/biz/ - Business & Finance

>>626494
If you're going to do it propely, it still pays. If you're a poorfag trying to turn your $20 into $40 whilst sitting at home in your underwear, it won't.

>>626501

This times a million and read no further

/biz/ is anti trader due to not understanding how to trade and what it takes to be successful

Don't believe me? Go through the archive and see how every Forex thread I made was filled with trolls and naysayers

Do investment banks still have trading floors or is all trading done by computers now?

>>626501

Okay, how do I do it properly?

>>626580

If you have to ask don't bother

really

>>626558
Yes, nothing is fully automated. Someone still has to manage the risk.

>>626509
>filled with trolls and naysayers
so, business as usual?

>>626509
/biz/ is almost exclusively populated by posters who don't know shit about business or finance but who WILL NOT shut the fuck up about it.

Trading as a way of life has the inherent flaw of being a zero sum game. You can't actually add value - only hope to benefit when others lose.

That's a pretty major flaw, which is why trading only appeals to horrible people, as demonstrated by this thread.

>>626906
>because there's no such thing as dividends

>>626715
>>626906

Yep

No hope here

>>626906
100% chance you've never traded. Crawl back into your hole.

>>626494
I am a full-time trader. Yes it still pays but it is very hard work.

Actively trading your own capital is no better than playing roulette in the long term. Traders at banks make money because they are fulfilling other people's orders and taking a commission.

>>627037
untrue

>>626925
That's not trading.

>>626494
How can it be a dying field? It's so easy to get into these days.

I just want to do better than bonds and what the bank gives me, while actively avoiding dips in the market. Fugggg you.

>>627276
My point was that it's clearly not zero sum when you're buying assets that are investments.

It's almost like you don't even understand the things you're trading and just see them as meaningless tickers with prices on the screen.

>>626494
I know 7 traders.

One doesn't know shit. He's long FXCM. Currently blowing his 4th account. I don't fucking doubt he lurks /biz/ he is that retarded. He's a pro at buying high and selling low.

Then there's 4 who have potential but still trade as a hobby. This guy I know makes a hundred or two a day, but he changes his strategy every other day that it's never consistent. If he just had discipline, he could do it full-time.

Two are professionals. One was a former trader for Merrill Lynch then a hedge fund in New Jersey. The other runs his own financial advisory practice in Canada. I don't know how much they wager, but they are always right on trades they share with me.

One is making over $500K a year. He was a nuclear physicist before he lost his job during the 08 crisis. Got into trading. He's made over $500K two years in a row now. Started trading in 2010 with $140K. Chinese guy. So of course he made it. In the year I've known him, I've never seen him have a losing day but once and that was $140 loss. He makes $1,500-$3,000 a typical day.

Trading as a career isn't impossible, but it's pretty much the same odds as becoming a professional athlete. You can certainly say 90% fail, but statistics are bull shit. The Heisman winning QB and some fucktard from a junior college don't have the same odds of becoming a NFL QB. You have to surround yourself with positive successful people. If you stick around /biz/ and only aim for the average or less, you will never be anything in life. Takes a mindset and intuition that you are born with to be successful, not a book or college major.

Trading is so flawed though. People think trading means turning $100 into $1M. It's a get rich or bust deal. If you have that way of looking at it, you will never make it. If you think you need to "beat" the market or have an edge to trade, you will never make it. Trading is full of misinformation and statistics with no backing.

>>627276
Also not zero sum because on the whole, there's a net average inflow to the stock market. Dividends are only paid a few times a year if at all, but that effect lasts. More workers, higher GDP, more investments = net buy-in of stocks, usually. So.. traders provide some sort of liquidity. Person X wants out of Stock 1 right now. Person X has been long-term, but something came up. The counterparty, person Z wants to buy right now. Since he's a trader, he's more likely to have that instant demand.

Person A wants to buy Stock 1 a week later. Coincidentally enough, Person Z wants to sell. Person Z makes a profit, and Person A and X are both given what they wanted - the option to get into or out of Stock 1 for a "long-term" investment.

Imagine if everyone just held forever. Stable price, stable price, and then the ticker tanks when some rich guy dies and his estate sells the stock. It would be much more like the RE market.. shares sitting around for months, discount after discount, no buyers. So yes, traders provide a valuable service. Value, as in of value to people besides themselves.

>>626501
Yes, this is very true.

>>626509
/biz/ is anti-everything because they know nothing. It's nothing but a septic tank for /g/ crypto monkeys and /b/ fake rich autists.

>>626558
Roughly 60-70% of trading volume comes from retail brokers and prop firms. 80-90% of prop firms are algorithm traders. Nothing fact based behind prop firms being 90% mechanical, but I'm sure you can find statistics confirming the 60-70% part.

>>626580
Find a full-time trader and ask to pick their brain. Don't ask /biz/ or any forum. Don't read any get rich trading book. Don't sign up for any "workshop" or education program. It's all bullshit.

>>626581
With that kind of logic, you will be a failure in life. If everybody thought that way, we wouldn't have anything we have today.

>>626605
It's usually the other way around. Many traders trade discretionary but their prop firm has automated risk management, such as daily max loss limits, max drawdown limits, etc. It prevents a trader from trading the remainder of the day when they've already lost $X.

>>626753
How about you post some quality information about business and finance instead of complaining.

>>626906
Trading is essentially taking advantage of arbitrage and volatility. It is a zero-sum game, but it's no way impossible to overcome.

>>627037
What a load of bullshit. Please stop posting when you know absolutely nothing.

>>627295
Why though? Even through the 08 crisis, your money would have doubled by now.

>>627305
This is a mistake many traders forget. They focus too much on MACDs and stock screeners to fully understand what they are buying and selling.

>>627366
this, all of this

I don't know a ton myself, but my dad has been a trader at Solomon Brothers a long time ago, First Boston after that, and most recently at Morgan Stanley, so I try to get as much knowledge as I can from him.


Although mortgage-backed securities trading isn't quite what I think most people are talking about in this thread, it's relevant simply by job title and workplace.

>>627366
>Find a full-time trader and ask to pick their brain.
>Find a full-time trader
How does one do this? I'm looking at forex here (going to bed, but here's to hoping the thread survives).

>>627366
>prop firm has automated risk management
He was asking about banks, not prop shops. A bank would never prevent their trader trading for the rest of the day, as it'd prevent them managing their risk, doing client business, and fulfilling their market making obligations.

>>628270

Banks don't hire traders. They never have. They have Sales & Trading professionals, but what they do isn't what OP is referring to.

Okay so I'm a British Somali (Father is Somali and mother is English) had a little dispute with father and now I have £120,000 to invest in Somalia. He says any profit I make is mine.

I've been watching the news lately and it turns out Somalia is actually getting back on its feet and business within the capital is booming. But the problem is I don't know what to do with the money.

>So what would be a good investment?
>Is £120,000 enough?

Just learn how to program an algorithm and sell it to a hedge fund for equity in the hedge fund.

>>628329
Er, no, banks have traders. They sit on a trading desk on the trading floor and spend their day trading. You are talking bullshit.
And I was referring to >>626558 who I originally replied to, not the OP.

>>627383
>this, all of this
>I don't know a ton myself

/biz/ in a nutshell. Fucking brainless faggots.

>>628342

No they do not. Name one bank that has day traders.

>>628353
Firstly, noone said anything about day traders.
Seondly, all banks have traders.

>>628369

Name one. There's a huge difference in trading to hedge your investments and trading for income. Banks don't have income traders.

>people in the thread not distinguishing between retail traders and institutional traders
Institutional trading is real. Retail trading is gambling. If you want to get into institutional trading, you have to get employed on the sell side to begin with (unless you've got major connections on the buy side). Then you work up from being a grunt, to an assistant to then running your own book. Will take time.

>627366
Shut the fuck up. I can't stand people who come to /biz/ proclaiming they're the guy who knows it all because they read up some shit on Investopedia. From your post it's so painfully easy to see you have no clue.

>>628379
>traders don't want to get the best price for their hedging customers
>getting the best price for your clients doesn't get you more revenue

All of the primary dealer banks have trading desks solely for newly issued US treasury bonds. Bonds are traded OTC and their clients want to buy them.

>>628379
Banks don't have pure prop traders since there are restrictions against taking speculative positions, but they have traders making markets, providing liquidity to their clients, and taking long term investment positions. They are all performing an income function, be it from spread, commission, or investment returns. Literally every bank on wall street does this. Yet you seem to be making the utterly bizarre argument that a bank's trading desk doesn't contain any traders. I guess you knowing seven people who trade has given you a unique insight into the financial industry, to which my years of actually working in it simply can't compete.

>>628391
He's saying that the "traders" at banks, are broker dealers not traders speculating on market movements like OP is suggesting.

>>628400
Traders acting as broker-dealers are no less traders than any other kind. OPs question was can trading pay? That kind certainly does.

>>628351
what the fuck, I said that I agree with what he said, and then went on to make clear that I'm not the most knowledgable guy in the world on the subject.

I didn't go on to make claims of anything or statements that regard trading knowledge, I just backed up that the best source of info, imo, is an actual trader.

Jackass

>>628487
His fundamental point is right though. 80% of this board is people who have zero real experience spouting things they've read off the internet or heard from a friend of a friend, followed by people replying to them in agreement because they used a bunch of big sounding words. You could probably count on one hand the number of people here who have ever set foot on a trading floor.

>>626509
Did you forget you're on 4chan? Just ignore them like every board does.

I don't doubt the people ITT who say that almost everyone on /biz/ knows shit about trading.
But if that's the case, how the fuck did moot get the idea to make a board dedicated to the subject?

>>628829

Do you think anyone on /fit/ lifts?

>>628520
>You could probably count on one hand the number of people here who have ever set foot on a trading floor.

You yourself betray ignorance. I worked in New York City at a Fortune 100 investment bank in IT. I never walked onto a trading floor for the first eight months of my job, and when I finally did it was simply to walk to the trading floor machine (computer) room and back.

IT was who was writing the software, connecting to the proper data feeds, making sure the trades got executed on the proper exchanges etc. Some traders were hired right out of some Ivy League college (usually the one the head traders in a group went to, maybe the same fraternity even). IT knew more than these kids.

Jim Simons is worth $8 billion. The year he retired he made $1 billion of that $8 billion. His firm trades its own capital and its Medallion fund has no outside investors. RenTech does not hire traders - it hires mathematicians, and computer scientists, and even physicists and astronomers with experience in making models from data. It is the most successful hedge fund in existence, and is purely quantitative.

Other hedge funds like DE Shaw do similar things. Watch the movie "Floored". The days of blue collar guys going on the NYSE/CME floor and making big money is over. The people making money now are the ones rewriting scikit-learn to work better for their trading strategies. Like this guy

https://news.ycombinator.com/item?id=8845105

One of the problems with these threads is that there has been a massive sea change in the past decade. Guys with PHDs in statistics or computer science are who are getting rich, high school graduates who were good at sensing the mood of the NYSE or Merc floor are gone.

I would read that thread I posted of the guy making 15%+ a quarter doing his own little black box work with his own capital. Imagine what he would make if he could get plugged into Rentech or DE Shaw properly.

>>628935
Finally someone with relevant post. I completely agree but I will add more background to the story. One very important thing to understand is that these specialists do well on a very thin ice with great competition, most of their trades are daytrades, or even occur in shorter time periods, I am not speaking of market makers here, or those retired FX matchmaking engines IT guys who get into FX and took advantage of their knowledge to trade FX on many of their automated trading systems, I'm pointing out to these hedge funds, they do mostly short term trading. Why do I point it out? Because there is still and always will be, space for longer time periods traders without using automated trading systems. I trade for over 5 years now and my CAGR is over 55%, last year even 67%, my strategy is only scalable up to 50 contracts, if that is not enough for you, go figure, but form me as an independent retail trader, it is well enough, especially if I reinvest most of the money somewhere else. If you need better optimization and larger scalability (even thousands of contracts), look for most liquid markets and option strategies, like this one: http://www.optionstradingiq.com/karen-the-supertrader/

>>628935
>RenTech does not hire traders - it hires mathematicians, and computer scientists, and even physicists and astronomers with experience in making models from data. It is the most successful hedge fund in existence, and is purely quantitative.

They don't disclose their risk profile and have been caught cheating taxes...for all we know they're leveraged 1000-1 and are the next LTCM in waiting.

>The days of blue collar guys going on the NYSE/CME floor and making big money is over. The people making money now are the ones rewriting scikit-learn to work better for their trading strategies

HFT is getting banned and volume has moved away from lit trading floors for years. The quantitative traders will cannibalize each other.

http://www.ft.com/cms/s/0/3438bfb4-8fd6-11e4-9ea4-00144feabdc0.html

>One of the problems with these threads is that there has been a massive sea change in the past decade. Guys with PHDs in statistics or computer science are who are getting rich

You are 100% right, algorithm trading has become huge. I don't think it's going to last due to the nature of it all. If volume and volatility keep declining there's not going to be anyone left to make money from. And the leverage employed by these quant firms also means they're 1 swiss franc trade away from being bankrupt if volatility catches them off-guard.

>>628981
>my strategy is only scalable up to 50 contracts, if that is not enough for you
$500 a pip? Jesus. That's a months salary, even on a nearly insignificantly short trade.

>>628388

>627366

fucking /biz/

>>628935
I'm not sure how you having barely ever been on a trading floor makes me ignorant.

In my experience (and I expect this is the case with most other dealers these days too), there's a clear separation of responsibility between programmers who mantain data feeds and connectivity, etc, and those doing pricing and algos. The former are part of IT, the latter work for the trading desk. You seem to be blurring the two.

>>629003
Pretty much this

If you want to try forex use this so you can start with just $10

tradersway.com/?ib=1043687

>>627017

Way to state the obvious you braindead fuck. Did any part of my post indicate that I have?

It's a horrible activity and you are a parasitic vermin for practicing it.

I make a living trading mostly S&P mini futures. It took me 2yrs to be profitable. After I graduated college I saved up a lot of money and learned from my past mistakes when I barely started trading futures. Created my trading methodology and stuck with that plan. I put 25k in my broker account and made 50k my first profitable yr. didn't take any of gains out so I had 75k total for my second yr which I then turned into close to 200k. Now I make 120k+ with an account starting off at 100k each yr. what I discovered is that u need a lot of capital to make a living off of this. The very first time I traded futures I blew up my 10k account I had put in. By that time I knew how it felt to trade real cash and it was pretty scary. After I lost my 10k I wasn't scared anymore..I actually started trading back on the paper money account from my broker. Thankfully they let me keep the live data feeds after I blew my account. Having the live data feeds on my paper account made fee still like I was trading real cash. After I became consistanly profitable is when I gave the go ahead to dump real cash again. never had a losing month since. I have had a losing week but at the end of the month I'm always positive. Enough to pay bills, Put food on the table for my family, go on vacations,take care of my son from home. Feels good man.

>>630216
Do you have any advice, or are these all personal experiences that you need to have yourself to learn from?

>>630216
I am also like this guy. E-mini exclusively.

>>630635
I found that the most important thing is to find your instrument, then dive deep on it. For example, there are traders who trade nothing but shares of Apple. Or nothing but options on C. Or, for many, nothing but the ES.

Everyone who I have seen who didn't bust or an ero is a specialist of one instrument. And they know /everything/ about that one thing.

After that, it's all just anonymous advice on the internet.

One useful thing that I wish someone had told me: Trading futures in Chicago can be done for very small amount of capital. Usually under $4000. Compare to stocks that start at $30k for a margin account, and the appeal of the futures starts to become apparent.

The other thing about CME, is the volume is as close to actual as can be expected, whereas NY is full of dark pools and market maker volume which is dark, and that can be misleading to the point of fatal.

Whatever else you do, you will need to become an expert at the arithmetic of price, volume, and price and volume change. You will need to examine the ways others have done it, and figure out a rule-governed system which allows you to make as few emotionally influenced interferences as possible.

To get a taste of what such a system looks like, try a few chapters of this:

http://www.amazon.com/MIDAS-Technical-Analysis-Approach-Investing/dp/1576603725/ref=sr_1_1?s=books&ie=UTF8&qid=1422472571&sr=1-1&keywords=MIDAS+market+analysis

and see if you are still interested.

>>630668
>http://www.amazon.com/MIDAS-Technical-Analysis-Approach-Investing/dp/1576603725/ref=sr_1_1?s=books&ie=UTF8&qid=1422472571&sr=1-1&keywords=MIDAS+market+analysis
Thanks. Found it online, I'll check that out.

I was asking about the mini futures because I'm only doing forex and I'm fairly ignorant to other daytrading (on purpose, I want to get comfortable with forex before I start anything else). The other stuff seems to require too great a capital to start, and there aren't any widely avaliable simulators for it (unlike forex, where you can get a demo account anywhere).

Thanks for the advice (I can post the link for finding the book if someone wants it).

>>630178
you sound like you bought bitcoins at 1200 and got sick and tired of people shitting on your bitcoin threads over and over and over again.
>>>/g/
>>>/b/

>>630178
Trading futures on the CME provides liquidity for the hedgers who manage grandma's pension, grandpa's annuity, every last morsel of food you stick in your face, every drop of energy which keeps you from freezing to death, and every adjustment to the currency system which prevents the USA from nuking you into the stone age.

Your argument is so monumentally stupid and suicidal you can only be a Russian a Chinese or a Democrat.

>>626925
>dividends
>from trading
Nigger you dumb?