garachen, from some interactions we've had in the past and reading some of your threads i know you to be the real deal and that is quite rare on this forum. You seem to have done quite well for yourself in this business and given your motivation i have to say i am quite skeptical that you will get the benefit you are expecting out of this exercise. I call it that because in my mind i cant justify undertaking this as anything other than a mental exercise. 4-5 years ago i turned one of my good friends into a full time trader. What i did was fund an account 100% then go on to teach him my methods in detail. We were in video chat daily as i traded the account in front of his eyes explaining all my actions. After about 3-4 months i ran up the account 100% at which point i took my initial investment out and turned the account over to him at a 50/50 split. Our roles were reversed. He was doing the execution and explaining the reasons behind it as i only intervened if i disagreed. It probably took another 6-9 months until i was comfortable that he could make it on his own. Fast forward to today, he still trades the account which is now in the 7 digits as well as his own personal account. Even though in the end i profited quite nicely from it my motivation wasnt monetary at all. I never intended to keep the account open this long but given the drop in vol the past few years the frequency of trading dropped so it didnt require much effort to keep it going. Having said all that if i ever were to do this again the reasons cant be monetary at all as the economics behind it simply do not justify it in my opinion. It cant be anyone random off the street and i certainly wouldnt structure it as a business transaction. If your edge is real i can't imagine a single instance where the economics behind it work over the long term unless you are training someone to be a desk jockey in the higher frequencies. Perhaps you can invest this time and extra effort in some other aspects of your life outside of trading which in the end would add variety to your day as well as allow you to meet new people and improve the quality of your life. Unless you are the real life version of Josh Brolin's character in Money Never Sleeps where you always want "More" as just a score then i can't imagine this to work out well, much less as an anxiety reducing proposition.
@garachen: I wondered when you started this thread if you were thinking of some blend of training/mentoring with talent search. I think that's an interesting idea. Some years ago when I was a programmer and before becoming a trader, I saw an ad from a local company offering to train a group of experienced programmers on the computer system they were using. I applied and was accepted, but after the training they never made me a job offer. I suspect the company shot themselves in the foot by grossly overestimating how desirable their company was to work for and how important style is. Programmers tend to be socially challenged nerds. When they find a programmer who looks sharp and talks a great line, the fellow is likely a phony or someone who will not stay long. This company should have been picking from the lower half of the student rankings rather than from the top. If you're planning something like this, I recommend being upfront about your motivation. And I agree with bone that your timeline (2 weeks) is pretty optimistic for programming with tick data, building algos, and real-money trading. The people who do the best in 2 weeks may not have the best qualities longer term. The challenge for the students will be to fund their travel expenses. And you will need to weed out the students who are just there for trading ideas or who would not be a longer-term fit for your organization. But I think this might be a viable alternative to process you're using now. Good luck!
There is the off chance this would turn into a job offer but not too likely. What I need full time - which I described in the job post I had removed - and what I'm looking for out of this are pretty different skill sets. Plus. There's only about 30% chance I'd actually do this but there's a 100% chance I'll have to hire a few people sooner. I think funding their own travel expenses is a reasonable show of good faith. Sure, if you are a starving student and put forth exceptional effort during the two weeks I'd probably reimburse you if you pressed me. But I would never hire someone who did. People with a lot of needs and who have the expectation of you to fulfill them make terrible employees
Hi rallymode, been a while. I think you are probably right. And hearing it from someone else reduces the possibility of experiment likeliness from 40% to 30%. I'll share a bit more of my thought process. There can be some advantages of having fresh minds to look at things. My trading style is very market making centric. I have dozens of market making strategies. Only 2 momentum strategies. I'd like more balance there and as hard as I might try to not overly influence people I work with eventually everyone kind of adopts my philosophy and finds it more productive to just keep iterating on what works. There's some amount of serendipity involved with trading. A few weeks ago we needed to generate more volume on a product so I slapped a generic market making strategy on it and it did horribly. Then I spent a few days watching it carefully and manually trading it and I found it to be an AMAZING product for manual trading. There are a few products like this that I've found. Sometime even from looking at this site. The same usually applies to reading research papers. Sometimes the ideas are good but they are almost always misapplied or applied to poor data. With a bit of tweaking sometimes there's a viable idea. It's hard to increase serendipity where, for example in a permanent hire, I'm pretty focused mainly on identifying a specific skill set and I might have a better chance at it given a small group of motivated people with a short time horizon.
I forgot to mention. I'll be in Chicago a few days mid October doing my semi annual visit. PM me if you want to meet up. I'd like to keep it < 5. I'm not sure we will have time. It's usually pretty busy. But we might.
Look for the ones who have a lot of needs and are grateful that you provide the means for them to fulfill those needs. I once worked for a company whose chairman was a great believer in second chances, because he came from nothing. The 'second chancers' were almost always better than the swish MBAs because they valued the job more and put in that much more effort and diligence.
Good post. I think we might distinguish garachen's proposal from your training experience. This isn't about teaching a real edge to someone else (which I would agree is uneconomic) - rather I thought garachen was proposing presenting some information on types of successful automated strategies and details on e.g. latency, matching engines, etc beyond what is available from the published exchange documentation (which I'd expect everyone attending to be familiar with). Then with access to a database/backtesting engine of the sophistication which would not usually be available to all but sophisticated / institutional participants, a group of motivated and smart individuals could test theories and quickly determine which areas merited further investigation. Serendipity is the word indeed in this business where even the small chance of discovering something worthwhile can make relatively short and cheap exploratory ventures +EV. The biggest issue is people & personalities. I was (and still am to an extent) somewhat of a recluse. Human nature being what it is there would be (for me) an unacceptably high risk of anxiety created by people...being people. If all participants had the correct attitude and were also mindful, thoughtful, and respectful I would think the experience would be valuable for all involved. Screening to ensure (as well as possible) the correct participants are selected would likely be tedious and for this reason I understand the recommendations against doing this. I've benefited immensely in my younger years from those who were prepared to give opportunity and access to polite, respectful, intelligent, and hard working young men. I fear that the general decline of behavioural standards, general intelligence, motivation, and lack of personal responsibility combine to present formidable drawbacks to those in a position to offer such opportunities. Sadly this worthwhile idea may well remain a thought experiment.
There's a fine line between being able and willing to help people find a solution to their problems and people who expect their employer to solve their (numerous) issues. I've found the latter to be unmotivated and ungrateful.
+1 I need a comfortable and quiet workplace and also the opportunity to withdraw and contemplate. I tried a trading arcade during the late 1990's and early 2000's and found it a hindrance to productivity. It was fun for a while. And I need to work at my own pace, because my best work often evolves in spurts. I wonder if garachen could pattern his business after a pro sports team whereby participants could be cut because they aren't needed, not only because they didn't perform. Conventional employment (based on the traditional master/servant relationship) would seem to be a poor structure for this business.
Indeed yes. We solved that issue by putting everyone on a contract for provision of services. Everyone understood that they could be fired with no notice and no compensation. We had no obligation to provide them work every day, but if they proved themselves useful, they'd have a hard time getting a vacation. You'd be quite amazed at how that sorts out the wheat from the chaff.