Tell about your education

[Predictor]

I found this interesting quote:

"Most of us enter the investment business for the same sanity destroying reasons a woman becomes a prostitute. It avoids the menace of hard work, is a group activity that requires little in the way of intellect, and is a practical means of making money for those with no special talents for anything else."

-- Richard Ney

 

[brokershopping]

you said:

...watching Tiger Woods play a tournament start to finish...The way he positions himself on Thursday's and Friday's...How he tries to make his move on Saturday's and how he plays with a lead...

I don't golf a lot, and maybe if I did I would understand... (and I have never watched any tornament from start to finish)

You seem to imply that he has a capacity to make himself "play better" at certain times and uses it strategically to his benefit. That makes sense to me if you were a marathon runner or tri-athalete. You could push hard at a certain point in the race in order to gain a psychological edge, but you have the cost of using that energy. In golf, it seems like you would hit your best shot every time. You are not "spending" anything you might run out of on the next hole.

When you get to that level, maybe concentration and focus are required at such a high level that you really can't sustain it for the duration?

 

[darkhorse]

Originally posted by brokershopping
you said:


When you get to that level, maybe concentration and focus are required at such a high level that you really can't sustain it for the duration?

My personal .02 is that the problem isn't sustaining the concentration and focus, it's keeping a clear head. This is why people invariably play "amazing" or have "incredible runs" when they are goofing around with buddies and there is nothing at stake. (This is also why novice traders look great on paper, but crumple like tissue under live fire.)

Most people choke up or get nervous when it's all on the line. The higher the stakes, the easier it is to get nervous or self-conscious, and even a fraction of hesitation or unease can show up in your game.

And when you are pro, the level of competition is super intense-it's like timed competitions at the olympics- at the highest levels a 0.5% edge can be the difference between all or nothing.

 

[RAY]

Education 0: Reading books about the markets and trading.
Trade Help (1-10):
1.5 (other than just learning the basics, books have not seemed to help that much.)

Education 1: University of Texas and Rutgers Business school (Finance): 3.93
Trade Help:
3.5 (excel, PV/FV, CAPM, Banking, etc., etc... also helps to formulate hedges)

Education 2: Working in a shipyard during my summers in high school: Min. Wage
Trade Help:
5 (damn, I hated my job; damn, a dollar doesn't go that far)

Education 3: Race Driver (4+ years)
Trade Help:
8 (risk and emotion in trading? Ya sure, but try trading when your account equity is life itself)

Education 4: Trading (for some time now, watched markets almost daily for 1.5 years before I started)
Trade Help:
10 (of course)

IMO, It is all in the head. Today I found myself felling uncomfortable, but I also had a large LONG position in NVDA! (>10,000) Ended up OK, but that is a different topic.

Hope this helps.

 

[Treykool]

A big EGO is in fact a common trait among good traders.

All the traders on the desk I used to work for at Merrill were the biggest pricks in terms of EGO....but they all made incredible loot for the firm. I don't know where you're coming from, but from my experience in the industry, traders are the most egotistical jerks I have ever met. I wouldn't base assumptions on a book...just ask anyone on any major trading desk. However, if you must read, maybe you might want to pick up a book called "Liar's Poker" and read about the big swinging d:cks at Solly back in the 80s.

Originally posted by Commisso


There is a thin line between arrogance and confidence...
EGO maniac = huge balls - the humility to accept when wrong and surrender to the will of market...

The greatest traders were not ego manics and quite frankly that is a pretty sill statement in my humble opinion...

At the risk of coming off pretty arrogant myself, you obviously do not trade or are very new to the game so I will tell you this... If you think being an EGO MANIAC is a plus in this game you are sadly mistaken and I would strongly urge you to extinguish that beliefe beforeyou blow up...

PEACE and good trading,
Commisso

 

[Commisso]

Originally posted by Treykool
A big EGO is in fact a common trait among good traders.

All the traders on the desk I used to work for at Merrill were the biggest pricks in terms of EGO....but they all made incredible loot for the firm. I don't know where you're coming from, but from my experience in the industry, traders are the most egotistical jerks I have ever met. I wouldn't base assumptions on a book...just ask anyone on any major trading desk. However, if you must read, maybe you might want to pick up a book called "Liar's Poker" and read about the big swinging d:cks at Solly back in the 80s.

Just for clarification nothing I post on this or any other board is recycled info from books... it is an accumulation of experience from close to 10 years in the market (4 ft as sole source of income)

With that said I have never actualy worked in a professional trading environment BUT if they were EGO Maniac's personality wise and made increible loot for Merrill I am sure they learned to put there EGO on the back burner when it came to trading...

And one more thing... The market is indifferent and sometimes she is gracious enough to accomodate these ego-maniacs BUT they eventualy give it ALL up and sadly sometimes more... I know of quite a few traders over the years this has happened to, especiay during the 98-99 where some were doubling accounts in a month BUT when the market turned south it was there EGO that perpetuated a downward spiral and made them not accept what was going on

I am reminded of the old wall street adage "there are many old traders and there are many bold traders, but there very few old AND bold traders"

PEACE and good trading,
Commisso

 

[vulture]

Originally posted by brokershopping
you said:

...watching Tiger Woods play a tournament start to finish...The way he positions himself on Thursday's and Friday's...How he tries to make his move on Saturday's and how he plays with a lead...

I don't golf a lot, and maybe if I did I would understand... (and I have never watched any tornament from start to finish)

You seem to imply that he has a capacity to make himself "play better" at certain times and uses it strategically to his benefit. That makes sense to me if you were a marathon runner or tri-athalete. You could push hard at a certain point in the race in order to gain a psychological edge, but you have the cost of using that energy. In golf, it seems like you would hit your best shot every time. You are not "spending" anything you might run out of on the next hole.

In fact, competitive golf at the level those guys play at is all about positioning...It is not necessarily about not trying to hit the best shot, per se, but realizing that in the first two days of a tournament these guys want to be aggressive in spots...This is the way they play for the Majors(Masters, US Open, British, PGA)...They realize that a score closer to par will win, so they simply look to avoid big numbers and just position for the final two rounds...You will often see a relative no name at the top of the leaderboard during the first two rounds, but by SUnday these guys are so far back(most of the time) that you almost forget they were ever contenders...

When you get to that level, maybe concentration and focus are required at such a high level that you really can't sustain it for the duration?

Yeah, that is also a part of it...I think that you have to pick your spots and try to be conservative when there is nothing to gain...Kinda like trading mid-day in the markets...How much do u have to gain as opposed to how much is at stake...Pick your spots and pick wisely...These guys use the same exact criteria...

 

[darkhorse]

Originally posted by Treykool
A big EGO is in fact a common trait among good traders.

All the traders on the desk I used to work for at Merrill were the biggest pricks in terms of EGO....but they all made incredible loot for the firm. I don't know where you're coming from, but from my experience in the industry, traders are the most egotistical jerks I have ever met. I wouldn't base assumptions on a book...just ask anyone on any major trading desk. However, if you must read, maybe you might want to pick up a book called "Liar's Poker" and read about the big swinging d:cks at Solly back in the 80s.

I think it would be helpful to clarify some of the differences between trading for an investment bank versus trading your own funds and/or customer funds.

To start with, the typical Ibank "trader" is actually working in tandem with the "salesman," and he is not "trading" so much as exploiting relationships. The client is the mark, the salesman is the smooth talker who lures the client into danger, and the desk trader is the predator who either nips him- takes a little chunk out of his hind quarters- or else rips him- takes him for all he is worth, rips his lungs out. The Ibank "trading" game is more about working clients than it is actual discretionary trading. They smooth talk their way into deals and take crumbs off the cake, or they take the other side of blowup trades where the client gets fragged and the ibank was on the other side cashing in the chips. This is why most desk traders at ibanks are sharks with no morals; you have to be a shark to survive and thrive in that environment.

I would love to see an in-depth study of trading desk profitability at the major institutions. Of course, we will never see such a study because the big boys would not air their dirty laundry. But I would bet my last dollar that 80% of those guys' profitability comes from the relationships they have exploited and the clients they have screwed, rather than true trading prowess of any kind. Furthermore, when they DO try genuine directional trading, those desks have a consistently nasty habit of blowing up. The typical routine is for some overly aggressive idiot to make fifty million for the firm over a few years of favorable conditions, and then lose two hundred million in less than 24 hours when the laws of probability finally catch up with him. For every Nick Leeson or Sumitomo or LTCM or John Rusnak you hear about, there are another ten or twenty more fallen heroes that fragged their employers but weren't big enough to make the news.

Currency traders at the big banks have the same deal: most of their profits come from exploiting relationships and taking the other side of customer trades. If anything, their "trader" operations aside from taking bid/ask nips probably has a net negative effect on p&l....but the traders have to have something to do so they don't feel like trained monkeys.

I'm not saying there are no genuine successful traders in the institutions...there are a few, but they are probably only one out of ten, just like elsewhere, and they are not stupid enough to think they are bigger than the market. Show me a blowhard and I'll show you someone bound to take himself down sooner or later. Common sense observation supports the notion that while ego and self centered cruelty are assets when it comes to exploitation, they are liabilities when it comes to true trading. Anything that prevents you from seeing things with 100% clarity is a negative for the trader, and being a prideful SOB falls under that category.

 

[Treykool]

This is an absolute GROSS generalization of what goes on in an "Ibank trading desk". I assume you've never worked for one. True, a lot of our trades were institutional client order flow. However, the bulk of my trades were proprietary. Like daytraders, each of us on the trading desk had our own p&l book. We had one guy absolutely dedicated to arbitrage trading and never even handled client orders. Please get your facts straight before posting next time.

Geez, give a guy a daytrading account and they think they know everything about how the street works.

Originally posted by darkhorse



I think it would be helpful to clarify some of the differences between trading for an investment bank versus trading your own funds and/or customer funds.

To start with, the typical Ibank "trader" is actually working in tandem with the "salesman," and he is not "trading" so much as exploiting relationships. The client is the mark, the salesman is the smooth talker who lures the client into danger, and the desk trader is the predator who either nips him- takes a little chunk out of his hind quarters- or else rips him- takes him for all he is worth, rips his lungs out. The Ibank "trading" game is more about working clients than it is actual discretionary trading. They smooth talk their way into deals and take crumbs off the cake, or they take the other side of blowup trades where the client gets fragged and the ibank was on the other side cashing in the chips. This is why most desk traders at ibanks are sharks with no morals; you have to be a shark to survive and thrive in that environment.

I would love to see an in-depth study of trading desk profitability at the major institutions. Of course, we will never see such a study because the big boys would not air their dirty laundry. But I would bet my last dollar that 80% of those guys' profitability comes from the relationships they have exploited and the clients they have screwed, rather than true trading prowess of any kind. Furthermore, when they DO try genuine directional trading, those desks have a consistently nasty habit of blowing up. The typical routine is for some overly aggressive idiot to make fifty million for the firm over a few years of favorable conditions, and then lose two hundred million in less than 24 hours when the laws of probability finally catch up with him. For every Nick Leeson or Sumitomo or LTCM or John Rusnak you hear about, there are another ten or twenty more fallen heroes that fragged their employers but weren't big enough to make the news.

Currency traders at the big banks have the same deal: most of their profits come from exploiting relationships and taking the other side of customer trades. If anything, their "trader" operations aside from taking bid/ask nips probably has a net negative effect on p&l....but the traders have to have something to do so they don't feel like trained monkeys.

I'm not saying there are no genuine successful traders in the institutions...there are a few, but they are probably only one out of ten, just like elsewhere, and they are not stupid enough to think they are bigger than the market. Show me a blowhard and I'll show you someone bound to take himself down sooner or later. Common sense observation supports the notion that while ego and self centered cruelty are assets when it comes to exploitation, they are liabilities when it comes to true trading. Anything that prevents you from seeing things with 100% clarity is a negative for the trader, and being a prideful SOB falls under that category.

 

[darkhorse]

Originally posted by Treykool
This is an absolute GROSS generalization of what goes on in an "Ibank trading desk". I assume you've never worked for one. True, a lot of our trades were institutional client order flow. However, the bulk of my trades were proprietary. Like daytraders, each of us on the trading desk had our own p&l book. We had one guy absolutely dedicated to arbitrage trading and never even handled client orders. Please get your facts straight before posting next time.

Geez, give a guy a daytrading account and they think they know everything about how the street works.

a) You are correct, I haven't, because I decided not to

b) I never said that no real trading goes on, in fact I thought I pointed out that there are good traders at ibanks, they are just few in number (I am friends with a few also)

c) I'm not a daytrader

Obviously I can't cover all the nuancies of ibank life in a single post. But in terms of being overbought or oversold, the major houses are definitely overbought as far as their reputation goes. It's just annoying to see the attitude that so many guys come in here with, as if they are lords sticking their heads in the door to check on what the serfs are up to. Yes, there is legitimate trading activity going on and yes some good guys at the desks who are making good money, but by and large the superman image as it's presented as a whole is bogus and I felt it might be a little helpful to all to shed some light on the subject. Structural advantage built into one's place of employment and actual pure trading ability shouldn't be confused, that is the main point I was trying to make, as a secondary point to the observation that ego is a hindrance not a help.