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I am not sure DMA is my best route (not to mention 10k min balance to start for Interactive Brokers). So if its ok with you, I will try to explain what I would

by xaevir 16y ago

I am not sure DMA is my best route (not to mention 10k min balance to start for Interactive Brokers). So if its ok with you, I will try to explain what I would like to do and maybe you can point me in a direction. I would like to create a game that teaches beginner investors how to invest with real money by looking at a company's strategy and basic financial data. To do this, I would like to use the otc market and about 50 companies that I will provide analysis on. I would like the transaction cost for the trades to be low, as low as possible to reduce barriers to entry in playing the game. So maybe with 5 dollars you could buy stock and start playing. If it would make sense and be more cost effective, I would do non-realtime trades, and maybe just run a batch of orders once per night. Do you think DMA is my best move? Is there another option that might be better? Thank you.

veyron 16y ago
I'm confused by your goal. If your goal is to "teach beginning investors how to invest", then why not set up a paper trading system? Basically, you can build a simulation engine that lets people try to trade with paper money. If your goal is to "teach beginning investors how to invest with real money", then you need to go through all kinds of legal hoops: - Lets say you are just giving investment advice (there are a bunch of companies that just generate trading signals). You need to pass a few Series tests in order to be legally authorized to give advise e.g. Series 7: http://www.finra.org/Industry/Compliance/Registration/QualificationsExams/RegisteredReps/P011051 http://www.finra.org/Industry/Compliance/Registration/Qualif... - Lets say you just want to be a broker, allowing others to trade through your platform. This is not a bad idea, so long as you can ensure that investors seed money before they start and that they dont short. There are a few snafu's regarding SIPC compliance (your operation will be considered an investment activity, and as such investors may expect protection). At the end of the day, though, you can find discount brokerages with low costs to trade. For example, Zecco Trading has $5 trades. So that gets back to the question: What are you teaching investors? If you are teaching general signals that can be implemented in an all-active strategy (i.e. if your signal is strong enough, you can afford a penny slippage costs), then DMA does not matter. You can do it with matlab hooked against IB or some other platform. If you are teaching specific execution mechanics (market making, rebate capture) then it makes no sense to run the system from a proprietary infrastructure [the investors have to be able to use it] unless you make it accessible for them to use after the learning period is over. In that case, see the discussion about brokerage. The main regulatory body is the Financial Industry Regulatory Authority (FINRA). Sucks that HN has no private messaging feature.

by xaevir 16y ago

veyron 16y ago

I'm confused by your goal. If your goal is to "teach beginning investors how to invest", then why not set up a paper trading system? Basically, you can build a simulation engine that lets people try to trade with paper money. If your goal is to "teach beginning investors how to invest with real money", then you need to go through all kinds of legal hoops: - Lets say you are just giving investment advice (there are a bunch of companies that just generate trading signals). You need to pass a few Series tests in order to be legally authorized to give advise e.g. Series 7: http://www.finra.org/Industry/Compliance/Registration/QualificationsExams/RegisteredReps/P011051 http://www.finra.org/Industry/Compliance/Registration/Qualif... - Lets say you just want to be a broker, allowing others to trade through your platform. This is not a bad idea, so long as you can ensure that investors seed money before they start and that they dont short. There are a few snafu's regarding SIPC compliance (your operation will be considered an investment activity, and as such investors may expect protection). At the end of the day, though, you can find discount brokerages with low costs to trade. For example, Zecco Trading has $5 trades. So that gets back to the question: What are you teaching investors? If you are teaching general signals that can be implemented in an all-active strategy (i.e. if your signal is strong enough, you can afford a penny slippage costs), then DMA does not matter. You can do it with matlab hooked against IB or some other platform. If you are teaching specific execution mechanics (market making, rebate capture) then it makes no sense to run the system from a proprietary infrastructure [the investors have to be able to use it] unless you make it accessible for them to use after the learning period is over. In that case, see the discussion about brokerage. The main regulatory body is the Financial Industry Regulatory Authority (FINRA). Sucks that HN has no private messaging feature.