What's the difference between trader and portfolio manager?

Quote from sjfan:

I don't mean to be confrontational, but will you tell us who these mythical successes are? And what are the opportunities, beyond a isolated and quick to disappear statistical anomalies, for a small guy in some of the worlds' most liquid and efficient markets.
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This is like me claiming I know of people who can win at roulette and you claiming that based on mathematics it is impossible.

And then you asking me to prove it by naming these people ... all of whom you wouldn't recognize anyway because they are not public figures and have no interest in being so.

If you feel adamantly that people can't beat roulette, leaving no room for the possibility of otherwise, I don't know how you might be convinced.

This by the way is a long standing tradition on ET. Some one can't make money himself, concludes that it is humanly impossible in order to salvage his self-esteem and then "challenges" anyone to prove otherwise.

No matter what is brought forth to the person, he becomes so personally invested that he can't back down.

These "challenge" posts are a regular feature at ET.
 
It's nice to see someone with real world institutional trading knowledge, like sjfan, in these forums. I agree with some of the points made by him. However, where I disagree with him is in the markets being efficient. In the ultra short term ranges, I believe he is probably some what correct because half of trading, if not more, is done at lightening speed with computers anyway. But when you come out of those ultra small time intervals I believe the market has points in which it is extremely inefficient almost everyday. I see so many opportunities almost everyday that I don't have enough eye balls and capital to catch them all. I should state that I am a professional independent FX trader and I manage my own and OPM. It took me around eight or nine years of losing money and self teaching to get to where I am, but it can be done. It seems to be rarer then I thought after reading the posts here, but it can be done. I applied to several, if not all, trading related institutions about two years ago and even with my phenomenal returns and experience (though be it non-institutional experience) I didn't get any interviews. I figured it was because I didn't have a completed college degree or they just did not believe me. So, in conclusion, either I am an absolute genius and outlier, which I doubt, or sjfan's reasoning is slightly wrong.

Sjfan, I would like to state that this post is not meant to imply anything bad about your experiences or opinions, I am just sharing my experience and opinion. Quite the contrary, I am glad to have you here and I believe you are very knowledgeable and intelligent. Thanks for your insights.
 
sjfan:

Thank you for not being confrontational, we all appreciate it.

The student, Eric and I agree, as stated, that names are not put in the space ordinarily. Contact Tim Bourquin a regular moderator at Traders Expo (1 800 790 4355) to discuss how he sets panels, does the luncheon to agree on the Q's for the panel and why he lets the Q's go by the wayside once the interactions of the panelists take off.

All his panelists are the types of people mentioned to you. If you need a few cell phones of these guys, do not use my name as I wish to preserve my relationships.

The people Tim will inform you about regularly help each other out by taking on mid 8 digit handoffs under NFA section 208 where the amateur limits are set and upon which the IB based reporting questionaires are defined. The reporting to the IB and at the request of the IB is done more frequently than annually.
 
Quote from Eric215:

I should state that I am a professional independent FX trader and I manage my own and OPM. It took me around eight or nine years of losing money and self teaching to get to where I am, but it can be done. It seems to be rarer then I thought after reading the posts here, but it can be done. I applied to several, if not all, trading related institutions about two years ago and even with my phenomenal returns and experience (though be it non-institutional experience) I didn't get any interviews. I figured it was because I didn't have a completed college degree or they just did not believe me.
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Hi Eric,

What you said here is part of the reason that motivated me to ask this question in the beginning. It seems that the institutions would hire business school graduates with no trading experience into the money management business, but would not hire traders with even proven track records. Of course it may be true that strategies used by small traders may not be scalable, but that's not always inherently true.

The bottom line comes to this: Say if the goal is to make $100K per year somewhat consistently. The two options are 1) Go to business school and try to find a analyst/trader/PM job at a money management firm and focus on just part of the management activities, or 2) trade your retail/prop account independently.

It seems to me that option 2 is much harder and with much more uncertainty.
 
sjfan,

maybe you should ask yourself a question why it is that you do not know anybody who is making a decent living without the institutional support.

or why do you think that only folks in investment banking can make it with the funding/IT/analytical support of the institution.

if you did not have the opinion you have maybe you would not be in the bank/fund after all...(!)
in your case obviously vice versa applies as well...

so it is nice to hear your subjective opinion on the matter - it does not necessarily mean it is valid for everybody.

good luck and stay open minded :)
 
Quote from ezbentley:

Hi Eric,

What you said here is part of the reason that motivated me to ask this question in the beginning. It seems that the institutions would hire business school graduates with no trading experience into the money management business, but would not hire traders with even proven track records. Of course it may be true that strategies used by small traders may not be scalable, but that's not always inherently true.

The bottom line comes to this: Say if the goal is to make $100K per year somewhat consistently. The two options are 1) Go to business school and try to find a analyst/trader/PM job at a money management firm and focus on just part of the management activities, or 2) trade your retail/prop account independently.

It seems to me that option 2 is much harder and with much more uncertainty.
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Were you to spend some time as a prof at a top tier, you would see that students do not face any challenges in regard to markets. Dead end. Wharton would be a pragmatic reference for me.

Your option 2, were it qualified by a 5 ES contract account, makes the decision very simple.

For this 500 dollar a day decision (wages or net), you are surrounded by a great deal of information, that once culled, will help you understand how money making works.

There is no need for any support systems and speed means nothing.

No one even needs to trade full time to hit a horizon ten times the size you are viewing.

5 contracts are simply compounded up to 20, 30, 40 and then 50 in ES.

You see the ATR every day. The range is built EVERY day and it is slow, inevitable and very regular and a system operating like clockworks. For 500 bucks a day on 5 contracts, it is a 2 point day.

It is clear to me that you need to get the handoff from someone who respects your intention. Do a local search and get the handoff.
 
Quote from sjfan:

Ah coming on jack - you troll better than this! where's the page long rant? where's the summary word document?

By the way, do you do parties? I would love to have you performing at our Christmas party this year. PM me your rates.
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I missed this.

Obviously, I am free.

Just email me a copy of your last year's seasonal donations and how you will be donating throughout this coming year, monthly, to local NGO's serving vets with PTSD at equal to or better than last years pro rata donations.

My air and accomodations are picked up by others.

I will let you know the date and location for your party later. It will be near 18th and Chestnut or over in little Italy where Frank S. used to go.
 
locals are individual traders and I know quite a few of them. Most come with no college degree. They are great traders. Also I know a lot of prop traders that come with no ivy league education or none at all.

I find that the guys that trade their own capital are by far the toughest and sharpest traders out there (cause if they don't make money they don't eat). Now im not talking about the guy living in his parents basement eating hot pockets and calling himself a YM scalper. Im talking about the guys who use profesional software, own memberships on the exchange, etc.

In my opinion anybody who truly wants to do this can. But it takes dedication, hard work, etc. It definitely takes a certain person to be successful at this business but its definitely possible to make it without having an ivy league degree or getting in with goldman.
 
Quote from ezbentley:

Hi Eric,

What you said here is part of the reason that motivated me to ask this question in the beginning. It seems that the institutions would hire business school graduates with no trading experience into the money management business, but would not hire traders with even proven track records. Of course it may be true that strategies used by small traders may not be scalable, but that's not always inherently true.

The bottom line comes to this: Say if the goal is to make $100K per year somewhat consistently. The two options are 1) Go to business school and try to find a analyst/trader/PM job at a money management firm and focus on just part of the management activities, or 2) trade your retail/prop account independently.

It seems to me that option 2 is much harder and with much more uncertainty.
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Yes, I would agree that if your goal is to make 100k/year, and do it with a realistic and secure route, then your option 1 would be the preferred route. I would also recommend that most younger people choose option 1. I didn't decide to become a career trader until I had already quit college. I also didn't realize at the time how important a degree was in this industry. I was kind of uninformed, inexperienced, and naive. So, again I would definitely not recommend people take my route, but we all have to make decisions, and for me I didn't think going back to school for 3-4 more years at age 27 was the best choice. I don't regret my decisions and I have still not even come close to reaching my goals in this industry but I just made that post to state that it is possible to start as an independent retail trader and become successful. And also to point out that I believe even a deep, liquid, and competitive market, like the Eur/Usd for example, does present small points of inefficient market opportunity every day or two. For me to explain my philosophy on why these opportunities exist and why FX markets overall move the way they do, another words how I see and frame the markets, would take a whole other, much longer, discussion.
 
Quote from youngtrader:

locals are individual traders and I know quite a few of them. Most come with no college degree. They are great traders. Also I know a lot of prop traders that come with no ivy league education or none at all.

I find that the guys that trade their own capital are by far the toughest and sharpest traders out there (cause if they don't make money they don't eat). Now im not talking about the guy living in his parents basement eating hot pockets and calling himself a YM scalper. Im talking about the guys who use profesional software, own memberships on the exchange, etc.

In my opinion anybody who truly wants to do this can. But it takes dedication, hard work, etc. It definitely takes a certain person to be successful at this business but its definitely possible to make it without having an ivy league degree or getting in with goldman.
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Good post and I agree. I don't think you have to be on an exchange floor to fit the self reliant, tough as nails, trader mold but I see your point about most screen based retail traders. And your last paragraph hits it perfectly for us non-ivy league guys, it may take more dedication and work, but if you want it bad enough and have a "I will never give up and I will do whatever it takes" kind of attitude, you will succeed. There are some other prerequisites like an independent open mind and a yearning to constantly learn, but your general idea is dead on.
 
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