Topsteptrader
- Thread starter deaddog
- Start date
thank you, and all the very best to your (and everyone's) success, too
I think we can all agree that trading anything, any market and any symbol is damn hard. The failure rate has always been high, always will be high. Nobody disputes that fact. Same as any other individual performance-based pursuit.
I personally cringe when I get email promos that say, "join us and trade like a pro in seven days" or "automate yourself to instant riches" and similar crap like that. Trading successfully is grueling, demands every ounce of mental fortitude we have, and sometimes a bit more.
That said, it sure appears to me that over time we see TST making changes and adjustments that favor a trader's potential success with their program. Yes it is for-profit and yes they probably have made a lot of money collectively. But so have all our brokers, so have all our chart software providers, etc. We choose who we opt to do business with.
In my opinion, TST has shown continual goodwill towards making the combine qualifying process more realistic for traders over time. Traders who don't yet have all their ducks in a row can discover that in a hurry for what, less than $200? I only wish my self-discoveries in the past were all capped to that mark.
For traders who do have their proverbial ducks properly lined up, now there is an unlimited time to meet the funded requirements going forward. I personally think it'll make a big difference for a number of traders who've been real close to the mark before, including myself more than once. I guess we'll see as time goes by.
Now that I am back from vacation and there are a bunch of NEW things to talk about, well, why don't we just get down to business?
I wanted to write a longer post advising them since apparently they are listening, (and they have followed some of my ideas in the past) but the recent changes made some of my criticism irrelevant, so I will spare it for later. So since Austin decided to turn this TST thread into his personal journal, he shouldn't mind a couple of observations.
Nice trading and your trading brought up a couple of points against TST:
1. The 55% daily win rate is completely out of touch and rather irrelevant. I could have a once a week opportunity, and the rest of my trading crap, that would give me a 20% or so daily winning rate and I could still be hugely profitable. I understand that this rule is for showing consistency and not just a few lucky trades, but it still should be much less, around 30-40%. That would still cut out the few lucky trades guy, but would let normal traders to pass more easily. Not to mention a few scratch days can mess up your stats, but they are hardly losing days. The bottom line should be overall profitability and not some arbitrarily made up stats.
2. If the trader uses more instruments, as long as he is hugely profitable overall, why does it matter that some of the instruments are losers as long as the losses are small? Austin lost a little with ES but made good with CL. The obvious solution would be not to let traders LIVE trade losing products, but a small loss in a product shouldn't stop them from passing the Combine. Again, overall profitability should be the bottom line, not one particular instrument. And later on if the trader still wants to Live trade that losing instrument, he has to trade it at least with a minimum profitability.
So basicly the above 2 rules are there just to make the Combiners to fail the Combine but I don't see any real world advantages for them....
And a last world about Austin's Combine: You do protest a little too much about summer doldrums, but hey, after 3 decades of trading experience, shouldn't you know about summer doldrums? Summer is for vacations (guess where I have been?) and not for watching computer screens.
But all in all, if I were backing traders, unlike TST, I would hire you, and let you trade only CL, until I see a consistent at least slightly profitable return with ES. After all you made 100% annually by day 8th (using real world margin numbers, 200%), and that should be good for any backer....
I wanted to write a longer post advising them since apparently they are listening, (and they have followed some of my ideas in the past) but the recent changes made some of my criticism irrelevant, so I will spare it for later. So since Austin decided to turn this TST thread into his personal journal, he shouldn't mind a couple of observations.
Nice trading and your trading brought up a couple of points against TST:
1. The 55% daily win rate is completely out of touch and rather irrelevant. I could have a once a week opportunity, and the rest of my trading crap, that would give me a 20% or so daily winning rate and I could still be hugely profitable. I understand that this rule is for showing consistency and not just a few lucky trades, but it still should be much less, around 30-40%. That would still cut out the few lucky trades guy, but would let normal traders to pass more easily. Not to mention a few scratch days can mess up your stats, but they are hardly losing days. The bottom line should be overall profitability and not some arbitrarily made up stats.
2. If the trader uses more instruments, as long as he is hugely profitable overall, why does it matter that some of the instruments are losers as long as the losses are small? Austin lost a little with ES but made good with CL. The obvious solution would be not to let traders LIVE trade losing products, but a small loss in a product shouldn't stop them from passing the Combine. Again, overall profitability should be the bottom line, not one particular instrument. And later on if the trader still wants to Live trade that losing instrument, he has to trade it at least with a minimum profitability.
So basicly the above 2 rules are there just to make the Combiners to fail the Combine but I don't see any real world advantages for them....
And a last world about Austin's Combine: You do protest a little too much about summer doldrums, but hey, after 3 decades of trading experience, shouldn't you know about summer doldrums? Summer is for vacations (guess where I have been?) and not for watching computer screens.
But all in all, if I were backing traders, unlike TST, I would hire you, and let you trade only CL, until I see a consistent at least slightly profitable return with ES. After all you made 100% annually by day 8th (using real world margin numbers, 200%), and that should be good for any backer....
Just a few quick thoughts about the recent changes. After the last changes my bet was that they would have another change before the summer was over and sure enough, they didn't disappoint. This is like the 7-8th major change in 2 years, I kind of lost counting.But anyway...
1. The continuous Combine replaces rollovers. Period. Thus it also makes more money for TST in the long run.
2. If trader A makes the target in 10 days and trader B makes it in 100 days, they both pass the Combine, but there is a HUGE difference between their performances. Until now, if you missed the Combine target by 1 dollar, you failed. Anybody see here the inconsistency in their policy???
Most importantly:
3. It doesn't matter how they change the rules in the Combine, if they don't change the rules in the LTP and Live trading. I am not aware of any change in the later 2, so the new rules will make more people pass the Combine and TST making more fees from it, but it doesn't really mean there will be more backed traders eventually.
Just think about that 3rd point while you are sipping margareta on the beach...
1. The continuous Combine replaces rollovers. Period. Thus it also makes more money for TST in the long run.
2. If trader A makes the target in 10 days and trader B makes it in 100 days, they both pass the Combine, but there is a HUGE difference between their performances. Until now, if you missed the Combine target by 1 dollar, you failed. Anybody see here the inconsistency in their policy???
Most importantly:
3. It doesn't matter how they change the rules in the Combine, if they don't change the rules in the LTP and Live trading. I am not aware of any change in the later 2, so the new rules will make more people pass the Combine and TST making more fees from it, but it doesn't really mean there will be more backed traders eventually.
Just think about that 3rd point while you are sipping margareta on the beach...
AustinP and Pekelo had made excellent points regarding Topstep prgram.
I follow Brett Steenbarger. He has coached 100's of traders at very high quality firms.
Follwoing write up from him shows many things. One thing which stands out that
in a professional enviornment - making 20% a year return is EXCELLENT.
Traders trying to make a living while trading full time on 30k, 150k etc, paying retial
comission , having restrictions like overall day wininng of 55% or more, profit target
of $9000 ( on 150k funded account) , max draw down of $4500, 10 day duration etc.
have no chance. As usual there are ALWAYS EXCEPTIONS.
This does not mean TST program does not have merits for traders to check what's
it's like before juming into trading full time. Traders doining combine 5 times, 7 times
and on and on- have no clue. It will make more sense if they do what Marc
Greenspoon does everyday. With technology available now, it's much easier and
cheaper to record ones trading day etc. vs keep throwing money at TST. I have to
admitt TST guys are good traders- they have set up a system where they have all
the upside and ZERO downside. Now that's an EXCELLENT trade.
" Marc Greenspoon: A Visit With A World-Class Trader
In past posts, I have tried to describe the qualities that I have observed among very
successful traders. I've also attempted to outline specific steps that traders can take
to make themselves more successful. In this post, let's make the discussion more
concrete by taking you inside one of my visits with a trader I consider to be among the
best in the world.
The name Marc Greenspoon won't be familiar to you unless you've read my book
Enhancing Trader Performance. He doesn't speak at conference events or advertise
himself as a guru. What he does do is trade every day of the week, average between
50 and 100 trades per day in the equity indexes, and make millions of dollars a year.
Not just one year or two years, but year after year. He doesn't trade with a
mechanical system, and he doesn't trade with quantitative research. Nor does he
manage a portfolio. He trades with his mouse and his computer, accounting for
several percent of the day's total volume all by himself.
I'm grateful to Marc for giving me permission to write this about him, because it
illustrates the sheer level of skill needed to be a great trader. Imagine the
commissions of trading so frequently, even given the lower commissions available to
a trader at a firm that is an exchange member. Imagine how the slippage adds up over
the course of, say, 80 trades in a day. Now realize that Marc's profits are afterthe
costs of paying for his overhead at Kingstree Trading, his trading firm, after all the
slippage, and after all the commissions. He would be a fine trader simply by trading
that often and breaking even at the end of a year! To make millions of dollars a year,
year after year, trading that frequently makes it transparently clear that markets are
not random.
Marc called me on Friday and asked, "What are you doing today?" He wanted to set
up a meeting. Friday didn't work, but Margie and I had plans to be in Chicago on
Saturday, I told him; we could meet then while markets were closed. Sure enough,
Marc was up early Saturday morning to greet us.
What did he want to meet about? He wanted to review his first quarter performance
and set goals and take specific steps to improve during the second quarter. Not that
his first quarter was bad. He made a significant amount of money, certainly in keeping
with his past earnings.
But he knows he can do better.
That's one of Marc's defining features. He's not just an expert trader; he's a
continually improving trader.
Marc studies himself as diligently as he studies markets. His daily journals, religiously
kept, go back years in notebooks that are always at his side. Sometimes he illustrates
a point for me by going back to an entry in last year's notebook. He knows the
entries--and the markets--that well that he can jump back months and find exactly
what he's looking for.
Similarly, Marc keeps a large TV monitor and recording device in his office. He records
his trading day by capturing everything on his trading screen, and then he archives
each day for reference. The screen shows how the market was trading at the time,
where he placed his orders, and where he entered and exited trades. At times Marc
will get excited and go back to one of the recordings to show me a specific moment in
a specific day's trading. He knows the market so well--and his own trading--that he
selects the right day and fast forwards to the right spot in the tape.
Quite simply, he's reviewed so many more of his performances than other traders
that he's learned more than others. He is a one-man study in implicit learning. And it's
all driven by his desire to improve.
Also by his side are small dictation devices. Marc records his thoughts about his
trading and then plays the tapes for review. Many of the tapes focus on what he
needs to do to make himself better. He never trades better than when he is
thoroughly disgusted with his own performance. Listening to his first tape, my first
thought goes to Coach Bob Knight--another professional who hates losing and is
driven to win.
Indeed, there is similarity between Marc and Coach Knight. Both are aggressive
competitors who wear their emotions on their sleeves. Both are generous to a fault
and inspire both admiration and loyalty. And, yes, both can push the envelope too far
in frustration and sheer determination. If non-emotionality were a necessary
ingredient of trading success, Marc would have gone belly up long ago.
But Marc succeeds for two other reasons:
1) He knows that winning is guaranteed to no one. Look at it this way: let's
conservatively say Marc trades 60 times per day with an average of 400 contracts per
trade. That's 24,000 contracts per day. It's also about 6,000,000 contracts per year.
Do the math: if he makes several million dollars in a year, his edge is far less than a
single tick of profit per contract per trade. That razor thin edge, replicated many
times, is what makes him a success. It is like the razor thin edge of a NASCAR
champion, battling with his pit crew for every fraction of a second. All it takes is a
small flip to turn that small positive expectancy into a small negative one and put a
trader like Marc into severe drawdown. Marc knows that. That's why he calls me.
That's why he keeps recordings and journals. He works as hard on himself as on his
trading. Indeed, for Marc, those are one and the same.
2) He has the support of a superior organization. To use one of Marc's phrases, he has
"balls" when he trades. But that is, in part, because he has a boss who has the brass
ones. Chuck McElveen, also featured in my book, makes it a point to develop large,
successful traders. If you don't have a goal of making a very solid six or seven figures a
year, Kingstree isn't interested in you. (Of course, if you don't have a track record of
success with smaller size, Kingstree isn't going to enable you to trade thousand lots in
the ES contract. Indeed, you wouldn't even get hired.) But once a trader is successful
at one level, Chuck encourages a raising of size. A trader like Marc can take risks
because Chuck can take risks. As a firm owner, he understands that you only learn to
take risks by taking risks. You only learn to trade large by growing your size.
Marc is living proof that you don't need a huge edge to be successful, but certain
factors are necessary for success. You do need to have an edge; you need the
consistency to replicate that edge; you need the drive to continually adapt to
changing market conditions; and you need enough capital. I have never met a
successful trader who makes money by doubling his or her money every year. The
successful traders start with meaningful capital and earn a respectable, but
reasonable return upon it. Their success is measured in their consistency, not in their
ability to make occasional big scores. The small trader who tries to make millions is
forced to take undue risk by trading imprudent size. When the inevitable strings of
losing trades occur--as they do for the greats--the account cannot weather such
drawdowns.
If you have the drive of a Marc Greenspoon to trade tick by tick every day, review
markets in video, keep journals and audio recordings, and sustain a learning curve,
just focus on sustaining profitability. Don't try to develop a mad edge. Instead,
sustain the edge you have and then seek out those organizations that will bankroll
your success. Marc is a constant reminder for me of what can be accomplished with
determination and skill. For that I am both grateful and proud.
I follow Brett Steenbarger. He has coached 100's of traders at very high quality firms.
Follwoing write up from him shows many things. One thing which stands out that
in a professional enviornment - making 20% a year return is EXCELLENT.
Traders trying to make a living while trading full time on 30k, 150k etc, paying retial
comission , having restrictions like overall day wininng of 55% or more, profit target
of $9000 ( on 150k funded account) , max draw down of $4500, 10 day duration etc.
have no chance. As usual there are ALWAYS EXCEPTIONS.
This does not mean TST program does not have merits for traders to check what's
it's like before juming into trading full time. Traders doining combine 5 times, 7 times
and on and on- have no clue. It will make more sense if they do what Marc
Greenspoon does everyday. With technology available now, it's much easier and
cheaper to record ones trading day etc. vs keep throwing money at TST. I have to
admitt TST guys are good traders- they have set up a system where they have all
the upside and ZERO downside. Now that's an EXCELLENT trade.
" Marc Greenspoon: A Visit With A World-Class Trader
In past posts, I have tried to describe the qualities that I have observed among very
successful traders. I've also attempted to outline specific steps that traders can take
to make themselves more successful. In this post, let's make the discussion more
concrete by taking you inside one of my visits with a trader I consider to be among the
best in the world.
The name Marc Greenspoon won't be familiar to you unless you've read my book
Enhancing Trader Performance. He doesn't speak at conference events or advertise
himself as a guru. What he does do is trade every day of the week, average between
50 and 100 trades per day in the equity indexes, and make millions of dollars a year.
Not just one year or two years, but year after year. He doesn't trade with a
mechanical system, and he doesn't trade with quantitative research. Nor does he
manage a portfolio. He trades with his mouse and his computer, accounting for
several percent of the day's total volume all by himself.
I'm grateful to Marc for giving me permission to write this about him, because it
illustrates the sheer level of skill needed to be a great trader. Imagine the
commissions of trading so frequently, even given the lower commissions available to
a trader at a firm that is an exchange member. Imagine how the slippage adds up over
the course of, say, 80 trades in a day. Now realize that Marc's profits are afterthe
costs of paying for his overhead at Kingstree Trading, his trading firm, after all the
slippage, and after all the commissions. He would be a fine trader simply by trading
that often and breaking even at the end of a year! To make millions of dollars a year,
year after year, trading that frequently makes it transparently clear that markets are
not random.
Marc called me on Friday and asked, "What are you doing today?" He wanted to set
up a meeting. Friday didn't work, but Margie and I had plans to be in Chicago on
Saturday, I told him; we could meet then while markets were closed. Sure enough,
Marc was up early Saturday morning to greet us.
What did he want to meet about? He wanted to review his first quarter performance
and set goals and take specific steps to improve during the second quarter. Not that
his first quarter was bad. He made a significant amount of money, certainly in keeping
with his past earnings.
But he knows he can do better.
That's one of Marc's defining features. He's not just an expert trader; he's a
continually improving trader.
Marc studies himself as diligently as he studies markets. His daily journals, religiously
kept, go back years in notebooks that are always at his side. Sometimes he illustrates
a point for me by going back to an entry in last year's notebook. He knows the
entries--and the markets--that well that he can jump back months and find exactly
what he's looking for.
Similarly, Marc keeps a large TV monitor and recording device in his office. He records
his trading day by capturing everything on his trading screen, and then he archives
each day for reference. The screen shows how the market was trading at the time,
where he placed his orders, and where he entered and exited trades. At times Marc
will get excited and go back to one of the recordings to show me a specific moment in
a specific day's trading. He knows the market so well--and his own trading--that he
selects the right day and fast forwards to the right spot in the tape.
Quite simply, he's reviewed so many more of his performances than other traders
that he's learned more than others. He is a one-man study in implicit learning. And it's
all driven by his desire to improve.
Also by his side are small dictation devices. Marc records his thoughts about his
trading and then plays the tapes for review. Many of the tapes focus on what he
needs to do to make himself better. He never trades better than when he is
thoroughly disgusted with his own performance. Listening to his first tape, my first
thought goes to Coach Bob Knight--another professional who hates losing and is
driven to win.
Indeed, there is similarity between Marc and Coach Knight. Both are aggressive
competitors who wear their emotions on their sleeves. Both are generous to a fault
and inspire both admiration and loyalty. And, yes, both can push the envelope too far
in frustration and sheer determination. If non-emotionality were a necessary
ingredient of trading success, Marc would have gone belly up long ago.
But Marc succeeds for two other reasons:
1) He knows that winning is guaranteed to no one. Look at it this way: let's
conservatively say Marc trades 60 times per day with an average of 400 contracts per
trade. That's 24,000 contracts per day. It's also about 6,000,000 contracts per year.
Do the math: if he makes several million dollars in a year, his edge is far less than a
single tick of profit per contract per trade. That razor thin edge, replicated many
times, is what makes him a success. It is like the razor thin edge of a NASCAR
champion, battling with his pit crew for every fraction of a second. All it takes is a
small flip to turn that small positive expectancy into a small negative one and put a
trader like Marc into severe drawdown. Marc knows that. That's why he calls me.
That's why he keeps recordings and journals. He works as hard on himself as on his
trading. Indeed, for Marc, those are one and the same.
2) He has the support of a superior organization. To use one of Marc's phrases, he has
"balls" when he trades. But that is, in part, because he has a boss who has the brass
ones. Chuck McElveen, also featured in my book, makes it a point to develop large,
successful traders. If you don't have a goal of making a very solid six or seven figures a
year, Kingstree isn't interested in you. (Of course, if you don't have a track record of
success with smaller size, Kingstree isn't going to enable you to trade thousand lots in
the ES contract. Indeed, you wouldn't even get hired.) But once a trader is successful
at one level, Chuck encourages a raising of size. A trader like Marc can take risks
because Chuck can take risks. As a firm owner, he understands that you only learn to
take risks by taking risks. You only learn to trade large by growing your size.
Marc is living proof that you don't need a huge edge to be successful, but certain
factors are necessary for success. You do need to have an edge; you need the
consistency to replicate that edge; you need the drive to continually adapt to
changing market conditions; and you need enough capital. I have never met a
successful trader who makes money by doubling his or her money every year. The
successful traders start with meaningful capital and earn a respectable, but
reasonable return upon it. Their success is measured in their consistency, not in their
ability to make occasional big scores. The small trader who tries to make millions is
forced to take undue risk by trading imprudent size. When the inevitable strings of
losing trades occur--as they do for the greats--the account cannot weather such
drawdowns.
If you have the drive of a Marc Greenspoon to trade tick by tick every day, review
markets in video, keep journals and audio recordings, and sustain a learning curve,
just focus on sustaining profitability. Don't try to develop a mad edge. Instead,
sustain the edge you have and then seek out those organizations that will bankroll
your success. Marc is a constant reminder for me of what can be accomplished with
determination and skill. For that I am both grateful and proud.
I have been told that my previous post is hard to read. I am not sure why becuase it looks OK on my screen.
Sorry for the confusion. I am not sure how to fix it.
Sorry for the confusion. I am not sure how to fix it.
You can edit it down to 5 sentences .... at the most.
You can edit it down to 5 sentences .... at the most.
Or use paragraphs. LOL. FYI...the article is from 2007 and Kingstree doesn't exist anymore.
Reposting previous post.
In past posts, I have tried to describe the qualities that I have observed among very successful traders. I've also attempted to outline specific steps that traders can take to make themselves more successful. In this post, let's make the discussion more concrete by taking you inside one of my visits with a trader I consider to be among the best in the world.
The name Marc Greenspoon won't be familiar to you unless you've read my book Enhancing Trader Performance. He doesn't speak at conference events or advertise himself as a guru. What he does do is trade every day of the week, average between 50 and 100 trades per day in the equity indexes, and make millions of dollars a year. Not just one year or two years, but year after year. He doesn't trade with a mechanical system, and he doesn't trade with quantitative research. Nor does he manage a portfolio. He trades with his mouse and his computer, accounting for several percent of the day's total volume all by himself.
I'm grateful to Marc for giving me permission to write this about him, because it illustrates the sheer level of skill needed to be a great trader. Imagine the commissions of trading so frequently, even given the lower commissions available to a trader at a firm that is an exchange member. Imagine how the slippage adds up over the course of, say, 80 trades in a day. Now realize that Marc's profits are after the costs of paying for his overhead at Kingstree Trading, his trading firm, after all the slippage, and after all the commissions. He would be a fine trader simply by trading that often and breaking even at the end of a year! To make millions of dollars a year, year after year, trading that frequently makes it transparently clear that markets are not random.
Marc called me on Friday and asked, "What are you doing today?" He wanted to set up a meeting. Friday didn't work, but Margie and I had plans to be in Chicago on Saturday, I told him; we could meet then while markets were closed. Sure enough, Marc was up early Saturday morning to greet us.
What did he want to meet about? He wanted to review his first quarter performance and set goals and take specific steps to improve during the second quarter. Not that his first quarter was bad. He made a significant amount of money, certainly in keeping with his past earnings.
But he knows he can do better.
That's one of Marc's defining features. He's not just an expert trader; he's a continually improving trader.
Marc studies himself as diligently as he studies markets. His daily journals, religiously kept, go back years in notebooks that are always at his side. Sometimes he illustrates a point for me by going back to an entry in last year's notebook. He knows the entries--and the markets--that well that he can jump back months and find exactly what he's looking for.
Similarly, Marc keeps a large TV monitor and recording device in his office. He records his trading day by capturing everything on his trading screen, and then he archives each day for reference. The screen shows how the market was trading at the time, where he placed his orders, and where he entered and exited trades. At times Marc will get excited and go back to one of the recordings to show me a specific moment in a specific day's trading. He knows the market so well--and his own trading--that he selects the right day and fast forwards to the right spot in the tape.
Quite simply, he's reviewed so many more of his performances than other traders that he's learned more than others. He is a one-man study in implicit learning. And it's all driven by his desire to improve.
Also by his side are small dictation devices. Marc records his thoughts about his trading and then plays the tapes for review. Many of the tapes focus on what he needs to do to make himself better. He never trades better than when he is thoroughly disgusted with his own performance. Listening to his first tape, my first thought goes to Coach Bob Knight--another professional who hates losing and is driven to win.
Indeed, there is similarity between Marc and Coach Knight. Both are aggressive competitors who wear their emotions on their sleeves. Both are generous to a fault and inspire both admiration and loyalty. And, yes, both can push the envelope too far in frustration and sheer determination. If non-emotionality were a necessary ingredient of trading success, Marc would have gone belly up long ago.
But Marc succeeds for two other reasons:
1) He knows that winning is guaranteed to no one. Look at it this way: let's conservatively say Marc trades 60 times per day with an average of 400 contracts per trade. That's 24,000 contracts per day. It's also about 6,000,000 contracts per year. Do the math: if he makes several million dollars in a year, his edge is far less than a single tick of profit per contract per trade. That razor thin edge, replicated many times, is what makes him a success. It is like the razor thin edge of a NASCAR champion, battling with his pit crew for every fraction of a second. All it takes is a small flip to turn that small positive expectancy into a small negative one and put a trader like Marc into severe drawdown. Marc knows that. That's why he calls me. That's why he keeps recordings and journals. He works as hard on himself as on his trading. Indeed, for Marc, those are one and the same.
2) He has the support of a superior organization. To use one of Marc's phrases, he has "balls" when he trades. But that is, in part, because he has a boss who has the brass ones. Chuck McElveen, also featured in my book, makes it a point to develop large, successful traders. If you don't have a goal of making a very solid six or seven figures a year, Kingstree isn't interested in you. (Of course, if you don't have a track record of success with smaller size, Kingstree isn't going to enable you to trade thousand lots in the ES contract. Indeed, you wouldn't even get hired.) But once a trader is successful at one level, Chuck encourages a raising of size. A trader like Marc can take risks because Chuck can take risks. As a firm owner, he understands that you only learn to take risks by taking risks. You only learn to trade large by growing your size.
Marc is living proof that you don't need a huge edge to be successful, but certain factors are necessary for success. You do need to have an edge; you need the consistency to replicate that edge; you need the drive to continually adapt to changing market conditions; and you need enough capital. I have never met a successful trader who makes money by doubling his or her money every year. The successful traders start with meaningful capital and earn a respectable, but reasonable return upon it. Their success is measured in their consistency, not in their ability to make occasional big scores. The small trader who tries to make millions is forced to take undue risk by trading imprudent size. When the inevitable strings of losing trades occur--as they do for the greats--the account cannot weather such drawdowns.
If you have the drive of a Marc Greenspoon to trade tick by tick every day, review markets in video, keep journals and audio recordings, and sustain a learning curve, just focus on sustaining profitability. Don't try to develop a mad edge. Instead, sustain the edge you have and then seek out those organizations that will bankroll your success. Marc is a constant reminder for me of what can be accomplished with determination and skill. For that I am both grateful and proud.
In past posts, I have tried to describe the qualities that I have observed among very successful traders. I've also attempted to outline specific steps that traders can take to make themselves more successful. In this post, let's make the discussion more concrete by taking you inside one of my visits with a trader I consider to be among the best in the world.
The name Marc Greenspoon won't be familiar to you unless you've read my book Enhancing Trader Performance. He doesn't speak at conference events or advertise himself as a guru. What he does do is trade every day of the week, average between 50 and 100 trades per day in the equity indexes, and make millions of dollars a year. Not just one year or two years, but year after year. He doesn't trade with a mechanical system, and he doesn't trade with quantitative research. Nor does he manage a portfolio. He trades with his mouse and his computer, accounting for several percent of the day's total volume all by himself.
I'm grateful to Marc for giving me permission to write this about him, because it illustrates the sheer level of skill needed to be a great trader. Imagine the commissions of trading so frequently, even given the lower commissions available to a trader at a firm that is an exchange member. Imagine how the slippage adds up over the course of, say, 80 trades in a day. Now realize that Marc's profits are after the costs of paying for his overhead at Kingstree Trading, his trading firm, after all the slippage, and after all the commissions. He would be a fine trader simply by trading that often and breaking even at the end of a year! To make millions of dollars a year, year after year, trading that frequently makes it transparently clear that markets are not random.
Marc called me on Friday and asked, "What are you doing today?" He wanted to set up a meeting. Friday didn't work, but Margie and I had plans to be in Chicago on Saturday, I told him; we could meet then while markets were closed. Sure enough, Marc was up early Saturday morning to greet us.
What did he want to meet about? He wanted to review his first quarter performance and set goals and take specific steps to improve during the second quarter. Not that his first quarter was bad. He made a significant amount of money, certainly in keeping with his past earnings.
But he knows he can do better.
That's one of Marc's defining features. He's not just an expert trader; he's a continually improving trader.
Marc studies himself as diligently as he studies markets. His daily journals, religiously kept, go back years in notebooks that are always at his side. Sometimes he illustrates a point for me by going back to an entry in last year's notebook. He knows the entries--and the markets--that well that he can jump back months and find exactly what he's looking for.
Similarly, Marc keeps a large TV monitor and recording device in his office. He records his trading day by capturing everything on his trading screen, and then he archives each day for reference. The screen shows how the market was trading at the time, where he placed his orders, and where he entered and exited trades. At times Marc will get excited and go back to one of the recordings to show me a specific moment in a specific day's trading. He knows the market so well--and his own trading--that he selects the right day and fast forwards to the right spot in the tape.
Quite simply, he's reviewed so many more of his performances than other traders that he's learned more than others. He is a one-man study in implicit learning. And it's all driven by his desire to improve.
Also by his side are small dictation devices. Marc records his thoughts about his trading and then plays the tapes for review. Many of the tapes focus on what he needs to do to make himself better. He never trades better than when he is thoroughly disgusted with his own performance. Listening to his first tape, my first thought goes to Coach Bob Knight--another professional who hates losing and is driven to win.
Indeed, there is similarity between Marc and Coach Knight. Both are aggressive competitors who wear their emotions on their sleeves. Both are generous to a fault and inspire both admiration and loyalty. And, yes, both can push the envelope too far in frustration and sheer determination. If non-emotionality were a necessary ingredient of trading success, Marc would have gone belly up long ago.
But Marc succeeds for two other reasons:
1) He knows that winning is guaranteed to no one. Look at it this way: let's conservatively say Marc trades 60 times per day with an average of 400 contracts per trade. That's 24,000 contracts per day. It's also about 6,000,000 contracts per year. Do the math: if he makes several million dollars in a year, his edge is far less than a single tick of profit per contract per trade. That razor thin edge, replicated many times, is what makes him a success. It is like the razor thin edge of a NASCAR champion, battling with his pit crew for every fraction of a second. All it takes is a small flip to turn that small positive expectancy into a small negative one and put a trader like Marc into severe drawdown. Marc knows that. That's why he calls me. That's why he keeps recordings and journals. He works as hard on himself as on his trading. Indeed, for Marc, those are one and the same.
2) He has the support of a superior organization. To use one of Marc's phrases, he has "balls" when he trades. But that is, in part, because he has a boss who has the brass ones. Chuck McElveen, also featured in my book, makes it a point to develop large, successful traders. If you don't have a goal of making a very solid six or seven figures a year, Kingstree isn't interested in you. (Of course, if you don't have a track record of success with smaller size, Kingstree isn't going to enable you to trade thousand lots in the ES contract. Indeed, you wouldn't even get hired.) But once a trader is successful at one level, Chuck encourages a raising of size. A trader like Marc can take risks because Chuck can take risks. As a firm owner, he understands that you only learn to take risks by taking risks. You only learn to trade large by growing your size.
Marc is living proof that you don't need a huge edge to be successful, but certain factors are necessary for success. You do need to have an edge; you need the consistency to replicate that edge; you need the drive to continually adapt to changing market conditions; and you need enough capital. I have never met a successful trader who makes money by doubling his or her money every year. The successful traders start with meaningful capital and earn a respectable, but reasonable return upon it. Their success is measured in their consistency, not in their ability to make occasional big scores. The small trader who tries to make millions is forced to take undue risk by trading imprudent size. When the inevitable strings of losing trades occur--as they do for the greats--the account cannot weather such drawdowns.
If you have the drive of a Marc Greenspoon to trade tick by tick every day, review markets in video, keep journals and audio recordings, and sustain a learning curve, just focus on sustaining profitability. Don't try to develop a mad edge. Instead, sustain the edge you have and then seek out those organizations that will bankroll your success. Marc is a constant reminder for me of what can be accomplished with determination and skill. For that I am both grateful and proud.
#1 = agreed
#2 = agreed
#3 - "summer doldrums" usually describe stock markets mid-August thru September. Go back and look at the specific month of July past decade... it is often one of the most ranging and volatile months in all the calendar year. Earnings warnings and season period.
August 2011 had one of the most volatile ten-day stretches in the past decade, too.
This particular year of 2014, the summer doldrums began on April 7th and continue thru today.