I will agree with you on that Once they invented Globex It was the best thing they ever did for the smalltime independent trader
Are you saying that there could be some who know inside-mates and top notch brokers? If yes, who pays them? It would worry me if I were to know they exist. Would it worry you?
or it should flow around the -$500 mark for some time before your out?i`m just trying to get what you meant by the ''$500 time stop''.
Suggestion: Add substance to the thread or go away. Your disjointed comments are the equivilent of talking to yourself. Most of us have the good sense to avoid jerking off in a public place. Make that the first thing you learn from this interesting thread.
A friend of mine who was a floor trader asked me to rewrite his resume when his floor was getting "thin" and it was headed for extinction. I wrote advertising copy for a company I owned at one point in my life and he knew that the copy was strong. He was looking for a job with a hedge fund and did not even have a clear idea of what he could do for them. The following week he asked me to help two of his friends and then three of their friends called the week after that. These guys, all succesful floor traders ... none made under 200K and one double that, were terrified that once there was no longer a tit to suck on they were mediocre at best. None of this group (I'm sure a level or two up was different) wanted to risk their capital trading on the screen; they knew the couldn't make it. s0mmi knows from what he speaks. There were an amazing number of guys on floors that got in on a relative or played high school ball with a friend at Bear Sterns and got first cracker at "paper" as it hit the floor. I'm not saying that there weren't very sharp guys on every floor but the bottom third are probably pumping gas today. I was amazed at how lame these guys were.
Interesting Thread. To the OP, Could you give an Idea about your Firm's overall capital Including margins of all individual traders . are we talking 500 Mil or more than that?
>> My friend... in all aspects of life there is corruption and cheating. Some firm made $500 million in 10 seconds because they knew that the U.S. Fed would not taper and beat the speed of light to buy bonds/equities when the Fed announced No Taper in September. Oh, and what did the Security of Exchange Commission do? NOTHING. The regulators did NOTHING. They let them slide. It's kind of a big scam with special privileges for the big boys. They pay a lot of money to the exchanges in brokerage fees so they would never be fined. This only happened a few months ago... and no-body was charged. They didn't release the name of the firm either. All kept secret. Funny that, hey? But more importantly, let me open your mind. If you do a lot of 'brokerage' for a specific firm, you get some special privileges. You make friends around in the industry... because your broker is your little sex toy who leeches off you and make money off you. They take no risk. They're just your little bitch. But when they over-hear something, or they might 'over hear' something in their office, or they might walk past their friends desk and see what that he has an incoming order from "Insert random Hedge Fund here" to sell 5,000 of whatever Bond future today, you start to get a feel for the little advantages to be had. >> Now I know for a fact that a few of bigger guys in my firm receive special phone calls every now and then. They are informed about certain 'rumours' regarding which bank/fund is looking at which cash bond, or how big the rumoured auction is going to be. Why is this important? Well, as a big trader, you won't know exactly how to cheat, but you will know that the dollar amount of a cash-auction processed to one company might be something like $280 million dollars.... which means that you would know "Ahh, okay, so over the next few days... someone is going to have to sell a lot of Bonds. They would need to do... 25,000-28,000 as an order." >> I have both seen this with my own eyes AND heard about it. Rumours don't happen out of nowhere in the Finance industry. >> I am not making this up. I know this first hand. Yes it sucks but what can you do? There's collusion and cheating even in politics. But... the best part is, you don't NEED it to make money. You can win over time, too. >> This shouldn't scare you because it is only a very very very select few who would profit from such information. Don't forget, you may be caught long but another big firm might cover a position to let you out... and those poor guys didn't have the secret information! So it's a mugs game. Everyone is out to f*ck everyone else in the ass. That's just the finance industry. >> You can battle it out. If you are disciplined and focus you WILL win over time with enough persevere, will and determination.
>> I'm just giving you a broad example here. You mentioned having a small account.. of $10k capital. Well, that is plenty. You can have a $500 DAILY stop, as well as use a time stop with it. Using 1-lots in the U.S. Tnote is only $15/tick. You can collect 2-3 more times and have maximum 3-lots ($45/tick) and try to weave your way out of your position and still make money. You can survive in the long run with this small account and build yourself up. >> There is no golden rule as to when you should get out. But remember we are against bots and algorithms. If you make your time-frame of exit too short, you will do a lot of brokerage (at terrible retail cost price relative to the bots) and you will rely on some sort of 'win rate percentage' which is very computerized style of trading. >> If you were to just long 1 U.S. T-note and then it goes offside, perhaps you could make yourself a rule "Okay I'm only going to average WHEN the Bund stops and goes up 5-ticks on a 5-min chart, or when the Dollar yen stops moving and settles." It's things like these which are like 'extinguishing the emergency fires' and that is what is going to take your account far.
>> I completely believe this story. In short, markets got faster, deadlier, and the knives started to come out of everyones pockets. >> Basically, with electronic trading and 'markets getting more efficient', people who use primitive strategies were not able to milk it for ANYWHERE NEAR as long as the time they could milk it on the floor. In fact, in the early electronic trading days, I was told on two separate accounts about how patterns would emerge in the market you watched.... and the same patterns would happen for a good couple of months. Depth Market book example: Sometimes in a specific Australian product, in the very open maybe the market would go 1-way until big size appeared and then it would go the other way. >> So now markets are more punishing. If you find a pattern that is very obvious to see, chances are its going to be gobbled up and won't appear the next day there-after. You need to become a multi-market, multi-skilled trader to survive. It's not a scary thing.. if you work hard, you will get there. You can't just do things like place bids/offers and get easy flicks anymore. That is primitive trading. And that's long gone and dead now. There are simply far too many algorithms, bots, and funds out there cleaning things up.
>> To be honest I have no idea about the Firm's overrall capital. If I had to take a wild guess, purely based on rumour, I would say that the allocated cash at hand may be around 30-$40 million of 'backing' which the exchange will use as a buffer to distribute a multitude of limits across lots of financial products. >> As far as the available limits, I do not know. In all firms, though, it is like a pyramid scheme. For 100 of our futures traders, I am very sure that the top 5 clean over a $1 million a year. (Two of them make more than 4-5 million). For 6-15... I am guessing it varies anywhere between +$200k up to $1 million. Depends on how good the year is etc. For everyone else.... it's basically a series of battlers who are just emerging the 150-200k/mark (but they haven't done it consistently... so for like more than 1 year straight). And the rest are lucky to even crack 50-70k/year. It really is a 'winner takes all' type of game. >> I also believe that because my firm does a lot of brokerage, it gets very very very cheap cost of limits distributed to us. The margin requirements are very small. In fact, when my firm asks for money deposited it's not actually really because the firm needs it. They don't care about 'cost of borrowing' and those useless pennies. When they want you to deposit money in the account, it's to show you're serious. It's also to back yourself mentally. And to have an account at least that always has got your back when things may seem tough. So that you're never truly in too much debt to the company. >> I feel that the primary 'goal' of every prop shop is first and fore-most a brokerage house. But you will definitely get those few mentors/head-traders who don't want you to play the brokerage-game and hunt for rebates, but instead start to make 500k/year to justify your heart being put on the line every day.