big bank traders vs all

[mdl060374]

Quote from xxfunguyxx:

Thanks for the update guys.

But I mean fundamental news on certain companies, or economic indicators, etc...can these trader acquire such news faster or more efficently then we do

Yes. basically insider information.. One of the best attributes for a trader to have to work for a hedge fund..

Sounds shady. It is..

There was a article written about SAC (Steven Cohen's famous fund) and they basically said SAC pays insitutions TONS of money to get the information FIRST b/4 anyone else, and that was their main edge.. (not necessarily "insider info" but they made sure they were trading on it b/4 anyone else was..
(this isnt my opinion, this was in the article)

Also, alot of hedge funds want traders who "have connections" on the street as far as "information" goes.

I was asked that blatantly in 2 interviews I had. One for a self employed broker on the floor on the NYSE (who made a living front running info, and getting "tips" from specialist friends) and another by a hedge fund that specified in biotech..

and also I know a lot of traders need computer skills...is that for making better indicators?

I think (and I could be wrong) that alof of it is detailed statistics on behavior that get used for trading..

 

[mdl060374]

Quote from jack hershey:

What I tried to do was suggest to you how to look at what the market offers and how what you need to know is available to you (retail and amateur) as leading indicators of price and "news". I recognize this stuff may have no interest for you. [/B]

Best advice out there to this day Jack (that I have run across)..

Your ideas (and Spyders teaching) of cycles, and velocities, volume dry ups, opened my eyes to alot of concepts..

 

[jack hershey]

Quote from mdl060374:

Best advice out there to this day Jack (that I have run across)..

Your ideas (and Spyders teaching) of cycles, and velocities, volume dry ups, opened my eyes to alot of concepts..

This is a nice simple and convenient chart that can be used as the day goes by to verify how front running news and price indicators works.

An illustrated view (77 page document) of a day (Monday) unfolding using this is "Putting the Pieces Together". I snagged about 30 pics of how the batting order of prechosen stocks (the day before, Sunday). All the trades are "called" in the write up.

This approach shows how over a few days 10% per turn is achieved. When it is optimized about 100 turns per year @ 10% average is the result. As you can see from the read their is no aspect that arouses the SEC's interest except the money velocity of the accounts. They may not adjust to it but they know it is a result of itirative refinement of TA.

 

[$preader]

Quote from Surdo:

Anybody can subscribe to Bloomberg, and has access to the same news.

HAHAHAHAHAHA

A half hour before THREE sets of extremely strong numbers on Friday,some "anonymous" player sells 100,000 bunds going into the afternoon.

Bunds drops 100 points.

Do me a favor.The Exchange aren't even going to investigate because they "didn't see anything wrong".

WAKE UP.

 

[xxfunguyxx]

First I like to say...all of you people here are extermely knowledgable. I m glad to be learning

Second I like to mention that I am not talking about anything illegal or shady here. And I m not talking about some specific hedge fund technique that they use to keep clients. Although all this info were great to know.

I m merely talking about faster news gain and the ability to react to that news when trading. I m sure large banks and firms get alot of news and info as fast as possible, but does that give them any advantage over us? And I like to emphasize this for forex trading espically. Also what about better technology and software...how much advantage does that give them. Excuse me for my lack of comparision...basically I ask, when you have two warriors, one who has a crappy sword (individual traders/prop traders) and one who has a great sword (large firm/bank traders), . How much advantage does one have over the other when both have equal skills. thanks

also please elaborate on Dr. Sean's idea of trader getting best tech, and best research...thanks

 

[mdl060374]

Quote from xxfunguyxx:


I m merely talking about faster news gain and the ability to react to that news when trading. I m sure large banks and firms get alot of news and info as fast as possible, but does that give them any advantage over us? And I like to emphasize this for forex trading espically. Also what about better technology and software...how much advantage does that give them. Excuse me for my lack of comparision...basically I ask, when you have two warriors, one who has a crappy sword (individual traders/prop traders) and one who has a great sword (large firm/bank traders), . How much advantage does one have over the other when both have equal skills.

Yes, they have more info, but unless you are a trader who "trades the news" it doesnt really matter IMO..

Crappy sword works fine b/c you arent fighting directly with the great sword.... Its kind of an apples and oranges arguement unless you plan on moving millions of dollars like the "great sword"..

you get in and out of positions faster..

You are a nimble fighter who excels (ideally) on quick and accurate movements.. The great sword doesnt have that nimbleness b/c its too damn big and slow...

I guess it all depends on how you want to trade the markets.. I dont give a rats ass about "news..." I dont even watch CNBC, since its 90% crap anyway..

let the price action tell what is happening.

 

[nebulous]

The banks have a massive advantage in software, much faster and IT to customize it. The 'programming skills' are mainly for algo, stat stuff, not TA - anything beyond basic TA is a rarity.

There is a news advantage being better connected and closer to the rumor mill, but not as much of an advantage as is often suggested. There are black outs on securites prior to research releases which often physically inhibit trading those tickers right in the execution system.

The OP mentioned teaching methods in the question. IMHO this is where the ib's have the monster advantage. A professional atmoshpere, formal training and mentoring, capitalization and accountability - very hard to replicate outside a big firm and probably why trader success rates are often much over 50% in ib's as opposed to 10% in the retail space.

Whatever advantages they have though, doesn't mean there isn't room for everyone. The mistaken attitude is that you have to trade against them. Likes been suggested before, look for the signatures and trade with them.

 

[xxfunguyxx]

Quote from nebulous:

The banks have a massive advantage in software, much faster and IT to customize it. The 'programming skills' are mainly for algo, stat stuff, not TA - anything beyond basic TA is a rarity.

There is a news advantage being better connected and closer to the rumor mill, but not as much of an advantage as is often suggested. There are black outs on securites prior to research releases which often physically inhibit trading those tickers right in the execution system.

The OP mentioned teaching methods in the question. IMHO this is where the ib's have the monster advantage. A professional atmoshpere, formal training and mentoring, capitalization and accountability - very hard to replicate outside a big firm and probably why trader success rates are often much over 50% in ib's as opposed to 10% in the retail space.

Whatever advantages they have though, doesn't mean there isn't room for everyone. The mistaken attitude is that you have to trade against them. Likes been suggested before, look for the signatures and trade with them.

Hi ,

you mentioned that they dont really deal with TA . Here is an emphasis on my question. Given the fact we use a lot of TA and FA, how much more USEFUL info can we learn from these guys if we were to work at their large firms? thanks

also you mention their trianning is a huge advantage...I was wondering if such trainning can be related to our type of trading style, which is short-term trading...thanks

 

[jack hershey]

Quote from xxfunguyxx:

First I like to say...all of you people here are extermely knowledgable. I m glad to be learning

Second I like to mention that I am not talking about anything illegal or shady here. And I m not talking about some specific hedge fund technique that they use to keep clients. Although all this info were great to know.

Of the basic 18 fund strategies which ones would you like to focus this thread on?

Hedge funds, over the last 6 months turned in their worst performance in HISTORY.

As they lose their original customer base, they are now mounting proposals to manage pemsions and endowments.

To make the point on how they operate with huge amounts of burroed funds, notice the assets of all funds are becoming more concentrated in the top 100. Over the last five years (2002 to 2007) the largest 100's capital has gone from 47% to 66%.

this year the net number of funds is fallin (7634 to 7601).

Funds of funds are increasing (a net increase of 110) and their perfomance is less, de facto, because of fees to cover the additional level of costs.

So the flow into funds this year is small compared the last year (29 to 118).

Banks are no longer willing to give HF's the leverage they had in the past to be able to generate double digit returns (double digit means 20%)[color]

I m merely talking about faster news gain and the ability to react to that news when trading. I m sure large banks and firms get alot of news and info as fast as possible, but does that give them any advantage over us? And I like to emphasize this for forex trading espically. Also what about better technology and software...how much advantage does that give them. Excuse me for my lack of comparision...basically I ask, when you have two warriors, one who has a crappy sword (individual traders/prop traders) and one who has a great sword (large firm/bank traders), . How much advantage does one have over the other when both have equal skills. thanks

Lets bear down a little here. The two bets that worked this year for HF's were betting on commodities and betting against.....hold your breath.... FINANCIALS. the punters this spring were global nmacros who are small in number compared to the past when Soros and Robertson were domineering. Do you think those guys knew "news"....LOL....

Think about putting down your swiss army knife. and wear sunglasses from now on ..there is no shiny sword, anyway.

Big money borrows money from people who can't make money with money anyother way. This is leveraging. by looking at all 18 sectors of HF strategies you get to see the worst performance ever and no more money is coming into HF's comared to the growth required to get banks to fork over more loans for leverage.

20% a year for an expert trader in the ES is 100 bucks profit a year on a contract margin of 500 bucks. Just to clarify, this is 2 ES points a year. In terms of trading stocks this is 2 turns of 100 annually which would take about 5 days using the chart I gave you. One week of stock trading by a retail amateur is 1 years perfomance at top levels by a HF.


Put down your swiss army knife and recognize that you can run a 100,000 shares of stock in each of 8 to 12 streams of capital and turn 20% in five days( 2 turns of 10%, each) by using a "1 pager" and not have anything programmed and not depend on any super news schema. This is 20% on 36 million in five days.

Also please elaborate on Dr. Sean's idea of trader getting best tech, and best research...thanks

 

[jack hershey]

Quote from xxfunguyxx:

First I like to say...all of you people here are extermely knowledgable. I m glad to be learning

Second I like to mention that I am not talking about anything illegal or shady here. And I m not talking about some specific hedge fund technique that they use to keep clients. Although all this info were great to know.

As has been pointed out to you, the regs are bend as far as possibole by big money using money to get "pre-news" whenever possible. they make 20% a year performing stunningly. This year they haven't got the "pre news" about which direction the global and currency markets are going. And old dollar takes a new dollar at 1.57 to have same buying power. This year is a better money maker than most any I can imagine. The reason is that prices are moving up and down more rapidly. Deep down in strategic planning is a sentence: "money is made by the principle of price movement"

Do you think it is a good idea to "see" leading indicators of price movement. Here are about 7 for you to look at.

I m merely talking about faster news gain and the ability to react to that news when trading.

In the pic above (lower right) you see a comparison of smart money and the "cash" market (where the public lives).

What I am showing you is a short time period (four black bars) which followed a volatility compression that lead to a market run. The market is turning long and one needs to nail five times the T&S level in five minimally spaced bursts. Just one of 20 to 40 a day that occur.

Ordinarly, each of these turns leads to a year's profits of a HF. Since there are 20 to 40 a day and there is NO reaction required but instead "anticipation" from the time of the compression until the indicator SAYS HIT T (The bars moving out of the center and grwoing longer with a color of the market's 2 or more point price shift). HIT T is a term for doing a trade using an electronic platform.

I m sure large banks and firms get alot of news and info as fast as possible, but does that give them any advantage over us?

No they are screwed. Markets have what is known as capacity. HF's are leveraged to make them huge which is their sales and fees advantage. Having info faster and their doing a little bit here and there (according the the capacity of the markets) is what the pic is showing you that they are doing.

You use swords as you equalizer mentally (one sword each). do the cowboy thing. The revolver is the GREAT EQUALIZER. Capacity is represented by the TRIGGER on the revolver. You and the HF shooter can only pull the trigger as fast as the CAPACITY of the market permits. I shoot, for example at a rate of five times the rate of the big and smart money I am tracking. I do it by trading the same number showing on the T&S and I do five shots eacyh a few seconds apart depending on harmonic conditions (even or odd)

And I like to emphasize this for forex trading espically. Also what about better technology and software...how much advantage does that give them.

When you walk into a trading area and go to the displays, you get to see what is going on. When you go into a research area you get to see what is going on. What location is found between the two? The only time I ever took money from these guys was when I lived in Greenwich and I focussed my summers on competitive national men's sailing competition and cocktail parties and collecting MB's 1 of 22 in US for example and I drove to Yatch club and cocktail parties in it). My job was to crituqe stuff from the research on the way to the trading. And to go to luncheons and write out Q's for the outfit's head to ask speakers. I was paid portal to portal for lunch in the low three digits per hour in the early 60's. Then when I moved, they brought the stuff to Switzerland for me to critique.

Timing markets is not done by today's HF's because there is a conference room between research and trading for the ap of cap.
CL is traded and so are the items I mentioned previosly but onlyat the capacity of the markets in bullet size little bits. think of the markets as war size and think of bullets in war. Got it? wars are won and lost not by bullets but more how big a gun you can biuld. Iran is running 6000 centrifuges 24/7 that is their capacity. Had they not gotten the technology nor the machinable materials to work with gases in a precise way, they would not be a pain in the ass.

At some point you can review my knowledge and my tooling. My IP and TS are regarded as valuable and unique. Do you think the people who own them aren't below the radar. How long do you think it would take to build the radar neceaary to win in that war? You do not want a wakeup call as I suggested before.


Excuse me for my lack of comparision...basically I ask, when you have two warriors, one who has a crappy sword (individual traders/prop traders) and one who has a great sword (large firm/bank traders), . How much advantage does one have over the other when both have equal skills.

The guys with the shiny swords are disadvantaged. The skill levels are in great contrast as well. I notice that the big guys cannot sleep for days after they have had a demo by someone that can run at five times the capacity of the markets. They do not have the tooling.


thanks

also please elaborate on Dr. Sean's idea of trader getting best tech, and best research...thanks