Endicott's genuine advice to young people who want to make it as pro traders

[onemoreshot]

The guy is clearly deluded. I suggest ignore after your pithy response.

This another Surf alias? Dipshit.

 

[versailles]

nobody said anything about liquidity completely drying up and why would you wipe your account if you are using sensible MM. Some of the stuff I trade is illiquid, I can get out instantly at any time but for a bad price but as I am trying to make money I don't want that bad price, the option is always there though. Infact I am offering my liquidity in that market, making myself available for people who puke or price insensitive traders. GL.

No need to defend yourself. The guy has an edge in liquid markets from his basement. Can not argue with that.

 

[onemoreshot]

You are a tool versailles, I mean surf.

 

[wrbtrader]

This thread is great. We have a seasoned pro named maverick who is explaining how things are based on tremendous experience--- but morons here are arguing with him.

People read maverick post and learn! Or find out the hard way.

Yeah, Maverick is running the longest enduring technical analysis thread here at Elitetrader.com

Thus, if someone wants to learn about The ACD Method...Maverick is the person to learn it from because he shows that TA works for some folks @ http://www.elitetrader.com/et/index.php?threads/the-acd-method.170318/

The above TA thread isn't just about technical analysis. There's other great discussions in the thread too involving the market that supports the use of TA. Simply, people are learning to use TA with other analysis instead of using it alone.

 

[onemoreshot]

Do you really think there's an edge in liquid markets? LMFAO!!!

So no edges possible in liquid markets? Just want to make sure I'm getting this correctly.

 

[versailles]

So no edges possible in liquid markets? Just want to make sure I'm getting this correctly.

No, there are edges but they are just much more prevelent in less liquid markets. It makes much more sense to concentrate on these markets.

 

[onemoreshot]

No, there are edges but they are just much more prevelent in less liquid markets. It makes much more sense to concentrate on these markets.

What about your hedge fund group surf? I have Intel something is wrong.

 

[wrbtrader]

View attachment 163777 View attachment 163777

Looks like Surf secretly mingles with TA's known wizards. Caught this photo on a newsfeed of Surf,a popular elitetrader TA leader and LBR from MarketWizards.

What more evidence is needed?

Yeah, he's known for such in the past. He's also known for recommending those that use TA along with trying to prove they are profitable traders while at the same time he bashes TA. My favorite is the Timothy Sykes guy heavily promoted and defended by surf. Accordingly to surf, the Sykes guys is a profitable trader that uses TA with other stuff although TA is not his primary trading method.

 

[wrbtrader]

So no edges possible in liquid markets? Just want to make sure I'm getting this correctly.

There's edges in liquid markets because liquid markets are not always efficient and sometimes liquid markets become highly volatile.

Unfortunately, inefficient price action doesn't always last as such and high volatility eventually reverts back to its mean. Simply, you gotta enjoy it while it last and hit it hard when it returns.

There's another issue as highlighted in an online article on FT involving illiquid FX markets and algorithms. In addition, there are also now "illiquid seeking algorithms" in other types of markets like U.S. equities. Actually, its been as such for about 3 - 4 years now and UBS is one of the biggest financial institutions involved in such.

Simply, you gotta be careful in liquid and illiquid markets these days regardless if you're new or a veteran.

 

[yiehom]

Sorry to desagree. What you are saying is that the holy grail is here and it is a computerized math formular. How come they still need people to trade, if math and computer are better fits for the job?
Every body knows there can't be such a thing as a true and unique recipe for winning in the markets, or either there will no longer be a market or everybody with the math computer combo would be a billionaire. This is not what happenned to LTCM and its roomfull of phd's and nobel prize winners, when the whole thing collapsed on them and their computerized formulas.

Nice post Endicott. You are a smart guy and a hard worker. The TST thread is like that bar down the street with the same two loud drunks that are there everyday shouting at the rain. Let me say this, I think the advice you offered was good advice 10 years ago. As some one who has been in this business now for 20 years and seen it evolve to where it is now and where it's going, here is what I would tell people. One, get a real job. For 99% of the people on this forum, you need to make a living and trading will not do that for you. The long term return on risk assets over the last 100 years is about 7.5% in nominal terms and if you hold those assets long term there are no end of year tax consequences. Very few people are going to beat those returns on a risk adjusted basis. If you do insist on trading, go to school, study math and computer science. For the love of Jesus, Mary and Joseph, study math and statistics. Trading today is VERY quantitative and no, you can't use a straightline ruler to achieve independent freedom dphoenix.

Understanding data, how to collect it, clean it, analyze it and model it is very important. There is more noise now then ever in the market and you have to put in a lot of work to separate the signal from the noise today. Now I know what some of you are going to say, you are too old to study math or stats or data analysis. Well, I got bad news for you, if you are too old for that, you are probably too old to trade because that IS what trading is. Most of the people on this forum are hobbyist traders. The definition of a hobby is one, it costs money. And two, it's meant to fill time. And that is what most are doing here, losing money and filling time. Why? I could write a book about it. Maybe you don't like to spend time with your wife and kids. Maybe you think it's an out to escape a corporate job you hate. Maybe it brings some meaning to your life you can't find elsewhere. But what it is not for most here is a profession.

If I was giving advice to a 22 year old kid, I would tell him to get his ass in school. Study math, economics, computer science, logistics, etc. I would tell him to focus on trading books that are full of math formulas and not charts. That is the litmus test. Open the book, if you see charts, toss it. If you see code and formulas, give it a look. Look when I was younger I hated math too. I didn't understand it's purpose in the world. I couldn't make the connection. As I got older and I delved deeper into it, I found order and structure in math. Math connected things. It built the bridge from theory to implementation of an idea. It quantified things. It tested things. It explained things. Now that didn't make learning math easier, but it did provide the purpose for it. The truth is, there is no easy way to make money in this business. At least not honestly. If you are allergic to hard work, you better keep that office job.

Now this is not meant to be a debby downer post, but a wake up call. I ran a regional prop firm office for many years. I had many ET guys go through that office. I was privy to their account statements and their p&l as I managed their risk and saw all the trades they put on. It was fascinating to see the evolution one makes in the road to failure. Most these guys were smart, most were hard working. Almost all of them were even well capitalized. We gave them access to every market under the sun, so that was not an excuse. We gave them access to equities, options and futures. So that was not an excuse. We gave them the ability to daytrade, swing trade, hell even hold long term portfolios. So that was not an excuse. We gave them access to over a dozen trading platforms. So that was not an excuse. We even lent them capital and gave them access to whatever margin they needed. So that was not an excuse. Hell, we even let guys trade with debit accounts for months on end allowing them to recover losses. So that was not an excuse.

Of course the easy out here is to simply say they didn't have an edge. That's a cop out. Why? Because they didn't even have the tools to develop an edge. And that is where the math, stats, programming, etc all come in. So out of the 40 something traders I over saw how many of them made money? None. How many of them blew out their accounts? Almost all. It's kind of a cruel psychological self destructing process really. It's like an alcoholic. They can't simply stop drinking because someone tells them they have a problem. Their moment of clarity only comes about after they are pulled out of a car at 3am by the jaws of life and rushed to the ER only to barely survive but to find out the woman and her two children in the mini-van that he hit did not. It's only then it seems that such a person sees their own reality more clearly. With trading it seems the same. Losing money is not enough. One has to completely self destruct and lose everything before they find their clarity.

This is only advice. Do with it what you will. And of course, good luck.