A trading group

Discussion in 'Professional Trading' started by Georgii, Dec 11, 2010.

  1. Georgii


    Hello all,

    I've frequently heard of trading groups - a bunch of traders get together, rent a space (or talk virtually to each other via skype), and trade as a team. This seems to be in between pure solo retail trading and trading a prop firm's capital.

    There appear to be several advantages to this method. From a trading perspective...

    1. Each trader brings something to the table, they either spot opportunities (scan stocks), analyze fundamentals, or come up with interesting ideas, strategies, backtest, provide IT support, etc. In the manner of taylorism, there is some division of labor.

    2. Psychologically they support each other. They may also analyze their trades together, etc. They learn together this way.

    From a business perspective...

    1. If the traders want to trade in an office, they can pool together their money and rent a space, split the costs of utils, an internet connection, uninterrupted power supply, etc.

    2. If the traders want to go together as a group to a prop firm, they have some collective bargaining power as to commissions, etc.

    I was interested if anyone out there has been a part of a group and has any input to offer. How do you get a group together, do you find people who are at your level of performance? Do you look for people who trade like you and like the same asset classes? How do you judge who is a good fit for you? Finally, any advantages to trading in one physical space versus remotely?

  2. jinxu


    Here's my opinion:

    A group of idiots does not equal one genius.
  3. That seems like a good idea when you are in the early stages of learning to trade, which for me has taken decades. The underlying motivation is that one can learn from others. Unfortunately, everyone else is thinking the same thing. Right not I can not think of a worse place to be than among traders using various methodologies, and systems. It messes with your mind just hearing the discussion.

    I believe that if a person knows how to trade, then the overhead to do so becomes much less significant. And the distraction and added coordinations needed in a shared room, become much more of a burden than an asset.

    However, an online chat room where traders of a similar ilk can communicate during the day is much different, and may be a great monotony breaker on those slow days.

    Just my thoughts, and as always they are only worth what you paid.:)
  4. Georgii


    This raises an interesting point: it appears in the end there are three options:

    1) Being in a group offers nothing to you from a trading aspect, it only offers some social interaction.

    2) Being in a group benefits your trading in some way.

    3) Being in a group hurts your trading, either you get distracted, or get bad ideas from people and are negatively influenced.

    I gather its only worth it, obviously, if 2 is the case.
  5. Imo sometimes it can be beneficial to exchange ideas with other traders and see other traders make mistakes so you can avoid them.
    But it can also be very bad if your own thinking gets derailed and you can potentially waste months or years on dead-ends.

    Long ago, when people didnt understand how the world worked they grouped together in churches and needed some Jesus to explain how it worked. If you understand it you dont need it.

    Also Metallica, My Friend of Misery is always good to remember:
  6. bone

    bone ET Sponsor

    The invariable result is that one or two traders outperforms the balance of the group, with an entirely predictable and ugly outcome.
  7. Well then here is my opinion:

    A group of "idiots" that are in an online group I trade with remotely combined for over $20M or so last year.

    Ya and I would say there is no benefit of being part of a group.

    I guess the point is if all you on here claim that good traders need no advice, no groups, no ideas, no news etc etc. Then you are far from a good trader.

    Give your head a shake, nobody that makes any cash just stepped into this job and made millions without help from others.


    Oh and the group size is not 2000 traders for any smart asses out there. its a dozen.
  8. Are any of the 12 full time?
  9. No 2 work at McDonalds and 3 at Walmart part time.

    They just make 10 or 20k here and there when they have a day off.

    Sorry I couldnt resist. But yes they are full time.

  10. bone

    bone ET Sponsor

    "Give your head a shake, nobody that makes any cash just stepped into this job and made millions without help from others."

    You are completely correct in that regard, no arguement from me at least.

    My only point was that I have never seen an individual carry a multitude of others on his/her back in terms of a profit split and IP sharing beyond a contractual obligation. They never stick around - why should they. If you have a track record you are always looking for the 'bigger, better deal'.
    #10     Dec 12, 2010