Traders: Millions by the minute. BBC i Player

Traders: Millions by the minute. BBC i Player

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R11ysf

1,931 posts

181 months

Tuesday 21st October 2014
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g4ry13 said:
Ok...I am going to stick my neck out. I know you're one of the pros and i'm just a lowly person who moves a bit of money around on some medium - high risk stocks. But the difference between success and failure in trading is a very fine line - almost non existent and can just come down to pain tolerance. The name evades me, but there was a well known investor who was selling the US index and mortgage market all the way up as it rose. Their loss getting bigger and bigger as they shorted into a bull market. They could have cut their losses and lost millions as a result. But they held and held and it came good and they made millions (maybe even billions) out of it and became legendary. Others obviously tried the same thing, but cut their losses and didn't make the money.
I'm sorry but this is the same kind of st that I hear from junior, inexperienced or not very good traders all the time. "It's much easier to trade size" "If I had deeper pockets I could have held it longer" "If I could have averaged more it would have been ok". Utter st.

Quite simply you trade according to you stops or you margin requirements. If you put a trade on and have to stop out before it comes back then you traded it too big. No ifs, no buts. You traded too big in relation to the market risk and your margin.

John Paulson (if that was whom you were referring to in the book you read) is a multi-billionaire with an incredible amount of experience and talent. The fact he went billions offside and then made billions showed that he traded a size which he did not have to stop out of and could let the trade progress to being a winner. This is the kind of thing inexperienced traders say all the time, "oh, he was offside £200k and he held it". Yes, because his account is up £2m and for him it is nothing. For you with £5k in your account, losing £2k is unacceptable.

It may be a fine line, but don't for a moment confuse this with luck. Trading is about allocating risk and controlling risk. If you don't know how to allocate risk according to yours and the market's limits then you will never be able to control it.

Dr Banjo

655 posts

148 months

Tuesday 21st October 2014
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Im sorry but I have just found the solution to profitable home trading :-

http://www.crazycashformula.net/LP/5/uk/index.htm?...

It must work as he now has a Maserati, is from Southampton and clears £3000 a week.


silly

g4ry13

16,888 posts

254 months

Tuesday 21st October 2014
quotequote all
R11ysf said:
g4ry13 said:
Ok...I am going to stick my neck out. I know you're one of the pros and i'm just a lowly person who moves a bit of money around on some medium - high risk stocks. But the difference between success and failure in trading is a very fine line - almost non existent and can just come down to pain tolerance. The name evades me, but there was a well known investor who was selling the US index and mortgage market all the way up as it rose. Their loss getting bigger and bigger as they shorted into a bull market. They could have cut their losses and lost millions as a result. But they held and held and it came good and they made millions (maybe even billions) out of it and became legendary. Others obviously tried the same thing, but cut their losses and didn't make the money.
I'm sorry but this is the same kind of st that I hear from junior, inexperienced or not very good traders all the time. "It's much easier to trade size" "If I had deeper pockets I could have held it longer" "If I could have averaged more it would have been ok". Utter st.

Quite simply you trade according to you stops or you margin requirements. If you put a trade on and have to stop out before it comes back then you traded it too big. No ifs, no buts. You traded too big in relation to the market risk and your margin.

John Paulson (if that was whom you were referring to in the book you read) is a multi-billionaire with an incredible amount of experience and talent. The fact he went billions offside and then made billions showed that he traded a size which he did not have to stop out of and could let the trade progress to being a winner. This is the kind of thing inexperienced traders say all the time, "oh, he was offside £200k and he held it". Yes, because his account is up £2m and for him it is nothing. For you with £5k in your account, losing £2k is unacceptable.

It may be a fine line, but don't for a moment confuse this with luck. Trading is about allocating risk and controlling risk. If you don't know how to allocate risk according to yours and the market's limits then you will never be able to control it.
Looks like I touched a nerve here, you seem kind of sore....

Paulson went billions offside - you don't know how close he came to either going bust or cutting his losses. Maybe you are privy to that information - if so, feel free to enlighten us how much wiggle room he really had before things started getting toasty. How long could he really hold that trade for as the market kept going up?

The book market wizards - traders blew accounts. Whatever reason you wish to attribute it to. They spunked their money away. Many other people do the same. The difference between the guys who ended up in market wizards and the ones who lost their shirts + more and ended up trying to grind a job? The market wizards guys may have a modicum of talent. The real difference is that they didn't quit when they hit a rock bottom and you got to hear about them.

Others took the same trades as Paulson, but their tolerance may not have been the same as his and they decided to call it a day with the trade. Paulson did not and did end up profiting. Soros and the pound, it's just about pain tolerance. Sometimes traders will blow up doing such a thing - Market Wizards is full of it, it just depends what the next step is.

R11ysf

1,931 posts

181 months

Wednesday 22nd October 2014
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g4ry13 said:
Looks like I touched a nerve here, you seem kind of sore....

Paulson went billions offside - you don't know how close he came to either going bust or cutting his losses. Maybe you are privy to that information - if so, feel free to enlighten us how much wiggle room he really had before things started getting toasty. How long could he really hold that trade for as the market kept going up?

The book market wizards - traders blew accounts. Whatever reason you wish to attribute it to. They spunked their money away. Many other people do the same. The difference between the guys who ended up in market wizards and the ones who lost their shirts + more and ended up trying to grind a job? The market wizards guys may have a modicum of talent. The real difference is that they didn't quit when they hit a rock bottom and you got to hear about them.

Others took the same trades as Paulson, but their tolerance may not have been the same as his and they decided to call it a day with the trade. Paulson did not and did end up profiting. Soros and the pound, it's just about pain tolerance. Sometimes traders will blow up doing such a thing - Market Wizards is full of it, it just depends what the next step is.
Not sore in the least my friend, but in 11 years of trading and managing trading groups I've heard all those sort of excuses so many times. Trading is simple, you trade according to your risk and margin. If you have to stop out (which in itself isn't a bad thing as we all have losing trades) then you reached your risk tolerance. The amount of times I've heard "if i'd just done this" "but he was allowed to hold it" yada yada yada. Most of the people who moaned on about it being easier to trade size aren't trading any more. They tried to run before they could walk and then reaslied they didn't know what they were doing.

The others didn't have a higher "pain tolerance" than Paulson, they just ran out of their capital allocation for the trade quicker than him. Whether it's billions, millions or hundreds makes no difference, it is all relative to your capital and risk. As soon as people learn to control their risk then they can learn how to allocate it better.

anonymous-user

53 months

Thursday 23rd October 2014
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I've been trading semi-professionally for the last year (as in rely on it to pay the bills as oppose to just doing on top of another job).

Having worked my arse off for 5 years to get good enough at it, I don't think I'd do it again if I went back in time.

My advice, don't do it laugh

jinkster

2,235 posts

155 months

Saturday 31st October 2015
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Having re-watched the programme recently.

Has anyone been on a trading course? Which one would you recommend?

Derek Chevalier

3,942 posts

172 months

Saturday 31st October 2015
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jinkster said:
Having re-watched the programme recently.

Has anyone been on a trading course? Which one would you recommend?
Decent algo trading book

http://www.amazon.co.uk/gp/product/1107091144?



DonkeyApple

54,923 posts

168 months

Wednesday 4th November 2015
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jinkster said:
Having re-watched the programme recently.

Has anyone been on a trading course? Which one would you recommend?
Well Greg Sucker who once served coffee to a man who was wearing a pinstripe suit sells trading courses from a rented helicopter and will teach how through selling trading courses you can rent a Lindon apartment for a few days and a flash car.

Anton Plankton who spent a decade on the sell side for one bank but talks about another that he only spent a year or two at and then spent a few years selling houses in Thailand will teach you how to trade on the buy side and he will be placing a trade from a spaceship, which as we all know is superior to a helicopter.

The reality, unfortunately, is that the vast majority of courses are rubbish and hardly any are taught by people who have ever traded or traded on the buy side.

Having said that and taken the piss out of Anton, I do actually rate what he says in his courses and the basic stuff is worth the money.

walm

10,609 posts

201 months

Wednesday 4th November 2015
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Plankton & Sucker? Seriously?
Tells you all you need to know!

DonkeyApple

54,923 posts

168 months

Wednesday 4th November 2015
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walm said:
Plankton & Sucker? Seriously?
Tells you all you need to know!
Greg Secker is one of the original spread bet bandits along with Vince Stanzione and Darren Winters but there are a plethora of replicants that have spawned out of the ooze. The usual format of photographing themselves next to rented goods and intimating that you too could retire to the sunshine after just a few years of trading.

Anton Kreil (krill ergo plankton) is actually kosher. He's a bit OTT on his marketing but what he says in his courses has validity and includes knowledge that isn't freely available from the library. My only issue is that his career was sell side and that generally gives a different perspective to trading.

MitchT

15,788 posts

208 months

Thursday 5th November 2015
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I can't believe anyone capable of making a fortune by trading would rather be in a conference room at a cheap hotel teaching others to do it than on a yacht in the Bahamas with their laptop making some more.

gregf40

1,114 posts

115 months

Thursday 5th November 2015
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MitchT said:
I can't believe anyone capable of making a fortune by trading would rather be in a conference room at a cheap hotel teaching others to do it than on a yacht in the Bahamas with their laptop making some more.
...and if you are too thick to realise this you are going to fit right in with the other people in the room!

Shnozz

27,422 posts

270 months

Thursday 5th November 2015
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gregf40 said:
MitchT said:
I can't believe anyone capable of making a fortune by trading would rather be in a conference room at a cheap hotel teaching others to do it than on a yacht in the Bahamas with their laptop making some more.
...and if you are too thick to realise this you are going to fit right in with the other people in the room!
Whilst there is a world of difference between some shiny suit salesman flogging £2k training courses from a Marriott, I do often wonder why employed traders/quants etc, no matter how generously rewarded, suffer the politics, geographic restrictions and other downsides of being employed.

If you are that consistent in making sizable returns, why would you not be sat by your Caribbean abode trading in your shorts to top up your personal fortune rather than fighting p1ss wet through on a roasting tube to your desk in CW or Mayfair?

Is it a simple case of risk?


walm

10,609 posts

201 months

Thursday 5th November 2015
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Shnozz said:
If you are that consistent in making sizable returns, why would you not be sat by your Caribbean abode trading in your shorts to top up your personal fortune rather than fighting p1ss wet through on a roasting tube to your desk in CW or Mayfair?
I'll have a go.
From a true bottom-up investor perspective…
It’s actually much easier to make money with OTHER PEOPLE’S money.
To do that you need to raise assets and to do that people like you to have legit operations and all the other great ODD (operational due diligence) requirements.
Being in a financial centre very much helps with that.

Secondly, to make consistent returns actually needs work – and often that work involves actually meeting the people you are invested in.
So it is much easier to do that from a financial centre too. And being in the same time zone as your investments also helps.

From a day trading/chartist perspective running your own money I guess you could do it anywhere.

Shnozz

27,422 posts

270 months

Thursday 5th November 2015
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Very valid points Walm, never really having considered the second one.

I had considered the first but always thought with a sufficiently well padded pay packet you could self-capitalise in a relatively short time frame.

That said, there aren't many PAYE positions with the potential to earn those sort of numbers and whilst apathy is not the right word, the usual glass ceilings, particularly earning related ones, don't really have much application in this circle so it would be very easy to see why you would have little temptation to fly solo.

walm

10,609 posts

201 months

Thursday 5th November 2015
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Shnozz said:
I had considered the first but always thought with a sufficiently well padded pay packet you could self-capitalise in a relatively short time frame.
The problem is for people who have well padded pay packets... they tend to spend it!

Even if you get say a $2m one-off bonus or something you then think you are the kind of guy who deserves $2m bonuses!!

Given you would be a hero to sustainably return say 20% (Buffett is on 22% IIRC) then you need $10m of assets on hand to self capitalise.
And even then that's not enough to cover whatever your salary is...

The best chance of getting another $2m bonus is usually to keep doing whatever you were doing that got you the first one!!! Hence... London in the rain.

walm

10,609 posts

201 months

Thursday 5th November 2015
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The difference is that if you do eat clean and do the exercise you WILL have a 6 pack.
That's simply not the case with trading.

You might have a six pack one day and a beer belly the next.
There is no Magic (Mike) formula to sustain a 6 pack for years.

DonkeyApple

54,923 posts

168 months

Thursday 5th November 2015
quotequote all
Shnozz said:
gregf40 said:
MitchT said:
I can't believe anyone capable of making a fortune by trading would rather be in a conference room at a cheap hotel teaching others to do it than on a yacht in the Bahamas with their laptop making some more.
...and if you are too thick to realise this you are going to fit right in with the other people in the room!
Whilst there is a world of difference between some shiny suit salesman flogging £2k training courses from a Marriott, I do often wonder why employed traders/quants etc, no matter how generously rewarded, suffer the politics, geographic restrictions and other downsides of being employed.

If you are that consistent in making sizable returns, why would you not be sat by your Caribbean abode trading in your shorts to top up your personal fortune rather than fighting p1ss wet through on a roasting tube to your desk in CW or Mayfair?

Is it a simple case of risk?
Let's say you average around 20% returns a year mostly. If you trade with your own capital then you will be making bugger all per annum. In fact, you'll probably be losing money due to the costs. However, if you can make that 20% on several Bln of third party money and you get to keep 1% of that then you will make a fortune.

Plus, you will need to be technologically near the exchanges for your order routing speed. Few exotic islands achieve this.

And there is also an extremely good reason why most Westerners living in exotic holiday destinations are raging alcoholics, they are the most boring places on the planet with nothing to do but be irritated by pasty, gobste holiday makers. smile

To compound it all most traders require their whole support team to deliver returns etc.

DonkeyApple

54,923 posts

168 months

Thursday 5th November 2015
quotequote all
walm said:
Shnozz said:
I had considered the first but always thought with a sufficiently well padded pay packet you could self-capitalise in a relatively short time frame.
The problem is for people who have well padded pay packets... they tend to spend it!

Even if you get say a $2m one-off bonus or something you then think you are the kind of guy who deserves $2m bonuses!!

Given you would be a hero to sustainably return say 20% (Buffett is on 22% IIRC) then you need $10m of assets on hand to self capitalise.
And even then that's not enough to cover whatever your salary is...

The best chance of getting another $2m bonus is usually to keep doing whatever you were doing that got you the first one!!! Hence... London in the rain.
One of my closest friends runs a bonus day loan book. The number of big bonus takers who require loans to cover them over until the next bonus is rather interesting. Very few seem able to live in the basic and pocket the bonus. It's all very council.

2008/9 saw lots of car keys and house keys being confiscated.

Condi

17,089 posts

170 months

Thursday 5th November 2015
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Not sure why some people do give courses... but Ive been on courses (professional courses) which have been taken by professional traders. At £900/day for a class of 12-15 people, suspect they make more 'easy money' ie risk free, by doing that rather than trading their own money. You can usually tell a proper trader - generally not wearing a suit, often have long hair, usually dont give a st about very much. hehe