The next step for a profitable trader

F

fortunatti

Ok - so maybe my situation is unique, probably not. I'm hoping someone can identify...

I worked as a clerk in the trading pits. Learned a lot there but didn't quite "get it."

Graduated university.

Went to work for an institution (processor) of a relatively obscure commodity product.

What I experienced in the pits started to soak in and become relevant. My brain was making connections.

While working for this institution, I lucked my way into a risk management position, executing the firm's hedges on the screen (a recently new concept) and eventually trading a proprietary/discretionary account.

At first I lost a lot. Then I started to break even. After a few months something clicked, and I became remarkably profitable. Haven't had a losing week in six months. Haven't had a losing month in 10 months. My trades are mostly intraday scalps or spreads, and I usually go home even or spread. I get relatively little acknowledgment or reward for my gains and losses.

I once overheard a floor trader say: "after a certain amount of time you feel a vibe and things just work, either you get it or you don't." I now know what he means.

I am three years out of university, still repaying debt, and am not in a position where my profitability directly equates to salary/bonus within the firm. I live well below my means while still earning a great (or what I think is great salary, someone told me people with my similar function make 10x as much). I just feel fortunate to have had the practice on someone else's time. (Thanks shareholders.)

With X$ buying power I can and a, consistently making money. I have spent hours and days figuring exactly what I need to get started. I am willing to make sacrifices to make this work. To put it simply - it will likely take more than few years to save the seed capital necessary to be successful.

I don't want to wait. I can't wait. I'm about to explode. I've decided to look at alternatives...

Seems the large banks and trading firms want guys with 5-10 years of experience. They want MBAs and CFAs. They want "sales traders." I am not a salesman. The entry level jobs with reputable firms are all about stats, mental math, computer programming, and brain teasers. (I'm really not that smart, just a guy who quickly recognizes patterns and is extremely risk aware, not much formal mathematical education anyway - I studied economics and music...) For other entry level jobs, interviewers have said I'm "overqualified" or were baffled by the fact that I have executed my own trades and ran my own positions.

I have relatively few industry connections. I have a great P&L record. I am young and don't have much work experience in terms of years.

What should I do next?
 
If you can trade the minis it really doesnt take much to get started. With IB my charting and frontend only cost a few dollars a month and you can open an account with 2k. It takes awhile to build a small account up but after a few months you will be off to the races.
 
Ok...time to wake up to reality. You've had a good record for 10 months, you havn't even been through the what I use to do, no longer works stage, which is coming in the next 12 months. You make it through that, and continue to do well, then you have a meaningful track record, IMO.

Your options, put your money where your mouth is, and go out on your own, I think that's your only option, given your limited, albeit successful, track record. There are both futures and equity firms that cater to traders, seek one out, put up some seed capital, and then sow and reap.
 
Quote from Bearbelly:

If you can trade the minis it really doesnt take much to get started. With IB my charting and frontend only cost a few dollars a month and you can open an account with 2k. It takes awhile to build a small account up but after a few months you will be off to the races.
More...

Quote from fortunatti:

My trades are mostly intraday scalps or spreads, and I usually go home even or spread. I get relatively little acknowledgment or reward for my gains and losses...
More...
he does spread, what he need is big buying power.
 
Sit tight - each day breath in slowly and just calmly absorb the lessons and opportunities around you in your job.

The worst thing to do now is to go out on your own. You'll certainly nose dive as so many other institutional traders going out on their own have in the past. Why? Your trading environment provides a whole stack of invisible (to you now) supports (back office, risk management, personal management, psychological support etc.) that you lose and have to create from scratch out on your own.

Sit tight - your being paid to do an apprenticeship in trading. When you've been inside for a few years, experienced a few boom and bust cycles, then you'll be ready to move on (you'll know the time).

Bill...
 
Quote from fortunatti:

Ok - so maybe my situation is unique, probably not. I'm hoping someone can identify...

I worked as a clerk in the trading pits. Learned a lot there but didn't quite "get it."

Graduated university.

Went to work for an institution (processor) of a relatively obscure commodity product.

What I experienced in the pits started to soak in and become relevant. My brain was making connections.

While working for this institution, I lucked my way into a risk management position, executing the firm's hedges on the screen (a recently new concept) and eventually trading a proprietary/discretionary account.

At first I lost a lot. Then I started to break even. After a few months something clicked, and I became remarkably profitable. Haven't had a losing week in six months. Haven't had a losing month in 10 months. My trades are mostly intraday scalps or spreads, and I usually go home even or spread. I get relatively little acknowledgment or reward for my gains and losses.

I once overheard a floor trader say: "after a certain amount of time you feel a vibe and things just work, either you get it or you don't." I now know what he means.

I am three years out of university, still repaying debt, and am not in a position where my profitability directly equates to salary/bonus within the firm. I live well below my means while still earning a great (or what I think is great salary, someone told me people with my similar function make 10x as much). I just feel fortunate to have had the practice on someone else's time. (Thanks shareholders.)

With X$ buying power I can and a, consistently making money. I have spent hours and days figuring exactly what I need to get started. I am willing to make sacrifices to make this work. To put it simply - it will likely take more than few years to save the seed capital necessary to be successful.

I don't want to wait. I can't wait. I'm about to explode. I've decided to look at alternatives...

Seems the large banks and trading firms want guys with 5-10 years of experience. They want MBAs and CFAs. They want "sales traders." I am not a salesman. The entry level jobs with reputable firms are all about stats, mental math, computer programming, and brain teasers. (I'm really not that smart, just a guy who quickly recognizes patterns and is extremely risk aware, not much formal mathematical education anyway - I studied economics and music...) For other entry level jobs, interviewers have said I'm "overqualified" or were baffled by the fact that I have executed my own trades and ran my own positions.

I have relatively few industry connections. I have a great P&L record. I am young and don't have much work experience in terms of years.

What should I do next?
More...
IMO, You should get a job in a trading desk.

They don't want overqualified people, but they also don't want ignorant people. Be aware that most people are ignorants in the investing world, even if they are MBAs. Something the founders know pretty well.

So you must present yourself as an knowledgeable but tolerant and open-minded person, who won't modify or critizise their strategies -even if they are losing money-. But, if asked you can provide kind advice.

So when a strategy is losing money, be cautious: you may experience backbiting if you act like a know-it-all.
Many people will prefer to save their as*es, even if the company loses money.
 
Great words Bill.

At the moment I'm going to sit tight and wait to capitalize myself. I think it's my best route because I need to define my own success conditions. I understand there are a whole slew of things that I won't have available on my own, trying to put a value on those and understand exactly what I do need before taking the plunge - which is a while off anyway.

Perhaps I didn't make myself clear - I (as far as I know) have been through the phases, failure, breakeven, success, failure, then 10 months of sustainable success....I feel really comfortable and at ease trading now, to reiterate the cliche, I'm really quick to get out of a loser and that's when my account slowly started growing.

I do feel as though now is the time though...will wait as long as I can.

As for "firms that cater to individual traders" what sort of firms are these? Can you give examples? My impression of most prop shops is poor, but I've also heard of decent firms that simply provide the basic infrastructure and facilities.

To add to the discussion, how should I be recording or building a journal of my work - I have account statements, is there anything more I should be doing to record my trades? I almost always have a position on, and am constantly reversing and changing sides, not clearly illustrated on my daily statements (which show ## buys/sells and avg price)....
 
Fuck it, man. Go for it. Trading is about trading comfort and security for the risk of the unknown, with the reward of having the best income in the world. You already took the risk of getting a job trading; now it's time to let youreslf get to the next level.

You might want to talk to your boss, and say you're not being adequately compensated for what you're doing, and if he isn't willing to pony up some more dough... fuck him, trade for yourself. 6 months without a losing week is some fucking awesome trading... yeah, market conditions will change, yeah, you could give yourself some more comfort and stay longer, but you already know what you need to do. Don't ask for reassurance from any of us; go and become a millionaire.
 
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