Proprietary Trading
Discussion
Best of luck. I am going full time at the end of this year after 7 years of trading.
I doubt I would have started had I known how hard the journey would be where I am now.
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
I doubt I would have started had I known how hard the journey would be where I am now.
layercake said:
Always been interested in abit of trading myself, currently my day job is sat in front of a computer which could be used to do abit of trading.
Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
I'd make sure off the bat that your expectations are realistic as to just how hard it is. Could any of you kind gent's point me in the right direction .. ie what site to use for trading etc?
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
It's been a solid month so far, the fx markets are pretty steady at the moment with not huge amounts of a volatility despite plenty of ongoing fundamental factors. I've been trying out a new platform the last few weeks and it's amazing how long it takes to relearn stuff which you take for granted.
It'll be interesting to see if the volatility picks up in the next few weeks.
It'll be interesting to see if the volatility picks up in the next few weeks.
La Liga said:
'd make sure off the bat that your expectations are realistic as to just how hard it is.
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
What do you trade La Liga? What would you change if you could?This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
One thing that is on my mind lately is finding a long term broker.
As my equity grows my trust in my broker has to be 100%. It seems all ASIC brokers aren't as safe as most people believe when the real trouble hits. Whilst client funds are segregated from the brokers account, it seems all clients funds are pooled together. They state that if a client goes beyond their margin they can and will use other clients funds to cover that loss. So I could be doing absolutely nothing and my funds could disappear to cover someone else's loss. That really doesn't sit well with me.
I've thought of only having 50% of available funds actually in my account and simply using the required leverage to trade as if the whole amount was there.
Does anyone have any strong recommendations? I don't trade huge volume, on average anywhere from 1 mio to 2 mio a day at present.
As my equity grows my trust in my broker has to be 100%. It seems all ASIC brokers aren't as safe as most people believe when the real trouble hits. Whilst client funds are segregated from the brokers account, it seems all clients funds are pooled together. They state that if a client goes beyond their margin they can and will use other clients funds to cover that loss. So I could be doing absolutely nothing and my funds could disappear to cover someone else's loss. That really doesn't sit well with me.
I've thought of only having 50% of available funds actually in my account and simply using the required leverage to trade as if the whole amount was there.
Does anyone have any strong recommendations? I don't trade huge volume, on average anywhere from 1 mio to 2 mio a day at present.
DonkeyApple said:
All OTC brokers operate in this pooled client account way. It's a non issue in the UK for clients with less than £50k due to FSCS protections but beyond that clients are at risk.
I offer a workaround of a Lloyds of London underwritten insurance policy to my larger clients, as do others but most large clients will look for balance sheets that are too large to fail such as MF Global (which failed) or IG.
The risk really comes into play where a broker has a series of huge clients that it pools with the normal ones as there is very little risk of a book of normal clients simultaneously defaulting but with the big clients it isn't just a high risk but in my book a certainty that one will default. And if their default is large enough then it wipes out all other client funds in the same pool.
The exact same risk is there for small brokers who run omnibus at larger clearers. It sounds safer to be exposed to the balance sheet risk of a big broker but that isn't where the default risk lies. It lies with your fellow clients. This is what happened to Echelon clients who thought they had the security of IG's balance sheet.
If you look at the most recent broker default episode around the depegging of EURCHF the average retail broker should not have given two craps about that event. Retail traders simply don't do carry trades in the first instance and secondly, there is no money in it for a retail broker as it is long term e posture that has to be A booked not B booked. And yet we saw some mid level retail FX houses go bust. This was because they had been busy playing 'Billy Big b
ks' and bringing onboard bottoms end institutional flow by under cutting the prime brokers on both rates and margins. So they had a whole book of toxic clients who by their nature were bad traders but with access to institutional funds all priced up wrong with one or more guaranteed to fail. Or, as happened with some of the pure B book bookmakers, the broker suddenly claims to have been hedging all their business so wire all their clients' funds to an offshore third party and go partying while also conveniently avoiding the impending AML investigation that was going to see your license removed.
Looking at ASIC, I wouldn't put a £1 of my money into most ASIC B book firms. There are as many bent and incompetent operators down there as there are in Cyprus and the regulator has decades of experience at letting scams run along with terrible risk management at the firms it is supposed to govern.
As a pro trader you should already have secondary accounts at other firms live and funded and you shouldn't be keeping any cash that isn't needed for initial or variation margin at a brokers so it does tend to boil down to how large your trading pool requirement is and how best to protect that in the reality that any broker can go tits up via a client default.
As always a good insightful post, many thanks.I offer a workaround of a Lloyds of London underwritten insurance policy to my larger clients, as do others but most large clients will look for balance sheets that are too large to fail such as MF Global (which failed) or IG.
The risk really comes into play where a broker has a series of huge clients that it pools with the normal ones as there is very little risk of a book of normal clients simultaneously defaulting but with the big clients it isn't just a high risk but in my book a certainty that one will default. And if their default is large enough then it wipes out all other client funds in the same pool.
The exact same risk is there for small brokers who run omnibus at larger clearers. It sounds safer to be exposed to the balance sheet risk of a big broker but that isn't where the default risk lies. It lies with your fellow clients. This is what happened to Echelon clients who thought they had the security of IG's balance sheet.
If you look at the most recent broker default episode around the depegging of EURCHF the average retail broker should not have given two craps about that event. Retail traders simply don't do carry trades in the first instance and secondly, there is no money in it for a retail broker as it is long term e posture that has to be A booked not B booked. And yet we saw some mid level retail FX houses go bust. This was because they had been busy playing 'Billy Big b
ks' and bringing onboard bottoms end institutional flow by under cutting the prime brokers on both rates and margins. So they had a whole book of toxic clients who by their nature were bad traders but with access to institutional funds all priced up wrong with one or more guaranteed to fail. Or, as happened with some of the pure B book bookmakers, the broker suddenly claims to have been hedging all their business so wire all their clients' funds to an offshore third party and go partying while also conveniently avoiding the impending AML investigation that was going to see your license removed. Looking at ASIC, I wouldn't put a £1 of my money into most ASIC B book firms. There are as many bent and incompetent operators down there as there are in Cyprus and the regulator has decades of experience at letting scams run along with terrible risk management at the firms it is supposed to govern.
As a pro trader you should already have secondary accounts at other firms live and funded and you shouldn't be keeping any cash that isn't needed for initial or variation margin at a brokers so it does tend to boil down to how large your trading pool requirement is and how best to protect that in the reality that any broker can go tits up via a client default.
Yes, the depegging of EURCHF was a complete shocker, these sorts of events are what worry me.
I appreciate the thoughts on capital and I'm in the process of withdrawing capital that isn't required above and beyond margin requirements.
Do you have any thoughts on LMAX?
dvshannow said:
I trade for a living and most of what I have seen on here sounds more like gambling and will not provide a secure career
If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
Not one aspect of my trading is gambling, but thanks for the info. I also do not trade stocks or use any 'software'.If you want to make a career out of trading you should become a portfolio manager at a hedge fund which has some investment strategy that gives you an edge
If you don't know how to get such an edge you need to work work someone who does first. If you think edge means some latest trend following algo or stock picker software then you need to go and work at a proper hedge fund
I would suggest first trying to be an analyst on salary at a hf to understand finace
I'm more than happy carving my own path like I am.
Edited by anonymous-user on Monday 5th June 06:32
Flipfloptrader said:
La Liga said:
I'd make sure off the bat that your expectations are realistic as to just how hard it is.
This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
What do you trade La Liga? What would you change if you could?This webinar by someone who is quite active socially is worth a watch: https://www.youtube.com/watch?v=NDkE6RHke9U
What would I change? Not much. Every trader needs failure to succeed.
Flipfloptrader said:
Does anyone have any strong recommendations? I don't trade huge volume, on average anywhere from 1 mio to 2 mio a day at present.
IG.I also keep my account funded around the FSCS threshold with the rest in the bank in case.
Gambling carries a negative connotation. When people use the word they often mean it in a negative way, so it's an understandable inteptrataion.
To be accurate, a professional gambler and the professional trader have the same things in common, as do the amateur gambler and amateur trader.
To be accurate, a professional gambler and the professional trader have the same things in common, as do the amateur gambler and amateur trader.
James_B said:
Can I ask what you mean by that? If it's not gambling then it's arbitrage, and every set of trades makes you a profit.
If any set of trades makes a loss, then it's gambling.
As with others above, I trade for a living, and have done so for a lot of years now. I have the house's edge on my side, but still am exposed to risk, so still, to some extent, understand that what I do can be described as gambling.
Exactly what La Liga says. The poster who said what he'd seen looked more like gambling than trading to my mind was applying no skill was being involved.If any set of trades makes a loss, then it's gambling.
As with others above, I trade for a living, and have done so for a lot of years now. I have the house's edge on my side, but still am exposed to risk, so still, to some extent, understand that what I do can be described as gambling.
It's been a tough last 3 weeks with 9 days spent in hospital with a burst appendix and a follow on infection and then I've spent the last week at home slowly getting back up to speed. Amazing how tired I get at the moment but had a solid day in front of the screen today and looking forward to cracking on with the 2nd half of the year.
Trading wise, the markets seem in a bit of a summer lull at present with most pairs I watch struggling for volatility and it's definitely been a case of being patient and picking the right spots to enter.
Trading wise, the markets seem in a bit of a summer lull at present with most pairs I watch struggling for volatility and it's definitely been a case of being patient and picking the right spots to enter.
Finally got round to building a new PC for my trading:
Case:Corsair Carbide 270R Windowed Black Mid Tower
Motherboard:Intel H270 Chipset mATX
CPU:Intel Kaby Lake i7 7700 4-Core 4.2GHz
CPU Cooler:120mm Tower Air Cooler
RAM:16GB DDR4 Black
Primary Storage Device:512G SATA3 SSD Pro Edition
Graphics Card:Nvidia GTX 1050 TI 4GB OC
Network:WiFi Dual Band N PCI-E Adapter
Power Supply:500w ATX 80 Plus Gold
Operating System:Windows 10 64bit Home Edition USB
Should speed things up a touch.
Case:Corsair Carbide 270R Windowed Black Mid Tower
Motherboard:Intel H270 Chipset mATX
CPU:Intel Kaby Lake i7 7700 4-Core 4.2GHz
CPU Cooler:120mm Tower Air Cooler
RAM:16GB DDR4 Black
Primary Storage Device:512G SATA3 SSD Pro Edition
Graphics Card:Nvidia GTX 1050 TI 4GB OC
Network:WiFi Dual Band N PCI-E Adapter
Power Supply:500w ATX 80 Plus Gold
Operating System:Windows 10 64bit Home Edition USB
Should speed things up a touch.
DonkeyApple said:
Just playing devils advocate but I've never appreciated how the speed of a domestic PC has any influence on the speed of the order routing down the pipe to the clearer or the speed of the clearer's pipe to the exchange?
If a particular style of trading requires extremely high speed pricing and order routing then you need to focus on dedicate lines to the clearer and to chose a clearer who is next to the exchange? And if the trading style isn't that sensitive then a standard PC is sufficient. Also, if the PC is being bogged down with trading programs then you need to split these among separate PCs rather than beef up the PC as at times of high activity you mustn't have trading software slowing execution software etc.
Nothing related to needing high speed pricing, just the case of wanting a new PC with a reasonable spec. I'd like it load quickly (which it will) and be able to do some light GoPro editing and general trading stuff.If a particular style of trading requires extremely high speed pricing and order routing then you need to focus on dedicate lines to the clearer and to chose a clearer who is next to the exchange? And if the trading style isn't that sensitive then a standard PC is sufficient. Also, if the PC is being bogged down with trading programs then you need to split these among separate PCs rather than beef up the PC as at times of high activity you mustn't have trading software slowing execution software etc.
My year wraps up next Friday as we're off on a 4 week trip back to the UK. Looking forward to the time off as I'm mentally pretty tired, trading intraday for up to 8-9 hours isn't all that simple.
I look back to when I left full time employment at the start of February and can't believe the year it's been. Onwards and upwards!
I look back to when I left full time employment at the start of February and can't believe the year it's been. Onwards and upwards!
Flipfloptrader said:
Finally got round to building a new PC for my trading:
Case:Corsair Carbide 270R Windowed Black Mid Tower
Motherboard:Intel H270 Chipset mATX
CPU:Intel Kaby Lake i7 7700 4-Core 4.2GHz
CPU Cooler:120mm Tower Air Cooler
RAM:16GB DDR4 Black
Primary Storage Device:512G SATA3 SSD Pro Edition
Graphics Card:Nvidia GTX 1050 TI 4GB OC
Network:WiFi Dual Band N PCI-E Adapter
Power Supply:500w ATX 80 Plus Gold
Operating System:Windows 10 64bit Home Edition USB
Should speed things up a touch.
Ended up with a H270 mobo with an i7 7700, 2444 16GB RAM, 512GB Samsung Evo 960 SSD and an EVGA 1050Ti GPU.Case:Corsair Carbide 270R Windowed Black Mid Tower
Motherboard:Intel H270 Chipset mATX
CPU:Intel Kaby Lake i7 7700 4-Core 4.2GHz
CPU Cooler:120mm Tower Air Cooler
RAM:16GB DDR4 Black
Primary Storage Device:512G SATA3 SSD Pro Edition
Graphics Card:Nvidia GTX 1050 TI 4GB OC
Network:WiFi Dual Band N PCI-E Adapter
Power Supply:500w ATX 80 Plus Gold
Operating System:Windows 10 64bit Home Edition USB
Should speed things up a touch.
I also went with 2 new Samsung 32" curved 1440p monitors and I should be all set for the next few years. Love the speed increase of booting up and loading programs with the SSD.
Approaching the 1 year mark since I left full time employment and concentrated on my trading. I don't know whether it's gone quick or slow when I think back.
I'm after some advice on a situation that has been playing on my mind more and more lately.
A good friend decided he wanted to invest some money back when I was still working full time, around 3 and half years ago. I agreed and we've never had any formal agreement, just an old fashioned gentleman's agreement and I've never charged any fees.
Long story short, his investment is now worth a considerable amount and it's got to the point that he's relying on me to get him to early retirement so he can buy a farm in the UK and retire. We're off to Pebble Beach for his 40th to celebrate what has been a massive ride.
I'm all too aware how dangerous forecasting the future is but all being well within the next 24-36 months he should have enough to buy his farm. However, a few things are on my mind. There isn't a conversation we don't have where trading/money isn't involved and bar our interest in golf and movies, I genuinely doubt how close we'd really be if it wasn't for the situation we're in. He has zero passion for cars and well, I have a huge passion for them.
I've treated my wife to a few presents leading upto her birthday and Christmas and noticed a few remarks about spending money etc. I'm not sure where or how it got to the point I have to explain my own spending but it's highly annoying! I cannot wait to see the reaction when my Trackhawk arrives towards the end of March, haha.
I think the ultimate issue I have is, why am I taking him all the way to his dream? And I can't really answer that. I've almost decided that I'll go to the end of this year and call it time and he can use the money how he sees fit.
Comments welcome...
I'm after some advice on a situation that has been playing on my mind more and more lately.
A good friend decided he wanted to invest some money back when I was still working full time, around 3 and half years ago. I agreed and we've never had any formal agreement, just an old fashioned gentleman's agreement and I've never charged any fees.
Long story short, his investment is now worth a considerable amount and it's got to the point that he's relying on me to get him to early retirement so he can buy a farm in the UK and retire. We're off to Pebble Beach for his 40th to celebrate what has been a massive ride.
I'm all too aware how dangerous forecasting the future is but all being well within the next 24-36 months he should have enough to buy his farm. However, a few things are on my mind. There isn't a conversation we don't have where trading/money isn't involved and bar our interest in golf and movies, I genuinely doubt how close we'd really be if it wasn't for the situation we're in. He has zero passion for cars and well, I have a huge passion for them.
I've treated my wife to a few presents leading upto her birthday and Christmas and noticed a few remarks about spending money etc. I'm not sure where or how it got to the point I have to explain my own spending but it's highly annoying! I cannot wait to see the reaction when my Trackhawk arrives towards the end of March, haha.
I think the ultimate issue I have is, why am I taking him all the way to his dream? And I can't really answer that. I've almost decided that I'll go to the end of this year and call it time and he can use the money how he sees fit.
Comments welcome...
I'd never trade for friends or family.
DonkeyApple said:
It sounds like his money is in your account and he is suffering from the classic fear that somehow it’s all a con etc?
If his money is in your account then I would move it out to an account in his own name and just connect it up to yours to mirror. Most brokers have a PAM system these days.
Ultimately you are going to lose him as a friend if you have a bad year and you get nothing if he has a good year so there is absolutely nothing in this relationship for you only downside anyway. Especially now that you are no longer a trader but an unpaid pension plan.
Does a PAMM require any regulation from the trader? If his money is in your account then I would move it out to an account in his own name and just connect it up to yours to mirror. Most brokers have a PAM system these days.
Ultimately you are going to lose him as a friend if you have a bad year and you get nothing if he has a good year so there is absolutely nothing in this relationship for you only downside anyway. Especially now that you are no longer a trader but an unpaid pension plan.
Gassing Station | Finance | Top of Page | What's New | My Stuff