position trading questions?

darkhorse,

Position trading is ok with me as long as the trader has sufficent capital, doesn't overleverage and has an exit strategy. Nitro & KTM make some valid points.

Monroe Trout and others mentioned have alot of capital to work with, and may have hedged their postions in some ways in case there is a Sept. 11. They are not going to "sell out" at the bottom. While you don't need 100 million dollars to position trade, you need much more than a daytrader or swing trader. If
you position trade for a living, don't overleverage and have an
"exit" strategy. If you are a daytrader, don't turn a losing trade
into a position trade.

Most NYSE floor specialists(for example) have to carry postions and daytrade against their positions. A NYSE specialist may be Long 100,000,000 in postions and Short 75,000,000 in postions.
The specialist is daytrading against his/her postions. The specialist must sometimes carry alot of inventory, sometimes not by choice. But if the specialist had a choice, he would probably be flat most of the time.


Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
 
nst,

from nyc, living in jersey....

i've only ever traded my own money and am not set up, computer, hw, sw, access-wise to do the best possible job.....
i was hoping someone might guide me to a firm that would allow me to use their facilities and some limited leverage (not interested in 100 to 1 LTCM situation) for which i would be willing to split what i make.

when i was on the floor in chicago there were numerous firms willing to put people in the pit and split the profits...alot of these firms have been absorbed (o'conner, first options, etc) by banks seeking a higher level of options expertise. it seems to me that hedge funds have very little interest in non-phd, non-mba traders...no matter how well one has done on their own...

what's your take on the situation...

re; bright reply.....
i don't believe the only "real traders" are day traders...and you probably don't either....we used to call that "talking your book"...

regards,

mbs
 
Not a negative comment, and certainly not talking any "book" here....I just speak from a place of being in the industry for a long time....on the trading floor, we would keep "hedged Positions" for quite some time (options, stock, futures, etc.)...but when it comes to trading equities, most (obviously not all) traders who do this for a living don't hold postions very long. We have ex-Specialists, floor traders, the whole range...that is all I meant.

Your last post seems to be a "fit" in a way...if you're interested in getting licensed and registered. If not, then the original post to stay retail is a must anyway.

Be glad to discuss anything with you at any time!!
 
Originally posted by Gene Weissman
While you don't need 100 million dollars to position trade, you need much more than a daytrader or swing trader.
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Gene:

I agree, you can't play this game without sufficient funds. As a swing/position trader who plays this game for a living, I don't think my method would be feasible below a minimum $50,000 of operating capital, double that to have a nice lifestyle, because even dirt cheap commission costs start being a factor when one is risking only a fractional percentage of equity per trade on frequent trades.

But that's one of the "secrets" of the pros: they understand that the goal is to put food on the table, not to shoot the moon, so they have enough buffer capital on hand and keep the risk per trade low enough so that the swings against them are palatable instead of gut wrenching.

Of course, the prop firms as a whole prefer to subtly promote the idea that you don't need a sizeable capital base because there are a lot more potential "customers" out there with small dollars than big dollars, and salesmen can't go cutting down the size of their potential markets...
 
Originally posted by nitro


How can this be? Since this multiplication is commutative, we can then treat this argument over the field of the Reals. Therefore, say I hold for an average of 5 minutes as a scalper. 10 * that is 50 minutes. But you use no leverage, but may hold overnight or for days - that is certainly more than the 10x in my multiplier:confused: Besides, as I stated above, it is (at least) a three dimensional number (vector) and even if the multipliers were close, volatility over holding period would change everything. Perhaps you believe the multidimensional risk parameter ("number") is a matrix. This would certainly change things, as matrix multiplication is not necessarily commutative!


nitro
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Nitro:

Me only simple caveman trader with radio shack calculator. No understand complicated math man ways.

But me do know that if trader nitro risking 5 cents per trade on 500 shares and trader darkhorse risking $2 per trade on 500 shares, and stock have biggum surprise intraday gap $5, then trader Nitro lose 100 times his planned risk while trader darkhose only losum 2.5 times planned risk. Nitro go home mass bigger headache.

Unga bunga. :)
 
Originally posted by darkhorse
But me do know that if trader nitro risking 5 cents per trade on 500 shares and trader darkhorse risking $2 per trade on 500 shares, and stock have biggum surprise intraday gap $5, then trader Nitro lose 100 times his planned risk while trader darkhose only losum 2.5 times planned risk. Nitro go home mass bigger headache.

Unga bunga. :)
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Brave Warrior darkhorse, nitro go home big headache X time per annum, you coppum not so big headache Y time per annum. Guessum what - Y much bigga than X. Year end Advil intake closer than you thinkum. And that's fair dinkum, mate.
 
Originally posted by tom_p


And that's fair dinkum, mate.
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Fair dinkum, right wot? Do we have an Aussie on the board, fresh in from campin' it up with the yabbies? Lissen ey, I dunno bout X or Y, but this here swinger's happy as Larry with his meddie intakes, right? Yeh, it's a dingo's breakfast that daytradin' is mate... hit the wrong bid and yer done like a dinner mate, cryin' in your tinny down the pub 'bout how the drongos ran out your cornhole right right wot? Ey? Yeh.

p.s. that Paul Hogan's a sexy bahstid, ey? bot a subaru i did i did
:D
 
Originally posted by N.ShoreTrading
You really don't need sophisticated software/hardware to trade for a living.
NST
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Very true. I pay $400 a month for my data and chart feed but that's only because I like going with the best, I could probably get by with a lower quality program.

Methodology of when to buy and sell probably contributes 30% max to a trader's success. The other 70% is discipline, consistency, money management, and holding it together on those days when you want to puke.
 
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