Traders: Millions by the minute. BBC i Player

[DonkeyApple]

Condi said:

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.

Or a barman.

[R11ysf]

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?

There is a couple of things. Firstly the leverage and margin requirements. You can trade much larger with the firm's money than your own and trade in a size that you would be unable to do with your own bankrole.

Secondly, the infrastructure of a bank/fund/trading house is huge and trying to put that in to a residential house in the UK can cost a fortune (I know one guy who did this and it was in excess of £30k installation and £3k a month) but trying to install this in some remote island would be virtually impossible.

Thirdly, there are extremely few traders who trade on their own with not a single bit of input from others. Often they make use of the firm's analysts, quants, IT guys etc etc. Even just talking through decisions with other traders helps give you confidence and clarity in your decision making.

Finally don't underestimate the psychology of trading with someone else's money. I've seen guys not give a crap about losing 50k of the firm's money and then get really angry about losing a £5 bet. Trading with the separation barrier of someone else's money helps some people greatly.

[Shnozz]

All very valid points R11syf and thanks for the explanation.

[Shnozz]

DonkeyApple said:

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.

Makes sense.

Re your last paragraph, I was only selecting the Caribbean as an example, of course. When I started my business I did so with the objective of making it portable as it was the primary motivator of getting away from PAYE. Although possibly bordering on being a raging alcoholic, I tend to base myself in other cities rather than on beaches, both for the interest factor and for the ability to have a decent net connection.

[walm]

Shnozz said:

Re your last paragraph, I was only selecting the Caribbean as an example, of course. When I started my business I did so with the objective of making it portable as it was the primary motivator of getting away from PAYE. Although possibly bordering on being a raging alcoholic, I tend to base myself in other cities rather than on beaches, both for the interest factor and for the ability to have a decent net connection.

One of the first places I worked, the founder had made literally HUNDREDS of millions of dollars.
They were all tied up in the fund and he continued to invest them as his day-to-day job.
However, he suddenly realised that as soon as he actually wanted to spend a decent chunk of the capital or STOP trading - he was going to have to give 50% to the US govt (or some not inconsiderable %age).
So he moved to St Thomas in the US Virgin Islands, kept 100% of the cash and started trading it on his own, from the beach.

So it does happen!

[Condi]

R11ysf said:

Finally don't underestimate the psychology of trading with someone else's money. I've seen guys not give a crap about losing 50k of the firm's money and then get really angry about losing a £5 bet. Trading with the separation barrier of someone else's money helps some people greatly.

Thats easy to identify with. Traders know the company pays a trader to take risk, knowing that sometimes the risks pay off and sometimes they dont. A trader who gets emotional when a trade goes against them will never do well, as you get rash and not objective.

Also a good trader (or anyone who is not a rent-a-desk monkey) will be salaried, so if you have a bad month you still get paid. Its nice to know.

[OtherBusiness]

This thread reminded me of this joke....

A Vicar dies and is standing at the Pearly Gates next to a man in sunglasses,a T-Shirt,leather jacket and jeans.
Saint Peter addresses the man,”Who are you,so that I may know whether to admit you to the Kingdom of Heaven?”
The man replies,”I’m Joe Smith,a Daytrader”
Saint Peter consults his list,smiles and says,”Take this silk robe and golden staff and enter the Kingdom of Heaven.”
The Trader goes into Heaven and it’s the Vicars turn.He stands straight and booms out,”I am Cyril Chambers,Vicar of Saint Mary’s for forty-three years.”
Saint Peter consults his list and says,”Take this cotton robe and wooden staff and enter the Kingdom of Heaven.”
“Just a minute,” says the Vicar.”That man was a Daytrader and he gets a silk robe and golden staff but I’m a Vicar and I get a cotton robe and wooden staff? How can that be fair?”
“Up here,We judge by performance” says Saint Peter.”He prayed more than you did”.