Quote from bentedges:
Since you asked nicely, and it is relative to this thread, I will answer a few of your questions. You've obviously read some of my other posts in the pair trading journal and a few other places, so I'll indulge you a bit. Then, along with gucci, I will put you on ignore to go along with the handful of posters here that already reside there. Sidenote: gucci, come up for some air, man. You're going to suffocate down there.
I came to this particular thread to see what some folks answered. In my case, I took a little bit different route in that I started trading in the early 90's but with commodities. Over the course of a few years, I blew up twice (between $5k-$10K accounts.) Being short corn while it moves limit up 3 straight days against you is no fun. But it served a useful purpose - it taught me risk management and proper position sizing, and how leverage is a very sharp sword that cuts both ways.
I decided I wanted to work in the financial arena full-time, so I became a broker. It was there I learned 'how things really work.' I read voraciously, studied much, and eventually saw that one could 'beat the market.' My mantra wasn't what the standard broker preaches nowadays - "Buy and hold managed money and you'll do well over the long-term" but rather, "Let's buy the Sep MO 45 calls for $3 as I think we can punt 'em for $4.50 at some point next week." It was then that I learned to be profitable, albeit with primarily client's money, and even with the exorbitant commish that full-service brokers charge. That was over a period of a few years.
I was then offered a position with a hedge fund as an analyst/trader/pm. It was the late 90's, and like everyone, we shot the lights out in the bubble, even as I implored the managing partner that we had to hedge ourselves more. I moved onto another hedge fund which had an extremely strong track record, and it was there that I learned to trade momentum from the best I had ever seen. Momentum is not my particular style, but I learned from this outstanding trader that it's sometimes ok to buy CAT up $2 in a strong tape and sell it later in the day up $4. Spent about 9 yrs at the funds, all of them profitable, with the exception of 2002 where I think we were down about 2% for the year (learned to quit trying to pick bottoms.)
Which brings me to today, where I trade full-time for myself. I'll just reiterate what I've seen written on these pages many times, without the garbel you espouse about binary fractals or whatever the hell it is you're talking about. For intraday/short-term trading, own strong relative strength and be short weak relative strength. For example, in today's tape, the primary engines are obviously JPM, WFC, INTC, and a few others as tells, and it appears like a trend day is likely, ie. be longer more than one is short until proven otherwise. Be short things like the refiners (VLO,TSO,SUN) as hedges. Don't fight the tape ( l had to relearn that lesson just a few months ago.) Position size correctly and manage the risk - you can always be around to play another day. Put in the time and work hard in the off-hours and I'll find profitability during the trading hours. And as many here have said, and nothing is more true, only screen time and experience will truly teach one to be profitable. Trade small while you learn, but do it with real money, cause sim trading can't give you that pit in your gut when something is going horribly against you.
The latter part of that is off-topic, so I'll stop there. But in short, it took me about 5 years to learn, and hell, I learn and explore new stuff every single day.
