All I can say is that the Echo returnees are very happy with the complete package (I've never said anything bad about my friends at Echo either...I hear that things changed quite a bit since the Pax/Merrill deal, and perhaps that's why the retunrees). There are some major changes with Generic/Carlin as well, but it's not my place to comment, ask them). I might suggest that, since my ever-increasing group at PairCo uses a lot of "market neutral, safe, overnights" and make a heck of alot of money, that in the current market conditions, overnights are almost a must. All the "swing traders" would probably disagree with you as well. And, I thank you for the nice comments about us...just keep in mind that we are in an ever-changing field of endeavor, seems almost "liquid" at times. Just as the nedd to "Adapt or Die" applies to trading, it also applies to running a successful business. Does this Caliber firm have a website that I can check out...I would seriously like to introduce myself? I try to stay in contact with most the bigger firms, share info about "rogue traders" and regulator issues, NYSE changes, all that kind of stuff. Don Don
Don't get on Don's blacklist Does this Caliber firm have a website that I can check out...I would seriously like to introduce myself? I try to stay in contact with most the bigger firms, share info about "rogue traders" and regulator issues, NYSE changes, all that kind of stuff.
We have thought about it, but to do it right as a Broker Dealer and exchange member (vs. an "introducing broker" type) requires a lot of NASD paperwork...and since the biggest benefit to our traders is being able to use capital it just doewn't quite seem to make sense at this point. Actually, we made out all the paperwork a few years back, did a cost/benefit analysis and opted out...but you never know what the future will bring. Don
Pair trading is "safe" ? LOL, just ask the guys who were in the GE/HON or FNM/FRE blowups how safe pair trading can be......not to mention you are paying double commissions. there are about 2000 Long/short hedge funds and you think some solo prop trader is going to beat them at the game? give me a break.....
Well, let's explore the facts, rather than speculate. Our Pairs group alone has grown from 3 guys in one location to around 50 in 3 locations (as well as many other pairs traders around the Country). Their success rate and net earnings are excellent..their retention rate is excellent (they lose a few, as we all do)...they actually pay and back many traders...they trade literally hundreds of pairs to lower overall risk. Pairs trading, when done correctly, often times does not involve "double commissions" as you put it. Many do what we call "crutch" pair trading wherein you (for example) short xx when the market is in a declining mode, and many times simply buy it back locking in profits...if that short were to go against you, you simply buy the other side leaving you with a pre-determined optimum price. Do some pairs "blow up" sure, do day trades go against you, sure, do "swing trades" go haywire, sure...does it sometimes rain, sure...all part of the game. Successful traders are capable of playing the game of risk/reward, obviously. When you do enough research, and have adequate capital, you can certainly compete with any hedge fund...but I don't mean you have to "out fox" them, you may be doing the exact same things.....and get to keep all your profits vs. the standard 20% that hedge fund managers keep. I'm not knocking legitimate hedge funds at all...some very smart guys...and since we are doing similar things, I guess you could say that "imitation is a pure form of flattery" - even though we have been doing it for decades. And, to be honest (even though I know it's just an alias, you probably do much more than scalp these days)...our "scalpers" are having more trouble lately...rule changes...pennies, etc., and have started expanding their horizons, so to speak. Many ways to make money, and now with more mergers taking place again, we should have another good year. All the best, Don BTW, I need to start using spell check, I meant "boots" not "botts" obviously in the previous post. BTW#2, I really wouldn't call a heavily manned research and technology group with hundreds of millions of $$ at their disposal a "solo" prop trader. Take a trip to BC, talk to Rob and Darren, you might like what you see...never say never, LOL. www.pairtrader.com (if anyone has an interest).
Holding bluechips overnight is safe? Ask the traders holding MRK overnight when the Vioxx fecal matter hit the ventilation system. Having positions on intraday is safe? Ask anyone on the wrong side of MSO when the various news items broke. Point here is that you can find numerous isolated anecdotal incidents like that, but as part of a consistent plan followed properly with appropriate risk management and diversification, pair trading can be as safe as most other proven strategies. Without exception, everyone I've seen hurt by pair trading has followed this process: 1. Put a number of pairs on 2. One pair starts going against you 3. Take some of the other pairs off and put on more in that one pair 4. repeat steps 2&3 until you no longer have other pairs on, have gone way past your money management points in the errant pair, and anxiously watch each tick of the pair. 5. Close the pair and take a huge loss because you didn't follow your plan. 6. Watch other traders put on the same pair to come in based on the "Pain Indicator" (this is where the trader next to you has been in increasing pain day after day after day, until he's primal screamed his head off, threw his keyboard at the monitor, threw his monitor across the room, and finally closed the position at a major loss... that's when you know the time is right to put the position on). Cash
Don Bright wrote: To use the word "safe" in reference to any style of trading strikes me as disingenuous, at the very least. Compliance OK with that? Re: current market conditions -- check out the PNL thread -- very few using overnights. (just an example -- in your statement you say it is almost a "must") Don -- Why do you think it responsible to be the arbiter of "current market conditions" and assume an absolute stance. Some people take your words seriously, as I once did, and you are doing a disservice to new traders to pigeonhole everything like you do -- obviously to fit your business model. Nice to see you and Cash giving props to each other. What a joke.