Ask mrbaseball about trading for a living - Page 11

kimchi · #**101** 09-20-2007, 08:13 PM

Many traders who work for a firm and do well often bust out when they decide to become independent.

I know independent traders obviously have a smaller a/c than they traded at the company, but I'm sure they take smaller positions to compensate. You've suggested that most of the trades you take can't really be scaled down to suit a 1-man band. I'm talking more about positional stock/futures traders.

I've also read about many traders who lose the discipline forced upon them by their bosses and the subsequent removal of trading privilages and partial ostracisation by their colleagues should they violate the stingent risk management strategy imposed upon them. This is usually sufficient incentive to stay focused and disciplined.

Why do you think successful traders who trade for a company often fail when they go alone using the same systems and methodologies?

mrbaseball · #**102** 09-20-2007, 08:34 PM

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Why do you think successful traders who trade for a company often fail when they go alone using the same systems and methodologies?

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I think it's probably different for everyone. The nice thing about a firm is that you personally won't lose everything. I guess guys could lose discipline, especially concerning risk management which means death. Also guys could get gunshy when it's their very own money which means they don't do what they know they should.

But even guys trading their own money at our firm still answer to the risk manager of the clearing firm. If their positions get out of line they make them reel them in because you can lose a lot more than your own money in this game.

But each guy is different. I traded on my own for a while many years ago and I didn't like it. Lots of heat and it's much more uncomfortable when it's your own money rather than just your income.

pig4bill · #**103** 09-20-2007, 11:09 PM

Most of the traders I know trade their own accounts and wouldn't have it any other way, with the exception that a couple of them started hedge funds. Even then, a large chunk of the money in the funds is theirs, and they don't answer to any "bosses".

CrushinFelt · #**104** 09-21-2007, 09:15 AM

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most of the orders being complex spreads which doesn't lend itself well to computers (yet!).

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ya ya ya, lol we're working on it damn it! Some of the spreads are just big ol' cluster-[censored] which don't seem to have meaning to anyone other than the few who trade them.

burkoboy · #**105** 10-02-2007, 08:25 PM

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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 · #**106** 10-05-2007, 08:28 PM

bump

mrbaseball · #**107** 10-05-2007, 10:11 PM

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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?

Foghatlive · #**108** 10-06-2007, 12:02 AM

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But each guy is different. I traded on my own for a while many years ago and I didn't like it. Lots of heat and it's much more uncomfortable when it's your own money rather than just your income.

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This is what I was referring to in my "Difference between Poker and the Market" thread, not so much the technical distinctions.

A Trader, on his own, has to worry about maintaining a bankroll, and earning enough to pull out living expenses, exactly like a poker pro. The only difference is the game they're playing.

housenuts · #**109** 10-06-2007, 02:36 AM

how good at math to you have to be?

more specifically, for someone who was always good at math, but never took it beyond grade 12 math in high school, are there some math formulas i really need to learn?

mrbaseball · #**110** 10-06-2007, 02:55 PM

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how good at math to you have to be?

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Depends on the kind of trading. Heavy arb stuff you should be good at math. For market making in options you need the ability to make a lot of quick but basic calculations on the fly. For scalping you should know how to add and subtract. For reaseach you should know probability and statistics and how to do mathematical spreadsheets. For heavy quant fund trading I guess you should be a rocket scientist [img]/images/graemlins/smile.gif[/img]