daughter asks for advice

oldtime · Mar 14, 2013

Quote from ammo:

you could sit her next to you and mentor,sounds like she will talk back, might be good for both of you after the 1st few weeks of

thanks, I don't want her to take the same risks I take, so far, best advice is to get a job in a related industry, but I think she is too far gone for that. But getting away from her and me personally

where would you advise a new kid starting out to go if they had an interest in stock trading?

I know Warren Buffet started out by buying shares in a shoe company (and the story goes, he got the CEO to meet him at the factory on a Sunday.)

Brighton · Mar 14, 2013

".... and can read people, and most importantly she can talk you into anything, a very good salesman ... "

None of which is important if she's considering trading her own account from home. Is she passionate about the markets or is she just looking for a different way to make a living?

As someone noted in a different post, unless a beginning trader is ready to eat, breathe and sleep markets for at least a year or two, he/she will probably not be successful. Maybe that drive, that passion can be developed, but I'm skeptical if there's no previous history of wanting to participate in the markets/in the industry.

Took2Summit · Mar 14, 2013

Quote from ofthomas:

actually, no... if by companies we are talking about IB's (Investment Banks) there are not that many... and you are in fact restricted.. it is part of their legal compliance and within their code of conduct... if you get fired because of violating compliance or conduct, you will have a hard time getting another job at another IB... it is a small world..

now, if you are talking about working within the investment division of an insurance company or large conglomerate, then the rules are different... but your statement(investment advisory/ bank/ brokerage/ fund etc) had to do with financial services companies, and I know first hand experience, from working for the majority of the IB's, that it is an incorrect statement...

BTW your statement is incorrect

I work for an IB, one of the largest in the US. and I will tell you right now there are only 3 restrictions.

1. you have to make all personal trades in disclosed accounts (no hidden accounts)

2. you cant make any trades in personal accounts that are the same as client accounts within 24 hours (buy or sell, assuming you work with clients within the IB)

3. you cant make any trades in personal accounts within 24 hours of an updated opinion on the given stock from the IB firm you work with, whether it was a downgrade or upgrade or even a reiteration.

other then that, trade away

Took2Summit · Mar 14, 2013

Quote from ofthomas:

if you are an employee of an IB, you can not trade your own account. There are so many restrictions and limitations that is not even funny. The same goes for a hedge fund. The only thing you can trade, are indexes and some ETF's, and the holding period is usually 30 days...you are not allowed to trade a short timeframe.

for my previous post i meant to quote this, and not what i actually quoted.

oldtime · Mar 14, 2013

Quote from Brighton:

".... and can read people, and most importantly she can talk you into anything, a very good salesman ... "

None of which is important if she's considering trading her own account from home. Is she passionate about the markets or is she just looking for a different way to make a living?

As someone noted in a different post, unless a beginning trader is ready to eat, breathe and sleep markets for at least a year or two, he/she will probably not be successful. Maybe that drive, that passion can be developed, but I'm skeptical if there's no previous history of wanting to participate in the markets/in the industry.

you know Brighton, I just emailed her and suggested getting a job at a money management firm. Like Edward Jones. I think once she gets a taste of OPM, she will forget all about trading.

otherwise, I agree with you, the first thing I ever read in a newspaper was the price of corn, 5,000 bu minimum, couldn't get enough of it, wanted to learn everything, always asking questions, reading all the books at the library

nutmeg · Mar 14, 2013

Quote from oldtime:

otherwise, I agree with you, the first thing I ever read in a newspaper was the price of corn, 5,000 bu minimum, couldn't get enough of it, wanted to learn everything, always asking questions, reading all the books at the library

......And then he met Oldtime. Oldtime had a fine reputation in commodities and he persuaded Livermore that his information on corn was all wrong [Livermore was short corn at the time]. Oldtime had better information and that information said corn was going to go up. Livermore said:

"Gradually, as I began to accept his facts and figures, I began to fear I had been basing my previous position on misinformation. Of course I could not feel that way and not cover. And once I had covered because Oldtime made me think I was wrong, I simply had to go long. It is the way my mind works."

Unfortunately, the price of corn fell. Livermore sold his profitable position in wheat (a position which, had he held it, would have profited him by eight million dollars) to buy more corn. Every day Livermore bought more corn. In fact, he bought so much corn that he was supporting an entire market into which the smart money was selling....

In the end, this incident did not wipe out Livermore's fortune completely, but it lost him millions.

--------------------

Sorry had to do it (write about corn. your comments reminded me about Livermore's cotton trade...

ofthomas · Mar 14, 2013

Quote from Took2Summit:

BTW your statement is incorrect I work for an IB, one of the largest in the US. and I will tell you right now there are only 3 restrictions.

1. you have to make all personal trades in disclosed accounts (no hidden accounts)

2. you cant make any trades in personal accounts that are the same as client accounts within 24 hours (buy or sell, assuming you work with clients within the IB)

3. you cant make any trades in personal accounts within 24 hours of an updated opinion on the given stock from the IB firm you work with, whether it was a downgrade or upgrade or even a reiteration.

other then that, trade away

interesting, so lets see... US based, there are only 5 ... MS, GS, C, BAC, and JPM... and non US, there are 7.... UBS, CS, DB, BNP, HSBC, Barclays, and SG... so largest in the US? hmmm.... what measure did you used? AUM, capital ratios, returns? curious...

your last statement("trade away") is incorrect, even for the industry... so lets discuss Personal Account Trading policies...

first... yes, full disclosure and account being held at a designated broker, for MD's this is even more strict.... clearly, the IB gets copies of everything.

second, everything requires pre-clearance (unless index or ETF's...) you cant trade until that is obtained, if you are indeed allowed.

third, minimum holding periods... you are only to "invest" ... so 30 days usually by default, specially in front office... backoffice sometimes get away with 7 days depending what line...

fourth, conflict of interests... your #2 and #3... they are prohibited, period... let's add to that as well the restricted list (any issue the IB is a MM for or acts as an underwriter/adviser)....

and if you try to get around the rules and get caught... how about this... you may be required to disgorge profits, if any; You may also be subject to termination of employment; and you may also be subject to regulatory sanction, civil and criminal penalties, which will clearly kill your career... specially if in the floor or with anything that will require a license... given your registration will be reviewed and revoked...

those are the rules... go ask your compliance dept or better yet, pull your policies on PAT... you will see... they will be in the same ballpark or even more strict...

ammo · Mar 14, 2013

Quote from oldtime:

thanks, I don't want her to take the same risks I take, so far, best advice is to get a job in a related industry, but I think she is too far gone for that. But getting away from her and me personally

where would you advise a new kid starting out to go if they had an interest in stock trading?

I know Warren Buffet started out by buying shares in a shoe company (and the story goes, he got the CEO to meet him at the factory on a Sunday.)

i would take the top weighted 3- 10 in any index and learn how to chart /read them,they each have their own personality,pick the one's she reads the easiest ,and they should be liquid,and she could trade the deep in the money call or put instead of the stock if she were going to trade rather than invest,you know the fastest way to learn is with a mentor,she will likely fail the 1st and or 2nd try without one, i would give her a primer on market profile also,fastest way to learn supp and resistance.. not the textbook version ...http://www.elitetrader.com/vb/showt...6934&highlight=bells+and+whistles#post3266934

newwurldmn · Mar 14, 2013

Quote from Took2Summit:

BTW your statement is incorrect I work for an IB, one of the largest in the US. and I will tell you right now there are only 3 restrictions.

1. you have to make all personal trades in disclosed accounts (no hidden accounts)

2. you cant make any trades in personal accounts that are the same as client accounts within 24 hours (buy or sell, assuming you work with clients within the IB)

3. you cant make any trades in personal accounts within 24 hours of an updated opinion on the given stock from the IB firm you work with, whether it was a downgrade or upgrade or even a reiteration.

other then that, trade away

That's extremely lax.

We couldn't trade in stocks that we had positions in.
We couldn't trade in stocks that were on the restricted list (bank was engaging in some kind of business in).
We had holding periods of 30 days. We had to get written and verbal approvals before any trade.
Managers got a report every month of all your trades.

oldtime · Mar 14, 2013

Quote from ammo:

i would take the top weighted 3- 10 in any index and learn how to chart /read them,they each have their own personality,pick the one's she reads the easiest ,and they should be liquid,and she could trade the deep in the money call or put instead of the stock if she were going to trade rather than invest,you know the fastest way to learn is with a mentor,she will likely fail the 1st and or 2nd try without one, i would give her a primer on market profile also,fastest way to learn supp and resistance.. not the textbook version ...http://www.elitetrader.com/vb/showt...6934&highlight=bells+and+whistles#post3266934

thanks, that sounds like a plan, they should have a ladiy's index, one that includes all the clothes retailers, phones and foods

but yes, that's the way I would do it, probably just the dow 30, you could hedge with YM

I really know nothing about it, I never understood what makes a stock trader click

I think I will take Brighton's advice and encourage her to get in the brokerage business where she can put her sales skills to use, and over time maybe learn the art of trading or at least buying and selling

funny, because I never asked anybody for advice

the mere fact that somebody would ask for advice gives me pause for concern

oh well, maybe she will ask for advice, and then just not take it, like a true trader

thanks for the replies