Collaborating to build automated models

BellaBella Daily Update

In his Daily Report Card, a developing hybrid trader noted the important value talking to another trader on the desk about his idea for an automated trading model.  (A hybrid trader is one who profits with discretion, AND discretion armed with technology, AND automated models.  They are not just a discretionary trader, pushing buttons based upon what they see in markets.)  This hybrid trader has been contemplating building a reversal model buying and selling baskets of stocks/products in extreme conditions.

Just before takeoff back to NYC from CHI, I chatted over the phone with this hybrid trader about expanding his idea to consider products and ETFs and not just stocks.

Yesterday this hybrid trader walked over to the desk of another trader and exchanged ideas improving his thought process.  Below is this hybrid trader sharing that experience sharing and learning from another trader on the desk:

It was a day I want to study and develop the basket idea around. Speaking with Garret this morning was incredibly helpful in setting the context of the day, not just looking at the ticks but the other measures he looks at as well, they were showing intense strength from the beginning of the day. A day to hold, not look to take profits.

A day like this is a big day for the basket idea. It is certainly one to really take a good look at and evaluate how I would use the basket idea here, how I would create baskets, how those baskets would trade? Even if there are only of 5 of these days a year- they have the potential of being very powerful when executed well.

Further both of these traders have had important input from Dr. Steenbarger on important inputs to consider.

This hybrid trader will now team with other traders, his Team Leader for sure and potentially another junior trader with excellent coding skills, to build a strategy to play more offense and with measured edge for large reversal trades.  This strategy will be built by a team of 2 or 3 firm traders.

Notice how this hybrid trader is tapping into the resources at the firm to take his idea and make it better: another junior trader, partner, trading coach, Senior Trader, other junior trader.  We find the best models at the firm are built collaboratively.

I appreciate your feedback/comments/questions- [email protected].

*no relevant positions

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