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Trading for a Living - Cliff Notes

  • #321
  • Jul 17, 2009 6:23pm Jul 17, 2009 6:23pm
Quoting acumen
A close friend of mine runs a very large hedge fund and he said one day...
watch my trade for a day and see if anyone jumps out.

So I did... He trades stocks only and I noticed his trades were absurdly small compared to the size of his account.

I asked... you aren't making much with those little trades.

He laughed out loud... and said... I didn't think you'd figure that out so soon.

m
you suggest scalping with 0.1% or close in each scalp? like scaling a position (prettty FAST) or y mean that you can have total 10 scalps a day so you max loose close to 1%?

the idea is still good, but you still have to make 6 out of 5 trades correct, am i right?

and last question: do you always enter at 0.1% or just when scalping? and you scale your position or it's too small takeprofit to do that?

thxx, jj.
  • #322
  • Jul 17, 2009 6:44pm Jul 17, 2009 6:44pm
Quoting acumen
A close friend of mine runs a very large hedge fund and he said one day...
watch my trade for a day and see if anyone jumps out.

So I did... He trades stocks only and I noticed his trades were absurdly small compared to the size of his account.

I asked... you aren't making much with those little trades.

He laughed out loud... and said... I didn't think you'd figure that out so soon.

m

What is the lesson to be learned?
  • #323
  • Jul 17, 2009 7:00pm Jul 17, 2009 7:00pm
Quoting gbppip
What is the lesson to be learned?
The smaller the trade size the less risk/trade.

It allowed him to open lot's of positions and close them when he thought the move would stall or reverse.

If it went against him there was no stress because of the sheer size of the account.

IF you can trade... your longevity is this arena will be determined by how well you manage risk.

m
  • #324
  • Jul 17, 2009 7:05pm Jul 17, 2009 7:05pm
Quoting jennajameson
you suggest scalping with 0.1% or close in each scalp? like scaling a position (prettty FAST) or y mean that you can have total 10 scalps a day so you max loose close to 1%?

the idea is still good, but you still have to make 6 out of 5 trades correct, am i right?

and last question: do you always enter at 0.1% or just when scalping? and you scale your position or it's too small takeprofit to do that?

thxx, jj.
10 lots open and when the trade goes against me near the 1% mark I'm out.

Yes... correct... your hit rate has to be high.

m
  • #325
  • Jul 17, 2009 7:09pm Jul 17, 2009 7:09pm
Quoting acumen
The smaller the trade size the less risk/trade.

It allowed him to open lot's of positions and close them when he thought the move would stall or reverse.

If it went against him there was no stress because of the sheer size of the account.

IF you can trade... your longevity is this arena will be determined by how well you manage risk.

m
Thank you. May I inquire about the goal of the trades? Income? Growth? Preservation of principle?
  • #326
  • Jul 17, 2009 7:09pm Jul 17, 2009 7:09pm
Quoting jennajameson
you suggest scalping with 0.1% or close in each scalp? like scaling a position (prettty FAST) or y mean that you can have total 10 scalps a day so you max loose close to 1%?

the idea is still good, but you still have to make 6 out of 5 trades correct, am i right?

and last question: do you always enter at 0.1% or just when scalping? and you scale your position or it's too small takeprofit to do that?

thxx, jj.
This takes a lot of practice an patience.

I use pivots and psych levels because of the bounce factor.

For example... when the market is trending down and price moves back to the pivot it will bounce off of that level 8 -10 PIPS 85% of the time.

m
  • #327
  • Jul 17, 2009 7:15pm Jul 17, 2009 7:15pm
Quoting gbppip
Thank you. May I inquire about the goal of the trades? Income? Growth? Preservation of principle?
Sure... win most of the time and lose small.

Knocking on wood... hard... I've never had a losing month.

I've never had a 40% month either.

Small profits day in and day out.

This year... my worst month has been 8%.

m
  • #328
  • Jul 17, 2009 7:44pm Jul 17, 2009 7:44pm
Quoting acumen
Sure... win most of the time and lose small.

Knocking on wood... hard... I've never had a losing month.

I've never had a 40% month either.

Small profits day in and day out.

This year... my worst month has been 8%.

m
Thank you. I still would like to know the nature of the goal per my initial inquiry.
  • #329
  • Jul 17, 2009 7:53pm Jul 17, 2009 7:53pm
Quoting gbppip
Thank you. I still would like to know the nature of the goal per my initial inquiry.
I don't understand.

Could you re-phrase the question?

m
  • #330
  • Jul 17, 2009 7:56pm Jul 17, 2009 7:56pm
There is only one goal in this game.

Winning.

Consistently.

With the lowest drawdown possible.

m
  • #331
  • Jul 17, 2009 7:57pm Jul 17, 2009 7:57pm
May I inquire about the goal of the trades? Income? Growth? Preservation of principle?

Are you familiar with mutual funds? They have different funds for different objectives: income, growth, etc...
  • #332
  • Jul 17, 2009 8:04pm Jul 17, 2009 8:04pm
Quoting gbppip
May I inquire about the goal of the trades? Income? Growth? Preservation of principle?

Are you familiar with mutual funds? They have different funds for different objectives: income, growth, etc...
Sorry.

Only hedge funds allow me... and most FX traders to do what we want.

About every other fund is highly regulated.

My funds are not income funds... I guess they could be.

The majority of my firms clients put capital in and expect it back over a period of time.

m
  • #333
  • Jul 17, 2009 8:13pm Jul 17, 2009 8:13pm
I trade a small fund for now.

I don't know what the 'real' guidelines are but these are mine:

Small Fund: 20 Million and Under
Medium: 20-50
Large 50-100
Holy Shit: 100 plus

m
  • #334
  • Jul 17, 2009 8:23pm Jul 17, 2009 8:23pm
Quoting acumen
I trade a small fund for now.

I don't know what the 'real' guidelines are but these are mine:

Small Fund: 20 Million and Under
Medium: 20-50
Large 50-100
Holy Shit: 100 plus

m
Not to be intrusive, I would like to know your maximum position size in lots for any given currency. If you are not at liberty to disclose, I'll understand.
  • #335
  • Jul 17, 2009 9:17pm Jul 17, 2009 9:17pm
Quoting gbppip
Not to be intrusive, I would like to know your maximum position size in lots for any given currency. If you are not at liberty to disclose, I'll understand.
The hedge fund I work for reads my threads and I don't want to piss anyone off.

I've only been trading other peoples capital for a short time.

I've been trading my capital for 4 years... losing for the first 2.

I traded equities prior to that.

m
  • #336
  • Jul 18, 2009 10:43am Jul 18, 2009 10:43am
discussing about brokers, your funds keeps the money in a separate bank and is able to do trades off of it by some documents attesting that you have the money or you trust a brokerage firm?
or you use multiple brokers?

last one: is the "low % risk per trade" strategy also a way to avoid lag in order entry when dealing with those vast capital base? scalpibg can be hard with leverage and 3%... and million $ to manage...
  • #337
  • Jul 18, 2009 11:49am Jul 18, 2009 11:49am
Quoting acumen
The hedge fund I work for reads my threads and I don't want to piss anyone off.

I've only been trading other peoples capital for a short time.

I've been trading my capital for 4 years... losing for the first 2.

I traded equities prior to that.

m
Traders can be such sensitive buggers at times.
  • #338
  • Jul 18, 2009 11:58am Jul 18, 2009 11:58am
Quoting jennajameson
discussing about brokers, your funds keeps the money in a separate bank and is able to do trades off of it by some documents attesting that you have the money or you trust a brokerage firm?
or you use multiple brokers?

last one: is the "low % risk per trade" strategy also a way to avoid lag in order entry when dealing with those vast capital base? scalpibg can be hard with leverage and 3%... and million $ to manage...
I'm guessing yes... no vast capital base here... however... if I ever own a fund large enough I will break the orders up among various scalpers.

I'll let you know when I hit the tripping point but I can still get in and out fairly quickly trading the above capital.

m
  • #339
  • Jul 18, 2009 12:01pm Jul 18, 2009 12:01pm
Quoting acumen
I'm guessing yes... no vast capital base here... however... if I ever own a fund large enough I will break the orders up among various scalpers.

I'll let you know when I hit the tripping point but I can still get in and out fairly quickly trading the above capital.

m
There are ways around large capital.

You can have two or three million dollar accounts on your screen and scalp between them.

m
  • #340
  • Jul 18, 2009 3:53pm Jul 18, 2009 3:53pm
Quoting acumen
There are ways around large capital.

You can have two or three million dollar accounts on your screen and scalp between them.

m
Speaking of large cash volume accounts, I have thought (based on very limited knowledge) that traders who had the means would trade directly through a bank that offered that service (Deutsche, UBS...?) and so might gain advantages in doing so over retail trading, such as (and here I am still assuming)....

- trading directly off the bank's data feed (i.e., Reuters?) with ability to see some depth of market type data

- negotiated (lower) fees for trading based on volume rather than spread

- security/segregation of the clients' funds held in the bank

Can you comment on any of this? Do you do the fund trading through a bank or through retail brokers?
"If The Fool persists in his Folly he will become wise." - William Blake
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