Using chart analysis? Believe it or not, more off the research of Thomson McKinnon analysts, and secondarily off my charts. Newer
brokers definitely tend to rely on their firm's research.
Did your customers lose because the research was wrong? No. They lost because their time horizon was mostly day to day, while the research was longer term.
So there was a mismatch? Exactly. I think that is a basic problem between most brokers and their customers. It is almost impossible to
get market information to your customer quickly enough for the customer to act on it.
What you are saying is that even if a broker can actually beat the market trading short term, he can't translate that to the customer. Insurmountable odds, because you have two people who have to pull the trigger, and the information changes
so quickly.
So, one of the points of advice you would give to speculators is to trade with a longer-term perspective? Yes, you have to.
,
,
Let's talk about floor trading. I know, at one point, you were both a floor broker and trader in the T-bond futures market. The question I think a lot of people would ask is: If you receive a large customer sell order at the same time you're thinking of closing out your own long position, how do you handle it? I never scalped, so the idea of being long and having a large customer order move the market against me 2
or 3 ticks never made any difference. Besides, I had so many customers that they were often going opposite ways.
OK, that's an easy one. But what if some important news was breaking, and all your customer orders were going one way against your own position? Did you ever end up trapped in a position because you had to execute all the customer orders first? Yes, that happened to me about half a dozen times, and it probably cost me a grand total of a half million
dollars over a number of years. But measured against the amount of money I was making, it didn't kill me.
