Differences in Retail vs Prop trading

ironchef · Jun 26, 2020

MichalTr said:
You know I think it's because it's easy to convince someone that TA works and to present it that way. And it looks much easier.

Who want to hear "ok, so I will teach you about correlations, about looking at yields, curves, to think in terms of cause and effect, so if thing A happened and thing B not, what then, if thing A happened and thing B happened what you expect then; to do some statistics, to observe price reactions to different events, to read ladder, and now, it's your time ! seat here and watch, every day, X hours a day and you will get it or not". Because that's how it looks like.

So it's easier to sell someone story, ok, those are magic indicators, watch it 30 min a day, and remember to send me one of your lambos when you buy third one.

People in general are lazy (in life), so they want easy way.

But there is also 1 important thing. I will give a short story. I was a dancer for many years, the reason I was very good was not because I watched tons of movies, read some books etc. (of course I did it also). But the main reason was, I was in the training hall, firstly twice a week, then three times, then 5, then 7, then going to workshops for many days, camps etc. So it was about hard work. I was also instructor, and I saw many ppl, a lot of them. Some very talented, some let's say completely disaster. But after long enough time those with not so much talent but very hard working were really good (I'm not saying they were artists but they were good craftsmen). One of my favorite students all time, was completely un-talented. But he was titan of work, and had so much heart for that. And after time he became very very good craftsman. Of course they can't compete with ppl who have talent and put hard work, but it's not always about that. It's about being best you can, to beat yourself. I also saw very talented ones, and at the beginning I told some friends "nope, they won't be great, you will see" and they weren't. It's very easy, it was easy to tell after their behavior, approach, complete lack of humility (it's good to believe in yourself, sometimes it's good to be cocky, but if you have complete lack of humility it' very bad sign). So hard work is the biggest part of success.

But there is also 1 important thing. If I take you to training hall, tell you "ok, those are the keys, you have access whenever you want, now crack it man !", it's is possible that you make it, but not so probable. So if first you have any basic knowledge, or you are pointed to right direction then that time is spent much more effective. I think that is why ppl in shops are much faster good in their craft then ppl outside. It's all about that. But they still need to do their hard work.

And there is one thing that ppl don't want to hear, so, not everybody can be a trader. This job is so unnatural that it just "can't work" with some personalities.
But from the other side, we have quant shops now, so ppl working there representing other type of personalities then old school pit traders and other then electronic screens traders. It's good to know where you fit, where is your place.
More...

It is important to be passionate about what you do.

Hard work and persistence often beat talent (IQ) in trading too.

MichalTr · Jun 26, 2020

ironchef said:
Question:

Do traders in prop firms day trade only or swing or position trade?

I am amateur retail, never visited or looked into a prop firm so really am clueless.

Thanks.
More...

I saw both, from intraday to weeks/months

themickey · Jun 26, 2020

Another question, do all prop guys daytrade?
Is there such a thing as a prop trader taking 1 trade a week or maybe a fortnight?
Maybe holding multiple positions simultaneously but large positions and running with a stock for some weeks, in other words, placing infrequent bets.

MichalTr · Jun 26, 2020

themickey said:
Another question, do all prop guys daytrade?
Is there such a thing as a prop trader taking 1 trade a week or maybe a fortnight?
Maybe holding multiple positions simultaneously but large positions and running with a stock for some weeks, in other words, placing infrequent bets.
More...

If you make good money for the firm and yourself, you can do whatever you want.
Some props want more volume, because of way of operating, but then they use new guys or those average to make it.

+depending on risk parameters, if you leave more of your money with firm, it can be more elastic.

Sekiyo · Jun 26, 2020

Just posting this here.

CFTC vs Optiver US, LLC, et al.
Transcripts of XYZ.wav
It’s from a legal case

The case :
SUMMARY OF DEFENDANTS' MANIPULATION OF THE ENERGY MARKETS AND VIOLATIONS OF THE COMMODITY EXCHANGE ACT

An article :
High-frequency trader Optiver pays $14 million in oil manipulation case

minmike · Jun 27, 2020

Sekiyo said:
Because you can see their book ?
Believe half what you see.
None what you hear.

Having exposure means nothing.
I can be short 20K ES contract
Then having exposure.
But it’s a hedge.
Yup. Yup.
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This is silly. Best of luck. Try googling crypto trader. Some big names with joba listings.

Illini Trader · Jun 27, 2020

MichalTr said:
You know I think it's because it's easy to convince someone that TA works and to present it that way. And it looks much easier.

Who want to hear "ok, so I will teach you about correlations, about looking at yields, curves, to think in terms of cause and effect, so if thing A happened and thing B not, what then, if thing A happened and thing B happened what you expect then; to do some statistics, to observe price reactions to different events, to read ladder, and now, it's your time ! seat here and watch, every day, X hours a day and you will get it or not". Because that's how it looks like.

So it's easier to sell someone story, ok, those are magic indicators, watch it 30 min a day, and remember to send me one of your lambos when you buy third one.

People in general are lazy (in life), so they want easy way.

But there is also 1 important thing. I will give a short story. I was a dancer for many years, the reason I was very good was not because I watched tons of movies, read some books etc. (of course I did it also). But the main reason was, I was in the training hall, firstly twice a week, then three times, then 5, then 7, then going to workshops for many days, camps etc. So it was about hard work. I was also instructor, and I saw many ppl, a lot of them. Some very talented, some let's say completely disaster. But after long enough time those with not so much talent but very hard working were really good (I'm not saying they were artists but they were good craftsmen). One of my favorite students all time, was completely un-talented. But he was titan of work, and had so much heart for that. And after time he became very very good craftsman. Of course they can't compete with ppl who have talent and put hard work, but it's not always about that. It's about being best you can, to beat yourself. I also saw very talented ones, and at the beginning I told some friends "nope, they won't be great, you will see" and they weren't. It's very easy, it was easy to tell after their behavior, approach, complete lack of humility (it's good to believe in yourself, sometimes it's good to be cocky, but if you have complete lack of humility it' very bad sign). So hard work is the biggest part of success.

But there is also 1 important thing. If I take you to training hall, tell you "ok, those are the keys, you have access whenever you want, now crack it man !", it's is possible that you make it, but not so probable. So if first you have any basic knowledge, or you are pointed to right direction then that time is spent much more effective. I think that is why ppl in shops are much faster good in their craft then ppl outside. It's all about that. But they still need to do their hard work.

And there is one thing that ppl don't want to hear, so, not everybody can be a trader. This job is so unnatural that it just "can't work" with some personalities.
But from the other side, we have quant shops now, so ppl working there representing other type of personalities then old school pit traders and other then electronic screens traders. It's good to know where you fit, where is your place.
More...

This is one of the best posts that I have ever read in my decade plus membership at ET. Thanks for sharing. It kind of reminds me of the movie Ford vs. Ferrari. The scene of Miles talking with his son as he describes every nuance of the Lemans racetrack and every action he needs to take at the exact precise instant. It kinda is like you were saying. To be at the very top of any profession it requires the best natural talent and determined work ethic. However most of us at ET are your dance students without the top natural talent but with determination, practice and perseverance we can be successful. Like Miles son then asked his Dad, "But you can't drive every lap that perfectly" (It is a 24 hour race). Miles said No, but I can try.