Ask mrbaseball about trading for a living

[whyherro]

This might be a little off topic but what is your opinion on black box algorithmic funds?

[ItalianFX]

Best Trade? Worst Trade?

[CrushinFelt]

Mr. B.

I work for the CME... would you think a product that is equivalent to the VIX for grains (soybeans, corn, and wheat) would be worthwhile to develop? Please say yes!

[mrbaseball]

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Do you recommend him going to get a MBA?

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I can't really say? I'm not sure what the environment is right now for getting hired. For me the MBA is basically worthless other than the fact it was a door opener. As far as what you learn as an MBA I feel is pretty meaningless to trading.

[shaftman11]

What college degree do you need for your job? Is any degree even required or just a 4 year degree? I have a social studies degree, is it possible to get in the door with it?

Thanks

[mrbaseball]

[ QUOTE ]
This might be a little off topic but what is your opinion on black box algorithmic funds?


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Funds? That's beyond my area of expertise. We do have a few guys who trade black box systems though. I'm not exactly sure what the actual indicators in the box are but I think they do okay. Basically the box trades it but they watch it and overide if the risks get out of line. Basically the black box is a perfectly disciplined but mediocre trader. Perfect discipline is real important though.

[mrbaseball]

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Best Trade? Worst Trade?



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Hard to say really? I have had so many trades in so many different situations. The one that strikes as the worst was the very first day of a speculative basket of spreads we decided to try. It took me 6+ months of rigorous backtesting and many meetings with the partnership hierarchy before the greenlight. On the very first day we sold 100 cotton spreads and that trade lost 100K by the close. It was part of a bigger basket though and eventually it became a very profitable strategy before the trade eventually dried up.

Best? Not really sure again but probably not a profitable one. Probably covering options shorts before a volatility explosion back in my market making days and staving off armageddon. The best trades are the ones where you dodge bullets and don't get rolled over.

[mrbaseball]

[ QUOTE ]
I work for the CME... would you think a product that is equivalent to the VIX for grains (soybeans, corn, and wheat) would be worthwhile to develop? Please say yes!


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There's no volatily in grains [img]/images/graemlins/smile.gif[/img] Actually I would like to see it. My firm is primarily a grain firm. We have lots of grain traders. But something like this would be right up my alley. I would work with it and figure out a way to use it. I just invented a new VIX strategy and we committed a lot of capital to it and just started trading it this week. So far so good and it looks pretty promising.

A lot of what I do involves new or different types of contracts that are basically niche contracts. My biggest skill is the ability to think outside of the box and invent new strategies. The downside is eventually the big boys catch on and the trade dies or gets arbed out of profitability. The markets constantly evolve and and what used to work will dry up at some point.

Is a contract like this (grain Vix) in the works? Please say yes!

[mrbaseball]

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What college degree do you need for your job? Is any degree even required or just a 4 year degree? I have a social studies degree, is it possible to get in the door with it?


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Again hard to say? No degree is neccessary. Then again you need to get in the door. My old clerk was working on his degree when we hired him. He was a sharp kid and eventually got his chance. He never finished his degree but is one of the best traders I ever met. Way better than me. He was born to it.

[kimchi]

I'd like to know a lot about the risks you expose to your trades/portfolio. I'd appreciate it if you could answer some of these questions:

-What is the most you'll risk (% of your a/c) on any given trade?

-And on any given idea?

-Do you use a monthly stop-loss? ie - some traders stop if their a/c drops a certain percentage for the month.

-If for example you are willing to risk 1% on each trade, how many open trades (in different/not so correlated markets) are you willing to be exposed to at any one moment (as a % of your portfolio)? Portfolio heat? I guess this would be similar to your monthly stop-loss if you use one.

-Do you employ stops placed in the market or in your head? (Some larger traders find it a disadvantage to have their stops available for MMs to view).

Cheers me dears.