Imagine a grand theatre. The curtains rise. The spotlight shines. The orchestra plays. But when the actor steps forward to perform… there’s no audience. Only empty chairs. This, dear reader, is the experience of a trader operating under an invisible execution model—where the trades appear real, but may only exist in a simulation.
Trading on a Ghost Ship
Traders are like captains on the high seas, steering their ships through market waves. But what if the sea beneath them isn’t water—but fog? And the ship? An illusion.
Many firms today offer funded accounts with trade execution that isn’t tied to live markets. Trades are simulated. Market impact is non-existent. Liquidity is fake. In this setup, traders are not sailing the real ocean but riding a ghost ship—unaware they are drifting in a world that mimics reality without being it.
This is not just misleading—it’s like navigating by a compass that always points to a magnet, not the North.
The Magic Mirror
These models are akin to a magic mirror—they reflect what you want to see. Your trade is executed, the charts move, the profit shows up. But it’s all within a walled garden. No real counterparties. No market slippage. No spread widening during news.
It’s not trading—it’s theatre.
“You thought you were dancing in the ballroom of the market,”
“But the floor was virtual, and the crowd was cardboard.”
Plato’s Cave in Modern Trading
Allusion time: Remember Plato’s Cave? Prisoners watch shadows on a wall, believing them to be reality. When one escapes and sees the real world, he understands how limited his perspective was.
Traders under invisible execution models are modern cave dwellers. They trade shadows. Simulated fills. Artificial price movements. And the worst part? They don’t even know they’re in the cave.
Q&A: Shedding Light on the Shadows
Q1: What exactly is an invisible execution model?
A: It refers to a setup where the trader’s orders are not routed to live markets. Instead, they are filled by internal simulation engines. The trader sees market-like activity, but it’s disconnected from real liquidity, depth, and execution slippage.
Q2: Why do firms use these models?
A:
- Cost control: Simulated trading avoids broker fees.
- Risk limitation: Firms don’t need to manage real market exposure.
- Performance measurement: Some use simulations to assess trader skill before risking capital.
Q3: Is this inherently bad?
A: Not necessarily—but lack of disclosure is. The real problem lies in firms not telling traders their trades are simulated. This creates a false sense of performance and affects strategies that depend on real market dynamics.
Q4: What’s the danger for the trader?
A: Traders may build strategies that work in a simulation but fail in real markets due to:
- No slippage
- No spread widening
- Unrealistic fills
- No impact from volume or order book depth
When they eventually move to a real account, they are blindsided.
Q5: How can traders identify these models?
A:
- Ask directly: “Are my trades executed in real markets?”
- Look for strange fills or unrealistic slippage.
- Monitor execution reports and time stamps.
- Firms with real execution often disclose brokerage partners and provide trade receipts.
The Trader’s Right to Know
A trader is not a mere actor—they are the author of their strategy. But authors must know whether they’re writing for a real stage or a shadow play.
Transparency in execution is not a privilege. It is a right. It is the candle that reveals whether you are in Plato’s Cave or standing in the daylight of real market interaction.
