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Is anyone here an institutional trader?

Quick question if I may....

when hunting stops do you hunt the stops purely for the 20 or so pips profit or do you do it as part of your inventory management operations - eg reducing liabilities etc.

Regards
Quoting BBCMicro
Quick question if I may.... when hunting stops do you hunt the stops purely for the 20 or so pips profit or do you do it as part of your inventory management operations - eg reducing liabilities etc. Regards
I traded NDF's so there weren't too many opportunities to run stops. My colleagues that traded spot markets ran spots if they felt they could...simple as that. But there are times when they tried to run a stop and it blew up in their face. Running stops is easy money when you trigger the stop. Inventory was never a consideration in my bank.
Quoting BBCMicro
Quick question if I may.... when hunting stops do you hunt the stops purely for the 20 or so pips profit or do you do it as part of your inventory management operations - eg reducing liabilities etc. Regards

Agreed with Jacob.

"when we felt like it" is the uncomplicated answer. We do have profit targets to achieve after all, so we take the pips wherever they come from.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
{quote} Agreed with Jacob. "when we felt like it" is the uncomplicated answer. We do have profit targets to achieve after all, so we take the pips wherever they come from.
Gents,

Thanks for your straightforward answers - I guess I wanted to know if stop hunting was predominantly a prop type activity or was incorporated into larger sell side operations.

Thanks for your time.

Regards

BBCMicro
When you consider targeting a bunch of stops, how far away is too far when there's nothing much going on?
Quoting Stinky
When you consider targeting a bunch of stops, how far away is too far when there's nothing much going on?
What is "too far"? "Too far away" from what? The TP target? The stops?
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quoting skenobi
{quote} What is "too far"? "Too far away" from what? The TP target? The stops?
The stops
Quoting Stinky
{quote} The stops
Never really considered setting a guideline for that sort of thing. I suppose it depends on the sentiment of the cluster of vultures you're with, and the strategy going forward.

In hindsight, I suppose I wouldn't bother joining in if the stops aren't at the "normal" textbook ambush points, and if the stops are more than one S/R level away, which could be any number of pips away.

So I would not put a number to the answer to your question. The others will have their own methodology, I guess.
I'm not trying to convince anyone. I'm not in the "convincing" business.
Hello, Jacon and Skenobi.

First I have to say that this is the most compelling thread, I've seen in a while. You guys have brought in tons of great input. I've been a retail trader since 2001, and have always tried to look and learn what goes on behind the looking glass, but I only had an overview unlike a 1st hand account of your experience. I too have some questions.

Seeing as you both now are retail traders, and have to trade directional -- How do you fair in your directional trades?

How do you think the market being as it is right now and more specifically this year FX has been in ultra tight ranges there has been lack of conviction on any end and retail brokers even with strong counterparts are all not able to make money in this type of conditions which are the worst. I've seen personally from my 13 years on the other side, How do you fair in this type of trading conditions?

How many of your old colleagues that you know left and are now doing it this from a retail perspective? Seeing as you said that their is no money in it spreads are tight bonuses are almost non-existent at least not for the guy doing the work. Are more people saying screw it lets go directional trading? Or lets go open a flower shop cause trading sucks? lol

Its interesting for me to see from your view of taking this market conditions -- taking what we do as retail traders which is make money from movement when there is no movement -- what happens to you pros -- Do you find money between the lines?

There are those who know, and there are those who don't know.
Quoting palabara
Seeing as you both now are retail traders, and have to trade directional
HAVE to trade directional? Some of you probably HAVE to. I don't.


Quoting palabara
How do you fair in your directional trades?
Not too bad. And if this answer leads you to ask "How much have you made?" or some such question, let me just say that I don't have to prove anything to anyone. As my sig implies, I'm not trying to convince anybody.

Quoting palabara
How do you think the market being as it is right now and more specifically this year FX has been in ultra tight ranges there has been lack of conviction on any end and retail brokers even with strong counterparts are all not able to make money in this type of conditions which are the worst. I've seen personally from my 13 years on the other side, How do you fair in this type of trading conditions?
I don't complain about tight ranges. I just trade them. And if some people say there are not enough trends out there, I say they are not looking hard enough or maybe they're too married to their preferred pairs (and/or timeframes) and/or are too rigid in their methodology.

Quoting palabara
How many of your old colleagues that you know left and are now doing it this from a retail perspective?
In my generation, I know of at least 3 still at it. And I know a handful of others who are much older and retired geezers.


Quoting palabara
Seeing as you said that their is no money in it spreads are tight bonuses are almost non-existent at least not for the guy doing the work. Are more people saying screw it lets go directional trading? Or lets go open a flower shop cause trading sucks?
I can't speak for Bank traders in other centres, but in the Far East, I don't think there are that many who would give up The Life of a Bank Trader for the uncertainties of Trading Your Own Money.

Definitely, there ARE those who tried. Those who tried and failed, failed because they thought they could export their hotshot institutional "trading skills" (notice the sarcastic quotes) into trading forex "for a living". They didn't realize early on that forex trading should be for building equity and not for generating regular income (keyword is "regular").

Am not saying generating income is not possible, but certainly it is impossible to generate enough CONSISTENCY and REGULARITY that is able to support the lifestyle that the Bank traders have become accustomed to.

(Naturally, there will be some uppity retail traders out there who will dispute my "it is impossible" stand and will try to convince me otherwise. To these people, I apologize in advance: I have no intention of going twelve rounds debating this issue with you as I am not trying to convince nor do I want to be convinced. I just wanna make money, So we'll just have to agree to disagree.)

Quoting palabara
Do you find money between the lines?
I don't understand the question. What lines?
I'm not trying to convince anyone. I'm not in the "convincing" business.
Quote
HAVE to trade directional? Some of you probably HAVE to. I don't.

Lol, Have to I guess is a "strong" term.. But assumingly in retail most traders make money from direction.. Unless your scalping, but to get into the 101 ways of making money from the market isn't the emphasis of the question nor do I want to get into that discussion. My focus was that trades in Retail Forex have to have some sort of direction if market ain't moving the train ain't driving.


Quote
And if this answer leads you to ask "How much have you made?" or some such question, let me just say that I don't have to prove anything to anyone. As my sig implies, I'm not trying to convince anybody.

Not to hurt feelings, I really don't care how much you have made lol. I am sorry, I just figuring if you are the successful transition from institutional to quote what you've said
Quote
they thought they could export their hotshot institutional "trading skills" (notice the sarcastic quotes) into trading forex "for a living".

My emphasis of the question was to know you transitioned, and then that was follow up question which you've answered.

Quote
some uppity retail traders out there who will dispute my "it is impossible" stand and will try to convince me otherwise.

Ahem.. I am not uppity I will agree to disagree.

Quote
I don't understand the question. What lines?

Metaphorical, that the hidden treasure lays.. Some where between the .. Feel in the blank. Lol. I think at that point I was reaching. You always assume the pros bring secrets with them, its a wide industry assumption. (Not only in trading just general industry assumption)

My overall emphasis with this questions is your and Jacobs view on this market conditions and how you generally fair in them, because you were the puppeteer that pulled the strings, your view to this market has a deeper understanding of the now and then. In terms of when things weren't stuck in "Neutral" sometimes it rolls up sometimes it rolls down, but no one is behind the wheel or so it seems.
There are those who know, and there are those who don't know.
Quoting skenobi
{quote} HAVE to trade directional? Some of you probably HAVE to. I don't. {quote} Not too bad. And if this answer leads you to ask "How much have you made?" or some such question, let me just say that I don't have to prove anything to anyone. As my sig implies, I'm not trying to convince anybody. {quote} I don't complain about tight ranges. I just trade them. And if some people say there are not enough trends out there, I say they are not looking hard enough or maybe they're too married to their preferred pairs (and/or timeframes) and/or...
I also want to separately say that, its much appreciated you answering questions giving wisdom and knowledge. Your insight has a lot of value, You've seen both sides of the board and being able to share talk and explain, and even entertain. It is really awesome.

Most of the time for an experience like this would have to go and buy a book and you only get the version the author wanted to show talk discuss etc..

On behalf of my self and many others, I am sure. We greatly thank you.
There are those who know, and there are those who don't know.
Quoting palabara
Hello, Jacon and Skenobi. First I have to say that this is the most compelling thread, I've seen in a while. You guys have brought in tons of great input. I've been a retail trader since 2001, and have always tried to look and learn what goes on behind the looking glass, but I only had an overview unlike a 1st hand account of your experience. I too have some questions. Seeing as you both now are retail traders, and have to trade directional -- How do you fair in your directional trades? How do you think the market being as it is right now and more...
palabara, seeing the market from different perspective is certainly an advantage. My experience as bank trader and corporate risk manager helped a lot to cope with the current low volatility environment. I traded options for hedging of the price and FX risks from simple collars to TRFs. When there is no direction in the market you can trade volatility and time decay. I prefer the binary options (regulated brokers only), because they provide you with some leverage (you can make 30 pips profit from 5 pips price move for example).
I don't think that a lot of bank dealers become retail traders. They just don't have the necessary mind set. These are completely different jobs. Some of my ex colleagues trade their accounts but as a hobby.
Quoting srmfx
{quote} I prefer the binary options (regulated brokers only), because they provide you with some leverage (you can make 30 pips profit from 5 pips price move for example)
I'm also using the options market, not trading it, just looking at the current vols for market regime indications (if we're gonna keep ranging).

Can you recommend some binary brokers from where you withdrew profits without problems?
Quoting Adal
{quote} I'm also using the options market, not trading it, just looking at the current vols for market regime indications (if we're gonna keep ranging). Can you recommend some binary brokers from where you withdrew profits without problems?
After Refco, MF Global and PFG went out of business, I don't recommend brokers. Regulation in UK or US is OK.
Quoting srmfx
{quote} palabara, seeing the market from different perspective is certainly an advantage. My experience as bank trader and corporate risk manager helped a lot to cope with the current low volatility environment. I traded options for hedging of the price and FX risks from simple collars to TRFs. When there is no direction in the market you can trade volatility and time decay. I prefer the binary options (regulated brokers only), because they provide you with some leverage (you can make 30 pips profit from 5 pips price move for example). I don't think...
Hey, Srmfx.

I want/wanted to get into Forex options, and their have a dept from NASDAQ that offers underlying that are derived from Forex spot so naturally its very attractive to me, problem is those options have like practically 0 volatility. Maybe 10 contracts a day lol. So if you want to cash out early.. You'll pay a huge spread. Binary trading is even regulated like NADEX its like gambling almost.. Maybe their is a strategy to it, but to play it directly I found it to be tough.

That's what I find so fascinating about this whole thing though. Is that the people who trade the big are also the once that on their own would sink as opposed to be able to adept and swim. You assume in your mind that someone given propriety access to behind the stage knows how to act on stage.

This are also the people who pull the strings on the real price, so having a background you have some calm of the market, because as its been said many times we are blind.. We trade what we seem there is no more road beyond that, and in hindsight its always fun.

When I was younger, I am not old LOL just younger.. I got romanticized with wall street.. You get the illusion that being a broker is "fun" that is cutting edge, that you do something edgy -- deal with money. So I joined a firm.. or got recruited (even though at the time, I didn't know that) I thought I was the "Chosen one" I got into it, and reality was DAMN disappointing lol. It wasn't as any fun as the movies but if you watched Boiler room or Wolf of wall street ya that was my job.

I got out of it before, I got sucked to deep in.. It wasn't as I imagined it to be.. Wasn't Wolf of Wall streety at all.. There was no "fun" just PRESSURE and LOTS OF IT!

I was just starting in Forex, at the same time. I went with Forex.. I still wanted the experience. Just not THAT experience I wanted my romantic experience.
13 years later it feels like a dull marriage. The Fireworks have left.. The sex isn't as good anymore.. and is it even moving? Its like being married to a corpse

If their only was a new young fresh piece of meat.. Err I mean market With all the thrills and the jills. No but in all seriousness, I used to do Betonmarkets.. They still around, but I think they have been bought or sold or something along those lines. They used to do Binary, but they did Binary good. They gave you the No touch, the touch the Barriers everything and good odds.. Like if you played it safe you got 18% but it was a legitimate 18% you could really go out of the money for a no touch like even back in 2005 when the average movement was 200 pips per day and play it for a week hold get 18% and it wouldn't touch! or Barrier that you play between 2 prices that it would trade between them, and once again you could really go out in Both directions 300 pips in Each direction and still get over 10-15% for 600 Pip Range for a week.. Starting Sunday Ending Friday! Then came the big bad regulators and they huffed and puffed and gave out a notice saying its gambling, and tough luck.

odds you get with Binarys now.. They may leverage it.. but its Casino odds.. House will win. ( I know that people would argue this with me, but I know Casino odds, when I see them.)
There are those who know, and there are those who don't know.
Quoting srmfx
{quote} After Refco, MF Global and PFG went out of business, I don't recommend brokers. Regulation in UK or US is OK.
I was watching the PFG Story on American Greed few weeks ago. I remember when it happened it was D!CK slap across NFA's face. It happened during when they were just lowering leverage and being criticized, by how they are bad at their jobs, and they are defending themselves and then BOOM PFG happens, and case and point.
There are those who know, and there are those who don't know.
Quoting palabara
{quote} Hey, Srmfx. I want/wanted to get into Forex options, and their have a dept from NASDAQ that offers underlying that are derived from Forex spot so naturally its very attractive to me, problem is those options have like practically 0 volatility. Maybe 10 contracts a day lol. So if you want to cash out early.. You'll pay a huge spread. Binary trading is even regulated like NADEX its like gambling almost.. Maybe their is a strategy to it, but to play it directly I found it to be tough. That's what I find so fascinating about this whole thing...
Probably the most important truth that I've learned from my banking and hedging experience is that dealers and fund managers care only about their bonuses. That changed my perception of markets and trading.
Regarding the binaries, you can treat them as gambling or you can use them as a trading tool. You can trade the same spot set ups via binaries. They will give you better risk/reward, but you must choose them carefully. There's always a trade off in trading.
Quoting srmfx
{quote} Probably the most important truth that I've learned from my banking and hedging experience is that dealers and fund managers care only about their bonuses. That changed my perception of markets and trading. Regarding the binaries, you can treat them as gambling or you can use them as a trading tool. You can trade the same spot set ups via binaries. They will give you better risk/reward, but you must choose them carefully. There's always a trade off in trading.
Curious. Who do you use for Binaries? In-case you don't wish to make it to public you can PM it if you feel comfortable in sharing.
There are those who know, and there are those who don't know.
Quoting JacobFordFX
Skenobi make some very good points. You only get paid the big money when you exceed your annual budget, I know some dealers who got nothing when they made just their budget. Those budgets were in the area of 5 million USD. So unless you did better you had only your salary that year, which by most standards is still a very good living. It is very exciting at times but my days started at 5 am and ended around midnight, not all in the office mind you but you are constantly watching and maybe in contact with your colleagues in other time zones or you...
It is some very interesting information that you and Skenobi is relating here.

From a psychological and fysiological perspective i think to work with something like that for 6 hours a day, 5 days a week is about enough. More then so is truely detrimental to physique and mental processis. Meaning to work that much as you did makes you a worse and worse trader. Of course you learn more and more and just hope your learning curve can compensate for your worsening physical and mental condition.

I see, based on this information, just as i thought that institutions like that have little understanding and little regard for the well being of their employees. Again, its not like it surprises me, i am just following this to where it goes. And it goes to the conclusion that this industry (the institutional financial industry), destroys people. And i mean that they destroy their employees in a way actually detrimental to themselves.

For after say 3 years a person working from 5 o clock to 23 in a stressfull situation is pretty much trashed. Maybe you get 6 hours of good work up until lunch. The rest you get out of that employee, the other 12 hours you get out of that employee, from lunch up until 23 o clock, thats the bad hours. Thats where the mistakes are made usually. But of course there are people who can work like that for say 12 hours and last maybe even 6 years before they become suicidal or in otherwise fashion destructive. Maybe even some can take it for a few years more even though they see signs of destructive acts: cocaine, whores, a pint of whisky every other day, no sex (except with prostitutes) no friends, no interests, no other learning and so on.

For me i find spending time in nature is very important. Thats sort how i started trading. It came to me when i was watching fire, ice and smoke in nature. Also of course other interests like friends and loved ones, art, philosophy, litterature, science and so on makes me better. And i need to be GREAT to beat the institutions.

Generally speaking i am an advocate for the 6 hour work day. Its enough, and it SHOULD be enough. The sand people of Sahara work 2 hours. They are nomads and if left alone they are a very happy and very ancient people. So i think 6 hours is definetely enough, generally. I still often work for 12 or 16 hours, but i take responsibility for that. As an employer i did make the employees work a bit more then 8 hours once or twice but i felt it was the wrong thing to do. And i could see it in their faces that it was the wrong thing afterwards.
My signature is: "Classified".
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