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TD selling order flow to HFTF


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TD selling order flow to HFTF

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  #1 (permalink)
timtimbo123
boston
 
 
Posts: 2 since Apr 2019
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Does TD ameritrade selling order flow allow high frequency trading firms like citadel allow them to trade against TD clients? I have noticed orders going against me almost every trade at exact same time and appear to be through dark pool with .999 just below my order. If this is true, puts retail traders at a HUGE disadvantage. Does anyone know anything about this? check out the pics below.

https://ibb.co/71T9GHn
https://ibb.co/kQXdwR3
https://ibb.co/YQxVMzV




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  #2 (permalink)
 Skidboot 
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Anything is possible, but I would think the size on the trades they pick on would be lot bigger - in the thousands to tens of thousands of shares.

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  #3 (permalink)
timtimbo123
boston
 
 
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The strange thing that makes me think they are trading against me. No matter how many shares you buy they sell the exact same amount against you. Those screenshots were from test, if I bought 13 shares, they sell 13 if I buy 29 shares they instantly sell 29 if you do 199 they sell 199. It really is fishy what they are doing with I assume the order flow they are paying for. Anyone have thoughts on this?

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flastunna954
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Trust me bro, highly unlikely that's the case. As said above, they have bigger fish to fry, no offense. Alot of us think that in the beginning , think someone's out to get you...but later on you will see that it is only you getting you lol. Learn how to follow where the big players want to take these stocks and ride the wave with them.

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  #5 (permalink)
 Keab 
London UK
 
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flastunna954 View Post
Trust me bro, highly unlikely that's the case. As said above, they have bigger fish to fry, no offense. Alot of us think that in the beginning , think someone's out to get you...but later on you will see that it is only you getting you lol. Learn how to follow where the big players want to take these stocks and ride the wave with them.

Sorry but that's simply incorrect. Brokerages get tens of millions for selling their data to HFTs who then use the fees to affect prices and shave nickels and dimes millions of times a day. Ameritrade won't even hide it. Most if not all large brokerages do it. It's a large dirty secret (not even much of a secret really) and they make many millions a year doing it. Still doubt me? Google is your friend. Took me 30 seconds.
https://www.google.com/amp/s/tickertape.tdameritrade.com/amp/trading/high-frequency-algorithmic-trading-17182
'Montemayor notes that many brokers (including TD Ameritrade) route orders from retail investor clients to large trading firms, which then match buyers with sellers (aka, order execution). Some of those firms could be considered high-frequency traders, considering the speed at which they operate and the amount of trades they handle.'

You'll note that this is an Ameritrade puff piece article

Or try this
https://www.cnbc.com/amp/2019/04/18/a-controversial-part-of-robinhoods-business-tripled-in-sales-thanks-to-high-frequency-trading-firms.html

"The so-called "payment for order flow" practice remains opaque and controversial. But it's common among other Wall Street broker dealers like TD Ameritrade, Schwab and E*Trade."

Look at how much money Robinhood makes from selling it's data. It's 40%+ of it's annual profit. Ameritrade will most likely be the same. Do you think they're not going to take the money?

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  #6 (permalink)
 snax 
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Keab View Post
Sorry but that's simply incorrect. Brokerages get tens of millions for selling their data to HFTs who then use the fees to affect prices and shave nickels and dimes millions of times a day.

Why does it matter if Citadel or some HFT takes the other side of your trade though? You are deciding where to enter, how much risk to take, and how to manage the trade. How are they "using fees to affect prices"? Sorry but I don't think this has ever caused me to lose on a trade. Even in thinner markets like YM where there is slippage I don't think its ever that big a deal, at least not in exchange-regulated products like futures.

When I started, I worried about this stuff too, but as I've gained experience, I began to learn that the only reason I was losing was because I was taking bad trades. Bad fills happen, sure. I think the whole "front-running customer orders" (which is illegal) is blown out of proportion on many of the threads I read on this site.

Not trying to be combative or a jerk, I just see this same kind of worry over and over and it just disappears when you work at this for a while.

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 Keab 
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snax View Post
Why does it matter if Citadel or some HFT takes the other side of your trade though? You are deciding where to enter, how much risk to take, and how to manage the trade. How are they "using fees to affect prices"? Sorry but I don't think this has ever caused me to lose on a trade. Even in thinner markets like YM where there is slippage I don't think its ever that big a deal, at least not in exchange-regulated products like futures.

When I started, I worried about this stuff too, but as I've gained experience, I began to learn that the only reason I was losing was because I was taking bad trades. Bad fills happen, sure. I think the whole "front-running customer orders" (which is illegal) is blown out of proportion on many of the threads I read on this site.

Not trying to be combative or a jerk, I just see this same kind of worry over and over and it just disappears when you work at this for a while.

Not a problem at all! I wasn't commenting on whether it mattered to trading or not, I was simply making it clear that Ameritrade WILL be selling your data to HFT firms.

As for whether it matters to a retail trader? Well the original comment was describing how price would keep moving away from his entry. I have no way of verifying if this is actually happening. But that is what happens when HFT algos are in play. Which means that you can miss trades which will affect your aggregated performance as you will not be able to execute your edge consistently. And/or you will enter at a worse price which will affect your risk/reward by reducing your profits and increasing your stop loss size.

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  #8 (permalink)
 CFuture 
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Why can orderflow be sold? I might suggest it is aiming for shure shots when you accept a price by market or are stopped out, you get the worst possible price and never a better price when the market data in Aurora has a lucrative difference by the delay retailers have with their pricefeed/distance/roundtrip and platform/IT-delay.

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  #9 (permalink)
 Keab 
London UK
 
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CFuture View Post
Why can orderflow be sold? I might suggest it is aiming for shure shots when you accept a price by market or are stopped out, you get the worst possible price and never a better price when the market data in Aurora has a lucrative difference by the delay retailers have with their pricefeed/distance/roundtrip and platform/IT-delay.

Read Flash Boys for a complete.explanation.

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  #10 (permalink)
 CFuture 
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Keab View Post
Read Flash Boys for a complete.explanation.

Read it some time ago, as i remember main focus on stocks whereas futures should be traded centrally and directly. This is why i said i "suggest" how money is made in futures with retail orderflow. The brokers let customers sign the agreement but nowhere can be read what exactly is done.


timtimbo123, i know individual manipulation of prices against customers by CFD/Forex/Binary-Options companies, Metatrader etc., i had a very ugly experience with GFT/360 degrees software by myself. You should use an independend, secondary datafeed to check if your pricefeed ist different. That should absolutely not be the case with a regulated brokerage that gives direct access to exchanges..

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  #11 (permalink)
 Keab 
London UK
 
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CFuture View Post
Read it some time ago, as i remember main focus on stocks whereas futures should be traded centrally and directly. This is why i said i "suggest" how money is made in futures with retail orderflow. The brokers let customers sign the agreement but nowhere can be read what exactly is done.


timtimbo123, i know individual manipulation of prices against customers by CFD/Forex/Binary-Options companies, Metatrader etc., i had a very ugly experience with GFT/360 degrees software by myself. You should use an independend, secondary datafeed to check if your pricefeed ist different. That should absolutely not be the case with a regulated brokerage that gives direct access to exchanges..

The idea of a.centralised exchange, whether it was for futures or stocks was not the answer. A centralised exchange is an easy target. The answer was to force a 'speed bump' onto any exchange/broker to ensure that no one could be quicker than anyone else and see orders before anyone else and manipulate prices in the same manner as described in the first post.

And NEVER use metatrader.

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  #12 (permalink)
 CFuture 
cologne, europe
 
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In fact every trader should be aware of money to be made by sold orderflow: https://www.cnbc.com/2020/08/13/how-robinhood-makes-money-on-customer-trades-despite-making-it-free.html

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  #13 (permalink)
SamMuller0927
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Hi, Yes I've observed the same thing during my trades with TD. TD does sell their order flows to HFT's which they also disclose in the financials. Please keep in mind the revenue lost through charging commissions has to be compensated through some other means, hence a larger portion of their revenue has now shifted towards selling their customers order flow to HFT's.

Many scalpers/day traders use brokers which provide them with Direct Market Access.

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