I think Nitro made a very valid point several times in this thread, which no one seemed to respond to.
That is the psychological aspect of trading one's own funds as compared to trading firm capital.
I once did a post about how I was consistently able to be profitable trading the money of others. As a firm trader, as a money manager, and as a floor trader (employee). While I struggled and managed to be pretty consistently unsuccessful trading my own account.
I attributed it to accountability. But the truth of the matter is there was another element. And that element, for me, was simply fear of losing.
When I traded on the floor of the CBOE, and was paid a salary plus performance bonuses, I quickly got very used to trading very large size and was totally comfortable with it almost immediately. I knew I would receive a salary, and hopefully bonuses. There was no fear. Win, lose or draw, I was going to have an income.
As a money manager, I felt no pressure to trade unless there was a real reason. So while the size of my trades were large, the frequency was very small. Selectivity and accountability served me (and my clients) very well.
As a firm trader with Schonfeld, again, there was no fear because there was no downside. It bothered me not at all to only get a relatively small percentage of the profits. Where else was I going to get the enormous buying power I got there and the freedom to trade pretty much as I wanted?
As things changed there, and I started making less money and got the itch to trade derivatives and not be confined to equity trading only, I went with another prop firm. I had to put up some of my own money, but felt there was no risk to my capital since I intended to use strategies that virtually eliminated any downside.
It turned out to be a mistake. My approach was fine, but the inability to get executions was something I did not foresee. So I found myself trading stocks as I had with Schonfeld, and have not had much success. Fear of losing has been a big detriment to my trading. It is certainly just an emotional thing, but that makes it no less real.
I have often quoted Mark Douglas' premise that you must trade without fear. And that is very different from being reckless. But it is easier said than done.
So I am a living example of what Nitro was talking about. while I have a very long and successful track record, trading my own money is just not in my repertoire. Maybe I am not mentally tough enough. Maybe I have convinced myself I am not able to trade my own funds. The reasons do not matter. Only the results.
It is crucial to know yourself. To admit to yourself (as I have here) your weaknesses. They are more important to recognize and deal with than our strengths.
So trading pro, prop or retail is something that is dependent on each of us. All have advantages and disadvantages. All have appeal or lack of appeal. But it is a very personal thing. What is right for one guy is irrelevant to the next.
Peace,
RS
That is the psychological aspect of trading one's own funds as compared to trading firm capital.
I once did a post about how I was consistently able to be profitable trading the money of others. As a firm trader, as a money manager, and as a floor trader (employee). While I struggled and managed to be pretty consistently unsuccessful trading my own account.
I attributed it to accountability. But the truth of the matter is there was another element. And that element, for me, was simply fear of losing.
When I traded on the floor of the CBOE, and was paid a salary plus performance bonuses, I quickly got very used to trading very large size and was totally comfortable with it almost immediately. I knew I would receive a salary, and hopefully bonuses. There was no fear. Win, lose or draw, I was going to have an income.
As a money manager, I felt no pressure to trade unless there was a real reason. So while the size of my trades were large, the frequency was very small. Selectivity and accountability served me (and my clients) very well.
As a firm trader with Schonfeld, again, there was no fear because there was no downside. It bothered me not at all to only get a relatively small percentage of the profits. Where else was I going to get the enormous buying power I got there and the freedom to trade pretty much as I wanted?
As things changed there, and I started making less money and got the itch to trade derivatives and not be confined to equity trading only, I went with another prop firm. I had to put up some of my own money, but felt there was no risk to my capital since I intended to use strategies that virtually eliminated any downside.
It turned out to be a mistake. My approach was fine, but the inability to get executions was something I did not foresee. So I found myself trading stocks as I had with Schonfeld, and have not had much success. Fear of losing has been a big detriment to my trading. It is certainly just an emotional thing, but that makes it no less real.
I have often quoted Mark Douglas' premise that you must trade without fear. And that is very different from being reckless. But it is easier said than done.
So I am a living example of what Nitro was talking about. while I have a very long and successful track record, trading my own money is just not in my repertoire. Maybe I am not mentally tough enough. Maybe I have convinced myself I am not able to trade my own funds. The reasons do not matter. Only the results.
It is crucial to know yourself. To admit to yourself (as I have here) your weaknesses. They are more important to recognize and deal with than our strengths.
So trading pro, prop or retail is something that is dependent on each of us. All have advantages and disadvantages. All have appeal or lack of appeal. But it is a very personal thing. What is right for one guy is irrelevant to the next.
Peace,
RS