Someone was asking about FNYS and I came across this interview. I think this interview encapsulates a lot of what I've said on here as well as others in terms of what a real prop firm is looking for in a potential trader. http://wallstcheatsheet.com/intervi...ents-donald-motschwiller-and-joe-schenk.html/
Mav, let me start by saying I know nothing about the prop world and finsih up saying thanks for posting this great article because these guys are clearly the real deal bring enormous value added to those that can cut it at a high level. I'd hate to be consistently on the other side of their traders. Seems like a losing proposition to me!
If you want to read about their top trader, Jimmy Balodimas, he was featured in the book "Hedge Fund Market Wizards" by Jack Schwager. If you don't have the book, you can read it here: http://www.scribd.com/doc/125265989/Hedge-Fund-Market-Wizards-by-Jack-D-Schwager-SaMeep104 P.194
Thanks for posting that. I've read most of that book a dozen times or so and never really paid much attention to that guy.. put's a new interest on it. I like how the intro about him opens with "Jimmy Balodimas breaks all the rules. He sells into uptrends and buys into downtrends. He adds to losers and cuts his winners short... " Often I see the "don't add to losers" with total disregard to differences in trade style.
I read the article on jimmy. he obviously isn't lucky but I assure you 95% of traders who trade like him will be wiped out. Jimmy obviously has proven himself and can with stand $10 drawdowns.He obviously loves to short and is a negative non believing question. during the last 8 months of almost straight up he had to have huge multiweek and month drawdowns. very few traders can withstand the pressure and even if they could who wants to always be fighting the trend.The best normal trader that can relate with et traders is marc sperling. His accuracy on trends is second to none. This past week he was in 10 of the hottest stk rising them all up. His ability to ride and stay on uptrends is second to none for a a manual trader.his rate of return on the money he trades is as good as any of these guys although he makes less money than the guys that trade with 50-100 million but his accuracy is unmatched for any trader I've seen or heard of.but again as the article on Jimmy says no trader can follow these traders as each trader much develop there own style to be successful
This is a pretty good article. I've been through the interview process and the biggest thing a prop firm looks for is critical, split second, outside the box, thinking. Some of the questions I got were along the lines of, "What is the surface area of the Hancock?" "How many jelly beans are in that jar?" "If you were an M&M what color would you be?" The answers to these questions are meaningless. It's the methodology (reason) you arrive to your answer that counts. This article mentions "discretionary traders." This is the only type of trader who I've seen make it. If you're the A + B = C variety you're not going to be successful. There is one single element that all successful traders possess -- the ability to think like a trader with <b>intuitive</b> knowledge. It's the art of "just knowing." Trading is not a science; it's a talent. Fortunately, for those who are aspiring to be successful traders this talent can be taught if you possess the traits mentioned above. You really need to have a Type-A personality. I can't tell you how many times an individual has told me my strategy will lead to ruin. Those are the types that generally insist on trading with a fixed stop. If you stick your neck out it will get chopped off. Using a stop to manage risk is THEE single WORST method of managing risk!
Well said, the1 and great article on the state of trading today. It's really quite different than the et TA warriors have stated.
The only thing that makes sense to me about Jimmy is that he has his own methodology and it allows him to put big numbers on the board. Beyond that reality, I have no idea how anyone can survive in that fashion.