Mentorship / training fail

[rallymode]

Hi rallymode, been a while.

I think you are probably right. And hearing it from someone else reduces the possibility of experiment likeliness from 40% to 30%.

I'll share a bit more of my thought process.

There can be some advantages of having fresh minds to look at things. My trading style is very market making centric. I have dozens of market making strategies. Only 2 momentum strategies. I'd like more balance there and as hard as I might try to not overly influence people I work with eventually everyone kind of adopts my philosophy and finds it more productive to just keep iterating on what works.

Not that there is anything wrong with it but the more i read the more you sound Bretton James-ish.

A few years ago i had an opportunity to get involved alot deeper in the industry and increase my earnings substantially. At that point i was probably putting in 12-14 hours a day as an independent trader. After much serious consideration i not only decided against it but also reduced my frequency as i came to the perhaps simple realization that the marginal utility of the extra income was quite low and disproportionate to what i'd be giving up in return. Common trend among good traders is their passion which often borderlines addiction, sometimes we tend to lose ourselves in the endless search of extracting more money from the markets. So I am quite biased and skeptical when it comes to undertaking new trading projects unless the personal fulfillment is there. Now before i get more philosophical i am open to meet up for food or drinks during your visit(sent you a PM) and perhaps with some liquor in you you won't be so tight lipped about those lucrative strats of yours.

 

[rallymode]

Good post.

I think we might distinguish garachen's proposal from your training experience. This isn't about teaching a real edge to someone else (which I would agree is uneconomic) - rather I thought garachen was proposing presenting some information on types of successful automated strategies and details on e.g. latency, matching engines, etc beyond what is available from the published exchange documentation (which I'd expect everyone attending to be familiar with). Then with access to a database/backtesting engine of the sophistication which would not usually be available to all but sophisticated / institutional participants, a group of motivated and smart individuals could test theories and quickly determine which areas merited further investigation.

Yes my experience is different but when it comes to training traders or mentoring them, the common theme is you trying to extract value from others be it monetary or not. That comes with a cost to you which could be money, time and effort and often stress. Perhaps given the frequencies he operates in he could make it work but in my opinion it would be mighty difficult to justify the personal cost to him of doing the project whether he realizes it or not. This is not to say that some things shouldnt be explored even if the cost can't be justified. There is plenty of value in new experiences which is often realized only in hindsight.

 

[garachen]

Not that there is anything wrong with it but the more i read the more you sound Bretton James-ish.

A few years ago i had an opportunity to get involved alot deeper in the industry and increase my earnings substantially. At that point i was probably putting in 12-14 hours a day as an independent trader. After much serious consideration i not only decided against it but also reduced my frequency as i came to the perhaps simple realization that the marginal utility of the extra income was quite low and disproportionate to what i'd be giving up in return. Common trend among good traders is their passion which often borderlines addiction, sometimes we tend to lose ourselves in the endless search of extracting more money from the markets. So I am quite biased and skeptical when it comes to undertaking new trading projects unless the personal fulfillment is there. Now before i get more philosophical i am open to meet up for food or drinks during your visit(sent you a PM) and perhaps with some liquor in you you won't be so tight lipped about those lucrative strats of yours.

I probably work a bit more than I'd like to ideally, but my commute is < 2 miles, I'm perfectly willing to take 3 months off at a time if I feel like it and my monetary goals have been satisfied. I mostly keep at it now to do right by my employees. And I'm still pretty young. Under 40. I have as many friends as I can reasonably manage, practice piano 1-2 hours a day, spend a lot of time outdoors and actually enjoy my family quite a bit. There are really very few things I'd like to change, the major one being emotional exposure to PnL volatility. My tolerance is much higher than it used to be, but the volatility is also higher than it used to be. I'm pretty close to solving this problem. 3 more months, I suspect. I'm grateful for a lot of things.

Ha! And I don't drink. Feel free to ask whatever you want. My only promise is not to lie.

 

[rallymode]

There are really very few things I'd like to change, the major one being emotional exposure to PnL volatility. My tolerance is much higher than it used to be, but the volatility is also higher than it used to be. I'm pretty close to solving this problem. 3 more months, I suspect. I'm grateful for a lot of things.

Interesting, I would very much like to hear about the way you solve that in three months that doesnt involve retirement. I've had some crazy drawdowns as well as home runs over the years that would make a regular person question my sanity and while I've become quite immune to the big winners, the big losers always seem to hit below the belt and hurt almost as much as they did when I first started out. Perhaps it's due to the fact I'm only risking my own money or perhaps it's an emotional handicap. Either way I've accepted that and use it as a reminder that keeps me in check the times i get too confident for my own good.

 

[sellindexvol66]

Yes my experience is different but when it comes to training traders or mentoring them, the common theme is you trying to extract value from others be it monetary or not. That comes with a cost to you which could be money, time and effort and often stress. Perhaps given the frequencies he operates in he could make it work but in my opinion it would be mighty difficult to justify the personal cost to him of doing the project whether he realizes it or not. This is not to say that some things shouldnt be explored even if the cost can't be justified. There is plenty of value in new experiences which is often realized only in hindsight.

Rally introduced me to a strategy and mini mentored me ( I'm not his local friend) and I'm forever grateful..as he knows. I hope you have realized a value from that.

In any case a great dinner is still forthcoming.

 

[convexx]

Hey, I got both of you into VIX!

 

[crazyoptiontrader]

whatever hillbilly

 

[MadeMan]

Its not about "Bad teacher " or "Bad Student"

But the Intention ONE goes Down the Venture ... One or the other..

 

[garachen]

Ug. I've given this some more thought. Maybe I'll try it in a year or so when I have some time.

I've decided to pull a 180 and hire people full time to manually trade. Seems crazy, I know, but I have good reasons. The last few weeks I've spent manually trading overnight. I hate it. But there's some really good stuff there. Good enough that I'm going to teach 2-3 other guys at work. I'd rather teach a bunch of people at once so I'm looking to hire 2-3 more people. Quickly. I prefer people with little to no experience so there's less to undo. Let me know if interested. I know there's lots of people here trading from their parents basement. That's what I'm looking for. And smart with good intuition.

I will be recruiting from the usual schools too. This is a salaried job with benefits and good upside potential. I rarely have time or inclination to manually trade nowadays - but I'm still pretty good at it. It's a skill worth having. I view it as insurance. Something to fall back on if everything goes to pot.

I expect people to be consistently profitable in 2-3 months.

 

[bone]

Ug. I've given this some more thought. Maybe I'll try it in a year or so when I have some time.

I've decided to pull a 180 and hire people full time to manually trade. Seems crazy, I know, but I have good reasons.

I much prefer this approach compared to your original idea. Make sure you put them under contract (iP, Confidentiality, etc). I have a former client who is wildly successful and he does a bit of this out of his Newport Beach office. Once they have made a certain amount of money, he cuts them free if they choose - but they usually stick around from what I can tell. Make sure you make them cover their overhead either through commission overage or monthly desk fees.

Much more sensible for all parties involved IMHO.