Ask mrbaseball about trading for a living

[APXG]

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Then there are the really great traders who are truly magnificient. As Bobby Jones said about Jack Nicholas "they play a game I am unfamiliar with".



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What it is that separates "them" from you? What are your weaknesses / unfixable limitations that they don't have? Do they play "better" defense? Have they just worked harder / had more passion? Locate & correct their mistakes better? etc etc

Obviously there are no definite answers as the traits it takes to be best change with the times, but any thoughts on the topic are greatly appreciated.

[mrbaseball]

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What are your weaknesses / unfixable limitations that they don't have?

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My biggest weaknesses are my risk aversion (which can also be a strength) and my tendancy to overanalyze situations. I am careful which sometimes leads to being a bit too careful. The leverage in the options and commodities markets can be a double edged sword. It's so insanely easy to get in big trouble you have to stay on your toes. I am sometimes slow to react to new opportunites and this causes me to either miss or get in too late or become too frustrated to pull the trigger. I am constantly working on this. A lot of where I am is also due to the constraints of my responsibilties. But I am perfectly happy with where I am.

I am much more a strategist than tactian. My strength is in looking at things a bit differently and figuring ways to profit from it. The great floor and screen traders are the best tactians. This is why I analyze a lot of non-mainstream trading opportunites. I am always looking for a new way to reinvent the wheel and search out niche trades in areas others aren't looking. Some of my better arbs are in the gray area that are too big for individuals but too small for Goldman and the big boys to bother with.

[Hiiiiiiii]

I just graduated from college with a communications degree and am currently in grad school for the same thing, but I haven't paid them yet and I'm not sure I'm going to.

What is the best way to go about becoming a trader at this point in my life?

[mrbaseball]

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What is the best way to go about becoming a trader at this point in my life?


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Not really sure? Knowing someone with power helps. Great computer skills help too. All of the newer guys at my firm got in the door with programming skills. Particularly Vbasic for excel. Trading is getting more and more computer generated and automated. Also willingness to start at the bottom and make contacts and learn. Back in the days of trading floors most guys started as clerks and runners and trade checkers.

[kimchi]

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Great computer skills help too. All of the newer guys at my firm got in the door with programming skills. Particularly Vbasic for excel. Trading is getting more and more computer generated and automated.

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What are your thoughts on 100% automated trading systems?

I know this was popularised by Jerry Kaufmann and Richard Dennis & his turtles back in the day. I've read that many traders these days use computerised trading with a certain degree of discretionary input.

IMamateurO, adding discretion to a disciplined, emotionless and rational computerised model defeats the purpose somewhat. I think however that most professions can be computerised to some degree. I wouldn't however want to be driven in a taxi or operated on in a hospital solely by computer though - I'd expect computers to assist but with significant discretionary input by the 'professional'

Thoughts on 100% automated trading systems?

[mrbaseball]

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Thoughts on 100% automated trading systems?


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100% is no good in my mind. There are certain areas, partcularly risk override where you need human input. We have a couple blackbox guys but it's mainly for help in execution for fast moving trades. They watch and override the risk.

But computers and trading automation will only get more popular. There are stock options programs for market makers where they can set the volatilities they are willing to buy and sell and then the computer automatically makes the market for them. Their job has shifted from execution to pure risk management to make sure they don't get loaded up too much one way or another. It's fun to put in an options order a nickel better and then see all of the automated programs immediately join your new bid or offer.

[burkoboy]

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I just graduated from college with a communications degree and am currently in grad school for the same thing, but I haven't paid them yet and I'm not sure I'm going to.

What is the best way to go about becoming a trader at this point in my life?

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sort of same position, I still have 2 years left of school, but im reading books like crazy, trying to learn as much as possible so that I'm ready right when I graduate. So for a COMPLETE newb, what can I do now to prepare for this moment?

[burkoboy]

bump

[mrbaseball]

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So for a COMPLETE newb, what can I do now to prepare for this moment?

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It depends? Keep reading and learning. I come from a market maker environment. There are lots of other "kinds" of trading. If you want to be a market maker I would learn everything I could about options and option volatility because I believe the best oppotunities in market making are presently in the options markets.

Sorry I can't offer more advice but it really depends on what kind of trading. An options market maker is different from a futures market maker and futures spreaders are different from futures scalpers and all of these are a universe away from bank trading or hedge fund trading. Fundamental traders and technical traders are very different as well. And there are all sorts of different arbitrage. It really depends?