Will trade for food-reminiscense of an unwanted trader

Discussion in 'Professional Trading' started by Worldcrusher, Feb 19, 2007.

  1. erik123

    erik123

    good luck- I am having a bitch of a time trying to get into energy trading.
    I may be considered old at 33, but I am still calling everyone I can.
    They don't care about my track record, in fact it seems like a determent because they don't want a "rouge trader" - this was told to me by the head of one of the largest NGL traders in NA. That really blew me away, they don't care how well you did, or what you did, they just want to rank and file you. and that it almost word for word what the Director told me.

    But getting in there even if I have to do whatever, I will be able to make more money that if I was trading on my own.


    I didn't see a degree there- you need one.

    Ya, you will be entry level, if you are lucky, I am willing to take a huge pay cut just to get into this crazy business just because of the future payoff.
     
    #21     Feb 20, 2007
  2. erik123, I wish you the best of luck in your endeavors. What you posted seems to be repeated here over and over as far as the common theme of the financial institution regarding "rogue traders." I like that term, BTW.

    Unfortunately, I have a family to support so I cannot come in at an entry level position, if I did it would eat up my trading capital. In answer to your question, I do have a degree in Finance from George Mason University as well as an Associate's degree in Pre-engineering (so I have done all the math requirements for an engineer). Doesn't seem to make much of a difference though.

    Best of luck to you!

    Daryl
     
    #22     Feb 20, 2007
  3. if you work on the west coast, hold your current day job, but trade the markets before work. build up enough capital and establish track record. if you're good and can consistently make money, then eventually you can quit your job and do it full time. if not, you have a steady paycheck to feed your family on.
     
    #23     Feb 20, 2007
  4. Wayne, thanks for your posting and I appreciate your interest in my trading methodology. Here is a brief synopsis: I trade only the index because I know it can't go to zero except in the case of catastrophic failure (in which I will have bigger problems to worry about). Therefore, I do mind owning it and holding it if need be for the long-term. Of the indexes I trade QQQQ because it has a volatility profile, spread and high liquidity/volume that I require.

    I wait until the market becomes "destabilized" in accordance with proprietary indicators and in an occurrence with a frequency less than a certain %. I then sell puts (once again proprietarily determined) with the capital in reserve to buy the underlying should I be assigned. I am prepared to buy them and let the market tell me what to do. If the option expires worthless, I repeat the process when the market is once again destabilized. If assigned, I wait for a destabilization and sell calls. In both cases, regression to the mean almost always ensures that the premiums will fall despite the overall movement of the market, giving me the opportunity to buy them back.

    In a bear market, I will accumulate through scaled assignments and then resell into the demand. Because no bull market goes straight up and no bear market goes straight down, opportunities of destabilization occur frequently enough to provide opportunities to sell calls. (choppy, volatile markets are great for this type of trading). Between dollar cost averaging, collected premiums and dividends paid while holding (though they are so small as to be negligible), my cost basis is constantly falling in a bear market.

    I practice risk management by limiting my margin to what a typical brokerage account permits for stocks and I also divide my trading capital into a certain number of lots so that I am fully positioned to buy on the way down.

    The greatest risk to my methodology is that I will simply expend all of my capital on the way down (100% in the market) and will have to wait until the next destabilization. However, they occur frequently enough to keep income coming in.

    Wayne, in regards to your question: "How would your method do if the Naz 100 stocks were down, week after week, for years? And with ferocious rallies in between?" I would just say that destabilization is triggered by these types of events and they must be significant. That is why I make so few trades. So if the market drop 100 points one week, it would probably not be significant. However, if the market dropped substantially in a day that might be a trigger. So my entries are limited and infact, rather difficult to put on. This means it takes me a long time to be 100% in the market.

    I hope that provides some insight and thanks again to all who have posted and provided such excellent advise!

    Daryl
     
    #24     Feb 20, 2007
  5. Daryl,

    Great thread, I do wish you the best of luck in your future endeavors!

    I was just wondering if you had a website or a blog? I'd be interested in learning more about your trading principles and hopefully learning a thing or two. :)
     
    #25     Feb 20, 2007
  6. Daryl, thanks for filling us in a little on your methods. I know it's off-topic, since you are just asking for possible funding avenues.

    But talking about trading methods is what we do! Sounds like your entry is based on something like very low or high RSI on QQQQ, or percentage move, or Boll Bands, or Put/Call ratio, or advance/decline, or VIX, or a combo of them, etc, etc. Then you sell a few puts or calls and wait for asnmnt or sell a few more.

    That can certainly work if you don't over-lever and get margin called and sold out (at the worst possible time). But let's also not forget that selling puts is the same risk/trade as covered calls - just that you can get much more leverage.

    And, of course, with naked short calls they can work out fine, until the stock gets a buyout offer late on a Friday or over the weekend. Ouch.

    Not sure where I'm going with this other than to say know your risk. Graph those positions. What is the MAX risk if the stock moves XX% against you? Then that's what you can lose. Stops? The market laughs at stops. I traded much like you are doing over the 1999-2002 period. Can you say "9/11"? That one still hurts... And you'd luv to get the prems we got back then. But, alas, it didn't help. The market "knows" how to price options...

    Regards.

    :cool:
     
    #26     Feb 20, 2007
  7. Wayne you present some good mental exercises. You also mentioned stops. That and evolution of a trading system are two items I failed to address but wanted to.

    I do not used stops of any kind any longer. In prior trading, I used stops with every trade and despite the fact that I was right on direction most of the time, the market would dip down, activate my stop for a loss, and then keep going in the direction I had forecasted. It was truly frustrating. I experimented with how far back to set the stops and nothing seemed to help.

    The system of trading I described in my last posting to this thread came about because I realized that I was not smart enough to figure out the direction of the market, I couldn't use stops without dying by a thousand cuts, and if I lost any more money, my wife would leave me, or worse, cut me off from trading :).

    I always seemed to be a step behind and out of the proverbial loop. I studied market makers, big institutional investors and casinos and realized that as a retail trader, I was being set up. I was the gambler and they were the casino. If you look around the table and can't find the patsy, YOU are the patsy. And I was.

    When I realized that I needed to trade like the big money, everything changed. I have a clarity that took me over 12 years to acquire, and now that I have it, no one is interested in putting it to use. Crazy. But the suggestions here have definitely given me the seeds of what will grow into a plan for global conquest!

    Trading style is a very personal expression of your core beliefs and how a trader views the world. It is shocking to me that firms would expect someone to give it up or not welcome someone who has mastered a particular form of trading (and I do not claim that for myself).

    Sorry, if I have rambled here, but I had a few odd thoughts to throw out there.

    Sincerely,
    Daryl
     
    #27     Feb 20, 2007
  8. Matt24SPFL, thank you for your kind words. I do not have a website nor a blog. However, in the spirit of openess that has been displayed here, I would be happy to try and answer any questions you might have. Maybe others will find them useful...

    Great success to you.
    Daryl
     
    #28     Feb 20, 2007
  9. something else to consider: any methodology and system may scale to 300 million easily if the underlying vehicle (such as futures) is liquid enough. The big question is whether the trader is scalable. if you're trading 3-5 million nominally valued futures, are you going to crap in your pants when the trade goes against you and you're down 10-20k? you're going to have to be able to stomach the bad times without getting blown out.

    also, how big is your current account that you're trading with. as had been discussed on the board, it's probably easier to make 30% on a 10k account than trying to make 30% consistently on a 100k account.
     
    #29     Feb 20, 2007
  10. Excellent point, Bandit77! And that is the X factor for me because I have never traded an account over 100k. I will most likely soil my fair share of underwear. However, because of my background and experience in severe high-stress situations (former counter-terrorism and protective services), I think I will rebound quickly when under pressure. Once again, time will tell, if I am ever fortunate enough to have the opportunity. It seems as though AUM will grow slowly despite what I do, and perhaps that is the best thing.

    Sincerely,
    Daryl
     
    #30     Feb 20, 2007