Although the hedge fund example I give is not daytrading (hedge funds of course hold positions for weeks/months at a time), your response makes the most sense out of all responses so far. I will need to approach a firm that will spot me at least 1 to 2 million in trading capital and not have a quick hook ("you're down $15K? you're fired"). Any suggestions as to which firms are the most reliable/reputable?
hedge fund trader vs. daytrader
- Thread starter flybynight
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Although the hedge fund example I give is not daytrading (hedge funds of course hold positions for weeks/months at a time), your response makes the most sense out of all responses so far. I will need to approach a firm that will spot me at least 1 to 2 million in trading capital and not have a quick hook ("you're down $15K? you're fired"). Any suggestions as to which firms are the most reliable/reputable?
Do you have capital to put up? If it's a reasonable sum (~$25k), $1-2M intraday buying power is fairly common. To hold that overnight you'd need a lot more cash and have to be doing some kind of arb, long/short strategy.
The topic has been discussed to death here so you'd find a lot to wade through with a search.
If you aren't putting up any money, then it's more complicated. You either compete with lots of qualified guys and get hired somewhere that will teach you and guide you and take a profit split. Or you go to an outfit like Swifttrade that will take anyone with no money down. You'll get almost no money to trade with and be harrased for losing $50 and give away 70% of your profits. But if you manage to get a grubstake out of it, then you can go to a real shop and put up your own money.
The topic has been discussed to death here so you'd find a lot to wade through with a search.
If you aren't putting up any money, then it's more complicated. You either compete with lots of qualified guys and get hired somewhere that will teach you and guide you and take a profit split. Or you go to an outfit like Swifttrade that will take anyone with no money down. You'll get almost no money to trade with and be harrased for losing $50 and give away 70% of your profits. But if you manage to get a grubstake out of it, then you can go to a real shop and put up your own money.
Daytrading is still being done, and from a Firm's standpoint, we prefer active day traders (no overnight risk, high volume), I am just saying that daytrading exclusively has seen a downturn within our firm. No "my way is the only way" - why should I care...as long as our people make money, they will be here a long time...a mutual benefit.
I realize that daytrading has been going on for 200 years, with the Specialist as the consumate daytrader (providing liquidity).
I think we agree overall, adapt your approach to the changing market conditions as necessary.
Bottom line is all that really matters, of course.
Don
ok, don. but your firm is not the entire daytrading universe. the opportunities for a small retail daytrader, in futures or equities (i personally perfer futures - but that's me), is still there.
it aint over.
as long as markets move, and CBOT (or CME for that matter due to the buyout) provides transparency, liquidity, and a FIFO order book), there will be daytrading opp's
and MANY MANY ways to skin the market cat.
it aint over.
as long as markets move, and CBOT (or CME for that matter due to the buyout) provides transparency, liquidity, and a FIFO order book), there will be daytrading opp's
and MANY MANY ways to skin the market cat.
Traded at worldco, made over $50K net in about 16 months of trading using no more than $100K in average daily capital. Worst month was down $2K net. Very consistent. 81% positive trading days. Not interested in putting up my own capital (I need it to pay my monthly living expenses since there is no salary coming in), and from what I hear there are reputable firms that don't require me to put up thousands in capital. Any thoughts on what my next move should be? thanks
Quote from lescor:
Don and Longhorns are right on the money. I put $2-5M of the firm's money into play on an average day, divided up into multiple strategies over multiple time frames. If you work out the ROI on capital deployed, it's probably only about 10 or 12%, with very small drawdowns due to the relatively short term nature of the trades and the strategy diversification.
Wow, I haven't been so honored around here on ET for quite some time, LOL.
I have to admit that his is a relatively "easy" thing to be right about.
Don
Maybe, just maybe, the time frame and volatility helped out a bit when you were at WorldCo. VIX near 40 then, VIX near 11 now.
??
Don
What? We're not the entire trading universe, I'm so shocked to hear that, LOL.
I agree about the cat skinning, and I admire anyone who takes the time to learn this profession, no matter which aspect or speciality they engage in.
Don
The skill sets required for a typical daytrader and a typical front line employee at a hedge fund are completely different, and the two worlds rarely intersect.
As such, most comparisons between them are meaningless in the sense that there are few to zero hedge fund employees asking themselves whether they are better off as day traders.
Analyzing balance sheets, building credit profiles, calculating correlation risks have little to do with watching squiggly lines on a screen.
That's not to say you can't make good money as a day trader - you can.
But there is really nothing to compare. You might as well ask whether one should deploy one's capital into medical school to become a surgeon or compound it as a daytrader.
Daytraders are or should be good at taking small amounts of money and make them produce high double or triple digit returns.
Traders at hedge funds should be good at taking large amounts of money and make them produce very low double digit returns.
The skill sets involved in the two exercises are completely different and so are the considerations such that they would rarely overlap.
As such, most comparisons between them are meaningless in the sense that there are few to zero hedge fund employees asking themselves whether they are better off as day traders.
Analyzing balance sheets, building credit profiles, calculating correlation risks have little to do with watching squiggly lines on a screen.
That's not to say you can't make good money as a day trader - you can.
But there is really nothing to compare. You might as well ask whether one should deploy one's capital into medical school to become a surgeon or compound it as a daytrader.
Daytraders are or should be good at taking small amounts of money and make them produce high double or triple digit returns.
Traders at hedge funds should be good at taking large amounts of money and make them produce very low double digit returns.
The skill sets involved in the two exercises are completely different and so are the considerations such that they would rarely overlap.