and I must stress 'unofficial') yet now implicitly understood response is: 'you need to effectively (1) quintuple your entire balance & (2) within a few months, before we'll consider doing that', then that is anything but a condemnation of IG Index. In fact, this poster reads an immensely commendable amount of positivity into this situation, insofar as it's very re-assuring to know, even if unofficially, that you've nothing to fear from even doubling or tripling your money, within months, when using any legitimate gambling method, with IG Index. Now that *is* excellent news - for at least the dreamers among us. ;-)
 
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Thanks for your commendation peakoil ;)

Although it can't be THAT unusual to quintuple your account. If you bet all your money on 3 successive 50/50 bets, you have a 1 in 8 chance of winning all 3 of them which would octuple your account. I'm sure plenty of people are crazy enough to have done that.

I didn't do any dirty tricks. To be honest a lot of it was due to getting lucky as for example I sold a lot of faraway options on the DOW which has been mostly flat for the last 6 months. A few times I nearly wiped out half my account. (I am aware that I have to change my strategy as this can't go on forever.)

Also the latency isn't intentional, it's because I have a boring job in the middle of nowhere and I put trades in through my mobile phone which gets terrible reception here so sometimes it's just slow or doesn't connect at all. In the long run I don't benefit from the latency, as I generally lose money because of it more often than not.

When you say that SB companies have closed accounts, when they close your account do they come up with an excuse to keep your money or do they let you withdraw?

EDIT: By the way, yes, I agree with you, overall it's been very smooth with IG. Even now, the dealer intervention doesn't happen all the time and it's only a few seconds when it does.. I'm just trying to find out what's going on.
 
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Thanks for your commendation peakoil ;)

...When you say that SB companies have closed accounts, when they close your account do they come up with an excuse to keep your money or do they let you withdraw?

Cheers, Mr. Brilliant. That's a very good question. And you know what? Even rarer than those who tell us that they can quintuple their s/b accounts within months (whether by playing fair or otherwise), are those who come back here shortly *after* their account's been closed, then to tell us what final settlement was reached between the s/b co and the said incredibly winning client, ...which is also why this one can only speculate as to the answer. Nonetheless, methinks it would be reasonable to presume that if you played fairly and simply got incredibly lucky, in a relatively short amount of time (as you're suggesting), then surely it's far from unreasonable to expect to keep your winnings.

The basic rule of thumb seems to be: if you won because you exploited market inefficiencies, and got very lucky, then you can expect to sleep sound. Albeit winning that multiple of money, in that short a time, is the trading equivalent of throwing your five star hotel's plasma tv out the window (heheh). In other words, it's possible that you may not be allowed to stay on much longer.

But if another won largely because he exploited IG's inefficiencies (etc.), then he can expect his sleep to be as unsound as it will be costly.

:cool: HTH
 
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Hi

Yes he has the authority to decline your trades and this will in the main be done for one of two reasons:

1. The client is categorised as 'A' book and the dealing desk are unable to get a hedge done in the market on his declined trade.

2. The dealing desk suspect he is dealing on latent prices and reject his trade because it's outside their accepted tolerance from the underlying market price.

If it's number 2 it's personal!

Hope that helps.
No. 1 is understandable, no. 2 is a ticket that shows the market maker in question have a long way to go, before being a serious alternative trading the markets.:)
 
Thanks for the explanation, I really appreciate it.

What qualifies you to join the 'A' book? Is it based on how much money you've made, how frequently you trade, or return ratio, or do they have some computation for risk?

My trading sizes are fairly small; I'm rarely going about £5/point, which is why I wonder if they would bother caring about how I'm hedged.

I have been doing a lot of trading from my mobile phone and I get terrible signal so the latency might be a problem.

Is there any long-term risk to my account? Can they close my account or just start refusing to open/close trades all the time?

As PeakOil has mentioned, turning £2k in to £10k in a matter of months is good going and although it has been seen plenty of times before you will most definitely be on the dealing desks radar and there are now only 2 ways to get off that radar.

1. Start losing and give back some of the winnings. Once they are satisfied that your 3 month win streak is over they'll assume you'll revert to type and become a 'normal' client again.

2. Leave them and trade somewhere else.


If their analysis of your trading strategy shows that you are not doing anything untoward but are just very good they will begin to hedge you. This means you will still be on dealer alert and your trades will still need to be manually accepted but it also means the dealing desk have identified how to have you as a customer and make money from you. they will now be comfortable with you but you need to be comfortable with them too and being on dealer alert is probably going to be too frustrating for you to continue with them.

I still don't really know what you trade, when and how frequently, but binaries have been mentioned in this thread. Binaries are potentially lucrative to spread bet firms and they're all rushing to offer them but bear in mind that dealing binaries on most spread bet platfoms is unlike the other products they offer.

They don't in the main price or run the risk of a binary bet as they do for say an indices or FX bet which they price from their own aggregated feeds and run to their own internal risk limits. Binaries are quite often white labelled from specialist binary providers and plugged in through an MT4 or other 3rd party platforms. The binary company assumes the risk and pays the s/b firm a commission for the trades. It is the binary company who will demand a B book client is moved or put on dealer alert.

The long term risk question you asked about can they close your account and can they refuse to open trades, the answer is yes to both of them.

can they refuse to send your money back? if they have evidence you've been dealing on prices that are palpably wrong then they may try but it happens so so rarely that you shouldn't worry about that, certainly not with IG anyway. If any s/b firm refuses to give you your deposit back then go immediately to their regulator and begin a claim against them.

The best advice I can give to anyone who finds themselves on dealer alert is to phone the dealing desk directly (not a sales trader or client support person) and introduce yourself in a professional manner and ask them why you are having trouble getting your trades on. Ask them if you are doing anything that is causing concern and what would be the best way to have the manual checks removed from your dealing. If you are on dealer referral they will tell you why and then at least you will know and be able to make a much better informed decision to either stay and change your style, or to leave and find another firm to continue with for a few months until the same thing happens again (and again, and again)

all the best.
 
"I generally only trade options and binaries "

Thats the reason , it has nothing to do with turning 2K to 10 , that's nothing for them , Doom made 100K in 2 days no problems , they want to double check their own options prices , not the first time i read this about binaries .
 
"I generally only trade options and binaries "

Thats the reason , it has nothing to do with turning 2K to 10 , that's nothing for them , Doom made 100K in 2 days no problems , they want to double check their own options prices , not the first time i read this about binaries .

Thanks for the input.

Who's Doom? How did he make 100K in 2 days?
 
It will be to check his trade level against the price in the underlying market to ensure he is dealing at the correct price or in extremes to get their hedge against him done before they fill him.

You can think whatever you choose but you asked a question and I answered it correctly.

They have small teams of risk managers who work a rotating 24 hour shift. In some instances the book is passed from London to Australia overnight and back to London again in the morning but in all cases the team is small. The platform, pricing blends and order engines are all automated but people who manage risk have ways of sniffing out clients that are costly and in the first instance this small group of clients are 'red flagged' so each deal they do needs to be manually accepted by one of the small team on the risk desk.

There may only be 100 people at any one time who are red-flagged and if 70% of this group of clients each deals 7 times in any one particular day (a typical client frequency profile) then thats less than 500 deals a day that need to be eyeballed by one of 10-15 people. Considering a good FX spread betting/cfd desk will take 10,000 to 50,000 trades per day it isn't really much to worry about from a resource perspective.

you can believe it or not but it is accurate.

I've taken you out of context a little, but you say you are accurate in what you write. This means you have actual knowledge of an illegal practice known as front running, which makes you an 'accessory after the fact'. You may wish to retract one or both of the above comments.

"An accessory must generally have knowledge that a crime is being, or will be committed. A person with such knowledge may become an accessory by helping or encouraging the criminal in some way, or simply by failing to report the crime to proper authority."
 
I've taken you out of context a little, but you say you are accurate in what you write. This means you have actual knowledge of an illegal practice known as front running, which makes you an 'accessory after the fact'. You may wish to retract one or both of the above comments.

"An accessory must generally have knowledge that a crime is being, or will be committed. A person with such knowledge may become an accessory by helping or encouraging the criminal in some way, or simply by failing to report the crime to proper authority."

lol. you're an idiot.

when a client is A book the spread bet firm acts as an agency broker and executes a hedge trade before accepting the clients trade (in some instances, certainly not all)

you think you know a lot but take a step back and you'll learn a lot more. you ask the right questions but you don't believe anyone who says something that doesn't support your theory. I try and help a poster with a reason why he is having trouble and you suddently start accusing me of participating in a crime.. people like you are why influential people within spreadbet companies stay away from this forum.
 
lol. you're an idiot.

when a client is A book the spread bet firm acts as an agency broker and executes a hedge trade before accepting the clients trade (in some instances, certainly not all)

you think you know a lot but take a step back and you'll learn a lot more. you ask the right questions but you don't believe anyone who says something that doesn't support your theory. I try and help a poster with a reason why he is having trouble and you suddently start accusing me of participating in a crime.. people like you are why influential people within spreadbet companies stay away from this forum.

If you have to resort to personal insults it shows your argument is weak.

This forum is a good place to put forward robust arguments that can be proved or disproved. (There are threads where people have a good laugh as well, I think its a good site).

So many posters make wild claims about almost everything, if the claim doesnt stand up to the slightest test then others can make their own judgement on its validity. One should welcome debate if in the right as it allows you to further support your position.
We have a great thread on this site with an accredited SB representative trying to put forward "the other side of the screen" argument on how SB's work. It was a real eye opener, and he categorically stated they do no hedge BEFORE they take your bet.
Now unless you are willing to say that you do work for an SB and they DO hedge your bet before they take it, then its just your personal opinion vs someone from within the industry.
 
@ highbury fx

What do you class as scalping?

Taking 1 or 2 points.
Or taking 5 or 10 points.
 
@ highbury fx

What do you class as scalping?

Taking 1 or 2 points.
Or taking 5 or 10 points.

its a good question and different people will give you different answers.

I still work in the industry, I've never hidden from that in any of my posts. I wont ever recommend any one firm for you to do business with and I've always said that I would prefer to remain anonymous as I'll be able to give a better opinion than if I was posting as the representative of a regulated firm.

scalping. I consider scalpers to be people that take advantage of a latent price and trade because the price has lagged or is palpably wrong. this will give people like me who are responsible for running risk a headache because we cannot hedge a trade profitably due to the fact we have inherited a position that is off-side instantly. now, we don't mind being off side very quickly in fast moving markets because our average position and the trades we take during the fast move would normally be enough for us to be ok, but in normal everyday markets there are people that search for prices that are wrong and trade on them. when I say wrong, I mean to say they are outside of the tolerance we would usually accept when checking against the underlying (as s/b firms do for EVERY trade). these people will never give me an opportunity to make money as they are generally enough on side instantly to run the position to break even at worst. it could take them 1 minute to come out of the trade or 10 hours, that doesn't matter (unless the exit is a scalp as well!) what matters is I won't have a chance to make money. now before you say tough sh1t, you should realise the s/b firm has to have to have a chance of making money otherwise they'd be no s/b industry.

robots don't worry me, they all break eventually with catastrophic results for the accounts using the robot.. nor do professional traders working on dealing desks in big banks with access to real time information that will move a market. why? because they;'re human and they all revert to type. they may know a huge order is going through on USDJPY for example and get in front of it but that's not trading, that's cheating.. when they trade they're the same as everyone else.. seriously. but scalpers who hunt for latent prices, I have no patience for that and when we find them I usually phone them and explain it isn't to happen anymore and to trade like a normal person. if they do it again i'll close the account. simple.

now you may not like all or any of what I wrote but when I decided to start posting here it was sincerely to give retail traders a true insight in to how s/b firms set up, operate, evolve and make money and I wont apologise for that. Whatever I say is without an ulterior motive, it is my opinion based on my experience at the highest levels in this industry and I genuinely hope it helps.
 
@highbury fx, there are some on this forum that like to get into arguments with people; they tend to be repeat offenders; I wouldn't worry about it. Personally, I think you've made fantastic contributions to this forum.
 
@ highbury fx
What do you class as scalping?
Taking 1 or 2 points.
Or taking 5 or 10 points.

its a good question and different people will give you different answers.

...

I understand the problem now, your using your own made up definition of a well known trading term "Scalping".
Of course different people will give you different answers, and they will be wrong when they do.

"I consider scalpers to be people that take advantage of a latent price and trade because the price has lagged or is palpably wrong"

My mistake, I thought you knew what you were talking about.
If your trying to help people out, then please use terms they all understand.

http://www.investopedia.com/terms/s/scalping.asp

DEFINITION OF 'SCALPING'
A trading strategy that attempts to make many profits on small price changes. Traders who implement this strategy will place anywhere from 10 to a couple hundred trades in a single day in the belief that small moves in stock price are easier to catch than large ones.

INVESTOPEDIA EXPLAINS 'SCALPING'
Traders who implement this strategy are known as scalpers. The main goal is to buy (or sell) a number of shares at the bid (or ask) price and then quickly sell them a few cents higher (or lower) for a profit. Many small profits can easily compound into large gains if a strict exit strategy is used to prevent large losses.


http://en.wikipedia.org/wiki/Scalping_(trading)

Scalping, when used in reference to trading in securities, commodities and foreign exchange, may refer to

a legitimate method of arbitrage of small price gaps created by the bid-ask spread.
a fraudulent form of market manipulation
a legitimate method of trading based on quick momentum trades triggered by order flow reading setups



To "...take advantage of a latent price and trade because the price has lagged or is palpably wrong..." is called profiting from your brokers under performing inadequate betting / trading platform.

I appreciate you are trying to help people on the forum, but using trading terms in the wrong way will only confuse people more.
 
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