Hey no worries being honest. 3 years is less than typical college and depending on your account size probably cheaper! I'm not expecting to be rich over night or anything. I actually look forward to learning everything there is to know and make money doing it. ThanksI actually started earlier ... and opened my first real-money account at 18, after a lot of practice on demo before that.
After about another 3 years. (Sorry - maybe not what you wanted to hear?!).
Good luck!
Recommended prop firms or lessons
- Thread starter Seth
- Start date
Hello Seth,
It's admirable that you are willing to put in the hard work, as that will be needed.
Unfortunately, you've decided to focus on something that is pretty difficult to crack: Day Trading.
Now I don't want to get you down, but if you want to win at day trading, there are a few ways. None are easy... but here are the main ones I know of:
1) Be a bottom feeder. Try to find others who are trading, or detect their patterns or market patterns and jump on the band wagon with the intent to jump off really quickly. You are basically looking for opportunities where you may squirrel away a few points of victory for every hundred points of victory that 'educated traders' garner. This is a slow, painful way to try and eek out a living. You mainly will need charting software and some knowledge of chart patterns to look out for as well as strong discipline on when to go in and when to get out. Often be willing to give up lots of potential upside for the guaranteed upside.
2) Be a fast algorithmic trader. In this situation its your algos vs. someone else's algos (which are probably equal in merit and discoverability) in an attempt to gain a few points on a trade. This is also slow and can be painful, but requires a significant amount of skill and resources. You will need good/strong coding skills, and most likely a co-located trading platform (either your own on-site or purchasing software that allows you to deploy algos to the companie's on-site hardware). Of course, if you are not doing your own on-site-hardware, chances are you can not run your own bespoke software (I don't know anyone that will rent you on-site hardware to run your custom C++/C# program for example).
3) Be an innovator. Come up with your own strategies and approaches that are completely alien to any one else out there. The basis of this is: If someone *ELSE* knows a way that works, then 1000 other people know it, and 10 of them are going to do it a lot better than you can. If you come up with something that no one else would thought of, you at least have an edge... for a year or two until everyone else figures it out... so you have to keep on innovating new ways. This is the hardest but can reap the most rewards. If you wish to do this you will most likely need custom analytical software (or at least, custom formulas on excel), and a lot of time doing research beyond just chart patterns (how economical, macro, political events interact with price movements for example). This will require a lot of education as well.
For #1: Go find some good charting software and websites, and try your luck. I hear there are some 'good' prop type shops, but I don't know personally any.
For #2: Learn to code... seriously... this could take a few years to get decent at, and a long time to be a pro. You'll want to perfect your math, statistical, and algorithm skills. You are looking at the equivalent of a Masters level education in Comp Sci / Math / Statistics and becoming a Quant who can write code. (If you want to do this well that is).
For #3: This is the toughest. You are looking at a sound understanding of micro & macro economics, as well as business and politics. You'll most likely want the equivalent of education in Finance *AND* Banking, as well as Investment Management & Risk Management as well as at least the equivalent of a BSc in Comp Sci/Math.
Note: When I say you want a masters/Bsc. I'm not saying you need to get those credentials, just that you should have the same knowledge as someone who has those credentials.
Note: There are alternatives to day trading to make money in the market and be free of a 9-to-5 job. But they require more capital than you have and more investment experience than you have. You may want to consider doing the 9-to-5 thing for a while to save up your nest egg and then go solo. And if you can spend those years working at a bank, in fintech, or the likes then that is serious experience that will help you in the future.
Bonus Note: If you are super keen to learn, I recommend the following:
Pull up the course material on Economics -- read it all
Pull up the course material on Banking & Finance -- read it all
Pull up the course material on CFA I/II/III -- read it all
Once you've done that, at least you are on equal footing with thousands of other talking heads on TV, analysts, and hedge fund managers (minus the experience).
tl;dr: Day trading ain't easy
It's admirable that you are willing to put in the hard work, as that will be needed.
Unfortunately, you've decided to focus on something that is pretty difficult to crack: Day Trading.
Now I don't want to get you down, but if you want to win at day trading, there are a few ways. None are easy... but here are the main ones I know of:
1) Be a bottom feeder. Try to find others who are trading, or detect their patterns or market patterns and jump on the band wagon with the intent to jump off really quickly. You are basically looking for opportunities where you may squirrel away a few points of victory for every hundred points of victory that 'educated traders' garner. This is a slow, painful way to try and eek out a living. You mainly will need charting software and some knowledge of chart patterns to look out for as well as strong discipline on when to go in and when to get out. Often be willing to give up lots of potential upside for the guaranteed upside.
2) Be a fast algorithmic trader. In this situation its your algos vs. someone else's algos (which are probably equal in merit and discoverability) in an attempt to gain a few points on a trade. This is also slow and can be painful, but requires a significant amount of skill and resources. You will need good/strong coding skills, and most likely a co-located trading platform (either your own on-site or purchasing software that allows you to deploy algos to the companie's on-site hardware). Of course, if you are not doing your own on-site-hardware, chances are you can not run your own bespoke software (I don't know anyone that will rent you on-site hardware to run your custom C++/C# program for example).
3) Be an innovator. Come up with your own strategies and approaches that are completely alien to any one else out there. The basis of this is: If someone *ELSE* knows a way that works, then 1000 other people know it, and 10 of them are going to do it a lot better than you can. If you come up with something that no one else would thought of, you at least have an edge... for a year or two until everyone else figures it out... so you have to keep on innovating new ways. This is the hardest but can reap the most rewards. If you wish to do this you will most likely need custom analytical software (or at least, custom formulas on excel), and a lot of time doing research beyond just chart patterns (how economical, macro, political events interact with price movements for example). This will require a lot of education as well.
For #1: Go find some good charting software and websites, and try your luck. I hear there are some 'good' prop type shops, but I don't know personally any.
For #2: Learn to code... seriously... this could take a few years to get decent at, and a long time to be a pro. You'll want to perfect your math, statistical, and algorithm skills. You are looking at the equivalent of a Masters level education in Comp Sci / Math / Statistics and becoming a Quant who can write code. (If you want to do this well that is).
For #3: This is the toughest. You are looking at a sound understanding of micro & macro economics, as well as business and politics. You'll most likely want the equivalent of education in Finance *AND* Banking, as well as Investment Management & Risk Management as well as at least the equivalent of a BSc in Comp Sci/Math.
Note: When I say you want a masters/Bsc. I'm not saying you need to get those credentials, just that you should have the same knowledge as someone who has those credentials.
Note: There are alternatives to day trading to make money in the market and be free of a 9-to-5 job. But they require more capital than you have and more investment experience than you have. You may want to consider doing the 9-to-5 thing for a while to save up your nest egg and then go solo. And if you can spend those years working at a bank, in fintech, or the likes then that is serious experience that will help you in the future.
Bonus Note: If you are super keen to learn, I recommend the following:
Pull up the course material on Economics -- read it all
Pull up the course material on Banking & Finance -- read it all
Pull up the course material on CFA I/II/III -- read it all
Once you've done that, at least you are on equal footing with thousands of other talking heads on TV, analysts, and hedge fund managers (minus the experience).
tl;dr: Day trading ain't easy
Your top goal is to find a mentor/ trader who has made money for years and his ideas and risk control make sense. Or much harder, find a newer guy with "secret sauce"
It is not enough this fellow used to be a big winner- he must be doing something that works now.
Offer to be his goffer/assistant.
All of this is hard to do. You may never do it.
....
Some of the biggest winners found inefficiencies or tricks that worked for a period of time.
SOES bandits, open order guys, Philly optons midlers.. even a fellow named Ed Thorp who made many hundreds of millions trading stock vs options.
...
Take a flyer and put in an appllication with SIG to work at the firm in any capacity. The firm is a trading/ market making firm run by billionaires who are ex-poker players. They trade only their money- which they made trading. You will work like a fiend for two years for not a huge amount but you will be taught by and rub shoulders with big winners. I think you will find that winning "trading" is different from what you thought. Your application probably will be rejected.
......
You are right to suspect that trading at a prop firm where you pay for lessons from probable losers, pay lots of commissions and other "fees" will probably not end well.
Generally the few people who learn to make big money at a prop firm will not teach you what they are doing, tho they may be used to lure you in. Do even be lured into a firm that you know has a big winner or two.. unless you have an unlikely relationship with those winners.
------------
Understanding computers and programing is not mandatory but is a plus.
Being a math wizard is not mandatory but is a big plus.
If you are already good at games like poker, chess or backgammon this is a plus. If you are not, don't blow tons of time on them, but a little poker will not hurt.
------
Being able to find the right people and learn from them is almost mandatory.
Books, videos, high priced week long courses will not get the job done.
Mostly what those things will "teach" you are things that used to work or that never worked.
However, reading good things by true winners ( hard to tell sometimes if they are or were) can add something but are not enough.
Googling "Renaissance Technologies" and learning all you can about them will not hurt at all. They have made billions over many years with no losing quarters doing things you will not be able to do.
But you will see how winners think!!!
---
Try and remember thrse things:
“Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
“Look for three qualities when hiring people: integrity, intelligence, and energy. If you hire somebody without integrity, you want them to be dumb and lazy.”
"The most important thing to do if you find yourself in a hole is to stop digging"
(Three of my favorite Warren Buffett quotes about people and life)
"Wherever you go, there you are," Buckaroo Banzai"
Amazing the wisdom the Masters are able to convey in a sentence or two.
It is not enough this fellow used to be a big winner- he must be doing something that works now.
Offer to be his goffer/assistant.
All of this is hard to do. You may never do it.
....
Some of the biggest winners found inefficiencies or tricks that worked for a period of time.
SOES bandits, open order guys, Philly optons midlers.. even a fellow named Ed Thorp who made many hundreds of millions trading stock vs options.
...
Take a flyer and put in an appllication with SIG to work at the firm in any capacity. The firm is a trading/ market making firm run by billionaires who are ex-poker players. They trade only their money- which they made trading. You will work like a fiend for two years for not a huge amount but you will be taught by and rub shoulders with big winners. I think you will find that winning "trading" is different from what you thought. Your application probably will be rejected.
......
You are right to suspect that trading at a prop firm where you pay for lessons from probable losers, pay lots of commissions and other "fees" will probably not end well.
Generally the few people who learn to make big money at a prop firm will not teach you what they are doing, tho they may be used to lure you in. Do even be lured into a firm that you know has a big winner or two.. unless you have an unlikely relationship with those winners.
------------
Understanding computers and programing is not mandatory but is a plus.
Being a math wizard is not mandatory but is a big plus.
If you are already good at games like poker, chess or backgammon this is a plus. If you are not, don't blow tons of time on them, but a little poker will not hurt.
------
Being able to find the right people and learn from them is almost mandatory.
Books, videos, high priced week long courses will not get the job done.
Mostly what those things will "teach" you are things that used to work or that never worked.
However, reading good things by true winners ( hard to tell sometimes if they are or were) can add something but are not enough.
Googling "Renaissance Technologies" and learning all you can about them will not hurt at all. They have made billions over many years with no losing quarters doing things you will not be able to do.
But you will see how winners think!!!
---
Try and remember thrse things:
“Pick out associates whose behavior is better than yours and you’ll drift in that direction.”
“Look for three qualities when hiring people: integrity, intelligence, and energy. If you hire somebody without integrity, you want them to be dumb and lazy.”
"The most important thing to do if you find yourself in a hole is to stop digging"
(Three of my favorite Warren Buffett quotes about people and life)
"Wherever you go, there you are," Buckaroo Banzai"
Amazing the wisdom the Masters are able to convey in a sentence or two.
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