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940832 No.940832 [Reply] [Original]

Ask a professional trader anything

>> No.940835

>>940832
The classic question

How many cocks do you suck op?

>> No.940836

>>940835

Can't say I have ever sucked a cock. How about you?

>> No.940837

>>940832
what is your monthly income from trading?

how did you learn?

what do you trade?

any educational resources for some of us newer traders?

thanks op

>> No.940838

What's your general trading strategy?

Are you trading on your own or is this trading in connection with a fund where you goal is minimizing transaction costs when moving large blocks of money?

>> No.940840

>>940837

Average monthly income after commissions and expenses tends to be $10,000 - $15,000 in a good year. I had a year I lost money.

I learned trading options on a retail account with my own money before being picked up by a firm.

I trade American and European bonds as well as S&P and NASDAQ futures. I follow those markets closely. I also follow energy (crude oil) and grain markets (soybeans, wheat, corn).

There's a shit ton of good e-books on piratebay under the user moneymakestheworldgoround or something like that. Most of it is advanced material on option mathematics and arbitrage, but that user provides a lot of good resources.

>> No.940843

>>940838

I'm a market maker so I employ a market making strategy at the firm I work at. I am associated with a very large exchange in Chicago and so we pay the least amount of commissions on any trade possible.

Yes, we move huge size in future markets trying to make a single tick (aka market making). This is normally not a viable strategy for retail traders since commissions eat too much profit. Specifically, we are an algorithmic market making group, the kind that gets a bad rap as "HFT" traders. We are merely doing what pit traders were doing back in chicago, except its all electronic now and transactions happen at the speed of light.

>> No.940844

>>940843
you said you started with your own money, how did you make money then?

i've got around 10k i put aside for trading and want to get started.

>> No.940845

>>940837

Heres a link to that user:

thepiratebay.la/user/moneymakestheworldgoround/


Reading about markets is good but the only way to learn is by risking real money in real time markets.

>> No.940849

In what ways in the algo trading different than what you did own your own before being picked up by a firm?

Which has had a great impact on your strategy, speed or lower commission costs?

What does your firm look for in a perspective trader. Obviously putting your own money and have a track record is a positive sign, but i'm sure you don't hire every idiot who made a few good trades in a row.

>> No.940850

>>940844

I was scalping equity options and index options through a retail broker. I was trading mostly using technicals and charting. It was rough when I started to learn because I went through several losing streaks before I started to make money again. I don't recommend day trade scalping because its very stressful and generally you are risking a lot to make a lot. Starting out, I think its better to be a position trader, that is, to hold onto a position for a period longer than a day. This helps you get a feel for how markets trade and exposure to markets is the #1 learnin tool.

I made a good chunk of money off several earnings reports which gave me the confidence to apply to a firm.

>> No.940853

Do you set stop-losses? Or trade purely by action?

>> No.940857

>>940849

Algo trading is all about arbitrage. We are arbitraging minuscule inefficiencies in the market. Since every other firm in the world is competing to spot and profit off these inefficiencies, speed is the edge you have over these other traders. These inefficiencies happen over microsecond spans, they happen so quick that most people don't notice them.

A simple example of these kind of ineffectiveness is for instance: NYSE is letting you sell apple stock at $100 while ARCA is letting you buy it for $99.98. Our algos pick this up and will buy aapl from arca and instantaneously sell to to NYSE for that 2 cent profit. Of course, we do this with huge quantities so we make more than 2 cents off the trade. Sometimes our algos execute these trades so fast that I don't even realize that it happened till it prints the PnL on my screen.

>> No.940865

>>940853

I set stop losses for about 75% of my trades. Trades where I set stops for are usually bigger ones where I dont want my emotions to get in the way. When I have that stop in there, the stop cuts the trade off for me instead of me panicking over whether to keep it or cut it.

I dont usually set stops for smaller trades where huge losses cant/wont accumulate as fast or as severely. Usually 1-lot trades or very far out-the-money options. I hate getting stopped out of a trade that later turns out to be good.

Im a huge fan of reading price action. Often times price action tells you a lot about the psychology of the market you are trading in. Someone dumpin a million shares at market tells you something way different than someone selling 100,000 shares 10 times with a limit order. I always pay attention to speed and magnitude of moves, it usually clues you into where the market is going.

>> No.940868

>>940849

To answer your last question, a firm is looking for people who can make fast decisions. When a market is moving, you need to make decisions very quickly. When I was interviewed, the interviewer later told me that I was better qualified than the other candidates because I made decisions quickly and confidently. Part of the interview process was the guy just throwing a bunch of math and non-math questions at me really fast like what is 1/256 in decimal form, what is 34*59, why are manhole covers round, etc. I didnt know the answer to them all immediately but I gave him approximate answers and I gave it to him fast and confidently and thats what he liked,

>> No.940876

this is really interesting.
How much arithmetic do you do on a daily basis? Are there people who use calculators for all their math or does everyone do it in their head instantly?

>> No.940880

>>940876

Not a lot surprisingly because our algorithms do the math for us. If we were to do the math for a trade in our heads or even with a calculator, you may have already missed the trade opportunity by then.

For other trades that dont require speed I usually try to do the math in my head but I have a calculator always sitting next to my mouse since its they dont ever make mistakes. There are very few guys that can bang out these math problems in their head but for the most part everyone uses a calculator for their math,

>> No.940889

Leave questions if you'd like, I'll be back tomorrow to answer

>> No.940924

>>940889
what kind of firm are they?

what kind of qualifications did you have that got you the interview?

how long did it take you to learn and then become confident enough to apply to a firm?

do you have a degree? if so, in what?

thanks again op

>> No.940955

>>940868
>manhole

>> No.940959

>>940889
What do you think about the book flashboys?

It kinda shits all over your hft/algo trading industry.

>> No.941065

>>940832
How often do you masturbate?
You said anything

>> No.941074
File: 92 KB, 1660x687, spotthepanicsellingidiots.png [View same] [iqdb] [saucenao] [google]
941074

Are you on Bitcoin yet or are you a good ol denial grandpa?

>> No.941078

>>940832
Any consumer level paid software/services you would recommend that would help bedroom traders get better info? esignal, DAS, benzinga etc?

>> No.941090

>>940832
What are good resources to learn for an absolute beginner?

>> No.941128

>>940840
>10k a year
>i make that much in a month playing poker

>> No.941144

>>941128
he said 10k a month

>> No.941486

>>940832

What program is the in the picture?

What are some good stock trading programs for computer that are cheap or free?

>> No.941526

>pic of ichimoku and bollinger (how you put those on the same chart and dont shoot yourself idk)
>talks about intermarket spreads

/biz/, you always (and I mean ALWAYS) fail me

>> No.941535

Which computer language is best suited for learning algorithmic trading? Will a MA in finance help if I've already completed a BA in Economics and Finance?

>> No.941537

>>940832
Is it true that assests are bought just on a whim instead of careful study?

>> No.941613
File: 21 KB, 534x516, mrjuha.jpg [View same] [iqdb] [saucenao] [google]
941613

>>941537
ofc. jesus fuck. and you should either. the instrument is not going up/down because of the fundamentals, it's going up or down because of the confidence.

>> No.941623

>>940843
How many cars you sling

>> No.941631

>>940832
>Ask a professional trader anything
Where do you tend bar?

Or are you a waiter?

>> No.941663

>>940832
How should someone amateur start trading? How does one trade online?

>> No.941697

>>940924

We are a market making and speculative trading firm. Our two main priorities is to be making intra-product markets (calendar spreads, bond spreads) and to be large speculative/fundamental traders in financial/capital markets. Half of our firm (the speculative traders) is approved to trade with or without algorithms. Our market making group is classified as an algorithmic trading group and 99% of our trades are fully automated.

A little over 2 years is how much I spent before applying to a firm. Those were two rough years. Firms like people who have experience trading their own money since 90% of trading is risk management.

I have double B.S. degrees in neuroscience and chemistry.

>> No.941702

>>940959

I liked Flash boys. I like M. Lewis. A lot of what was exposed in Flash Boys has actually made impact in the financial markets to prevent spoofing. Every firm is now closely monitored for spoofing (sending too many orders to the market that have no intention of ever getting filled) and the quota now is something like 99% of orders that you place on the market must be placed with the intention of getting filled else you face some serious auditing by the SEC.

Algorithmic trading is the natural evolution of where capital markets go. Where there's money, there will be competition to compete to make that money. HFT trading, though, brings huge volatility to the markets, I'll admit that.

>> No.941718

>>941074

I like bitcoin right now. If it manages to stay above the 300 mark, I'm looking for a nice bull run this year into next. Looking to buy some myself, not a lot, just a few.

>>941078

Depends on what you're trading. I trade futures and options. I actually like ThinkorSwim a lot for option volatility analysis, plus, it's free. I dont trade on it since the platform is sluggish and unresponsive. Plus all your orders through TDAmeritrade are most likely being front-run.

I really like Barron's LiveVol. Beautiful platform.

>>941090

I posted a piratebay link earlier to some good e-books. Also, Khan Academy videos on finance and arbitrage are very good. One of the keys to being a successful trader, in my opinion, is to understand the central principle of finance. In finance, capital markets must be arbitrage free else there would be risk free profits. Watch the Khan Academy videos on arbitrage.

>> No.941745

>>941074

whats the funny red green and gray line on the end?

>> No.941763

>>941537

Yes, I've seen a lot of professional traders buy or sell things just because they like the price or have a good feeling about it. That's all fine and well as long as the trader practices good risk management and discipline.

>> No.941765

>>941718
>learning

Thanks, man. I'll do that

>> No.941862

>>941718
i'm learning on TOS right now. i don't intend to scalp. will be orders still be front run badly in that case?

i've tried the IB platform but it's very clunky compared to TOS. haven't tried tradestation yet. those 2 are the main brokers that have no/little PfOF. any other brokers?

>> No.941864

>>941702
Do you think HFT should be illegal (I mean fibreoptic stuff where they house they machines in the exchanges

also answer this
>>941623

>> No.941868

>>941862
Don't use ToS, they are absolute shit
Not only are commissions insane, but it can't even stay connected for more than 5 minutes

>> No.941873

>>941868
i think their commission are reasonable; on par with other brokers really. platform useability is topnotch based on all the ones i've tried. if a person can't deal with $9 commission, they're undercapitalized and have poor entry/exits planned; positions that aren't likely to be profitable in the first place.

i can't speak about the connectivity because the papermoney account has different servers than their usual. i did notice it shit the bed on days with lots of earnings reports.

>> No.941876

>>941873
it's 2.50-3.50 per contract, for futures anyway
That is too high for any amount of money
If you're trading a significant amount of money that can easily be hundreds of dollars a day

>> No.941883

>>941876
well i'm a noob. not touching futures for a while yet. so their stock commission is acceptable to me.

>> No.941886

>>941883
nah just save yourself the trouble, right when you really need to exit a trade ToS will be frozen
It's happened to everyone I know who uses them

>> No.941893

>>941864

No, I dont think HFTs should be illegal. Our algorithms do what i would normally have done with my hand and mouse except they do it faster and without emotion or hesitation. I think algorithms that are designed to spoof or game markets should be illegal, no question, and for the most part they already are.

Algorithmic trading is the standard of the industry and it's here to stay. To smaller traders, my advice to you is to not compete in the same kind of markets/trading that these algorithms compete in: statistically its a losing game. The kind of trading these algorithms are performing are usually mean reversion trades and arbitrage.

I have one car.

>> No.941896

>>941886
well it only takes $2k to fund an account with them. i don't mind losing a few hundred to experience this myself. i have noticed that the graphs are slow to update by maybe 0.5 seconds. that's where having preset limit-sell orders would come in handy. i can't even count the number of times the high broke past my sell points and crashed lower than the open. you simply can't move your fingers fast enough to input a manual order.

since you're so set against TOS, what are some alternatives? really, the charting package is amazing. and i can tell the dev team are actually traders themselves because the useability is tops as well.

>> No.941901

>>941893
I meant contracts

>> No.941902

>>941893
So if you don't have an algorithm to trade with do you still think you can do better than the market as a value investor? As a swing trader?

>> No.941907

>>941862

Front-running mostly affects people looking to scalp trades so youll be fine. Brokers like to front-run trades for just a few pennies but they do it millions of times a day. If youre trading for the longer term, those few bucks shouldn't really matter, but yes, it can be annoying.

>> No.941913

>>941902

I know value investors, swing traders, scalpers who all perform well without algorithms. Running algorithmic trades is very expensive but if you can afford to have that edge on the markets, it very well may be worth it. Especially if you are running huge volume like my firm is, we find value in the algorithms.

Algos operate in a totally different aspect of the markets than what your average retail trader is usually trading. They may be trading the same products and that will affect your trades, but I don't think that you should think that you are directly competing for the same kind of trades/profits that these algos are trying to get.

>> No.941922

>>941901
>>941913
How many contracts do you trade

>> No.941925

>>941907
let's say i have a trading system that is good for calling 0.2% to 1% price swings. 3 conditions must all be met for me to enter the trade. then i look at the chart and subjectively determine whether i should enter the trade.

on a stock worth $100, that would be a 20 cent price swing on the low end. what are the chances of me being front run in that scenario?

i will be daytrading if i can continue to successfully apply this system. it works on a macro time scale of several weeks to months as well. however, pre and extended trading hours can really fuck with your maintenance margin requirement. the obvious example is VRX on the news. i simply can't stomach a black swan event dropping my position 7%. if you look at the VRX charts, the smart money got out at $180 and sold into $160. 3 full days before the mainstream got hold of the story. of course, tanking from 147 open to a low of 88 on the same day is newsworthy. but those others guys got out one hundred dollars ago. i would be a greatly relieved to open and close my positions same day.

>> No.941938

>>941925

So your chances are really dependent on what is happening in the market at that point and time. Say the stock you are trading is trading near $100. You know for a fact that a lot of other traders have their stops set at or just slightly below that $100 level. So at this point, your brokerage knows where your stop is. Say you are long from $100 and set a stop at $99.98. Your brokerage now knows that you are willing to sell at $99.98. Now say the brokerage also knows that a lot of their other customers have buy-stops at $100.25. They know that these people are willing to buy at $100.25. Your brokerage will attempt to run your sell stop and buy the stock at $99.98 and then attempt to run the buy stops at $100.25 and make that .27 cent profit. Brokerages know where their customers want to buy and sell, thats how they make money.

This can be avoided if you are a longer term trader. You want to be long from $100 and sell at your target of $125. Front running wont really affect you at this point.

Its very good that you have a system in place and if you find that system to perform to your liking, use it. Dont get discouraged by all the algos out there.

>> No.941946

>>941922

On a normal day, somewhere around 5000-7500 contracts.

>> No.941954

>>941718
>I like bitcoin right now.
Dropped.
Saged.
Reported.
Hidden.
Memory wiped.

>> No.941991

>>941938
yes, i've heard of stop hunting from brokers.

my stops and sell limits are a percentage relation to my entry point. they have nothing to do with round numbers, fib sequence or pivots. or whatever. i simply enter when i have feel there is a very high probability of profit. TOS can be set to calculate based on percent relation. very handy.

i was previously scalping quick trades worth 5 basis points but found that my lack of stop discipline completely wrecked any profits i made. so i've been looking at a system that would let me ride bigger waves for longer and cutting losing trades fast.

at this point, i'm actively watching the chart for an exit should the trend go against me. i'm no longer married to a sell target.

once again, i'm very leary of position or swing trading due to the possibility of black swan events. thank you for all the answers.

>> No.942018

>>941991
>i'm very leary of position or swing trading due to the possibility of black swan events

This is why you use options to define your risk instead of going all in with your money consistently.

>> No.942025

>>942018
if you don't mind explaining further or simply point me to some sites that have example strategies. it's definitely something i've read in passing.

i'm building up my knowledge and skillset one category at a time. it's enough to make a person go insane. too much to learn.

>> No.942225

>>941697
Did you ever work as a neurologist?

>> No.942262

I've studied physics and have had math courses including, but not limited to, calc 1-4 in addition to some comp sci classes, is that enough to handle the quantitative side of trading?

>> No.942264

>>940832
Trailing stops, yes or no?

>> No.942687

>>942225

No, I was a researcher in behavioral neuroscience and pharmaceuticals.

>>942262

Yes, calculus and diff eq related material is usually the most difficult quantitative trading gets.

>> No.942688

>>942264

I dont personally use trailing stops, but stops in general are always a yes.

>> No.942736

>>940843
> We are merely doing what pit traders were doing back in chicago, except its all electronic now and transactions happen at the speed of light.

https://www.youtube.com/watch?v=--H8SY334Zw

re: pit traders, if you haven't already seen "Floored," others may appreciate it.

>> No.942781

>>942688
What would you recommend to someone in the beginning stages of an undergrad finance degree to help them get on to the right track in terms of trading and investment banking?

>> No.942793
File: 87 KB, 1680x664, justlolatnocoiners.png [View same] [iqdb] [saucenao] [google]
942793

>>941745
Indicates path to moon.

>> No.942820

>>942264
Yes for swing trades. No for long term.

>> No.942824

>>942781

Start trading in your free time. Experience is very important. It's pretty bad to go into an interview not knowing anything about or having any experience with the job. Plus, you won't have anything to talk about during the interview. You can trade paper money on a market simulator or put $500 in a trading account to help you follow markets.

Obviously your #1 priority during undergrad is to study and get good grades. Good grades gets you interviews so don't overdo the trading.

The other important thing is to apply for internships as early as possible. Think about applying the end of your sophomore year, but you absolutely want one between your Jr. and Sr. year. Having interned at a firm gets you a foot in the door.

The last thing I can recommend is to network. Business is all about networking, especially in fields like banking and general finance. Any idiot can do a bunch of accounting work, people would rather hire someone they know to do it. Even as a trader, 75% of my firm all knew each other outside of work in some form or another. Most of the time, we hire people based on recommendations or referrals before we go through the exhausting work of plowing through a pile of resumes. I didn't know anybody in the firm so having experience trading and having had good grades is what got me the interview.

>> No.942833

>>942824
>You can trade paper money on a market simulator
I did this for a few months before I started trading for real. I would say the execution of trades seemed pretty realistic.
But I have read numerous studies that indicate a person will subconsciously take on extra risk if they're using a simulator. This can lead to confusion and losses when the switch is made.

>> No.942839

>>942833

Trade execution is actually better on a simulator than real time markets. In a futures market simulator, the sim will often give you a better position in a queue for FIFO (first come, first serve) markets so you actually get fills where you would not have in a realtime market.

Yes, sims are never a replacement for real risk in real markets. You obviously play more conservatively when playing poker for real money than no money. The sims are just good for getting feel for how a market trades.

>> No.942845

>>942839
Kind of funny reading your posts. I always wondered what corporate traders did all day.
Guess I kinda figured they let you look around for exploitable plays all day, like I do (except using other people's capital and proprietary strategies).

>> No.942850

>>942845

Haha yeah. We're always trying to come up with new arbitrage algorithms and tossing around ideas when the market is slow. Maybe watch some funny videos on youtube. Some markets may not move at all for an entire week so we constantly need to find ideas and trades so we can get paid :)

We actually dont trade other clients money. We only trade our own firm's money, which most of it is our boss's money. I have several bosses who all co-run the firm. They were some big time pit traders in Chicago back in the day. They have more money than they know what to do with, but at the same time I'm not going to be stupid with it.

>> No.942869

>>942850
>trade our own firm's money
Yeah, that's what I meant by "other people's capital".
"Other people's" as opposed to "yours".
I know people who are constantly bugging me to trade their portfolio for them, but I never took a 7, so it's not like I could (legally) anyway.

>> No.942881

will my new mastercard start working as soon as my old one expires or should i call my bank? i've had my new one for a week now and it's still not working, i can't buy things from amazon like this.

>> No.942904
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942904

>>942869

>but I never took a 7, so it's not like I could (legally) anyway.

Heyo Anon. I am also a professional trader, based in Europe, trading for a HFT firm. Just a hint for you. Many guys (professionals) who could not afford a Hedge Fund structure or simply did not want the hassle, opened up a "friens and family" account @interactivebrokers.

Good luck, you're welcome.

>> No.942919

>>942904
Appreciate the tip.
However, its not like I can't take a 7, I just never wanted to. Mostly because trading with other people's money is a responsibility I don't want.
I imagine that when you do well for people, they look at it as "your job". But if you lose their money, you'll probably never hear the end of it.
Are you in the UK?

>> No.942927

>>942919
I guess you are right. It's just the easiest and cheapest way to start off and I thought you might want to know.

and no, I am a continental guy ;-)

>> No.942956

Where can I learn about market sensitive news? Where to look, what to look for and how/what it effects.

Trying to find relavent books on forex is a fucking pain in the ass. Every fool is trying to push their strategy on you without ever teaching you about the market.

>> No.942958

>>942927
Well, I said "you" when I meant "one", but I might as well ask you, since you're in a position to know.
Do you have to deal with the people who lose money via your firm?
Or is that, hopefully, someone else's job?

>> No.942993

Yuropoor comp sci student here, some HFT firm was recruiting for software engineers at my uni. Anyone here doing that sort of thing? Didn't really talk to them but I'm kinda curious.

>> No.942996

>>942956
We use Bloomberg, but that's about 2k/mth.

I would not trade forex as a private investor. If you trade real money, 1 tick is 1/10'000 of a currency unit. If you use leverage you are likely to get screwed by your broker (as happened recently with the CHF move). Just my 2 cts.

>>942958
>Do you have to deal with the people who lose money via your firm?

Most exchanges function as a central counterparty. Unless you trade OTC you never know who you're trading against.

There are weirdos ringing us up every now and then, but we let the switchboard girls deal with them. The only folks we talk to are brokers and traders. Everything else is a waste of time (and therefore money)

>> No.942999

>>942958
Also, I'm neither English nor based in the UK. Just to clarify.

>> No.943005

>>942993
Specifically, how much overlap is there between the guys who write code, and the guys who trade? What are the basic roles in a hf trading firm, n who takes them on?

>> No.943010

>>943005
In my shop we have a trading deks and an IT department, they are strictly separated. I only occasionaly talk to programmers, mainly when exchanges release new features and the IT guys needs them explained.

Other companies require traders with programming skills.

It's mainly a matter of the company culture. Our bosses think a trader should focus on the market and not get carried away while coding.

>> No.943014

>>940843
Are you at CME? Me too.
I'm on strategy and education.

>> No.943027

>>943005
depends on the firm - in some systematic hedgefund it is the researchers/programmers who generate the alpha and get the lions share of profits - the traders are relegated to being execution monkeys and a large percentage of the trades are completely automated

at other firms - some options marketmakers for example there is more overlap - traders can be involved in coding or some of the systems developed are more like grey boxes and there is an element of discretion that still requires a human oversight so the traders can be attributed as having a reasonable contribution to the pnl - though still such firms will argue that the software/infrastructure gives part of the edge and so the profit split/bonus split will be lower for those traders in comparison to say a marketmaker/trader in a smaller firm using off the shelf software products to trade...

then again in some of these prop firms the traders still get a disproportionate share of pnl compared to researchers and programmers - see the leaked IMC figures for example

>> No.943045

>>943010
>>943027
Cool, thx guys.

>> No.943087

>>941486
looks a lot like thinkorswim

>> No.943135

>>940840
$120k a year seems low. I've heard of traders making millions. Is this just hype? Is 100k+ for a proprietary trader average?

>> No.943139

>>943135
It depends on
1) How much you make
2) How much your cut% is

If your edge is awesome and scalable you'd made many millions

There is no "average" salary since everything depends on what you make

>> No.943146

>>940832

What do you look for when choosing stocks? I just started, so I've been in a slight negative. I also just heard about Bollinger bands but not really understanding them.

>> No.943175

>>942996
>Most exchanges function as a central counterparty
Oh yeah, I wasn't talking about the people taking the losing side of the trades.
I meant the people who invested capital with your firm (assuming there are such people). You know, the people who blame the brokerage when the stock they pick tanks.

>> No.943179

>>940832
Murex, Calypso, OpenLink, Other (Specify)

Pick one

>> No.943182

>>943175

Oh, I did not even think of that. Sorry.

We (like any other succesful trading company) do not have external capital or shareholders. Why would we? We deliver profits on a consistent base. If that wasn't the case, we'd be selling trading newsletters and binary options webinars for 39.99€

>> No.943272

>>943182
Oh, my bad.
I figured you guys were hedgers.

>> No.943295

>>943182
Do you think that if you had a stronger history/quant. business degree that you would be better in some sense or farther along in your career? Is there much room for movement (promotions/salary-wise) in your current position?

>> No.943373

>>943182
So you trade solely on behalf of the owners?
Not a bad gig. I suppose if I had that kind of scratch, I'd hire a team to trade for us as well.

>> No.943383

>>943014

Yes, I am at CME within the Chicago Board of Trade building, Cheers, man. I'll be back tomorrow to answer the rest of your questions.

>> No.943469

>>943272
>>943295
>>943373

Sorry guys, I was sleeping. Remember I'm in Europe and it was in the middle of the night when I last wrote.

>>943272
But yes.We are hedgers. I basically do a market makers job, like OP. We are designated MM on Eurex and other exchanges. But other than OP we just focus on equity options and indices.

>>943295
I have never specified my background. I'm not OP, I am Eurofag. My background is pretty sufficent for what I do. I not striving for the nobel price in rocket surgery and stuff.

(In my case) there is always room for promotion if you are profitable, but there are two sides: On one hand you get a higher fixed salary and a higher cut of the bonus pool, but as a director/team leader/desk head or whatever, you get involved into politics and lose your focus on trading. You waste your time in useless meetings trying to maintain or enhance your little bit of power in order to get promoted again for a little bit more of the pie. It's a rat race I never wanted to get inolved in. I love trading and hate politics and meetings. I especially hate meetings which could be replaced by a two page email, but if you don't attempt you get backstabbed. (was deputy desk head, gave it away 'cause hating it)

Also I'm an oldfag. I am in my mid 30ies and still "only" a trader, not a desk head/lead trader or head of global heads. But I am one of the more experienced and profitable ones. And no, I am not bitter or frustrated. I do my thing and I love it, my bosses respect me and the youngfags sometimes make fun of me. Could not care less.

>>943373
No. I trade on behalf of the company. The "owners" as your refer to are the shareholders, and they are to shut there mouth until the AGM takes place. Given the fact that I am "old", experienced and profitable I am also a minor shareholder, but the founders have the biggest stake (obv). The share capital is in the region of > 100mln.

OP offered to answer you anything, so it's his parade.I'm out,nice w/end.

>> No.943494

>>942996
Not going to use leverage.
Mainly I just want to learn about market influencing forces

>> No.943527

>>940857
How can you do this if RegNMS doesn't allow crossed markets? I can see how it would happen if you were posted bid 99.98 and 100.00 offer but the way you word it sounds like you're taking which would not happen in the real world.

>> No.943532

>>941535
Real algorithmic trader here -- there is no language best suited for algo trading. It depends entirely on your role and the type of shop.

I love kdb/q due to its elegance, speed and ability to be used anywhere in the stack for anything thats not HFT. http://code.kx.com/wiki/Tutorials

In general:
Modelers and researchers will use something like python, Matlab or R due to their quick development times. They can churn out tens if not hundreds of models a year this way. Performance isn't an issue at this point in time, then when they are backtested and proven it moves to a faster language and gets optimized.

If you are more focused on the "computer science" aspect, but are equally as quanty most shops have a team that takes the proven models from the researchers and turns them into something production ready. This is normally in C++, high performance java or if you are Jane Street its OCaml.

Finally, you'll need someone to build your gateway to the market this is where its the least quanty and most about performance. Depending on the size of the job people may buy a hardware or software solution or build it in house. If its built in house it will likely be C or Verilog (I haven't seen much love for VHDL in finance).

>> No.943536

>>941702
You say you are a market maker then post crap like this. I agree that spoofing is bad, but a quota of 99% is entirely unrealistic.

Matt Levine is a great resource and notes reasonable cancel rates in this article:
http://www.bloombergview.com/articles/2015-10-08/why-do-high-frequency-traders-cancel-so-many-orders-

>HFT brings volatility
In what way? The large majority of HFTs are market makers (what you claim your company does), how do market makers bring volatility?

>> No.943648

>>943494
lol.
That's what I said 8 years ago.
Now it's like I can't live without it.

>> No.943654

>>943469
so are you at a dutch marketmaker then?

>> No.943680

>>943536

99% of our orders must have been entered and filled or entered and deleted by an algorithm. Manual order deletes must account for less than 1% of our entire order book history in a month or else we face auditing or fines.

Algorithmic trading brings volatility, in my opinion, due to this automated order deleting that happens at the speed of communication between the price server and black box server, which are usually co-located next to eachother. This can cause, for instance, ES futures being 100 orders thick at each price to less than 5 at each price in a blink of an eye. Plus, we haven't seen flash crashes until 1987 when algorithmic trading started to pick up.

>> No.943683

>>943527

You are correct, this can't actually happen in real life. I was using that as a simple example of a theoretical arbitrage.

>> No.943689

>>943179

For work, I use TT X-Trader. I like it because it is responsive, simple, and resource efficient (doesn't use a lot of system resources). It comes packaged with a GUI-based algorithm logic builder, autospreaders, and a few other useful trading automaters. Also, the single click trading is nice for getting in and out of markets fast, but can make for a lot of fat fingers.

>> No.943697

>>943689
Thoughts on trend following systems? Do you think retail traders could stand a chance by using a long holding time, coupled with a sound risk management? (implying the system has an edge, obviously)

>> No.943699

>>943135

Sure, $100-$150k a year might seem low for a trader but that's my net income after expenses, commissions, and paying a cut to my bosses. To be netting 150k a year, I would have to be grossing around 400k a year.

I don't personally ask how much other traders make, but based on what I've seen glancing at other people's PnL, a lot of other traders at my firm seem to be grossing about 2k-3k a day on average.

I know for a fact that other traders have had +$500,000 days. Not many, though,

>> No.943716

>>943697

For non-algo trading, I trade almost exclusively a trend trading system. There are a lot of ways retail traders can make money, but I've had the most success with trend trading and longer holding periods (longer usually being more than a few hours). Once my price target is achieved, I'm out. This can take one hour, one day, one week, but I always respect my price target. Retail traders need to trade less and trade better because commissions will quickly eat away profit. Trying to catch trend reversals will eat away at your account since you often times get stopped out. That's why I was trading trends as a retail trader.

You can make a lot of money trying to catch the trend reversal, especially with options, but this is a tricky game. Usually, markets spend the most time trending up, trending down, or trending sideways. They spend the least amount of time making trend reversals and so timing is everything when it comes to this. Bollinger bands are good for catching reversals.

>> No.943726

>>943716
>Bollinger bands are good for catching reversals.
My system uses two Bollinger Bands. Trading exclusively fx and indices. Took me a lot of time to realize that money are made on the trends, and the easiest way is simply to spot reversal on a lower time frame in the direction of the higher time frame. I burned my first account because i was obstinate on trying to play reversal even in the middle of nowhere. I also have a technical way to get out if i'm profitable, but i also use macro analysis to see if holding my position for weeks or even months is a good call.

And yes, spreads are a bitch. It's not much about how much you pay to get a market order, but how much in potential profit you end up missing because of the spread.
How much money were you making on the retail side, in percentage per month? Were you using leverage? How much did you start with?

>> No.943736

>>943726

Back when I started as a retail trader, I was either up or down 10-15% every month. Blew up my first $4000 account in about a year. I didn't have an effective system nor was I consistent with my strategies or trading. Started again with $10000 but implemented rules about my maximum risk tolerance and started to pick up trend trading systems along with option volatility arbitrage. I was using leveraged option spreads (verticals, condors, butterflies, etc) with defined maximum risk. My PnL was still a little inconsistent every month but I wasn't losing money. I had a big break when I started trading earnings reports. There was an AAPL earnings report (the one before the 7:1 split) where my $1000 options position was suddenly worth $20,000 two days later. Had a lot of profit to dick around with after that and a 'safety net' to take more risk. Started putting on larger options positions with LEAPS and played long term trends which turned out to be consistently profitable at a rate of 10% a month. Of course we were in a trending equity bull market back then so that was a slight over-performance compared to the S&P.

>> No.943737

retail here, trading since September 2014, total equity risk = £3000, total p/l = -£300. Total realised losses at one point was £2000.

OP, what's your long term outlook on US indices, namely Dow30 and Nasdaq (us-tech-100) futures?

What advice would you give someone in my position?

>> No.943752

>>943736
Interesting. Described my path as a retail. Still not profitable as i would, but i'm making money consistently, and worst case scenario, i end up being flat for the month. There is still much work to do, in the sense that i still sometimes stray from my own rules, but the improvements are there, and are consistent.
Trying to build my safety net as well, so i can increase my risk profile. meanwhile i'm learning options, mainly to hedge my positions as my account grows larger.

Anyway, well done man. Cheers

>> No.943753

>>943737

This is my personal view of US equity indexes and should not be construed as investment advice. Take it with a grain of salt.

The S&P and NASDAQ are currently in a bullish trending environment and has yet to pull back after a nice rally in October. Historically speaking, huge gains in October usually point to a weaker finish to the year. I am actually looking for new all time highs in the indexes going into the end of the year, but I am not willing to put on a huge long equity position at this point and time. I can't justify the risk. We have the possibility of a rate hike in December which brings potential downside risk, but I do not think there will be a rate hake this year. Even if there is a 25bp rate hike targeting in Dec, markets have had plenty of time to price it in and can even cause markets to rally. In reality though, no one knows where the markets are heading.

My advice to you is to keep trading a system that works. If you are only down -300 from being down -2000 at some point, it seems like you may have found a system that works. Keep working on it and look to take home a consistent amount every week. Consider a week where you don't lose money a victory. Trading isnt a race to see who can make the most amount of money the quickest. It's a long term game, keep putting yourself in good positions to make a little bit every day with the least amount of risk possible. Small profits add up. Keep learning but also don't over-do it. You can burn out fast, take breaks here and there.

>> No.943764

>>943689
been a few years since I used TT but back when I did the autospreadder was absolute shite - have the improved it much?

>> No.943767

>>943697
absolutely - there are CTAs/hedge funds managing billions using trend following

AHL, Winton, Aspect etc...

given that they can't exactly get into and out of positions all that quickly trend following is still potentially feasible for a retail trader with a small account... as to how you go about identifying a trend and start to enter a position that is another matter but in some respects the big players have an execution handicap here are are still managing to generate positive returns from it, which in itself is very improessive

>> No.943768

>>943383
Hey man thanks for answering our questions. I have a few more.

1) How does Chicago compare to New York?

2) Is it required to have a college education, preferred, or do you just need experience?

3) Do you dabble/work in any other areas of finance?

thanks!

>> No.943769

>>943764

Ive only been using TT for a little over a year but I do like their autospreader. It does a good job for setting up synthetics between different contracts for the same product but it's kind of shitty for setting up synthetics between two different products. Trying to figure out the tick size is a bitch. I think they added new pre and post-hedging programming logic since I started using it which is useful. Havent really used any other autospreaders other than TTs so I guess I can't compare it to anything else.

>> No.943779

>>943768

No problem man.

I actually read an article this week in Bloomberg about Chicago overtaking NYC as the major US trading hub. NYC exchanges are mostly moving stock but Chicago exchanges are moving stock indexes, commodities, and bond futures and options. In fact, CME acquired NYMEX which was NYC's largest commodity exchange.

I think Chicago is a lot more casual in terms of work environment. You won't ever see a trader here wearing a suit and tie to work. To answer your second question, a lot of the older traders here haven't even gone to college. Nowadays, I think the bare minimum you need is a bachelors, but not even in finance. Since quants are in high demand, trading firms here are looking for a lot of kids with science and programming backgrounds. I myself am a neuroscience and chemistry background. My experience with trading prior to applying helped me get a foot in the door.

I used to work in venture capital back when I lived in SF, so I have experience with startups and tech.

>> No.943820
File: 2.03 MB, 640x360, women and men are equal HELP ME SHITLORD.webm [View same] [iqdb] [saucenao] [google]
943820

>>943753

thanks a bunch! All your information has been very helpful. As another guy said, most of my losses are a result of poor trading psychology thus not following my (partially-developed) system. This system was based on the year's observation of western indices.

All I can give you in return is this webm.

>> No.943833

>>940832
Hello.

Can you answer this thread ?
>>943309
Thank you.

>> No.944141

>>940832
Would you have any advice for anyone wanting to get into the banking sector? I'm currently a maths undergrad just looking at career opportunities, and could use some education on what's available in banking. All I really know about is IB, which looks backstabby as fuck and I'm honestly not surprised by what I hear about how people in that area hate their lives... but what else is there in the banking sector?