Why strategies make money
- Thread starter garachen
- Start date
Both news dissemination and calming the panic performing very very well in recent weeks. (and also going with the panic and exiting when it is done)
Kind of Garachen to share.
These are good times for savvy independent traders just starting out with limited capital to bootstrap as the impact of fees is far less when volatility is higher, and there is edge to be had against emotional decisions and forced liquidation.
Kind of Garachen to share.
These are good times for savvy independent traders just starting out with limited capital to bootstrap as the impact of fees is far less when volatility is higher, and there is edge to be had against emotional decisions and forced liquidation.
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Anything off the back of SNB ?
presumably requires a bbg/reuters terminal or failing that, real time squawk
presumably requires a bbg/reuters terminal or failing that, real time squawk
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I agree. There's been a lot of high pressure panic lately during which it's much harder for people to hide their intentions through elegant execution. (As it is no longer elegant.) Certain participants can't just choose not to act.
Smart money management is about more than understanding the math. That part is simple: Spend less than you earn, and invest early and often so compounding will make you rich when you're old.
The numbers aren't difficult, but the psychological and emotional hurdles that prevent most people from achieving their financial dreams are. It doesn't have to be that way if you can stay on the right side of the mental issues surrounding your nest egg. Consider this list a mental reset button on your financial psyche.
There are no secrets. The basics of wealth building have been well-documented for centuries. Stop searching for shortcuts and secrets; focus instead on the simple things your parents and grandparents taught you, such as not to spend more money than you make.
The numbers aren't difficult, but the psychological and emotional hurdles that prevent most people from achieving their financial dreams are. It doesn't have to be that way if you can stay on the right side of the mental issues surrounding your nest egg. Consider this list a mental reset button on your financial psyche.
There are no secrets. The basics of wealth building have been well-documented for centuries. Stop searching for shortcuts and secrets; focus instead on the simple things your parents and grandparents taught you, such as not to spend more money than you make.
This is a good philosophy in theory but not practically.
If it were that simple no pension fund would be on the verge of bankruptcy. An average 8-10 percent year return is not guaranteed. Look at the US stock market for the last decade or the Japanese market post crash. An equities market can become moribund for decades at a time.
From ET member NTB:
Random thoughts on common edges in no particular order:
1. Local Pit Trader A gets Filling Broker B laid on a regular basis at XYZ Massage Parlor. Filling Broker B gets an order from Hedge Fund to sell 50 SPM6 at the market. Filling Broker B is sloppy with the order and sells it down a handle to Local Pit Trader A who buys it leaning against a 500 lot bid below.- that's an edge
2. $/Eur Trader at Major US bank has $ 1 Billion overnight order from big Asian customer to sell $/Eur @ 1.2800. Market is currently 1.2785/90. He takes out a short position in $/Eur at 1.2790 leaning against the clean-up of his 1.2800 order.- that's an edge.
3. Stock Trader John was roomates with Syndicate Manager Steve of Bulge Bracket investment bank. Stock Trader John is getting six-figure allocations of IPOs and selling them out the first print- that's an edge.
4. Sam has an automated stock trading system that is based upon speed of execution. He has the fastest computers in the world, has written the most efficient code in the world, and he happens to connect to the exchange via intranet because he is physically located in the same building (i'm not an expert on this stuff, just making the speed as an edge example)- that's an edge.
5. Bob has found a firm based in bumfuck Europe that allows him to switch investments within his whole life insurance policy daily. He switches from US large cap. equity to European large cap. equity to money market, etc. with no penalty and no limits. The insurance company is so antiquated that he realizes that they don't account for the changes in the currency movements. He figures out a way to arbitrage the movement in the currency by switching in and out of certain investments based upon stale currency fluctuations- that's an edge.
6- Bill G. has more capital than anyone in the world and therefore has the most staying power- that's an edge.
7- Stevie has better contacts for information flow than anyone in the world and can utilize that information to directly turn profits- that's an edge
8- Stacey has built a better mousetrap (not just claims she did)- that's an edge
9- John is the smartest guy in the world- that's an edge
10- Mike claims to understand the fundamentals of stocks, studies technicals and practices good risk management- not an edge- show me the money- prove yourself over 20 years.
Many more too many to list, you get the idea...
Random thoughts on common edges in no particular order:
1. Local Pit Trader A gets Filling Broker B laid on a regular basis at XYZ Massage Parlor. Filling Broker B gets an order from Hedge Fund to sell 50 SPM6 at the market. Filling Broker B is sloppy with the order and sells it down a handle to Local Pit Trader A who buys it leaning against a 500 lot bid below.- that's an edge
2. $/Eur Trader at Major US bank has $ 1 Billion overnight order from big Asian customer to sell $/Eur @ 1.2800. Market is currently 1.2785/90. He takes out a short position in $/Eur at 1.2790 leaning against the clean-up of his 1.2800 order.- that's an edge.
3. Stock Trader John was roomates with Syndicate Manager Steve of Bulge Bracket investment bank. Stock Trader John is getting six-figure allocations of IPOs and selling them out the first print- that's an edge.
4. Sam has an automated stock trading system that is based upon speed of execution. He has the fastest computers in the world, has written the most efficient code in the world, and he happens to connect to the exchange via intranet because he is physically located in the same building (i'm not an expert on this stuff, just making the speed as an edge example)- that's an edge.
5. Bob has found a firm based in bumfuck Europe that allows him to switch investments within his whole life insurance policy daily. He switches from US large cap. equity to European large cap. equity to money market, etc. with no penalty and no limits. The insurance company is so antiquated that he realizes that they don't account for the changes in the currency movements. He figures out a way to arbitrage the movement in the currency by switching in and out of certain investments based upon stale currency fluctuations- that's an edge.
6- Bill G. has more capital than anyone in the world and therefore has the most staying power- that's an edge.
7- Stevie has better contacts for information flow than anyone in the world and can utilize that information to directly turn profits- that's an edge
8- Stacey has built a better mousetrap (not just claims she did)- that's an edge
9- John is the smartest guy in the world- that's an edge
10- Mike claims to understand the fundamentals of stocks, studies technicals and practices good risk management- not an edge- show me the money- prove yourself over 20 years.
Many more too many to list, you get the idea...
We can get in and out at the push of a button instantly pretty much, larger players have to build positions over time, that's our edge!
I'll expand a little on Garachen's post. Regarding providing smart liquidity, it is possible for day traders to interact with retail customer orders while excluding toxic flow. Dark pools such as PDQ are actively seeking liquidity providers and for a fee, a trader can supply liquidity to retail traders and/or other day traders. I believe ET trader Dustin uses this as a route.