Traders' Most Commonly Asked Questions

Quote from WDGann:

Typical floor trader thinking.

One of the biggest reasons floor traders have a hard time converting upstairs. Thought of one market/one strategy expertise.

This has been said from long time ago but...

What is the edge for an upstair trader? Trading multiple markets.

With the improvement of technology... the edge expands to multiple strategy.
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I have no problem with multiple strategies, yes, as components of an entire portfolio.

My experience is that only the most seasoned traders can execute this successfully. Most commonly, when one aspect of the trading goes wrong, everything does and the trader has to sweep clean and start over. It gets very confusing and frustrating.

Slim
 
Quote from bdixon619:

Hi Slim,

Were friendships valuable in your development as a trader?
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Friendships/support is critical for the success of a trader.

That starts with spouse/significant other and includes fellow traders, friends and family.

It's amzing how even a trader in a pit with 200 other traders can feel isolated.

I'm a strong advocate of personal growth work and have been involved in such a Men's group for the past 9 years.

It's also makes a very strong case for coaching (Not an advertisement).

Thank you for a great question,
Slim
 
Quote from AskSlim:

Friendships/support is critical for the success of a trader.

That starts with spouse/significant other and includes fellow traders, friends and family.
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My parents and some of my friends have asked me several times to stop trading...guess I'm outta luck on the friends/family support :(

-Fast
 
Quote from downtickboy:

1. I don't know how much of your time was spent as a floor trader, but I have wondered how much standard pivot points are currently used by floor traders and the everyday effects on futures trading. Are they still considered a reliable indicator to trade off of or has it become merely a horizontal line on a chart that people trade off of without merit? If the standard pivots are still widely used does there use carry over to Bond futures or is it just Index futures? I don't really understand how these numbers came about to become the standard declared areas of support and resistance. Also if they are still widely used will that change as more trading leaves the floor (less floor traders) and becomes electronic?

2. Along the same topic, is Market Profile also a widely used indicator among floor traders for determining support and resistance areas?
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I spent 17 years on the trading floors. Most of my career was spent on the floor of the CBOE. However, I was a member of the MERC and the CBoT. I spend the Majority of my time in the OEX pit. I traded bonds, bond option, soybeans, corn and S&Ps on the futures floors. I left the floor for the first time in 1984 and have really since that time been an off-the-floor trader.

pivot points are generally an off-the-floor tool. Floor traders have a much shorter horizon, in general, and trade off of order flow, spreads and momentum.

I had an office for many years next to Peter Steidlmayer. So I'm quite familiar with his work. Market profile is a great tool. It takes some time to learn how to use it. I find the most value in its theory that markets tend to return to points that they traded in for extended periods of time.

Slim
 
Quote from dnaj65000:



Hi Slim,

Could you please profile a winning trader with respect to:
1) Psychology
2) Account characteristics

I know this is a pretty broad question because I'd like to hear what aspect you key in on as important information. However, I'd like to draw you towards a few specific things I'd like you to elaborate on.

1) Psyc- did the majority of winning traders play a competitive sport when they were young? are they optimistic? do they have a big social support group or are they lone wolves (indicating introversion).

2) Acct- % of winning trades, average win $ amount/average loss $ amount. This gives a real life account risk:reward ratio. It's one thing to say "have a 4:1 risk/reward" and actually having that ratio in their account statement.

Thanks
DNAJ65000
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This question is very complex and would take discussion well beyond the reasonable use of this forum.

The one personality trait that is universal for to all successful traders is adaptability. That coincides with my previous discussion on whether it's the trader or the system that makes a trader successful. Your question about whether the trader was successful in sports implies aggressivness is an important factor. I have not seen that to be true.

Optimism is another important factor. "If you can see it, you can be it".

I have seen introverts and extroverts become very successful or fail. People without vision or that easily depressed tend to have greater failure rates and live their lives destructively when things go wrong.

Regarding account %; It is different for floor traders and off-the-floor traders. The actual probability of success varies with a multitude of factors. Floor trader need and get a very high percentage of winning trades. An off-the-floor trader that gets 55% winning trades, 35% losing trades and 10% even trades will make tons of money if all disciplines are followed. A 4:1 R/W ratio is nice to compute on individual trades, but is very unrealistic to expect overall.

I hope this at least touches on the surface of your question.
Great Trading!
Slim
 
Few psychology related trading questions.

Beginners,
How much can I make, how fast, I sent my deposit for my brand new account 2 days ago, why I cannot trade yet? Mr Broker why is it taking so long?


Intermediate, after some experience sinks in,
Well, I should forget how much I'll be making, better start thinking how to minimize losses and survive? Time for a new account and a disciplined approach?


More seasoned traders, losers/winners,

Losers (in terms of money),
What the heck was I thinking trying this gig? How could I have been so wrong? Time and money lost, is it time to call it quits?

Winners,
The money is absolutely great, but does it justify the time, energy, mental wear and tear, psychological hardship? Are the ups and downs too stressful?, has the total effort reduced the overall life quality?


Long term stars,
Would I do it all over again? you bet you!
Would I change anything? maybe, but not much. Is trading what I was meant to do? Absolutely!
How can I become and do more? are there any limits?
 
Quote from Fast_Trader:


My parents and some of my friends have asked me several times to stop trading...guess I'm outta luck on the friends/family support :(

-Fast
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During the first 6 months of my trading career, back in 1974, my mother asked me to quit and sell my CBOE seat several times.

My father and very close friends believed in me and supported me. I had borrowed 35K from the bank to buy my seat, with their signature, and had gone through nearly 4k of the 6K they loaned me in cash.

By the seventh month I had started to turn it around and in Month 8,9 and 10 I averaged over 50K in profits. That wouldn't have happened without the great support I had.

If you would like to read about some of my horror stories, I'm chapter 2 in the book, "When Super Traders Meet Krytonite", by Art Collins. (Again, I have no financial interest in this book).

Slim
 
Quote from UVLC:

Losers (in terms of money),
What the heck was I thinking trying this gig? How could I have been so wrong? Time and money lost, is it time to call it quits?

Winners,
The money is absolutely great, but does it justify the time, energy, mental wear and tear, psychological hardship? Are the ups and downs too stressful?, has the total effort reduced the overall life quality?
More...

Don't forget those who vacillate between these two camps, suicidally depressed one day, elated the next, almost bipolar. At some point, you've got to have a little talk with yourself about the reality of the situation and about just how much of this you can take.

Good characterizations. Funny.
 
Quote from dbphoenix:



Don't forget those who vacillate between these two camps, suicidally depressed one day, elated the next, almost bipolar. At some point, you've got to have a little talk with yourself about the reality of the situation and about just how much of this you can take.

Good characterizations. Funny.
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I think it's Girlpower who likes to test to destruction...I see you are a little more tolerant, lol.
 
Quote from bdixon619:



I think it's Girlpower who likes to test to destruction...I see you are a little more tolerant, lol.
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Not much :D

Trading futures, I find that I have to do a lot more testing and a lot more "maintenance" in order to adapt to the market. Given the leverage, I just can't afford to ram my way through the tough times. And I at least behave correctly when things aren't going well.
 
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