Traders: Millions by the minute. BBC i Player

[TraderGuy]

g4ry13 said:

TraderGuy said:

MitchT said:

How to make money from trading:

Place a glossy ad saying 'how to make money from trading'
Book a conference room
Charge each punter £5k to attend
Explain each technical signal and what it *might* signify
Explain how each technical signal *might* be traded
Have caveats - lots of them - and keep repeating them

Repeat ad infinitum
Laugh all the way to the bank

Sounds like the Nakedtrader!

From what I have seen of his trades he seems to do pretty well. At least he puts stuff out there and his book is a good basic one from what i've skimmed through.

I'd always take with a pinch of salt someone who is selling a book/course results. Unless you are showing an audited account statement. Think about it, he makes at least 30% YoY return, for years. Any hedgefund would love a piece of him, but no he just wants to stay from home, without all the red-tape.
Ok, so why not publish his trades in real-time to subscribers - I assume he could get a few hundred subscribers a month for £200 a month So £40k a month?. But no, he doesnt want the stress of his subscribers following his buys/sells as they are just be illustrative purposes.
So what does he do, he "gives back" by having a seminar every month at Heathrow and charges £600 each. From the website you get the impression it will be about 10 people there, but a friend of mine went and there were close to a hundred. So do the maths, 12 x £600 x 100 = £720k a year, without risking a cent. Now, would anyone go, if he wasnt a "successful trader"?

[Hoofy]

I think you'll find loads of fund management companies have offered him positions. The deal-breaker is that he insists on trading in the nude.

[g4ry13]

So let's say you have the option of making £720k/year from doing some seminars once or twice a month over the course of a year. You do some trades which you post up to your site as you go along. He posts his trades pretty near to the time they're put on and he does put his head above the parapet and he's making a bit of change from book sales too.

There could be the argument he doesn't want to post/charge for live signals because he's trying to get people to learn. They buy books / seminars & maybe he's doing it out of the goodness of his heart Also there's a commitment if you're charging people to need to put up regular trades.

Or....you could work from 7am-7pm for a fund, with all that stress and red tape that goes around it for more money. I'd probably take the seminar / trading on the side option personally.

Edited by g4ry13 on Saturday 27th September 13:14

[TraderGuy]

Hoofy said:

I think you'll find loads of fund management companies have offered him positions. The deal-breaker is that he insists on trading in the nude.

Lol. Real trades or not, successful trader or not, he's done very well to create that income just "talking about trading". Buy his book, see what he does. I think his style appeals to a lot of people who are looking for a career change as its medium-long term, and you can do it part-time.

[335d]

g4ry13 said:

Going back to the Etoro thing - you may see people who seem to have good returns. But you really need to look at their equity swings and also open trades.

Take this guy for an example. A pretty nice curve, lots of nice looking % gains over the weeks and years. 14 trades and 0 losers (that's a dead giveaway something is up).

You can check out his history - fairly high % gain for each trade, I wouldn't be comfortable with it. But at least it's not stupid stuff like 5% for a 10 point FX move. Then check out his Open trades and you can see he's just sitting on losing trades from over a year ago. Quite substantial losing trades.

So it seems Etoro will put the closed trades on to the equity curve. The open trades don't get registered creating the incentive to leave them open and just close winners. Resulting in a nice looking equity graph. Of course, those guys aren't using real money and can sit on 50%+ losses because it's fictional. If it looks like it's easy money, then don't be fooled. Not to say that there may not be some worth copying, but I wouldn't put much weight on the 'top traders' of Etoro leaderboard.

I'm shocked that they would do something as misleading as this. It would be entirely straightforward to have all of the open trades marked to market. Without that, the 'successful' traders are a joke.

Why not open an account with 500 long positions and 500 short positions on the same markets. You could have a 100% success rate on 500 trades and loads of gullible followers!

[g4ry13]

335d said:

g4ry13 said:

Going back to the Etoro thing - you may see people who seem to have good returns. But you really need to look at their equity swings and also open trades.

Take this guy for an example. A pretty nice curve, lots of nice looking % gains over the weeks and years. 14 trades and 0 losers (that's a dead giveaway something is up).

You can check out his history - fairly high % gain for each trade, I wouldn't be comfortable with it. But at least it's not stupid stuff like 5% for a 10 point FX move. Then check out his Open trades and you can see he's just sitting on losing trades from over a year ago. Quite substantial losing trades.

So it seems Etoro will put the closed trades on to the equity curve. The open trades don't get registered creating the incentive to leave them open and just close winners. Resulting in a nice looking equity graph. Of course, those guys aren't using real money and can sit on 50%+ losses because it's fictional. If it looks like it's easy money, then don't be fooled. Not to say that there may not be some worth copying, but I wouldn't put much weight on the 'top traders' of Etoro leaderboard.

I'm shocked that they would do something as misleading as this. It would be entirely straightforward to have all of the open trades marked to market. Without that, the 'successful' traders are a joke.

Why not open an account with 500 long positions and 500 short positions on the same markets. You could have a 100% success rate on 500 trades and loads of gullible followers!

Maybe I am reading it wrong. But his graph has a few little dips in it, yet has 14 winning trades and no losers. I don't see why it would dip - surely it should be a linear graph if there are no losses?

Also I don't understand the 'gain' column. When it says gain of -58% is that of account total or of risk/trade? It's very confusing.....some people are making 500% on a trade, am I supposed to believe that those who took that trade just increased their account 5 times?!?

[MitchT]

TraderGuy said:

g4ry13 said:

TraderGuy said:

MitchT said:

How to make money from trading:

Place a glossy ad saying 'how to make money from trading'
Book a conference room
Charge each punter £5k to attend
Explain each technical signal and what it *might* signify
Explain how each technical signal *might* be traded
Have caveats - lots of them - and keep repeating them

Repeat ad infinitum
Laugh all the way to the bank

Sounds like the Nakedtrader!

From what I have seen of his trades he seems to do pretty well. At least he puts stuff out there and his book is a good basic one from what i've skimmed through.

I'd always take with a pinch of salt someone who is selling a book/course results. Unless you are showing an audited account statement. Think about it, he makes at least 30% YoY return, for years. Any hedgefund would love a piece of him, but no he just wants to stay from home, without all the red-tape.
Ok, so why not publish his trades in real-time to subscribers - I assume he could get a few hundred subscribers a month for £200 a month So £40k a month?. But no, he doesnt want the stress of his subscribers following his buys/sells as they are just be illustrative purposes.
So what does he do, he "gives back" by having a seminar every month at Heathrow and charges £600 each. From the website you get the impression it will be about 10 people there, but a friend of mine went and there were close to a hundred. So do the maths, 12 x £600 x 100 = £720k a year, without risking a cent. Now, would anyone go, if he wasnt a "successful trader"?

Indeed. If someone were a successful trader why would they bother trying to make money from talking about it at all? Surely they'll make enough from trading and can spend the rest of their time enjoying cars/coke/hookers/etc. For me when someone tries to make money by telling other people about trading it looks like they can't make money from trading itself, so they thought they'd talk about it instead. Problem is, if they can't make money from trading then what have they possibly got to say that's worth hearing?

[Dr Jekyll]

Couldn't you apply that to anyone who teaches anything? I know someone who lectures on creative writing at a university. Why doesn't she write novels herself you might ask? She has had about half a dozen published.

[MitchT]

Yes, but if these traders were as successful as they purport to be they wouldn't be teaching in their spare time in the same way that Bono didn't bob round this morning to give me a guitar lesson.

[Hoofy]

Think it's different for certain trades - trading, make an ok income teaching or rape it trading. Literature - make an ok living writing a book (most people are not JK Rowling) or make an ok living teach or indeed do both.

[g4ry13]

MitchT said:

TraderGuy said:

g4ry13 said:

TraderGuy said:

MitchT said:

How to make money from trading:

Place a glossy ad saying 'how to make money from trading'
Book a conference room
Charge each punter £5k to attend
Explain each technical signal and what it *might* signify
Explain how each technical signal *might* be traded
Have caveats - lots of them - and keep repeating them

Repeat ad infinitum
Laugh all the way to the bank

Sounds like the Nakedtrader!

From what I have seen of his trades he seems to do pretty well. At least he puts stuff out there and his book is a good basic one from what i've skimmed through.

I'd always take with a pinch of salt someone who is selling a book/course results. Unless you are showing an audited account statement. Think about it, he makes at least 30% YoY return, for years. Any hedgefund would love a piece of him, but no he just wants to stay from home, without all the red-tape.
Ok, so why not publish his trades in real-time to subscribers - I assume he could get a few hundred subscribers a month for £200 a month So £40k a month?. But no, he doesnt want the stress of his subscribers following his buys/sells as they are just be illustrative purposes.
So what does he do, he "gives back" by having a seminar every month at Heathrow and charges £600 each. From the website you get the impression it will be about 10 people there, but a friend of mine went and there were close to a hundred. So do the maths, 12 x £600 x 100 = £720k a year, without risking a cent. Now, would anyone go, if he wasnt a "successful trader"?

Indeed. If someone were a successful trader why would they bother trying to make money from talking about it at all? Surely they'll make enough from trading and can spend the rest of their time enjoying cars/coke/hookers/etc. For me when someone tries to make money by telling other people about trading it looks like they can't make money from trading itself, so they thought they'd talk about it instead. Problem is, if they can't make money from trading then what have they possibly got to say that's worth hearing?

It's very simple really. Trading is not guaranteed money. Selling books and filling seminar rooms full of people is. When you have a family, bills to pay and all the other expenses of life then that variance free money sure looks tempting.

So he may trade a bit now because there would be critics otherwise if he did nothing at all, but perhaps he's significantly scaled down his size. If you look at his journal he is making money so I think there's value in what he has to say.

As far as the snake oil salesmen in the financial circles go, I think he's one of the better options around for someone who was looking to 'invest' some money in learning the basics.

[335d]

g4ry13 said:

It's very simple really. Trading is not guaranteed money. Selling books and filling seminar rooms full of people is. When you have a family, bills to pay and all the other expenses of life then that variance free money sure looks tempting.

The problem with that is that trading can easily be scaled up, so if you can reliably make profits, you should become very wealthy very quickly. Wealthy enough to dwarf potential revenue from book sales and courses. If you have been trading for many years and still require these stable but modest forms of income, it suggests that you aren't particularly successful as a trader.

[Hoofy]

Indeed. And selling courses and books is still not guaranteed income. If only business were so simple.

[g4ry13]

335d said:

g4ry13 said:

It's very simple really. Trading is not guaranteed money. Selling books and filling seminar rooms full of people is. When you have a family, bills to pay and all the other expenses of life then that variance free money sure looks tempting.

The problem with that is that trading can easily be scaled up, so if you can reliably make profits, you should become very wealthy very quickly. Wealthy enough to dwarf potential revenue from book sales and courses. If you have been trading for many years and still require these stable but modest forms of income, it suggests that you aren't particularly successful as a trader.

Who says it can easily be scaled up? I think that theory of 'what i'm doing at £1/pt can be done at £100/pt or bigger' is actually very false. Then if we talk about trading directly on the markets you can run into issues of liquidity and finding it tough to move size around at times.

[335d]

g4ry13 said:

Who says it can easily be scaled up? I think that theory of 'what i'm doing at £1/pt can be done at £100/pt or bigger' is actually very false. Then if we talk about trading directly on the markets you can run into issues of liquidity and finding it tough to move size around at times.

It can clearly be scaled up from small retail size. Liquidity isn't really an issue with FX or larger stocks until you reach non-retail sizes. In fact you tend to be able to get better prices for larger sizes, until you begin to test market liquidity, but that is far beyond retail amounts.

I am a former derivatives trader for a US investment bank.

[TraderGuy]

g4ry13 said:

335d said:

g4ry13 said:

It's very simple really. Trading is not guaranteed money. Selling books and filling seminar rooms full of people is. When you have a family, bills to pay and all the other expenses of life then that variance free money sure looks tempting.

The problem with that is that trading can easily be scaled up, so if you can reliably make profits, you should become very wealthy very quickly. Wealthy enough to dwarf potential revenue from book sales and courses. If you have been trading for many years and still require these stable but modest forms of income, it suggests that you aren't particularly successful as a trader.

Who says it can easily be scaled up? I think that theory of 'what i'm doing at £1/pt can be done at £100/pt or bigger' is actually very false. Then if we talk about trading directly on the markets you can run into issues of liquidity and finding it tough to move size around at times.

His type of trading would be easy to scale up, as his strategy doesnt depend on execution. I've seen lots of shares crash through his stop-losses, and on the next update he managed to get out at break-even or £100 loss. I have even seen buys at prices which never existed on the day he claims to have bought. His journey was interesting back-in-the-day, but now its 1 update a fortnight of the kin "I bought x 2 weeks ago, cuz of good results", you look up the price, quelle surprise up 30%. Ummm. You also have to wade through all the selling of telecoms/spreadbetting acs/level 2/stories of his son at school/football/holidays etc.

Again, any noob should by his book, but dont expect a holy grail. There are lots of free webinars/info on the net which you can read. You could then use the £600-700 quid of the seminar and fund your real trading account.

[g4ry13]

335d said:

g4ry13 said:

Who says it can easily be scaled up? I think that theory of 'what i'm doing at £1/pt can be done at £100/pt or bigger' is actually very false. Then if we talk about trading directly on the markets you can run into issues of liquidity and finding it tough to move size around at times.

It can clearly be scaled up from small retail size. Liquidity isn't really an issue with FX or larger stocks until you reach non-retail sizes. In fact you tend to be able to get better prices for larger sizes, until you begin to test market liquidity, but that is far beyond retail amounts.

I am a former derivatives trader for a US investment bank.

I was more referring to STIRs and some of the difficulty moving size around on those markets. It's easy to scale up to a point, but there's obviously a finite amount you can move around easily before running into challenges. On one's own capital that shouldn't be an issue unless you have some screws loose.

[335d]

g4ry13 said:

I was more referring to STIRs and some of the difficulty moving size around on those markets. It's easy to scale up to a point, but there's obviously a finite amount you can move around easily before running into challenges. On one's own capital that shouldn't be an issue unless you have some screws loose.

I would typically trade a few thousand STIR contracts (euribor, short sterling or eurodollars) a day in my former role although I no longer trade those privately. That is equivalent to a few billion nominal of 3 month risk. I can't imagine any retail player having an issue with liquidity, except perhaps in the lightly-traded back contracts.

[Condi]

Interesting program. Seemed to focus more on the 'winners' rather than a cross section of those who trade though. Sold the get rich quick dream well to amateurs who only focus on the financial aspect of the job. No doubt the trading seminars will be thrilled to have such good advertising!

[g4ry13]

Did we watch the same programme? There was one moderate success story in the second show. A pair of guys (one of which lives in his parent's loft with a mattress on the floor) , some housewife who blew 50% of her trading capital, some elderly people having a bit of fun and some guy struggling to break even. I definitely didn't watch that programme and get the impression that anyone could open up a trading account the next day and be making millions within a year.

I actually thought about buying shares in IG after the programme, but given how it was a more realistic painting of the scene I decided not to