I spent over a decade on a market making desk at a large American bank (fixed income). I'm lucky enough to have the support of my wife, time and capital to give this a shot and trade for myself for a while. In all likelihood we'll be relocating back to the Midwest to be closer to family for the kids which also play into this decision. How did you decide what the right trading strategy for you was? How did you know what type of trading would suit your personality and give you the best chance for success? Obviously, I'm in the early stages here and I want to be able to focus my efforts on the right things. I'm initially splitting time between learning Python and getting my feet wet here. I mostly envision a systematic trading strategy because that would seem like the easiest thing to backtest and get quantifiable results out of it. My current lack of knowledge of trading platforms and tools available are probably contributing to that belief. Any suggestions on resources would also be much appreciated. Any and all advice or criticism is welcome but this is my first post so do be a little gentle on me! I look forward to becoming an active member of this community in 2018.
Briefly, I read textbooks, deliberately avoided online "information", discussed with successful traders I already knew, learned how to backtest as reliably as I could, and practiced a lot on demo/sim. I said more here, albeit in a slightly different context, if it helps. I agree, and I think you make a very significant point here, that relates directly to "objectivity". And welcome to ET.
Maybe start your your focus on CME Interest rate products, 5Y,10Y futures and options. It see like a good fit for someone with a fixed income background. bob
I like money. -- and risk. so I go all in in leverage products and repeat that daily. Compounding is the name of the game. go from crapping like a bird...to an elephant. High-Five`
I used to work with a guy that made a consistent 25k a day and then a few times a year would drop $1.5m. Boss man came buy one day and just shook his head and mumbled to himself, "that guy eats like a bird and (craps) like an elephant". I still crack up at that one.
You don't know in advance. You look at different interpretations of what you learn from books,then you start working on your own concepts,but there will be little success in them.From frustration you will hit the wall and then quit.Only after again you stand up something inside pushes you in that direction and have this strong difficult to explain believe that answers must exist that's when learning starts,because only then you look at this with hunger to separate what is correct from all that may seem like is correct.So you go back to beginning and think about new interpretations of what now seems like effective learning. Better take notes and read them again some time in the future. You need to build your own logic as to what makes money in systematic way if you going to seek strategy to automate I am skeptical about learning anything of value from backtesting alone,you need to discover the logic.I was sitting with a programmer i collaborate with and was explaining the questions that lead to building something meaningful and i said verbally the questions that lead to what we build and all replies were "yes this make sense",Did i seen those questions written somewhere on the forum or in the book,no,not straight up questions.Proper questions need to be asked and answers researched for them later.These questions will come from reading a lot of material,experimenting and experience To make it short,strategies are not books on the shelves.Don't be surprised if you never come across one that has positive expectancy period ! In quest to find out personality plays huge role. i am out,Good Luck !
Credit or rates? I have to assume credit since if you were a rates trader, you would be punting CBOT/CME futures instead of asking this question here. Credit is tough, since it's not likely to get electronic and liquid any time soon. This said, you should have a reasonable enough sense for single name quality and could naturally fit into the equities trading space.
Rates and in all likelihood I will end up doing just what you suggested but I'm not limiting myself to that for now. The one issues I see with trading note and ED futures around all day is that it's a big boys market and I will be at a very big informational disadvantage relative to what I was before. I guess there is a reason Bloomberg costs what it does! Perhaps that's not as big of an issue as I'm imagining but but it is a cause for hesitation out of the gate. At this point I'm really trying to get more of a grasp on whether I'll be better off focusing on charts, coding, both, something else entirely, etc. Initial thoughts are that something more systematic and rules based via programming eliminates emotional trading and allows for more testing and validation. There are certainly higher barriers to entry thought though, namely getting up to speed with python and working out the best platform to use. Anyway, I appreciate everyone's input so far. Definitely helpful.