Quote:
Originally Posted by supaTrade
Friends,
You need to understand the trade execution and data transmission mechanism. Please understand that the data is for "transmission" to broker has a gap of atleast 1-4 seconds. You can zoom in to NSE charts for that (gap of 4 seconds). Hence the trades happening between those times are not recorded in the charts. A trade can happen at 0.8 pico seconds and nobody will even know.
Eg. if a stock is at Rs 100, I see that 100 shares are available at my desired price of 100.05 and I put a market order for 100 shares. What happens is that another buyer may similiarly put a market order. Secondly the quantity displayed is not the actual size. It may be one tenth of the actual size (we have facility to reduce exposed quantity remember? i.e. actual size may be 1000). Hence order of both the buyers will get executed at real time and the price may go to 100.20 and come back to 100.05 due to momentary selling pressure and exposure. All this happens within 0.01 seconds.
However the data transmission interval is 0.5 seconds. Hence the transactions will not be visble on charts but will have been executed at price of 100.20.
These are called whipsaws. Is a whip visible before it hits you?
Have you observed the best 5 bid/ask data for sometime? You can clearly see this happening. The "quantity available" for bid/ask changes above and below the current market price (observe carefully) due to the reason mentioned above.
Please do not blame brokers for everything! Hari, changing brokers/data providers will not affect the execution. Your stop would have been hit even if you placed the order with some other broker. You are placing very tight stops, these are prone to whipsaws specially during these volatile market situations.
A broker will not risk his license and 2 crore deposit for gaining Rs. 1.5 from you. Hope this helps clear your doubt. Learn the art of placing stops.
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A broker can cheat in many ways,all for gain of easy money,and the easier targets are the retail investors,trading with a capital below 5 crore rupees.Otherwise IndiaBulls wouldn't have faced so much problem earlier.The investor grievances of this forum itself tell stories of this sort.....
But that is not the point.I have understood from ur post that the trades are not there in the charts because of the fraction of a second's execution time of the trades......and which is not transmitted to the vendors....actually it is not the broker's fault,it is a paradox of machine....'jantrer jantrana' according to jdm.Thanks for clearing the mechanism to us,to both of u and jdm.
Thanks a lot.
Now,tell me,why this
should happen?
A trader who is trading from a technical aspect,does so only by taking the price-volume data,alongwith time.He derives many calculations from the data,to help him/her understand better the price movements,like RSI,MACD etc. He also uses the levels of time bars.For longer time swing trades of 5 to 10 days,it may not be given importance to the data loss of half percent price movement,happened in 0.01 seconds.But for the traders who are using tick data,1 minute data,minuscule intraday time frame bars,to do a trade in which he will remain for minutes to hours,for a 1.5 to 3 percent swing,imagine what is happening....it is evident now that the trades are executed,but the data not transmitted.A professional day trader,who is earning for his lifelyhood from markets,is eyeing a long position in,say, Reliance,at say 100 rupee.....why? Because according to his indicators and price movements in the charts,from the detailed buy-sell data of each trade,he is seeing that Reliance is not facing selling pressure,rather it is not going below 99 for considereable amount of time..... if it is breaking 100,he will enter long in it,with a stop below 99.40.It did break.He entered at 100.10......Stoploss hit at 99.35 in seconds.
Is it only the stoplosses of our trades which is hit unnoticed or other trades also? Surely other trades of fractional time duration will also get unnoticed.......the whole data structure is vulnerable.The trader thought it didn't touch 99 for 1 hour,but the actual case may be that 5 trades of 98.10 rupees of worth 2 crore rupee have been executed,not once,but many times,in 5 minute interval.....now when he is entering the trade,it is not the right trade at all from his methodology,had he known the rightest data.Now after entering the trade price fell down and hit his stops.....this time it may b recorded,may not b.....who cares? The trader starts thinking what was wrong with the trade? Nothing ....as the trader entered in a wrong trade.....but he is the jack ass,not to know that.The whole system of calculation for us poor people is under threat.....we will analyze data,which is not correct......traders will backtest data,to gauge his/her system,he/she will get very high percentage of winning....which will be a false notion,as the data on which he backtested was wrong.......the levels were wrong,the trades were unnoticed with high volume,in critical price points.....who is the guilty here? I will raise my finger to nse for not doing its best to upgrade the machines to make the shortest time of transmission of data(which is 0.5 seconds currently according to u) to make equal to the shortest time in which the actual trades occur(0.01 seconds sometimes,as per u)........
And the art of stoploss placing is not always the same for all methods....some may place time stop,some percentage stop,some other techniques.....I placed it at 195.95,with a trigger at 195.90....u may place it at 20 paisa up,196.15.....doesn't matter.....as there had been always the trades which will be unnoticed....so 197 is safe? can't confirm.....
I doubt whether everywhere in the world this happens or not.....How the day traders survive in the competitive ES mini market there? Can the US market traders of our forum elaborate the problem?
24th November 2007, 12:03 PM
Re: Is this cheating?
