I see in agrrement with Maverick to a degree. I work full time at a job which pays welll in 6 figures, and trade to get out of that rut. I only trade the 2.5 most productive hours of the day, but put at least 2-3 hours homework in to prepare for this short period so I have my decisions on what I will do with price action pre-made. Some is news driven, the remaining on preparing my ACD entries, now combined with camarillo pivots, if the price action says these are good decision points. I trade equities, with some spreads such as the SPY - FXE. I once took a logical trader class with mark for the make a wish foundation. It was interesting how he focused so little on the method but on understanding the world and news.
I understand this works for you with your limited amount of data points. But let me play devil's advocate. Let's say you are making a meaningful return doing this. Hell, any positive return above the risk free interest rate. Why would any hedge fund or prop firm spend millions of hours working at this if they could run a 3 hour a day 5 day a week operation and generate edge? This is not directed at you personally. I always ask guys this as a way to think about what they are doing. I use to ask guys who told me they would make 50% a year trading iron condors why no hedge funds or investment banks trade them and make 50% a year. Why do they hire 1000's of quants to make 12% a year if making 50% a year is so easy trading condors. I never would get an answer. I know a lot of guys in this business that don't know what their kids and wife look like because they work so hard trying to eek out a few extra basis pts a year. If one could trade 3 hours a day and generate some edge, I would think most if not the entire industry would do it. Just something to think about. I ask myself this question all the time.
http://www.youtube.com/watch?v=LiE1VgWdcQM ........................................................... ed seykota and the boyz trading rules. the lad plays a mean banjo " ride the bucking bronco......." cheers, s
I like the devil's advocate, my answer is simple. I am well above the zero risk, and appproaching my salary with my trading. I do this so I can save much faster and leave the suit behind. On current pace, I am 3 years away from accomplishing this very important goal. As for family time, I get lots of quality time. I trade on west coast, so up 2 hours before everyone, it fits for me, and I know I am in a minority this works for.
Right, I know it works for you. But I'm curious why you think multi-billion dollar hedge funds don't do this. They like their families too! LOL. At least some of them do.
I don't know why or their goals. Perhaps hidden in there is the why. I trade my method, have different goals than most (I don't know another technology VP that works and trades actively). The hous required for me to make money trading is less than a hedgy, very simple. Now that my trade plan for tormorrow is ready except for pre-market review, I am off to the beach with my wife and a massage
Fair question, and very valid point. I always thought its because firms had to find various edges to attempt to diversify their risk and use as many non-correlated strategies as possible, and avoid slippage. Also they have to find multiple strategies in order put to work all that money they have. So in essence they need more edge producing avenues to spread out their capital, and multiple markets to do it with.