Everybody should keep in mind that most traders, including most people posting here, most people having a go at prop trading, most hedge funds etc, ultimately fail, lose more money than they make.
So if you have a bunch of guuys who have been trading net profitably and successfully for decades for me at least it's obvious who I'd listen to, who I'd see as a bench mark, seeing as nothing succeeds like success haha.
Lots more examples out there like the following.
William Eckhardt:
The Win/Loss Ratio
“One common adage on this subject that is completely wrongheaded is: You can’t go broke taking profits. That’s precisely how many traders do go broke. While amateurs go broke by taking large losses, professionals go broke by taking small profits. The problem in a nutshell is that human nature does not operate to maximize gain but rather to maximize the chance of a gain. The desire to maximize the number of winning trades (or minimize the number of losing trades) works against the trader. The success rate of trades is the least important performance statistic and may even be inversely related to performance. …
What really matters is the long-run distributions of outcomes from your trading techniques, systems, and procedures. But, psychologically, what seems of paramount importance is whether the positions that you have right now are going to work. Current positions seem to be crucial beyond any statistical justification. It’s quite tempting to bend your rules to make your current trades work, assuming that the favorability of your long-term statistics will take care of future profitability. Two of the cardinal sins of trading - giving losses too much rope and taking profits prematurely - are both attempts to make current positions more likely to succeed, to the severe detriment of long-term performance.
Market Wizards
-Billionaire hedge fund manager Bruce Kovner:
Michael Marcus taught me one other thing that is absolutely critical: You have to be willing to make mistakes regularly; there is nothing wrong with it. Michael taught me about making your best judgment, being wrong, making your next best judgment, being wrong, making your third best judgment, and then doubling your money.
Whenever I enter a position, I have a predetermined stop. That is the only way I can sleep. I know where I'm getting out before I get in. The position size on a trade is determined by the stop, and the stop is determined on a technical basis. I never think about other people who may be using the same stop, because the market shouldn't go there if I am right.
Market Wizards
- Richard Dennis (Turtles daddy, who turned 400 bucks into several hundred million):
When things go bad, traders shouldn't stick their head in the sand and just hope it gets better.
You should always have a worst-case point. The only choice should be to get out quicker.
The worst mistake a trader can make is to miss a major profit opportunity. 95 percent of profits come from only 5 percent of the trades.
- Bill Lipschutz (Biggest earning earning trader for many years at the then investment bank Salomon Brothers before he started his own hedge fund):
I don't have a problem letting my profits run, which many traders do. You have to be able to let your profits run. I don't think you can consistently be a winner trading if you're banking on being right more than 50 percent of the time. You have to figure out how to make money by being right only 20 to 30 percent of the time."
New Market Wizards
- George Soros:
I don't care when I'm wrong. I cut my losses and move on to the next opportunity. Trading is not about being right. It's about how much you make when you are right.
середа, 3 лютого 2010 р.
вівторок, 2 лютого 2010 р.
Attracting investors
First things first.
Make sure you know what you are getting into. Investing other peoples money is advantageous in the fact that it offers no capital risk of your own and plenty of upside (fixed fees, profit splits) but its not that cut and dried. Some people may think its much easier when its someone elses money on the line but you may find that investing/trading other peoples money may affect you adversely (it did with me when I was prop) when you realise that you are responsible to someone else not yourself which can create all kinds of pyschological/emotional issues.
Second to this, depending on your backers you may find you get levels of interference that are not desirable. e.g. What are you in at the moment? What?! You're short the S&P??! It's been going up for weeks?!"
Thirdly and perhaps most importantly there are all sorts of logistical and regulatory nightmares. In the UK, trading for others is highly illegal under a profit share arrangement unless you work under an umbrella company or you have the necessary regulatory certificates to do it. (In the UK it costs £1,500 to submit an application form to the FSA to trade others money and there is no guarantee that you will be accepted as they take experience etc into account... with the application fee being non-refundable for starters...a lot of people probably think they won't get caught...until they produce a 30% drawdown and bear the brunt of some disgruntled investors wrath...first rule of business is (or should be) never trust anyone!
I have been offered as much as £1m backing in total in the last year or so and refuse to accept it for the above reasons, I won't even look at trading a mini account for a family member but based on my experience and knowledge here are your best bets if you are set on the idea and you are legally able to do it...
1. Get a track record. If you are any good and in a position to return money to investors, you should be able to make money for yourself. Start small and build a track record that you can show to people. Your account may be small but its consistency and percentage returns, plus awareness of maximum drawdowns etc that investors look for. In this game, word of mouth quickly spreads. It depends on your circumstances but for smaller traders and even some that have become huge (e.g. the market wizards) investment often started at home. If family see you making money, they may come forward and ask you to manage some for them...this can lead onto close friends who then spread the word to other friends that they are doing well with you etc and you can get an entry in this way.
2. Get a presence in the community. This and the point above are closely related but adding this will boost your chances ten fold. If you look at the entries for Top 100 Traders (Trader Monthly) a large majority come recommended. That is to say, someone has come forward and said "I know a great trader who has produced massive returns..." and then they are assessed and featured. I was once contacted by the Financial Times because of a Dow position I had posted on a thread on here! So, easiest way is to start a thread on a board like this one or FF is good for investment also and show people what you are doing. You can clearly stipulate you are not going to give your edge away but entry and exit points or even screenshots of account statements on a consistent basis will get people pm'ing you often after as little as a few weeks. If you go one step further and become a frequent poster and a helpful one you will get a lot of opportunities and see a lot of doors open that you will literally not believe. With a board like this you not only have scouts from firms, funds etc but you also have "tired" investors that cannot make money and are quick to latch onto someone that can.
Sorry if these are obvious but they really are the easiest ways. Many people have been burnt in life and there is a lot of notoriety surrounding traders (Madoff ponzi scheme all the way down to the sh*t system you buy that doesn't make money etc) so simply posting a message saying "I make X% a week, anyone interested in backing me?" is almost 100% destined to get you nowhere.
The best way to get money thrown at you is to just be yourself and don't ask anyone for it.
Actually, it's a lot like getting a beautiful girl to fall for you: play it cool, do your thing and of utmost importance: act like you don't need it or want it.
Always remember the legal side though. It really is key. If you don't do things properly and you are caught, you can be fined, imprisoned and banned from trading for life. Is the risk worth it? That's something only the individual can answer.
Make sure you know what you are getting into. Investing other peoples money is advantageous in the fact that it offers no capital risk of your own and plenty of upside (fixed fees, profit splits) but its not that cut and dried. Some people may think its much easier when its someone elses money on the line but you may find that investing/trading other peoples money may affect you adversely (it did with me when I was prop) when you realise that you are responsible to someone else not yourself which can create all kinds of pyschological/emotional issues.
Second to this, depending on your backers you may find you get levels of interference that are not desirable. e.g. What are you in at the moment? What?! You're short the S&P??! It's been going up for weeks?!"
Thirdly and perhaps most importantly there are all sorts of logistical and regulatory nightmares. In the UK, trading for others is highly illegal under a profit share arrangement unless you work under an umbrella company or you have the necessary regulatory certificates to do it. (In the UK it costs £1,500 to submit an application form to the FSA to trade others money and there is no guarantee that you will be accepted as they take experience etc into account... with the application fee being non-refundable for starters...a lot of people probably think they won't get caught...until they produce a 30% drawdown and bear the brunt of some disgruntled investors wrath...first rule of business is (or should be) never trust anyone!
I have been offered as much as £1m backing in total in the last year or so and refuse to accept it for the above reasons, I won't even look at trading a mini account for a family member but based on my experience and knowledge here are your best bets if you are set on the idea and you are legally able to do it...
1. Get a track record. If you are any good and in a position to return money to investors, you should be able to make money for yourself. Start small and build a track record that you can show to people. Your account may be small but its consistency and percentage returns, plus awareness of maximum drawdowns etc that investors look for. In this game, word of mouth quickly spreads. It depends on your circumstances but for smaller traders and even some that have become huge (e.g. the market wizards) investment often started at home. If family see you making money, they may come forward and ask you to manage some for them...this can lead onto close friends who then spread the word to other friends that they are doing well with you etc and you can get an entry in this way.
2. Get a presence in the community. This and the point above are closely related but adding this will boost your chances ten fold. If you look at the entries for Top 100 Traders (Trader Monthly) a large majority come recommended. That is to say, someone has come forward and said "I know a great trader who has produced massive returns..." and then they are assessed and featured. I was once contacted by the Financial Times because of a Dow position I had posted on a thread on here! So, easiest way is to start a thread on a board like this one or FF is good for investment also and show people what you are doing. You can clearly stipulate you are not going to give your edge away but entry and exit points or even screenshots of account statements on a consistent basis will get people pm'ing you often after as little as a few weeks. If you go one step further and become a frequent poster and a helpful one you will get a lot of opportunities and see a lot of doors open that you will literally not believe. With a board like this you not only have scouts from firms, funds etc but you also have "tired" investors that cannot make money and are quick to latch onto someone that can.
Sorry if these are obvious but they really are the easiest ways. Many people have been burnt in life and there is a lot of notoriety surrounding traders (Madoff ponzi scheme all the way down to the sh*t system you buy that doesn't make money etc) so simply posting a message saying "I make X% a week, anyone interested in backing me?" is almost 100% destined to get you nowhere.
The best way to get money thrown at you is to just be yourself and don't ask anyone for it.
Actually, it's a lot like getting a beautiful girl to fall for you: play it cool, do your thing and of utmost importance: act like you don't need it or want it.
Always remember the legal side though. It really is key. If you don't do things properly and you are caught, you can be fined, imprisoned and banned from trading for life. Is the risk worth it? That's something only the individual can answer.
Prop trading firms! best condition
http://jctradinggroup.ru/Home/Service
Открытие и ведение счета: бесплатно.
Возможность торговать дробными лотами: да, +0.0018 ECN fee
Плечо: 1:20 внутри дня, овернайт - индивидуально.
Минимальный депозит: $1000
Остаток для поддержания счета: $500
Котировки: NYSE, AMEX, NASDAQ Level 1 = $3 (три доллара)
Платформа Laser - бесплатно.
Прямой счет в США, никаких офшоров.
Русскоязычная поддержка.
Payout (выплата прибыли) - 100%!
Комиссионные:
0-19 999 акций в месяц = $0,0065 за акцию
20 000-49 999 = $0,0060 за акцию
50 000-99 999 = $0,0055 за акцию
100К-500К = $0,005 за акцию
500К+ - индивидуально.
ECN, NASD, SEC fee трейдер оплачивает отдельно.
Услуги для клиентов
Открытие и ведение счета: бесплатно.
Возможность торговать дробными лотами: да, +0.0018 ECN fee
Плечо: 1:20 внутри дня, овернайт - индивидуально.
Минимальный депозит: $1000
Остаток для поддержания счета: $500
Котировки: NYSE, AMEX, NASDAQ Level 1 = $3 (три доллара)
Платформа Laser - бесплатно.
Прямой счет в США, никаких офшоров.
Русскоязычная поддержка.
Payout (выплата прибыли) - 100%!
Комиссионные:
0-19 999 акций в месяц = $0,0065 за акцию
20 000-49 999 = $0,0060 за акцию
50 000-99 999 = $0,0055 за акцию
100К-500К = $0,005 за акцию
500К+ - индивидуально.
ECN, NASD, SEC fee трейдер оплачивает отдельно.
About going to full size trading
P.S. Don't worry about who is confident and who is not. If you see a good level or an opportunity on the chart then post it or at least tell us what and where it is. You only get better in this game by trial and error.
Here is an interesting fact for you. One of the biggest traders here at my firm (£250k per week - yes I did type that right) spent the most time on sim learning while all his peers went live before him. But once he came off sim and went live he left them in the dust in a HUGE way. Just take your time. I'm working with people who have gone from zero in their account (of course they had margin to make a trade) to tens of millions in five years.
This is not a get rich quick game. It's a game where it might take you a good few years to master it and all the while you are trading small and wondering whether you are ever going to get anywhere. But once you have it down and you are consistently profitable - even if its just 10 pence a day you are making, day in and day out - all that stands in the way of your fortune is size. And upping your size is the easiest thing to do in trading.
Just learn the ropes, practice, practice, practice and refine what you do until you are as sharp as a knife. Money comes AFTER consistency. Save the big bets for once you know what you are doing. The ammunition will be there for when you are ready.
Here is an interesting fact for you. One of the biggest traders here at my firm (£250k per week - yes I did type that right) spent the most time on sim learning while all his peers went live before him. But once he came off sim and went live he left them in the dust in a HUGE way. Just take your time. I'm working with people who have gone from zero in their account (of course they had margin to make a trade) to tens of millions in five years.
This is not a get rich quick game. It's a game where it might take you a good few years to master it and all the while you are trading small and wondering whether you are ever going to get anywhere. But once you have it down and you are consistently profitable - even if its just 10 pence a day you are making, day in and day out - all that stands in the way of your fortune is size. And upping your size is the easiest thing to do in trading.
Just learn the ropes, practice, practice, practice and refine what you do until you are as sharp as a knife. Money comes AFTER consistency. Save the big bets for once you know what you are doing. The ammunition will be there for when you are ready.
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