I have found wso to be in general very academic when it comes to trading, but also very quant based. The general theme is that more math = more money. Honestly I feel this is just not the case. Markets are nothing more than the average of all market participant beliefs at a given time. The market is never wrong, it is always right. That does not mean that significant risk adjusted returns cannot be achieved.
I pose this question to all of wso - What makes a good trader?
The most essential trait I feel that makes a good trader is someone that is consistent. Consistency really is key, sure there will be guys that have terrific years but then give it all back the next year. For the profitable traders they will fall somewhere in the extreme of great highs and lows. What creates consistency? Your ability to make decisions under extreme pressure and completely quell the anxiety. A good trader is one that is able to accept when they are wrong and move on to the next trade. Having a mental repitioure is crucial to building consistency.
The second most important trait is that you must come to truly accept the risks associated with trading. You must be willing to realize that any results from trading are the results that you created. Markets provide the ultimate freedom. In most cases (unless carrying extreme size) there is always a way to get in and out.
Third, there needs to be a positive attitude and belief system in place. Good traders believe they have earned their return and do not attribute it to luck.
Your ability to make decisions under extreme pressure and completely quell the anxiety. A good trader is one that is able to accept when they are wrong and move on to the next trade.
Well, I think that it doesn't matter. As long as you are a cash-cow for the firm, and you get your huge bonus at the end of the year, it doesn't matter. Some people were born to trade, some weren't. People have certain qualities that make them awesome traders, whether it be intuition, luck, math or quant skills or something bizzare, as long as you make money, its all good. I, for one am an asian man who went to princeton, Im trading on a BB FICC, I would say Im good (I'm up 24% so far), but theres this guy I know, didnt go to an ivy, or graduated high school, for that matter, but he is a way better trader than me.
q: what makes a good trader?
a: knowing you are not that good.
Touche
Also knowing how to cut losses.
this bapebanker guy has been posting about how he went to princeton in many different threads. WE GET IT. You went to a target. so what. Many of us here went to the ivys. Nothing special.
Signs that you can be a good trader? (Originally Posted: 01/31/2014)
I've had an online brokerage account with TD Ameritrade for years where I've traded and have been pretty consistently profitable (except '08 and '09 of course). The profits mostly come from picking the right stocks (not shorting, arbitrage or anything more advanced). Is this any indication of being profitable as a professional trader?
Nope its not an indicator. If you lost in 08 and 09 and used the phrase "of course" it seems more of a sign that you are in fact not a good trader. It seems like you are just going with the flow of the market. The market has done well in years prior to 08/09 and years after. So as long as you were long on a basket of investments for a long period of time then you can fool yourself into thinking you are a "consistently profitable trader." In fact you are just an investor riding the waves of the market.
That said, all of this doesn't mean you don't have the intelligence to become a good trader. I know nothing about how your mind works and what types of things you excel at. Based on your post I would say you know too little about trading to even tell if you would be good at it. Another fact in your post that proves this is you said the profits came from picking the right stocks and yet you then said not shorting and compared it to an advanced trading strategy, even though shorting is a very simple concept. This means that you believe "picking stocks" is equivalent to going long only.
My advice: If you do want to consider trading professionally, spend a lot more time studying how trading works and you will quickly see how different it is to what you're doing. If it gets too complicated and you can't handle losing consistently in the beginning and/or you don't like it period, trading is not for you.
pretty much this
I made money in '09. Most people made money in '09. The S&P 500 ended '09 up 20% for God's sakes.
Make that just '08. I bought Apple in '09 for $125 a share. That was a good bargain. Yeah, I'll need to read up on trading more...
So it sounds like you're having trouble keeping track of your trades.
I'm really not sure this is the business for you. Maybe E.R. or Fixed Income Research.
No because if you were good, you'd have made tons of money in 2008 by shorting.
The interest you have shown by opening the account and trying to pick stocks in a thoughtful way at a young age is a good sign in terms of you eventually becoming a good trader. In my opinion anyone can be a good trader with work and dedication (except for a very few people who have real personality/emotional issues). Keep working on getting better both in terms of theory and practice and you most likely can become a professional trader. Trading is a skill.
Trading is a skill, but there are certain prerequisites for it. One of them is being organized, having a lot of situational awareness, and a lot of confidence. I'm not sure I see OP doing well in S&T at a BB (maybe as a quant or desk strat- I don't know what his math background is).
My answer would be different for ER, and I think that's really what OP wants, but doesn't realize yet. At a bank, ER is where all of the decisions are made about whether a stock is a cheap, or whether people should buy it. Banks no longer make these bets, and many of the people at asset managers and hedge funds making these kinds of decisions are former ER guys.
Where is the real Bondarb?
If you're looking at the quantitative side of trading such as prop or hedge fund, being able to understand how markets work is great, but market making is vastly different than day trading/investing.
...do you benchmark yourself against the S&P? Or have anyway of measuring/benchmarking your performance in the equity market?
Risk management. Trading is not as much about making money, as about not losing money. The ability to identify and mitigate risks is imo the most important trait a trader must have.
What makes a good trader? - Analogy correct? (Originally Posted: 04/03/2007)
Is this analogy correct at all??
If you asked Michael Jordan how he made the last second 3 pointer to win the game while being double teamed I doubt he would have much to say.
If you ask an allstar baseball player how he hits homeruns he could not say much more than "I just swung the bat and hit it hard."
If you ask an all star trader how he knew when to execute the buy and sell, he would say it was a gut feeling.
Is trading a skill that can only be taught to a certain extent, and then the rest of the way its instinct and understanding of the trade?
errr...i think you guys are missing bapebanker's point, which is that it DOESN't matter whether or not he/you went to Princeton.
Summing up his post, he's saying that 1) some people were born to trade and 2) There's no specific set of qualities that makes a good trader. Some of them are good bc they are extremely good at math. Some are good bc they were born with the "instinct", etc.
bump
??
Seriously, this is a legit question. Are there no traders on this forum?
Is there a single person out there who actually has a real job and can contribute to this forum?
yes, what do you want?
different products trade differently and their are different types of traders. some of it is personality based, sure. but you can't trade exotics by gut feeling for instance.
Which products can you trade by gut feeling? Also, is this what people mean when they say a product is more qualitative than quant?
If you asked Michael Jordan how he hit the last second shot he would (and has) say that it was a result of the thousands of shots he made in practice leading up to that moment.
....discipline to follow your trading plan day in and day out. u must want the win more than anything else in life because competition doesn't feel karma.
Whatever you do .... don't ever compare MJ shooting a three last second to trading during an interview. You'll look foolish.
Honestly, people think traders are gods. They aren't.
Don't think that is what the OP was implying.
There are a lot of analogies between sports and trading. Both are basically decision making under uncertainty. If a player is a 40% three point shooter then that means that in the long run he should make 40% of the threes he takes.
Now the EV of taking a three is EV = 0.4u(3) + 0.6u(0) Where u(x) is the utility function that he/team receives from points.
Now you may argue that no player on earth does this sort of decision process, but I would argue that that is what a good athlete can do very quickly to make decisions.
This concept is very similar to what trading is about.
Read the book Market Wizards at least 3 times and then see if you still want to ask this question.
best advice i've read all day
[For All Aspiring Traders] How do you know that you will turn out to be a good trader? (Originally Posted: 04/12/2012)
1) How do you know you won't end up like Nick Leeson or Kweku Adoboli, the former UBS trader? Where you continue to make more trades, hoping that it will cover up your losses?
2) It is a well known teaching in business school that most active professional fund managers cannot beat the market index returns. How can you be sure you will not end up like one?
3) We always like to hear or read about the good stuff, like interview this or that famous trader and he tells us that strategy. When we read something like what BBs have to let go of xx number of traders from their trading desks, we tend to read about it awhile and then let it go. In short we like to remember the good stuff and forget the bad.
Just having many thoughts after someone I know is owing $300k in debt after trading the stock market (which was bearish in the second half of last year). He is not a trader but basically trades his own money at night after work. I have no idea how he got into so much debt but it seems that he borrowed more and more to think that he could recover his losses. He ended up gambling. And note that he is a smart guy intellectually as he graduated with a good honours degree from a good school. Last I heard, he may file for bankruptcy and may lose his job because he did not declare this debt to his company.
Another person close to me also got reassigned to a different portfolio in a bank after the bank cut down their trading desks as they were not making much money last year. He was previously a Fixed Income Trader but now he is being assigned to Asset Management doing an analyst job. His Fixed Income desk performed badly last year and his own bonus got decreased by 75%. The Fixed Income Head of his desk now has lesser traders under him and his trading budget decreased by half. To top it off, he says this is better than being jobless as he had seen some of his fellow traders at other BBs losing their jobs.
Any thoughts guys? I mean have you all taken all these into consideration? Just worried as I am graduating from my Masters soon.
"What the hell does your trading at BB FICC and went to a target have to do with what it takes to be a good trader?"
Dude, stop being a tool. Those two things have very much to do with being a good trader.
Target School - Means he received a top education from some of the world's top professors. Don't you think listening to Mankiw teach you macroeconomics then just reading a textbook, will give you a step up?
BB FICC - He is in the environment to learn from some of the best and brightest. He hs getting firsthand teachings from great traders. As well as access to large pools of capital and unique strategies and models.
If you seriously don't think that BBs and other top firms can not just get brains and make them great traders, you are mad jaded.
Furthermore he speaks that even with all his advantages, someone without these can still succeed and surpass him. That is his point, and he hit it bang on.
The traders I worked with said its all about discipline. Having the discipline to find that specialized niche strategy that works for you and sticking to it. Having the discipline to think ahead and change that strategy when you see it compromising. As well with what you said, having the discipline to never give it all back.
yeah, trading has a high attrition rate. if you didn't know this before you decided to go into it you didn't do your research. anyone can be fired at anytime for anything. id rather be coming into the industry at the bottom of the market cycle than at the top though....thats for damn sure
nobody really knows if they will be a good trader or not unless you actually go and trade. there's absolutely no way of knowing, and banks try to use all of their resources to determine who they think will be the best. obviously it doesnt always work out. if you go in thinking you will fail....you most likely will end up failing.
though I very much agree with this statement, I don't think my 2 friends traded thinking they will fail.
I don't know and if it doesn't workout, I will try to go to Asset Management. I will try to prepare myself for the worst by taking steps which would allow me to find a job in case I lose it - I will try to get CFA and get contacts in asset management industry. Also, getting finances in order will be a priority for me - think about being frugal and investing.
But I'm a student know so thinking what if questions is pointless, first I have to get in to even be concerned about potential job loss.
How does he trade after the markets closed? For all you know he could be hitting the craps tables. In any case, your friend is not a trader. As you said, he is a gambler. In most cases banks can sniff out that personality quickly (not always - Kweku), and they would be let go.
I think the best way to get an idea (just a sense, not certainty) of how you would be as a trader is to trade your own money. Eventually you will have a horrible trade in which you lose big, and if you can handle that with a cool head, overcome greed (decide to cut your losses) and panic (close the trade according to an orderly exit strategy), and rein in your emotions, you may have what it takes to at least START trading institutionally. If you (or your parents) don't have $3-5k to commit to this brokerage account, I guess you could try to have the same approach to poker. Ultimately you need to figure out whether you have the ability to rationally manage risk under pressure or fear of loss - that's what makes a good trader. Your friend essentially decided to double down on a bad investment (his experience gambling), and though he seems to be am intellectual guy outwardly his actions speak to him being emotional and greedy.
i don't know the specifics. Maybe he executed his trades at the opening bell? Anyway, market was horrible at the second half of last year. It was so bearish that many thought there would be another financial crisis.
I think you can have all the skills you want but a lot of it is mental. How can you possibly know that your ready to handle staring down a 10% loss on the first day or that genius carry trade you have on go against you and blow you up entirely. When you swing for the fences and miss, can your ego take it? Can you stand losing money on a position and just move on? So much of trading is staying disciplined inside a system with pre-defined rules. Obviously there are people who can just trade from the gut on a whim but those are few and far between. Frankly, more important to trading than the technical skills are ego and temperment management. The moment you start to get too emotional about your trades is the beginning of the end.
Could not be more true
exactly. the mental part is v important.
Traders (in the strict sense) are not fund managers. They don't "invest"; they make markets and their profit is the spread on their securities.
For fund managers, the value you provide isn't necessarily solely in the returns you yourself provide, independent of how other fund managers perform. Instead, part of the value is in providing diversification to institutions. There are many funds that exist with low Sharpe Ratios (i.e. their risk/return ratio is not very favorable), but since many of these are not very correlated with the market, they provide an important aspect of diversification for institutions.
Oh please, most garbage definition of trader yet.
Traders (actually, in the strict sense) exchange one thing for something else. Let's leave aside YOUR definition, which is a market maker (aka dealer, who has very little and usually no skin in the game) and stick with pure proprietary trade. They exchange the risk (and one can obviously lever up) of something immediately for the reward possible in the future. Be it something plain vanilla as long equity (giving up the capital and giving it to someone else in the market) or more exotic like selling a CDS, i.e. receiving payments every Q whilst possibly having to payout in an unfortunate event.
i dont know but i know im doing shitty. what can i do? :(
To your questions:
1)Depends on your moral compass and your ego.
2) I trade on the flow institutional sales guys can hussle up and standard spread (and clip) trades for hedge funds. Not asset managment.
3) General definitions: People that suck at their job will get the boot, and good people will stay (unless it is a complete revamp of the desk).
I take it you're mostly interested in what kind of an 'X' factor prop traders have to remain profitable. But this is just my two cents.
Dealers have no skin in the game? Are you kidding me?
As for the OP:
1.- Because I'm not a rogue trader. If you lose money you go home, try to sleep and make it back the next day. You don't do illegal shit. I mean, that's like asking someone how do they know they are not going to become thieves and steal all the computers in the office. It's one thing to suck as a trader, it's a whole lot different thing to be Kweku.
2.- Fund managers whose target is to beat a market index generally beat it. Otherwise they don't stay in business too long. Like someone said above, not all the funds in the world invest in blue-chip american stocks with the target of beating the S&P. There are thousands of indices, strategies and targets.
3.- There's no question in there. Yes, some people are good and make millions, some people suck and get fired. That happens in every job. What's your point?
4.- No offense, but your friend is an idiot.
Go for singles and not home runs. If you know what you're doing, you can size up accordingly. If not, it won't bankrupt you to find out. I guarantee that a good number of the traders who've ever blown up big time have overreached on their risk mgmt. Using this, it's gonna take a long time to blow up like your examples, and I would hope you have the common sense to stop and take a look at what you're doing wrong long before that occurs.
It's like driving on the highway: if you're tailgating, you have little room for error if the person in front of you slams on the brakes. If you give them ample room, the odds of a major accident drop precipitously, and you still get to where you're going in the end.
And #2 is pure BS; that sounds like that random walk nonsense. If that's true, then Soros, Cohen must be the luckiest guys in the history of mankind. And I must be having an incredibly lucky April, because I made 6% last week, and 3% today.
saved
It's not about P/L... It's about consistency. The best traders have intuition... They can easily look at the market and tell whether it is expensive or cheap. They don't second guess and bite their nails whether or not to get into trade... They JUST know. Once you master intuition, plus whatever strategy you use, you will be a great trader. Of course, it doesn't mean you will make money every trade. No one does...
what makes good traders? (Originally Posted: 01/05/2009)
I am a junior at a target school and am applying for summer internships. I know I want to work in finance and trading appeals to me in many ways. However, I also have some reservations about whether my natural strengths and weaknesses are suited to trading. My question to the traders out there is: what kind of traits make the best traders? I'm talking the prop traders who bring home the big pay-checks.
For example, under what kind of time pressure must decisions be made? I revel in constant stress, but if given a very short time to make an enormous, mathematical decision, I feel there are many others better than I. A math class analogy would be that I could ace a long, hard, conceptual test, but would have a tougher time than many other bright kids doing 53*92 in my head during an interview.
Please give any inherent or learned traits you think are key for success in trading. If this is a redundant thread, I apologize, the search facilities suck.
Self-reliance Sound Judgment Courage to Act Prudence Flexibility
Self-reliance Sound Judgment Courage to Act Prudence Flexibility
I could 2nd courage and flexiblity.
I think a strong desire to win is important to me
i'd recommend reading Market Wizards by Jack Schwager
I am a firm believer in flexibility and ability to stay calm. Many people underestimate the importance of staying calm, but so many times traders have told me that they've made bad decisions in the past because they were anxious and as a result impatient.
ADD
I can only speak for myself, but I have an uncanny knack (almost like Rain Man) for calculating complex equations in my head on the spot. When I was trading futures full time, it was a distinct advantage.
I'm not saying other guys without the talent didn't do well also, but they never managed to pounce on the arbitrage situations I was able to recognize. You can probably make it as a trader without a head for quick math, but you should definitely work on it because it makes life a hell of a lot easier.
Also, the emotional aspects of the job can't be overstated. If you don't have some dipshit college intern to beat on when shit goes south, you'll self destruct.
To those applying to S&T SA/FT, how do you guys know beforehand that you'll make good traders? (Originally Posted: 01/07/2010)
people keep telling me how limited the exit opps are for S&T, and that you would be limited by your product group...they also say that average to mediocre traders are always fired...that being the case how would anyone know in college whether or not they'll make good traders? people say one should get an internship to find out, but wouldnt getting an SA spot in S&T also mean that u'll most likely end up in S&T FT? I feel that finding out one is not a good trader in the job would make it too late to make a meaningful switch to a different career
40% skill; 60% luck & risk taking
To those about to rock...
I don't really think there is any way to know for sure. You have to know that you want to be in S&T for the right reasons (which differ based on person) and know that you'll enjoy it (which is where the internship experience comes in) and have confidence that you can add something to the desk you land on. If not, yea, you'll get fired. But that's just the nature of the beast.
Open a small trading account, learn as much as you can by asking successful people, and see if you are even equipped with the emotional discipline in the first place.
All of that can easily be done before committing to a major career move.
And even if you aren't a spectacular trader, you could become a product specialist on the sales side.
You don't. That's why you end up in sales.
View it this way, as a 22 year old your downside is very, very limited. You have next to no responsibilities and overhead. This is THE time to take risks because your risk profile is skewed. You fail, your downside is minimal. However, your upside is not capped.
Its also false that trading has no exit opps. Plenty of asset classes to transition into. There is are more informed posters on this board who can help you with that.
Double post
What's with all the idiots on this site always making fun of sales as if it was second rate to trading?
Compensation wise, good salesman >>avg. trader, some good traders. Some sales positions also require a good bit of intellect.
passed up a sales gig because i couldn't see myself doing it at all (i'm just not very salesish) and find salespeople annoying in some respects (way too friendly?) but really, its crazy how people on here diss anything thats not banking/trading FO.
if you are doubting yourself right now, and have no clue if should or should not be, then you will not make a good trader...
with that said, you can always diversify :)
This is why there is interviews, people who are doubters get weed'd out quick.. Also SA vs FT is totally different story if by the time your interviewing for FT and you do not think you will be a good salesman or trader, its very doubtful anyone is going to buy your story.
Also agreed people who have not worked in BB keep ripping on sales, while there is tons of traders out there that hate the sales guy. The sales guy makes his money in January. The trader makes his/her in November when they are actually managing the risk.
An internship means nothing its 4months, you do not decide your life in 4months.
Oh yah very common behavioral first round question. "I tell you to go research XYZ, you come back with all the data and tell me this how I should trade it, I tell you no your an idiot your data is crap the market acts like ABC. How do you react and who is correct?"
so what would be a good answer to this question that would not get one dinged?
Seeing as how Colt Mccoy has gone down, and the longhorns are totally out of sink.
Another version of this question is, "tell me a time that you have convinced someone of something, what was it, how did you do it, and what was the ultimate result?"
Answer it truthfully if your an analytical person, explain that you think your analysis is correct and the trader should seriously consider X,Y,Z as the market has changed this year. If your a gut person, explain how all the research in the world can not top experience and someone 5-10 years your senoir has a much better gut and grasp of how the market will react regardless of conditions. If your a cocky kid explain how you think you analysis is correct and if the trader totally did not agree with it, they are seriously hurting themselves.
Other questions this style. "Would you rather the richest of your friends, or have way richer friends and be poorer?". "If I gave you 10million today, what would you do? ok now what if i offer you this job or the money which you going to choose?" "# You have very good grades. However, you don't you have a 4.0. Given the fact that there are students around with stronger academic credentials, why should we consider you?" "How do you measure success in your life?" "What about your personality will make you a good Trader?"
I agree with the poster who said that people shouldnt knock sales...many many salesman make big $'s while taking no risk. They laugh their way to the bank while investment bankers work 20 hours a day for a fraction of the cash and some traders kill themselves taking big risk to make less money. If you are succesful, sales can be the best job on all of wall st. in terms of money earned vs stress/hours. Also, as I have discussed previously, EVERYONE on the sell-side of wall st. is in reality a salesman....that includes the bankers, the research analysts, and of course the actual sales force. So I would suggest getting over the whole stigma about being in sales.
On the question of "how do you know you'd be a good trader?"....I think the whole concept is mistaking the skill needed to be a buyside trader vs that of a sell-side trader. If you are sitting at a hedge fund trading from the buyside then you are truely playing a zero-sum game and it is very difficult to be good. Very few buyside traders will end up being truly great in the long run (by definition) and most will end up being humbled by the market.
However, on the sell-side you are primarily making markets and you have a huge advantage because of that. It is really not that hard to make money as a sell-side trader and it is very rare to hear about a young sell-side trader "blowing up". Now that is not to say that everyone will be a good sell-side trader, it takes certain skills just like it takes skills to be a passable investment banker or research analyst, however it is not like the buyside where most who enter will be cut down by the market.
To summarize, the whole mystique of "being a great trader" is not something you are probably going to have to worry about in the first five years of your career on the sell-side. You probably will not be taking meaningful risk and even if you are lucky enough to do so it will be with the great advantage of being a market-maker in the products you are trading.
What I've notice from hanging out with traders...we all get cocky making coin. Then in time hopefully you'll get to join the elite crowd. Those are the humble players.
where else can you make 100k+ first two years out of college with absurd upside if you're good?
"In my opinion level of education matters little to nothing in being a sucessful trader. A certain level of formal education may be required yes, and certainly to get into good programs its mandatory. I do not think formal education gives anyone a leg up in trading no."
it depends entirerly on product. good spot fx trader might not be good structured traders and vice versa.
for the more structured products, some handle on the math is critical.
What makes a successful Trader? (Originally Posted: 05/09/2011)
Hi guys,
So, I've been going back and forth between several career paths within Finance (AM, IBD to Trading) but I always seem to come back to the latter. I know it's not good to do that but I just feel that I want to make sure I'm able to enter a career that I enjoy but also one that I would do well in.
What do you think makes a good Trader, in terms of skills? What should one consider before he/she pursues such a career?
multi tasking
multitasking is important
but
1) short memory/even temperament. if you find yourself getting wired up and screaming at video games when you fuck up, I wouldnt recommend trading
2) if you want to insure you have a job in 3 years, a freakish obsession understanding/minimizing risk
that being said there are plenty of successful traders who are borderline bipolar... they just tend to get fired in a spectacular blow up
I hear balls of steel and ice water in the veins are good to have
Go take $5K to your backyard and burn it. How do you feel?
Being a good trader is more about learning how to lose money than it is about learning how to make it.
I felt extremely aroused...guess I'm gonna be a great trader!
good robots make good traders, and good traders make good robots
^ I take it that you're a mechanical trader.
There's no specific skills or personality that make a successful trader; each trader can have strengths or weaknesses of any kind. I believe, in some ways, that patience and focus make some traders better than others.
I don't care if your a phd or high school drop out
You MUST have a love for the game and a burning passion to win. Your strengths and weaknesses will work themselves out in the long run due the first two traits in my honest opinion. Many may see it differently.
THIS for sure.
non-public information
This!
A connection to the government in every conoutry but the U.S.
wheres you poker face??? you gotta be zen like you will lose money but if you play poker you actually may have learned to limit risk after all trading is about playing long enough and having en edge(technicals) and over time profitting...
How do I become a great trader? (Originally Posted: 10/04/2007)
What can I do while still in school to develop skill in trading as a career? thanks
If you read Market Wizards, the series of books interviews top traders and they have some common threads. I think there is an element of pure talent that cannot be taught. Some people have an athletic type ability to feel out the market. Also, it is important to be very disciplined and stick to strategies and control emotion. I think good traders match their specific skills to what and how they trade.
www.sharpeinvesting.com
Most desks within BBs are math heavy, so get comfortable with numbers.
^^^What kind of math tho? like advanced calc? or you mean more like getting comfortable with doing math in your head...thanks
Start reading up on technical analysis, check out the Investopedia free tutorial on tech. analysis. Start practicing on the Investopedia simulator also.
Learn to play poker, it will teach you control over your emotions which is one of if not the most important personality traits for a trader.
I'd also say take a long HARSH look at yourself, and see if you have it. I am NEVER one to doubt people but trading takes a certain personality type. Just look at how level-headed you are and realllllly think clearly that if you lost money, could you trade with the same prowess you did beforehand. If you make a giant profit will you become a cowboy? If you lose alot of money will you become super shy and risk-averse? You have to learn to keep your emotions in check in order to be a great trader.
Lastly, buy the book Self-Discipline in 10 days. Paul Tudor Jones said "90% of any great trader is risk control." and that is based in discipline. You must be able to remove emotions and stick to your plan in order to be successful at trading for the long run. The book has a funny title but it will help you learn to control yourself, and mastery over the self is again, the most important characteristic of great traders.
Completely agree with Closer121 that emotion is the single biggest factor that determines a trader. A book that many have recommended (and I haven't had a chance to read yet) is The Stock Trader by Tony Oz.
Another way to reduce the emotion involved in trading is through building an Automated Trading System (ATS). Just make your rules that you believe will give you an edge and just let the system do the rest. You could practice this on TradeStation, Interactive Brokers, and a bunch more. This will require some knowledge of programming. Backtest your strategies (be warned that backtesting doesn't ensure it will work in the future) and start by paper trading (virtual trading). Once you feel that you've gotten a hang of tweaking your system to your liking, you could begin trading with real money, although most people recommend that you have at least $25k to trade.
Before you start any trading though, you're gonna have to learn about technical analysis, indicators, and the financial instrument of your choice whether its stocks, options, currency, etc. Investopedia, blogs (try google), wilmott.com, elitetrader.com, nuclearphynance.com, books (I've bought most of mine off Amazon, but your college might have some).
Technical analysis? Automated trading? You kidding me?
Don't worry about being able to do math in your head - just take the most advance math classes your school offers, and do a quantitative degree(math, engineering, stats) at uni along with finance.
Also, read Hull, then Dynamic Hedging by Taleb. That should get you thinking about the risks a trader faces/needs to manage.
read the technical analysis tutorial, despite what ficcster says. also work on self-discipline. good luck man.
make money.
trading strategies are as diverse as any other industry. If you want to be a floor trader, being a big guy helps to get your trades cleared first. If you want to be a desk trader, econ helps a lot, maybe some skills in regression and monte carlo analysis. If you want to do more advanced stuff, stochastic calculus, fluid dynamics (from physics), and computer programing can be really useful for model building and testing. Other than that, the raw talent, intuition, and control over your emotions are all good.
I think that was mostly a great response to your question.
Market Wizards is probably the best trading book ever written. PERIOD.
"Oh - the ladies ever tell you that you look like a fucking optical illusion?"
What makes Top Traders so Good? (Originally Posted: 08/03/2009)
I'm wondering what makes top traders so valuable. Under contractual terms, Citigroup is supposed to pay Adam Hall $100mil and I recently read that Fortress Investment Group awarded shares worth 300$mil to retain "top trader" Adam Levinson last year.
Why are these guys so valuable? And what are their trading styles like? Are they more qualitative, fundamental traders or are they quant jocks with secret formulas and such?
I guess the real question is how do I become like them!?
I think the big thing is it depends who you ask. The person answering you will tend to have a personal bias towards it (myself included). Based on my experience I would say it is more psychologically driven.
The other thing you cant forget is a lot of these top traders are also phenomenal people managers such as well.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
Bruce Willis' old sneakers. He's a stud.
Do you mean Andrew Hall? An article on him can be found here : http://online.wsj.com/article/SB124848894204180877.html .
Beyond looking purely at the compensation, you've got to consider the climate (and a radically different world) under which he thrived and made his name.
Clearly, if you're in it for the sort of money the Halls and McGoldricks had/have been getting, don't expect it for a long time coming (that's assuming you're even any good at all)...
I was referencing Paul Tudor Jones and his "rare" video.
I would love to get a copy of that tape.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
I had a friend send me a copy... which brings us to the riddle of the day - how much fluffing would trade4size engage in to get his hands on a copy of a tape that really isn't that helpful to becoming a better trader but amps up the romanticized notion of a trader?
My guess is somewhere between "US auto CEOs asking for bailout" and "pre-iron man robert downey jr fiending for a snort".
http://www.marketfolly.com/2009/07/paul-tudor-jones-1987-pbs-film-trade…
You can dl it hereSo what do you do? -I work for an investment banking firm. Oh okay; you are like my brother, he works for Edward Jones. -No, a college degree is required in my profession
Thank you.
"Oh the ladies ever tell you that you look like a fucking optical illusion" - Frank Slaughtery 25th Hour.
Successful Traders (Originally Posted: 09/26/2013)
I am an undergraduate in a finance program and my mentor at school recently posed a question to me: If you could trade places with any three people in the industry, who would it be?
My question to all of you is, aside from personal contacts, how are some ways I can research specific traders who are doing really well in the industry?
(Also: I have access to Bloomberg but not Capital IQ)
Elite Trader, ZeroHedge, SeekingAlpha, Stock Twits, Yahoo Answers
PTJ x3 times
i thought all the hype was cuz of 87? but I agree with the rest.
PTJ, Soros, Arnold
PTJ is in known because of the extravagant lifestyle as well. Because he's been making money for decades now. Because he had 3 consecutive years returning over 100%. He might not be the best trader ever, but he's pretty good... I would probably do Louis Bacon, Bruce Kovner and PTJ. Maybe change Druckenmiller for Bacon.
bruce kovner PTJ James Simon
Soros Druckenmiller PTJ
i am pretty sure the "hype" around paul tudor jones has more to do with his 25 years of 20% avg annual return then it is about him being from the south.
I was only joking - need to work on my sense of humor. There is no doubt that he's one of the best traders ever and in my mind his emphasis on highly disciplined risk management along with probing a market with trades rather than being married to a thesis has inspired far more traders than the alchemy of finance ever would. It was the PTJ & Kovner market wizard interviews that piqued my interest in markets, with the Kovner one being purely on the grounds of personal reasons.
I would also be happy going with 3x James Simons...i mean why be greedy...
Soros or Druckenmiller. They broke the BOE.
i think paulsons subprime short was a far bigger deal. but im still sticking with those two.
If everyone wasn't so religious about "don't fight the government", bankrupting the BoJ would totally be within the realm of possibility, but this time it would have to be a more apparent 'team effort'. In any case, I think the Abenomics story has totally played out after attempting to defy more than 20 years of economic gravity.
Interesting point. Isn't it too early to make this statement? Why do you think Abenomics did work/is working?
Some traders you may want to research. Stan Druckenmiler George Sorros Louis Bacon John Paulson
Andrew Hall, Daniel Mate
be the Big Swinging Dick....thats all it takes.
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