"markets are stupid",says veteran trader...What a bunch of space chocolate!!!!!!!! Sponge headed jerk off!
By MARTIN VAUGHAN And ENDA CURRAN Foreign-exchange trading volumes fell sharply toward the end of 2011 as the euro zone's sovereign-debt crisis flared up and European banks cut back lending world-wide, the Bank for International Settlements said in its quarterly report. Non-European banks and emerging-market bond issuers stepped in to fill funding gaps as European lenders retrenched from global markets in the final part of last year, the BIS said in its report, released Sunday. .Daily turnover in global foreign-exchange markets likely reached $4.7 trillion on average in October 2011, but volumes likely dipped sharply toward the end of the year and into the start of 2012, BIS researcher Morton Bech wrote. Foreign-exchange volumes were hit hard through 2011 by the euro zone's debt crisis, as rolling volatility kept investors on the sidelines. Figures from a range of trading centers show volumes during October fell for the first time since 2009, when markets were recovering from the collapse of U.S. investment bank Lehman Brothers. The last time the BIS measured daily foreign-exchange trading volumes was in April 2010, in its triennial report. At that time it estimated daily turnover at $4 trillion. The Basel, Switzerland-based BIS describes itself as a banker to central banks, serving as a counterparty for central bank transactions and conducting research. BIS researchers also found that a roughly 50% increase in emerging-market bond issuance in the fourth quarter of 2011, compared with the previous quarter, helped compensate for shrinking available bank credit as a result of European deleveraging. That helped support asset prices and kept trade finance flowing even as European banks sold assets and reduced lending, the BIS said. "An open question is whether other financial institutions will be able to substitute for European banks as the latter continue to deleverage," the BIS wrote in its quarterly review. European banks' funding was strained in the last half of 2011 as economic growth slowed and questions about the solvency of European sovereigns raged. Regulatory requirements that European banks hold more capital added pressure, bringing "fears of deleveraging to the forefront of financial market concerns," the BIS wrote. As those banks retrenched globally, cross-border lending to emerging economies fell by $18 billion, or 0.6%, in the third quarter, the first such decline in 10 quarters. The European Central Bank's refinancing operations that provided looser conditions for euro lending also helped to slow the deleveraging process and cushion its impact on markets, the BIS said.
What's wrong with being a sales trader? Relatively speaking, it's a high margin business You're starting to sound like an IT guy. Not that there's anything wrong with that, if you're into that kind of thing.
Its slightly off-topic but why do you say they are highly dishonest. Want to learn something here from your experience. In what sense are they dishonest? Also, can give you an example of ridiculously stringent condition in a contract. Thanks From your writing, Do you run a fx hft operation or do you help set up people on the technology front ?
this is the stuff you negotiate as quant trader when joining as PM. Very different concept: As discretionary trader your IP comes and goes with you. When you bring strategies with you that can be deployed and harvested then that is an entirely different story. The second you set foot into the door your IP is gone unless you safeguard through contractual agreements that favor both sides of the deal.Hope that explains a little better.
I run my own hft fund. Example there are a number firms out there that force you to sign over the contractual rights to your own strategies that you may bring into the firm. They also are vehemently opposing black box type of implementations. This should give you a very clear idea that what they are after is your strategies not your skill set in developing new ones. That is generally fine with me but when "purchasing" a strategy something in exchange should change hands.
I think the market is largely news-driven these days, mainly due to the precarious global economy and investor reliance on headline numbers and speeches to gauge direction, rather than a clear-cut, well-established trend. One day, Europe is fine, the next, its not. One day, the stock market is tanking, and the next, Bernacke puts QE3 on the table. It all leads to range contraction outside news events, then big moves within the first couple minutes after a release. Perfect for Wallstreet insiders that get the numbers ahead of time. Not so good for regular traders. Crude is the last market that moves good, regardless of news, afict. Since the CME hiked margins on gold and silver, it's the new inflation trade, which is where all this bs is headed. One last point, Central Banker intervention is what's needed to keep the music going. The economy and market wants to crash, but it's being held up. Each new milestone on this crisis path threatens the entire global financial system, and investors know that. So everyone looks to Central Bankers every chance they get for the first sign of policy weakness. Nobody is all in. It's all defensive, now. Everyone is taking little nipples, than laying off risk. That's just my opinion. On the flip side, if we get some big moves, some of the HFT shops will get murdered. Their strats were built around this low volatility chop, and they will get decimated. On a personal note, the trading is more difficult of late. The past few months weren't easy. Still good, but lots of singles. Some doubles. Few triples. And hardly any homeruns. CL is where it's at.
Seven Habits of Ineffective Traders By Ken Wolff Recently, a couple of people I know packed up and quit trading after struggling for a long time to hold their heads above water. They didn't make it. This isn't unusual, of course. This profession has a high failure rate. But it frustrated me. It frustrated me because I could see potential in them. I don't believe you have to be particularly talented or intelligent to be a successful trader, but these people seemed to have a grasp on the market and the love of trading that's necessary. They had the tools, the knowledge, the time and the funds. It also frustrated me because I could see the pressure they were under that contributed to their failures. Most of all, though, it frustrated me because I could clearly see what they were doing wrong, but they couldn't stop repeating the same mistakes. This happens a lot. I see a lot of people making the same mistakes. So I thought I'd share my list of the seven most frustrating things that struggling traders do. 1. When people won't do their own homework. Too many people want to make money, but aren't willing to put the time in and do what it takes. I love answering questions, and I have a passion to help people learn, but when I notice someone asking the same questions over and over, and they are basic questions that anyone could Google, and gave it 30 seconds worth of effort, I know that person is lazy and probably won't make it. You want to know what makes successful traders? People who glue their butts to their chairs. Look at their computer desks and you're likely to see lots of coffee rings and crumbs. You get out of something only what you put into it. If you aren't willing to take notes, take some initiative, keep a journal and spend a lot of time watching stocks, futures or forex then I don't see much hope for you as a trader. 2. When people can't explain their reasoning for a trade. If your reason for entering a trade is something vague like, "I thought I saw buyers, and last week it had news, and I dunno, it just looked good," then you don't belong in that trade! People like this usually have no clearly conceived, written, organized trading strategy because they are lazy. They are doomed to failure. If you have no solid reason for a trade, you will have no confidence in it. You will wind up mistiming, misjudging, fumbling and losing. Here's a quote from my partner Phil Rosten, who is a brilliant technician: I think the most important thing to do is to develop a system that you have confidence in. You will get nowhere if you are second-guessing what you are doing. When the market is open, you need to know what you are doing, and why you are doing it, without thinking too much about it. If you start thinking too much about what you are doing or second-guessing yourself, you will quickly get taken out of the game. Believe it or not, it doesn't matter much what your reason is, as long as you are consistent with that reasoning. But you'd better have a reason. 3. When people make things more complicated than they need to be. Let me give you an example. One of the leaders in my chat room finally unveiled a new trading system he had developed after more than a year of extensive testing. The system works just as it is. It isn't perfect (no trading system will be 100%), but it is highly profitable. People's initial reactions were interesting. Instead of saying, "Wow, great. Let me give it a try," a common first response was, "I wonder if it would work even better if we changed this and that, and instead of a 15-day moving average we used a 10-day moving average," and on and on. Before they even tried or understood the system, before ever becoming profitable and successful with it, they immediately set about trying to improve it. Maybe it's human nature. We love trying to reinvent the wheel. Many of us see trading as a puzzle. If we could just find that solution or formula that no one else has thought of yet, we would be rich and happy. A lot of people think that the more indicators they pile on, the better their trading results will be. So they wind up with analysis paralysis, unprofitable and frustrated, convinced that trading is an unwinnable gamble. I can't say this enough: What matters is not the system itself, but what you do with the system -- your discipline to use it and keep stops. You won't find a system that always works, so you'd better limit those losses. Two percent of your trades can easily wipe out 98% of your gains if you can't keep stops. 4. When people enter a trade for a good reason, then lose their nerve and exit too soon. This is a lot like walking across a log over a river. If you keep focused on your goal, you will get to the other side. You know how to walk a straight line, and you would have no problems if the log was on the ground. But once you are out there, if you start second-guessing yourself and looking down at the rocks below, you will fall. Too often emotions set in and sabotage good trades. If you have a reason, stick with it. Stay in the trade until your target is reached, you have an exit signal, or the reason for your entry is no longer valid. 5. When people hesitate, or follow others, and enter a trade too late. I understand traders' lack of confidence and I can empathize because I've been there. If they don't get a grip on it, though, it will be their downfall. Calls are great and gurus are great, but if you follow, you will always be late. You need to learn to rely on your own reasoning. Otherwise you will be too slow and you'll become fish bait. Inexperience is often the reason for this, and that will take care of itself with time. That's why I recommend starting with small shares until you gain confidence in your system and your ability to keep stops. But this problem frequently has to do with deeper emotions, pressures and self-esteem problems that may not go away as easily. This is hard stuff because it's all about confidence. When you are under pressure from a spouse who disapproves of your trading, or under pressure to pay bills, etc., you are working under an enormous amount of fear and pressure. And that is automatically going to cause hesitation. I know that's a hard situation. But I tell you, if you don't get that under control and learn to trade like you don't need the money -- with control and a system, leaving out emotion -- you are not going to make it. You must find a way to ease that pressure. Get a part-time job if things are that rough and you still believe trading is the job for you. If you cut back and trade a couple of days a week without the pressure, you'll probably trade better for it and wind up making more money than you did trading five days a week under pressure. I've seen it happen many times. 6. When people will not contemplate the real reasons for their failures. I don't know how many times I have heard this: "The market was tough today. I had one good early trade and then gave it all back in the afternoon in a few bad trades." Let's be honest here. The market wasn't making you do those stupid later trades. It was you. Don't blame it on the market when in reality you were chasing longs all day when the market was tanking. Then people will say something like "I need help with risk management," "I need help learning to find good entries," "I need help learning executions" or some other topic not really related to their true mistake. What they need instead is a dose of self-restraint and some personal accountability. They need to stop making trades out of boredom, frustration, regret or any other reason other than "it met my trading criteria." They also need to be honest about these criteria and not stretch things into "well, it kind of meets my criteria -- if I look at it cross-eyed." I know this is hard. It's tough to sit there all day and stare at these numbers, especially when things are slow and there have been no good trading opportunities that day. It's like fishing. Fishing can be really boring. But if you aren't sitting there waiting with your hook in the water, you won't catch anything when the big fish come by. And it won't help if you jump in the water every time you see a ripple, trying to convince yourself you had a bite. 7. A defeatist attitude. The potential in our lives far exceeds what we ordinarily imagine. Too often we put limitations on ourselves with Eeyore-like thinking. We say "I can't do this" or "I am just not smart enough" or "I'm just unlucky." In doing so, we fail to challenge ourselves and develop new potential because we've lost faith in ourselves. We are like circus elephants tied with small weak chains to a stake, believing we could never get free, unaware of our own strength. We possess tremendous potential, but if we develop the bad habit of convincing ourselves that our potential is limited, we will not actively challenge ourselves and grow. Like the elephant, we will be held captive by our own beliefs. If you have a defeatist attitude, you've already lost. Keep a positive mindset and try to see each mistake as a stepping stone to growth. ............................................ Blame your failure on some external issue when all you have to do is look into the mirror. you are doomed in this game unless you change. cheers, s