Why trade at all?

ramora · Aug 1, 2003

"Why trade at all?" The MBA trend stopped maybe before 1995, the trading opportunity will last for a lot longer.

The evening news tonight had a report of a 'Red Lobster' franchise which ran an ad announcing 300 job opportunities. They received 10000 resumes for the 300 positions. The tag line was that 'it is easier to get into Harvard Business School than it is to get a job at Red Lobster'.

Two weeks ago I was at a party and talking to a group of HBS MBAs. 3 were 'shopping resumes' and the other was 'managing a small hedge fund' (yeah right!). I was the only one in the group making a living, and the only one not making student loan payments.

A management report published about 6 months ago that said an MBA degree, except when it is from the top 2 or 3 universities, doesn't pay for itself and is not a predictor of success in any endeavor. Companies know this and hiring is now only a âbeauty contestâ. If you have the physical appearance of Tom Cruse and âserious connectionsâ you might get a $200k job and it might last for 2 years, or maybe until you are 35 or 40 then you might want to look at trading again.

If you think the MBA is a ticket to a great lifestyle, you are wrong. Trading may, or may not be a good ticket, but you have to pay for it with a max effort over several years. The success or failure is in your handsâ¦

Good luck Maximusâ¦

ramora,

donaldduck3419 · Aug 1, 2003

Quote from Maximus:

If most successful e-mini traders only make about 1.5 points a day on 1 - 5 contracts, why not just earn an MBA and get a job paying $200k/year?

Hey wiseguy, if you make 1.5 points a day, just start trading more than 5 contracts. If you don't have the loot to do it, you can build up your account. Multiply 1.5 by 30, now isn't that much better than a real job, huh sweetheart?

cornholetrading · Aug 2, 2003

Quote from momotrdr:

24yr. old trader sits next to him, trades 50 lot positions daily.
Yesterday made 180k. Ok, so shy of your number by 20.
BFD!

Y-T-D, from Jan. 1st up 3/4mil and accelerating.

-momo

We must know some of the same people because I just heard this story too. However I did not get a good idea of how the rest of the office was doing. It is nice to see it happen but I guess does not mean much if it does not show up on your screen too.

Now about the top 10 school MBA route. I just talked to a friend today who graduated 2 yrs ago from a top 10 school. He is making 200K a year at an investment bank. He will probably really make bank when and if business starts picking up anytime soon. He knows several friends in the same situation. However much of your life is given up for work. One week your working 50 hr and the next you have something come in where you spend 120 hrs a week working on it until it is done. So your life seems to revolve around your work then around your family, ect.

On the flip side he has friends that have not found jobs like his and are sitting there with an expensive degree. However they do have jobs. If you chose to go job searching I would rather have the extra degree then not have it when you line up with the other 1000 BA/BS degree people. Also this is in the short term. In the long term these guys should have better chance at getting better jobs when the hiring starts again.

The other thing is that just having a top 10 MBA is not all there is to going to school. Half the time spent there is developing the network and the friend base for the future. It sets you up with some pretty good contacts for when and if these people ever break away and do their own small business.

bdixon619 · Aug 2, 2003

momo,

24yr. old trader sits next to him, trades 50 lot positions daily.
Yesterday made 180k. Ok, so shy of your number by 20.
BFD!

I don't doubt he trades some size but he would've had to have traded larger size yesterday...that is unless he garnered 70% of all the points possible yesterday. He would've had to have been very, very good to do that, imo...with a 50 lot position.

Bruce

0008 · Aug 2, 2003

Trading and working at a company are two different things. In a company, your future depends on your boss and the industry. In trading, you can control everything. Even if they give me the same earning potential, I would perfer trading. No f**king boss, no commutation, trade anywhere... trading has just too many advantages!

candletrader · Aug 2, 2003

Quote from Maximus:

If most successful e-mini traders only make about 1.5 points a day on 1 - 5 contracts, why not just earn an MBA and get a job paying $200k/year?

Well, I do agree with you on the 1.5pts as a ceiling for a long run average... in fact, most of the best traders I know are averaging under 1pt a day over the long run in size...

The operative phrase is "in size"... ES doesn't pose liquidity issues in the way that trying to trade the equivalent face value of stocks would pose... spinning 50 contracts on ES would currently be equivalent to about $2.5 million of SPY (the Spider Trust ETF), or 25000 shares of SPY... but spinning 50 contracts of ES doesnt pose the same liquidity issues as spinning 25,000 SPY or, for that matter, an equivalent amount of corporate stock...

The point is that, if you are consistently getting 1pt a day on average (some days will be 10pt'ers, some days losers, some days 2pt'ers etc) you can make a dam good living by simply scaling up... personally, I am small fry since the maximum number of ES in a trade I have ever done was 30, and the usual range is 5-20 contracts for me depending on the style of trading I am using and on the specific circumstances (e.g. I may have simultaneously got a 20 contract scalp on -- ass tight stop loss-- and a 5 contract longer term play -- much larger point stop loss)...

If I decide that the time is right for me to do real size, I would not have major liquidity issues even at 50 contracts, possibly up to 100 contracts...

Now, let's suppose you are averaging 1.5pt a day (after costs) on 50 ES... that's $3750 a day or nearly $1million a year... that is a good living for something you can do in your underwear, in my view!! And I tell ya, if the bull market ever returns, you won't even need anywhere near 50 contracts to make $1million a year...

DT-waw · Aug 2, 2003

Quote from momotrdr:

Just got off the phone with my buddy in chicago.

24yr. old trader sits next to him, trades 50 lot positions daily.
Yesterday made 180k. Ok, so shy of your number by 20.
BFD!

What?? 180k in a day with 50 lots? You missed a dot in that number. 1.80k /day with 50 lots, that will be 1800 / (50*50) = 0.72 ES pts /day. Sorry, English is not my 1st language, I don't understand "shy of your number by 20"... I guess you mean "divide your number (1.5 pts/day) by 2" - to get realistic figure.

candletrader · Aug 2, 2003

Quote from DT-waw:

What?? 180k in a day with 50 lots? You missed a dot in that number. 1.80k /day with 50 lots, that will be 1800 / (50*50) = 0.72 ES pts /day. Sorry, English is not my 1st language, I don't understand "shy of your number by 20"... I guess you mean "divide your number (1.5 pts/day) by 2" - to get realistic figure.

I gotta agree with Brother DT-waw... it is an outright fallacy to claim $180,000 profits with 50 lots on any day last week... that would equate to $180,000/($50*50 contracts) points per contract = 72pts per contract, which is clearly bullshit... 7.2 points was possible, but 72 points per contract is simply crap...

All of the best and most consistent ES traders I know do not average much more than 1pt a day on average in size... some days they may get 10points per contract, some days they may lose 5 points per contract... but their average doesn't exceed 1pt by very much...

Trader5287 · Aug 2, 2003

Oh, and let's not forget this small scale, and stunning, illustration that was put up by some able member of ET a while back:

10K account:

50$/week - just 50$ - 25% yearly return
$50/day.................. - 100% yearly return

There are no places of employment that I know of that offer that kind of equal-opportunity opportunity.

Geo.

Girlpower · Aug 2, 2003

Quote from donaldduck3419:

Hey wiseguy, if you make 1.5 points a day, just start trading more than 5 contracts. If you don't have the loot to do it, you can build up your account. Multiply 1.5 by 30, now isn't that much better than a real job, huh sweetheart?

That's $500+k per annum, and you get to decide when to give yourself a payrise, and there is no office politics and does your face fit to stand in our way.

(by the way. Build the capital a little further still and play 50 cars, and you are then on just short of $1m p.a.)

But money is far from the whole story. You take risk in the market, you take risk in the jobs market and corporate world. No having to suck up to tohers to get to the next step on the ladder. No other people dictating you have to do xyz when you need to do something important in your personal life. No-one owning you because they pay your salary. No-one appraising your 'performance' - yeah right - more like does you face fit.

Trading may be no bed of roses and none too easy much of the time, but I'd far rther have that than what a company (or their management more to the point) might 'expect' of me... :eek:

Best

Natalie