200K yearly

Discussion in 'Professional Trading' started by wannabetrader01, Dec 30, 2005.

  1. segv

    segv

    Wannabetrader,

    Your question is a bit like asking, "How much money will it take to for me to climb to the peak of Mount Everest?". You are asking the wrong question. What you should be asking is "Where do I start?", because you are a very long way from risking capital in the market. That is of course, if you want to keep it.

    What you will soon learn is that in this amazing industry, there exists a great majority of information that is absolutely, positively, worthless. You have crossed over the domain of normal reality and entered the realm of shysters, hucksters, self-deception, popular delusion, and fantasy. The first step in any new career should be to become as educated as possible about the task at hand. Given the quality of information in this industry, that can be a very real challenge. I am going to give you a running head-start.

    I will start by pointing you to the one book worth buying at this stage of your trading career. I suggest you read it, read it again, and read it one more time:

    Trading and Exchanges
    Larry Harris
    ISBN: 0195144708

    To be a successful trader, one must understand how cognitive biases, stress, deception, manipulation, self-deception and coping mechanisms are the fast track to bankruptcy. If your background is not in Psychology, allow me to suggest enrolling in a local community college, and taking ALL of their psychology curriculum. This will give you a solid background that will enable you to evaluate the information you are recieving, be it from an individual, a forum, your thoughts, or a trading screen.

    To be a successful trader, one must understand probability, statistics, expectation, random-walks, brownian motion, kurtosis, time-series,black-scholes, and a whole lot more. If your background is not in Mathematics, allow me to suggest enrolling in a local community college, and taking MOST of their mathematics curriculum. You are particularly interested in probability and statistics, be sure to tell them that.

    If you already have a bachelor's degree and are interested in persuing an advanced degree in this area, allow me to suggest the excellent financial markets program at Stuart:

    http://www.stuart.iit.edu/programs_ms/financial_mkts/

    If/When you have a solid quantitative and psychology background, you are ready to evaluate the information in more texts:

    Option Volatility & Pricing: Advanced Trading Strategies and Techniques
    Sheldon Natenberg
    ISBN: 155738486X

    Option Market Making : Trading and Risk Analysis for the Financial and Commodity Option Markets
    ISBN: 0471578320

    Dynamic Hedging : Managing Vanilla and Exotic Options
    Nassim Nicholas Taleb
    ISBN: 0471152803

    Fooled by Randomness : The Hidden Role of Chance in Life and in the Markets
    Nassim Nicholas Taleb
    ISBN: 0812975219

    Please Understand Me II: Temperament, Character, Intelligence
    David Keirsey
    ISBN: 1885705026

    The Moral Animal : Why We Are, the Way We Are: The New Science of Evolutionary Psychology
    Robert Wright
    ISBN: 0679763996

    Extraordinary Popular Delusions & the Madness of Crowds
    Andrew Tobias
    ISBN: 051788433X

    The Original Turtle Trading System
    Curtis Faith (Free!)
    http://www.originalturtles.org/system.htm

    A Random Walk Down Wall Street Seventh Edition
    Burton G. Malkiel
    ISBN: 0393320405

    Reminiscences of a Stock Operator
    Edwin Lefèvre
    ISBN: 0471059706

    Human Action: A Treatise on Economics
    Ludwig Von Mises
    ISBN: 0945466242

    Pairs Trading : Quantitative Methods and Analysis
    Ganapathy Vidyamurthy
    ISBN: 0471460672

    You knew this was going to be work, right?

    There are other decent texts, but by this point you should recognize the scent of shyster when you smell it.
    You might be asking, "What does any of this have to do with trading?". Trading is competitive, like any other business. Your competitors are the brightest minds in the world, and any edge you gain in this increasingly efficient market will probably be theoretical. Without an edge, these competitors will be taking your money, and taking it fast.

    If you have an academic background, consider getting a job in the industry as
    a trading assistant. You can use the list of member firms at the exchanges for a start. If any job you take involves trading, it should provide a salary, and should not involve risking your own capital. Beware of anyone asking for your money, because chances are, they would like to keep it.

    And finally, let me suggest the following, which might be the single best piece of advice you will get on this board: Do not trade, do something else. If you want the real fast-track to making $200,000 a year, it will not be found here. Get your MBA, sit at a desk between golf matches, and take credit for the work of everyone else for $200,000 a year. You can float from company to company, taking credit for the work of your predecessor who was just fired, and look like a hero the whole time. When that gets boring, use your connections to fund a start-up doing something you enjoy. Its a good life, and a stark contrast to the failure you will probably experience trying to profit in the markets. But, if you are like me and love the markets, good luck to you.

    :)

    I hope it helps.

    segv
     
    #21     Mar 1, 2006