Schonfeld Sec. bad moon rising ???
- Thread starter cz1
- Start date
there's one thing i don't understand. In all of the problems that firms in our industry have encountered, and with knowledge that the go-go days of 20 point moves are over, why are firms allowing traders to get into such huge positions? What kind of risk management is there? Or should i say, lack of risk-management. And to say that it's normal to be down most of the time tells me that it's a gambling way to trade. Make a trade, lose some, then max out on next trade. One of these winners will (hopefully) make some money before busting. That's crap.
There are some people i know who never have losing months (myself included) and i never even traded a few years ago. I also didn't make 75 million. But i can make money day-in-day-out in a market of 20 cent moves for the whole day. I wonder how much i would have made back then? Must be tough to be a "great" trader when the stock moves 10 points. You miss have the move and still get 5 points. Gee, some genius.
THis market is constantly evolving. Yes, when news comes out, there is a pop, but to say you can call your moves like the IBM with a high degree of probablity is simply nonsense. To have a portion of your position carry over for a medium-long-term is fine, but putting your whole eggs in a basket and basically flipping a coin is insane. That's the real reason why prop. firms are in decline. People are more careful with their own funds.
I still can't believe the original post, about the guy making trades from the phone off CNBC and losing that much money. Does he think he's calling a bookie? It seems to me that many "great" traders, like that guy, are nothing more than gamblers. Trading is not gambling. It is about risk/reward and executing when there is a high probabilty of success. Not about maxing out your buying power and hoping to the Stock Gods. These people are a stain on our profession. Stick to horse tracks.
cheers
There are some people i know who never have losing months (myself included) and i never even traded a few years ago. I also didn't make 75 million. But i can make money day-in-day-out in a market of 20 cent moves for the whole day. I wonder how much i would have made back then? Must be tough to be a "great" trader when the stock moves 10 points. You miss have the move and still get 5 points. Gee, some genius.
THis market is constantly evolving. Yes, when news comes out, there is a pop, but to say you can call your moves like the IBM with a high degree of probablity is simply nonsense. To have a portion of your position carry over for a medium-long-term is fine, but putting your whole eggs in a basket and basically flipping a coin is insane. That's the real reason why prop. firms are in decline. People are more careful with their own funds.
I still can't believe the original post, about the guy making trades from the phone off CNBC and losing that much money. Does he think he's calling a bookie? It seems to me that many "great" traders, like that guy, are nothing more than gamblers. Trading is not gambling. It is about risk/reward and executing when there is a high probabilty of success. Not about maxing out your buying power and hoping to the Stock Gods. These people are a stain on our profession. Stick to horse tracks.
cheers
As a trader at schoni, I was given small buying power at first. As i proved my self, i got bigger. Now, for those of you guys that ever traded size, going up has some adjustments to be made.
Now all of a sudden, a hit becomes a bigger hit. There are many factors as to how I trade. Unlike most of you guys, I would have up to 40 positions at once, not one or three.
So, im long 1 million in dollar amount, spread in share size between sectors. Sometimes I could make 20 thousand in a few minuets, and sometimes I would get hit for 20 thousand.
You will never understand unless youve been long 1 million and all of a sudden the futures crap out, and the market falls. Its not like you can get out anytime fast. You will have to wait for a bounce and scale out. (sometimes scaling out in the selloff.)
We were all long max size when all of a sudden the surprise rate cut came. That was two years ago. It was around lunch, we were all eating, watching MTV, laughing, we were short and had positive marks.....then bammm, Frozen yells out in a loud shreak.
I look at the futures and they spike 1000 points in a second.
"They cut rates", quick cover and go long. by the time i blinked i was down almost 50 thousand dollars, Frozen was down 1.5 million in combined futures and stocks.
However, from covering and going long, marking to close, I made a nice profit on the day, comming back from my losses, Dave made back most of his losses.
This is just one example of what went on. I saw frozen make an easy 250 thousand in one move......so, I would have to say, for most of you guys, You havent seen, been in, or even played with the capital we have.
Now times have changed. Things are diffrent and my size is smaller, 300 thousand at most. Guys who have not lost are good consistent traders. But they have a long way to go to catch up profit wise with most traders i traded with.
Back then it was size, and taking huge risk, now its the consistent base hits. It is all realitive. But give me a trader who has lost and came back......i would trade with him, give me a trader who makes a little everyday, he has a big surprise down the road.....its only a matter of time before he will be tested.
Now all of a sudden, a hit becomes a bigger hit. There are many factors as to how I trade. Unlike most of you guys, I would have up to 40 positions at once, not one or three.
So, im long 1 million in dollar amount, spread in share size between sectors. Sometimes I could make 20 thousand in a few minuets, and sometimes I would get hit for 20 thousand.
You will never understand unless youve been long 1 million and all of a sudden the futures crap out, and the market falls. Its not like you can get out anytime fast. You will have to wait for a bounce and scale out. (sometimes scaling out in the selloff.)
We were all long max size when all of a sudden the surprise rate cut came. That was two years ago. It was around lunch, we were all eating, watching MTV, laughing, we were short and had positive marks.....then bammm, Frozen yells out in a loud shreak.
I look at the futures and they spike 1000 points in a second.
"They cut rates", quick cover and go long. by the time i blinked i was down almost 50 thousand dollars, Frozen was down 1.5 million in combined futures and stocks.
However, from covering and going long, marking to close, I made a nice profit on the day, comming back from my losses, Dave made back most of his losses.
This is just one example of what went on. I saw frozen make an easy 250 thousand in one move......so, I would have to say, for most of you guys, You havent seen, been in, or even played with the capital we have.
Now times have changed. Things are diffrent and my size is smaller, 300 thousand at most. Guys who have not lost are good consistent traders. But they have a long way to go to catch up profit wise with most traders i traded with.
Back then it was size, and taking huge risk, now its the consistent base hits. It is all realitive. But give me a trader who has lost and came back......i would trade with him, give me a trader who makes a little everyday, he has a big surprise down the road.....its only a matter of time before he will be tested.
even though schoni is comming to a cross roads, I would put the guys I traded with against any consistent trader. Sure, making a few G a month is nice. But being able to go balls out when the time is right and make 500 G in a day is even better.
We were not gamblers, there are primary rules we stuck to. Yet, I highly doubt that any trade has fool proof system. Schoni did overextend, as did Broadway, Momentum, Protrader, etc.
All i know is the guys from schoni I know, including me, will not have to work for a while if we dont want to. So, all in all, not a bad way to live ones life.
We were not gamblers, there are primary rules we stuck to. Yet, I highly doubt that any trade has fool proof system. Schoni did overextend, as did Broadway, Momentum, Protrader, etc.
All i know is the guys from schoni I know, including me, will not have to work for a while if we dont want to. So, all in all, not a bad way to live ones life.
While I can see where your coming from, not being shy about loading up with positions, that animal has been dead and slaughtered for a while now. Just because trading somewhat mindlessly worked out for some traders in that totally false environment (more balls less brains) doesn't mean these were talented traders..... The question is how have they preformed in the last year? I think the thread starter is concerned with schony blindly standing by those type of traders....
Yeah,
Mindless momentum trading is gonna make a comeback along with bellbottoms, black and white TVs and rotary phones.
Mindless momentum trading is gonna make a comeback along with bellbottoms, black and white TVs and rotary phones.
"There is a time for all things, but I didn't know it. And that is precisely what beats so many men on Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying and selling stocks daily - or sufficient knowledge to make his play an intelligent play."
Jesse Livermore
"There is a time for all things, but I didn't know it. And that is precisely what beats so many men on Wall Street who are very far from being in the main sucker class. There is the plain fool, who does the wrong thing at all times everywhere, but there is the Wall Street fool, who thinks he must trade all the time. No man can always have adequate reasons for buying and selling stocks daily - or sufficient knowledge to make his play an intelligent play."
Jesse Livermore
That is a great quote,however, Jesse Livermore traded way
before Electronic Trading , Computers and regulation. When Jesse Livermore traded , they didn't even have the + tick rules. Stocks could be manipulated alot more by the JP Morgan's of the time.
I think in 2002, we have a couple of factors that make trading tough. The .01 spreads,arbitrage(stock option,index etc),ECN's all keep the markets very tight. As soon as a stock runs up .04, seller's come in . We are in a bear market , add the .01 spreads , ECN's and we have a no scalping , no momentum market. Jesse's
point is well taken, sometimes it's best to sit on the sidelines.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
Jesse Livermore
That is a great quote,however, Jesse Livermore traded way
before Electronic Trading , Computers and regulation. When Jesse Livermore traded , they didn't even have the + tick rules. Stocks could be manipulated alot more by the JP Morgan's of the time.
I think in 2002, we have a couple of factors that make trading tough. The .01 spreads,arbitrage(stock option,index etc),ECN's all keep the markets very tight. As soon as a stock runs up .04, seller's come in . We are in a bear market , add the .01 spreads , ECN's and we have a no scalping , no momentum market. Jesse's
point is well taken, sometimes it's best to sit on the sidelines.
Gene Weissman
Lieber & Weissman Sec., L.L.C.
gweissman@stocktrade.net
I agree with what most have stated. However, I can only tell you how i trade, not how Schoni's trade. Frozen and I never did trade like the rest of the firm.
Sure, we no longer take huge risk, because the reward is no longer there. Very few follow through days. Overnighting has been marginal at best.
My point is that at anymoment, a X factor can come along and bitch smack you. All you can do is get up and trade your way back to positive.
Consistent gains are good. Of course I am far more consistent in the sense of making base hits everyday than say the volitility in my P&L that mached the99/00 market.
Basically, I feel that daytrading is dying. The market is becoming far to effiecent. Penny moves and slow, choppy moves don't excite me. VIC and a few other "Market Wizards" i spoke to told me this was going to happen, almost a year and a half ago.
I refused to belive. Now im a believer. Im not saying you can't make a nice living but intraday daytrading is not as profitable now. Looking at holding positions longer term, a day or three.
Ie: the play was: to slowly start to scale into your long tech positions starting friday. Come monday, big up open, what for a lull or pull back, build more into your long positions. WHY? based on the action of AMAT and the Semis/Ibm showing strenght into the meetings this week. Carry into today, Look to start to take profits off the table. Keep 25% on for another overnight play, expecting a slight to moderate down open to shake the longs out on weds. From that point, gage and see if the techs show strenght. Re-inter and scale back in on weds for a quick pop off the rally that hits around 9:00 central. Be out of the longs by 10:00 centeral, because the odds are weds will be a choppy midday move.
This is not a daytrader play. Of course you can keep getting in and out after you missed most of the rally, racking up commisions and buying the top only to get shaken out. That is daytrading.
Sure, we no longer take huge risk, because the reward is no longer there. Very few follow through days. Overnighting has been marginal at best.
My point is that at anymoment, a X factor can come along and bitch smack you. All you can do is get up and trade your way back to positive.
Consistent gains are good. Of course I am far more consistent in the sense of making base hits everyday than say the volitility in my P&L that mached the99/00 market.
Basically, I feel that daytrading is dying. The market is becoming far to effiecent. Penny moves and slow, choppy moves don't excite me. VIC and a few other "Market Wizards" i spoke to told me this was going to happen, almost a year and a half ago.
I refused to belive. Now im a believer. Im not saying you can't make a nice living but intraday daytrading is not as profitable now. Looking at holding positions longer term, a day or three.
Ie: the play was: to slowly start to scale into your long tech positions starting friday. Come monday, big up open, what for a lull or pull back, build more into your long positions. WHY? based on the action of AMAT and the Semis/Ibm showing strenght into the meetings this week. Carry into today, Look to start to take profits off the table. Keep 25% on for another overnight play, expecting a slight to moderate down open to shake the longs out on weds. From that point, gage and see if the techs show strenght. Re-inter and scale back in on weds for a quick pop off the rally that hits around 9:00 central. Be out of the longs by 10:00 centeral, because the odds are weds will be a choppy midday move.
This is not a daytrader play. Of course you can keep getting in and out after you missed most of the rally, racking up commisions and buying the top only to get shaken out. That is daytrading.
I can see why you're not making money in this market. You have too many preconceived notions on how the market is going to move, based on some historical data. You have to look for the intraday plays and make consistent quarters and maybe halves by playing the momentum pullbacks on volatile stocks that you know well. React to what your screen is telling you (Level 2 ECNs, market makers, futures, baskets of industry stocks) and stop predicting. Opinions are like assholes; everyone's got one. Opinions are the Achilles heel of veteran traders. Swing trading for size in a sideways market is a 50/50 proposition at best. You're better off playing craps.
_____________________________
"Float like a butterfly, sting like a bee." Muhammad Ali
"He who picks bottoms ends up with smelly fingers." Ancient Chinese Trader
_____________________________
"Float like a butterfly, sting like a bee." Muhammad Ali
"He who picks bottoms ends up with smelly fingers." Ancient Chinese Trader