I spent ten years of my career trading at a couple really top tier Chicago proprietary trading firms. Stupid size. Mostly flat at the end of the day - but I sometimes traded around a biased core position because I had earned the right. I was David Ellis' biggest MF spread trader EVAH.
I always found that I was best on my game when I reacted to the market. Let me explain what I mean by that.
Scenario 1: The market is selling off, I think that the market has sold off enough and I load up on the buy side, and I sit with it taking the pain. I stopped doing this very early in my career.
Scenario 2: The market is selling off, the downward momentum stops, the market trades up two tics - and I step out and take the entire offer. In this scenario, I am reacting to the market. If the market reverses again and makes fresh lows I am going to quickly reach well into the bid side of the order book to puke.
In Scenario 1, I am telling the market what I think it should do. In Scenario 2, I am letting the market tell me what it wants to do.
I had a personal rule that I would never give away more than a Week. On two occasions in my career I gave away a Month - circumstances pretty much beyond my control in terms of liquidity gaps. If you've got on two thousand cars and there's a scared super thin market there's not much you can do.
I think what helped me was the earner/grinder mentality. I was married with three kids, the house on the North Shore, mortgage, cars, private schools, the whole enchilada. I supported the family with my trading. So I had to grind out income. After splitting it with David Ellis and getting taxed on a W-2.
The best analogy to this "react to the market" statement I can make is like an ambush predator. Think Nile Crocodile on the banks of a river. Very successful species - been around for hundreds of millions of years. Expends minimal energy for massive meals.
I always found that I was best on my game when I reacted to the market. Let me explain what I mean by that.
Scenario 1: The market is selling off, I think that the market has sold off enough and I load up on the buy side, and I sit with it taking the pain. I stopped doing this very early in my career.
Scenario 2: The market is selling off, the downward momentum stops, the market trades up two tics - and I step out and take the entire offer. In this scenario, I am reacting to the market. If the market reverses again and makes fresh lows I am going to quickly reach well into the bid side of the order book to puke.
In Scenario 1, I am telling the market what I think it should do. In Scenario 2, I am letting the market tell me what it wants to do.
I had a personal rule that I would never give away more than a Week. On two occasions in my career I gave away a Month - circumstances pretty much beyond my control in terms of liquidity gaps. If you've got on two thousand cars and there's a scared super thin market there's not much you can do.
I think what helped me was the earner/grinder mentality. I was married with three kids, the house on the North Shore, mortgage, cars, private schools, the whole enchilada. I supported the family with my trading. So I had to grind out income. After splitting it with David Ellis and getting taxed on a W-2.
The best analogy to this "react to the market" statement I can make is like an ambush predator. Think Nile Crocodile on the banks of a river. Very successful species - been around for hundreds of millions of years. Expends minimal energy for massive meals.
