Predictions

BellaGeneral Comments7 Comments

We received an email from a very accomplished young man the other day with an obvious passion for trading.  He had traded different products and still had not finished his studies.  I am looking forward to meeting him.  When we are interested in a candidate we ask that they answer some questions.  This young man answered one of our questions (below) which I would like to discuss.  And it helps delineate the clear advantage of being an intraday trader.  Intraday traders make money whether our predictions are accurate or not.

8) Please share a life experience that demonstrates your ability to be patient.

I would like to take an example from my trading experience to demonstrate my ability to be patient. I had the feeling that the commodities prices were being driven up incessantly and part of it was speculation. When oil was at 136, I felt it was overpriced and thought that there will be a sharp drop in commodity prices. As lower oil would support the dollar, I took a long dollar position. Oil prices continued to rise and even touched 145. I still was convinced that there would be a fall in oil prices and did not close out my position. Soon after, oil prices dropped drastically which led to a rise in the dollar strength. I booked profits when oil had dropped to 120. I think this example shows that I have the ability to be patient even when the chips are down.

As an intraday trader we are not beholden to the accuracy of our predictions.  GMan blogged about the top in oil right before it turned.  Pretty good call GMan (I think he also called the bottom of the dollar btw).  Steve btw is also scarily talented at calling tops and bottoms in stocks.  But GMan pointed out that he would seek confirmation of his thesis from the inside market.  And I think this is the point.  As intraday traders we develop theories daily.  And those are great.  But our P&L is not dictated by our predictions but our trading skill.  And when you develop trading skills it does not matter whether you accurately predict the top in a sector it just matters that that sector is active.  And if it is we are going to make money.  Our trading skills allow us to make money on the short side or the long side.

If you were to take a look at GMan’s or my trading records you would see 17/20 net positive days.  It is almost like something really strange needs to happen for us to be negative.  Our trading skills enable our consistency.   Presently, CNBC is full of very bright people predicting that oil is going to $200 a barrel.  CNBC is also packed with very bright people who predict that oil is going to $100 a barrel.  I tend to think those who believe we are headed for $100 a barrel are more persuasive, but honestly I really don’t know (thoughts?).  And I am not going to pretend that I do.  I do know that if oil goes to $100 I am going to make money.  And if oil goes to $200 a barrel I am going to make money.  Because I am a trader, an intraday trader.  And I leave the predictions for others and just handle the profitably trading part.

7 Comments on “Predictions”

  1. The thought of a career trading at a firm like SMB sounds like a very good opportunity.

    I have always loved stock trading, but because of a full-time job I cannot truly invest the time into it. But I believe I have what it takes to become a professional trader. Diligence, patience, and most importantly, the desire to succeed. Most importantly, I want to be in control of my own p&l, being able to make my own decisions and see the outcome. It is a bit of a more liberating profession than working in the corporate world.

    I believe that I can do what is required to be successful. I know the success rate of traders is small, because most lack the training to learn how to trade with discipline. Having watched SMB be profiled on Wall St Warriors, and doing some research and reading up on the firm – I have great respect for the depth of training and the investment that SMB makes in their traders.

    Each day that I work at my job in Corp Finance, I know I could be instead, trading and making far greater sums of money. For the last few years, this thought creeps into my mind over and over – and particularly the last several months, the nagging feeling that I belong in front of a trading platform – studying charts, identifying patterns, and capitalizing on trade opportunities – this I cannot escape.

    Are you still accepting applications for new recruits to your desk?

  2. The thought of a career trading at a firm like SMB sounds like a very good opportunity.

    I have always loved stock trading, but because of a full-time job I cannot truly invest the time into it. But I believe I have what it takes to become a professional trader. Diligence, patience, and most importantly, the desire to succeed. Most importantly, I want to be in control of my own p&l, being able to make my own decisions and see the outcome. It is a bit of a more liberating profession than working in the corporate world.

    I believe that I can do what is required to be successful. I know the success rate of traders is small, because most lack the training to learn how to trade with discipline. Having watched SMB be profiled on Wall St Warriors, and doing some research and reading up on the firm – I have great respect for the depth of training and the investment that SMB makes in their traders.

    Each day that I work at my job in Corp Finance, I know I could be instead, trading and making far greater sums of money. For the last few years, this thought creeps into my mind over and over – and particularly the last several months, the nagging feeling that I belong in front of a trading platform – studying charts, identifying patterns, and capitalizing on trade opportunities – this I cannot escape.

    Are you still accepting applications for new recruits to your desk?

  3. GMan, Steve and myself know exactly how you feel. That is why Steve and I are not writing some brief now that needs to be done by the end of the day. And that is why GMan doesn’t work at Goldman. For some the corporate world is a great fit but for others it isn’t.
    We are accepting applications. And we also agree that SMB is a great place to start your trading career. Thank you for your contribution.

  4. bella,

    In essence, does not “trading” in any timeframe accomplish exactly the same outcome?

    As “price” is not mandated by a “Random Walk” trends develop in a fractal nature.

    Thus the only “difference” is “timeframe”

    jog on
    duc

  5. bella,

    In essence, does not “trading” in any timeframe accomplish exactly the same outcome?

    As “price” is not mandated by a “Random Walk” trends develop in a fractal nature.

    Thus the only “difference” is “timeframe”

    jog on
    duc

  6. closet trader,

    From reading your application for consideration to the training program at SMB I would say that you have not yet identified the real drivers of success in trading.

    The single comment that jumps out is; “Each day that I work at my job in Corp Finance, I know I could be instead, trading and making far greater sums of money.”

    This is further reinforced via the excuse of “I have always loved stock trading, but because of a full-time job I cannot truly invest the time into it.”

    I would hazard the guess that you are not yet ready to move to full-time daytrading.

    jog on
    duc

  7. closet trader,

    From reading your application for consideration to the training program at SMB I would say that you have not yet identified the real drivers of success in trading.

    The single comment that jumps out is; “Each day that I work at my job in Corp Finance, I know I could be instead, trading and making far greater sums of money.”

    This is further reinforced via the excuse of “I have always loved stock trading, but because of a full-time job I cannot truly invest the time into it.”

    I would hazard the guess that you are not yet ready to move to full-time daytrading.

    jog on
    duc

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