Building a team in San Francisco

Discussion in 'Hook Up' started by mag, Apr 2, 2011.

  1. mag


    I'm interested in building a team of traders in San Francisco. If you live in SF or the surrounding area and the idea of working within a team to make trades appeals to you, send me a PM or an email.

    I've heard from 4 people so far. In a few days we're going to set up a meeting to organize and pitch ideas.
  2. It might be more better if you first tell every one who you are. your trading history, how long you trading for, and what is the purpose of building a team of traders.

    As i know there are severals prop firm already in SF area.Why do people need another one and why do you think yours might be better than them.

    I have couple of friends in SF and if i really get the answer to my questions here and Not in PM then i might have them to contact you.

  3. hedge123


    Agree 100%.
  4. I used to live near San Francisco. It is a great city to work in. I worked in San Mateo, which is a bit south, but I always enjoyed visiting the city. You really should give a brief bio about yourself.
  5. mag


    I realize I was vague, so I apologize. My name is Collin. I've been trading for 5 years. I started out swing trading stocks, then day trading the e-mini, and now I'm swing trading options on stocks. I have plenty of experience but I'm not a trader for a living.

    The purpose of building a team is to get traders with different styles, techniques and histories to somehow combine their talents and place trades together. Everyone provides analysis, we decide as a group which trades we like and which we don't or can't agree on and then make trades based on these discussions. The key is to take trades together.... not just exchange ideas. To really form a tight knit group we have to be mutually and evenly invested in our trades.

    The edge behind this is that you go from being an individual with limited skills and knowledge to instantly having access to 5 or 10 other sets of skills, knowledge, and perspectives. Another point is that the odds are high that some of these traders will know about forex, stocks, futures, etc. So if we are placing trades together, we would all be involved in all of these markets at the same time. That's something that would be very challenging to accomplish on your own.

    Now this idea isn't magic. It's going to take a lot of work to set this up right and that's why I'm organizing a meeting right now. I'm not the captain of this venture, I want input and help in organizing. If this sounds interesting to you, send me an email.
  6. Nice idea in theory, very hard in practice. Many legal issues. Also, something that I ran into in the past, the issue of someone in the group taking the opposite trades secretly or front-running the trades. Good luck. If it happens, it will be the first group.:)
  7. mag


    I realize its going to take a lot of work to get this going. My idea is to have everyone trading their own accounts so I'm not aware of legal issues. It would probably save me a lot of trouble if you know of some.

    I don't think front running will be a problem because I plan on paper trading at first, then trading small, and finally once we know and trust each other, taking more risk. I wouldn't do something like this with large amounts of money unless I considered everyone in the group a colleague.

    I sat down and clarified my idea, here's some more detail.

    Traders analyze a number of opportunities using whatever market, time frame, and method they are specialized in. The trading team meets and each team member explains his analysis/market/method and why he chose the opportunity he is presenting. Each trader then analyzes the other traders’ opportunities using his own specialized knowledge, tools, and perspective regardless of his experience with the specific market, time frame etc. The team comes back together to summarize and communicate their analysis of each opportunity and then vote for which opportunities are favorable. Once an agreement is made, the team takes the favorable trades together.


    There are 3 traders: Bob, Joe, and Jane.

    Bob analyzes AAPL and decides it’s a good time to buy. He uses daily charts and moving averages to look for price pullbacks and has noticed AAPL bouncing off its 100 day moving average. Joe likes to trade the Dollar against the Yen and has decided to buy the Yen because it has been sinking below support in intraday charts and closing above it, creating a “hanging man” candlestick pattern. Jane trades commodities and has decided that consumer sentiment towards coffee is waning and he wants to short it.

    The next step is for Bob, Joe, and Jane to hold a meeting and explain their trade opportunities to eachother. Then the meeting would end and Bob would go home and use his knowledge of momentum analysis to look at the Dollar/Yen and Coffee. Joe would use his knowledge of support and resistance and candlestick patterns to analyze AAPL and Coffee. Jane would analyze the fundamentals of APPL and the Dollar/Yen.

    The group would meet again and each trader would explain his views of each opportunity. Bob, Joe, and Jane would then vote on which of the 3 opportunities are favorable. A majority vote for any of the trades would constitute a signal and all three traders would place trades on those opportunities.

    Each trader would make the trade on their own account with an amount of shares/contracts that fits his money management needs. However, each trader would be taking basically the same trade at the same time. This gives Bob, Joe, and Jane a shared fate and a reason to invest their energy and time in being as open, honest, and reliable as possible with each other.

    Records are kept for each trader’s suggested opportunities. So if Jane’s suggested trades (regardless of whether some or all of them have been dismissed by the group) have a higher profit to loss ratio and a higher win to lose ratio then the rest of the group, her “history” can give her analysis more weight in conversations.

    The Values of the group

    • Profitability – the purpose of our group is to create profits for its members.
    • Respect – building the integrity of the group and of its individuals is paramount to its success.
    • Learning – sharing and creating information for one another will build our knowledge and therefore our capabilities.
    • Teamwork – being part of a team is all about creating something that is greater than the sum of its parts and teamwork is the tool to do this.
    • Camaraderie - sharing our experience trading the market with one another will allow us to overcome the losses and celebrate our victories.

    The benefit of using this approach:
    • Since we are each trading our own accounts, there’s no need to worry about scams and BS.
    • Since we are taking the same trades we have a shared fate and thus a vested interest in doing the best we can for each other.
    • Each trader learns the methods, markets, and perspectives of the other team members.
    • Each trader has the opportunity to explain and teach others his perspective and thus clarify it for himself.
    • Each trader will trade multiple markets, methods, time frames, etc. at the same time. This is something few individuals are capable of. This also allows the trader to expose himself to whichever market is profitable at any given time as opposed to limiting him to a few well known markets which may not be trade-able at the moment.
    • Each trader makes trades based on the perspectives of other traders as opposed to just himself thus creating more confirmation for his/her trades.
    • Each trader can face the challenges of trading the market as a member of a team instead of by himself where he/she is more susceptible to emotion.

    The limitations of using this approach:
    • Entry is delayed because of the need to wait for other members to analyze each trade and then vote on which are acceptable. Swing trading is probably the fastest time frame we can affectively trade like this.
    o The benefit to this is that trades won’t be made without due analysis.
    o Revenge trading and emotional trading won’t be possible.
    o It’s possible with time that we may open an office and trade side-by-side someday and thus decrease the delay between when an opportunity is spotted and when we can act on it.
    • Members won’t agree on what to trade and some traders will get frustrated seeing their ideas dismissed especially when they turn out to be “right.”
    o By trading within a group and being exposed to different approaches and markets, it’s easy to feel overwhelmed and stubborn. However, by being open-minded and paper trading at first; these different styles can give us confidence and experience in markets that can increase our capabilities to make money.
    o If an individual is passionate about a trade and the group disagrees, perhaps the individual can make the trade regardless and keep the group updated on the outcome.
    • In order to maintain team work, a majority of trades will have to be made as a group (meaning everyone takes the trade) thus giving the group a shared fate.
    o This may mean forcing members to take trades they are unsure of or disagree with. However, if we go through a trial of paper trading together and learn more about one another we can gain enough trust to step out of comfort zones when a majority of the team is confident in an opportunity.
    o It’s possible if an individual is passionate about not taking a trade that he/she can opt out and be updated on the results by the rest of the group. They may take the situation as an opportunity to learn more about the method/market involved and watch from the sidelines.
    • Members may face criticism for their beliefs, system, or analysis.
    o Although a constructive atmosphere is essential for this concept to work, it’s possible that members may find their weaknesses come into the spotlight. Although this is uncomfortable, it is an invaluable opportunity for growth. No professional has succeeded in any endeavor without facing his weaknesses.
    o Any incorrect or misplaced criticism will be sorted out through the results that each trader has. If we keep accurate records for which opportunities originated with which trader and the results from those opportunities, we will get a good feel for who the stronger traders are.
    • Some traders will have far more experience and talent than other traders.
    o This is a given because we are not clones of one another. We may decide to give more weight to individuals who have proven to be more profitable. However, we won’t eliminate members input or weight completely unless that person has proven to not follow the values of the group. An example would be someone who is disrespectful and disruptive.

    The ultimate goal of this project would be to have the group be profitable enough to rent an office and actually trade side-by-side. This would reduce the delay before actually taking trades and allow us to really gain trust and camaraderie with one another.

    Steps for moving towards this goal:
    1. Paper trade as a group using this method on swing trades. We exchange opportunities, give it a day or two for the others to analyze and then trade as a group.
    2. We keep detailed records and begin live trading when we prove to everyone involved that we are ready and profitable enough.
    3. We make enough money for us to make a bigger time/energy/money commitment to this idea and we decide to rent a cheap office for us to have space to trade side-by-side.
  8. Very SFO to have a communal traders study group. Wish you guys the best of luck.
  9. jj90


    This is gonna come down to 2 things: trust, altruism, and a dash of politics. You might want to consider the scenarios in which your group is composed of all newbs and 1 good trader or all good traders and 1 newb. Put yourself in the scenario of the odd man out and see what I mean. I'm not even getting into the scenarios of snake oil salesmans and losing streaks.

    I was in a group that had a very similar approach to what you are doing, but with no trading consensus. Members each presented an idea and members could take what they wanted from the presentation individually. This worked amazing because no one was forced to trade.

    Like another previous poster has said, the biggest problem here is going to be legal issues. Think about that. Good luck.
  10. mag


    Oh I see where you guys are coming from.

    "Forcing" people to make trades would be a big legal issue.

    I wanted everyone to trade the same stuff in order to create a shared fate, like a company would have. However, you guys point out that if someone doesn't like a trade, they just flat out got to go with what they prefer.

    I definitely didn't have it in my mind to "force" anyone to trade.

    Clearly, the group would exchange ideas and the individuals would make the final decision on whether they in particular would trade.

    Trading is such a lone wolf thing and the internet is full of scammers and low life scum, I knew by suggesting this idea online that it would get a lot of flak and I'm actually surprized there hasn't been more. Maybe its because I posted in the "hook up" section.
    #10     Apr 9, 2011