In this video, we discuss what will get you fired from a trading desk.
View Video Transcriptyou work at a prop firm
and
you will meet
with
your floor manager
your floor manager will go over your
maximum intraday loss
the firm is
giving you license
to lose
that amount intraday
firm is not giving you license to lose
one dollar more than that
losing one more one more dollar
losing a dollar more than that
is
a breach of trust it’s irresponsible
it is
at a hedge fund they may even treat it
more drastically it is a fireable
offense
on the spot
period full stop
and
you know the reason for that is your
coast you’re a custodian
of the firm’s
money
the firm is telling you you can lose
thousand dollars a day
it’s permission you to lose that it has
not permissioned you to lose one
thousand and one dollars
that’s number one
this is a i think people look at this
as this is a risk issue or a risk
management issue it’s actually an
ethical issue
for everybody here
you ethically do not have the right
the firm has not permissioned you
to do anything more than trade within
its guardrails
so
when you’re in a position you need to be
thinking about all the things all the
crate and this is crazy
you need to be thinking about all the
crazy things that could happen
so you do not
lose the trust of the firm
and you can’t get that wrong
all right and then you know as you get
as you gain more experience
and
you work with the risk manager more and
more
you will develop
rules
for being a bigger trader
but
at the start there really shouldn’t be
anyone going over and and it we won’t
look at it as a risk issue we’ll look at
it as an ethical issue if we can’t trust
you
to stay within five hundred dollars how
you know how can we trust you when your
stop loss is a hundred and fifty
thousand dollars
and you’re
short a hundred thousand shares of
beyond
how we possibly
that could go from 150 000 to a 500 000
rip
and more pretty quickly
secondly
secondly
the market
that we’re in right now has so much
opportunity
one trade is not worth
stopping yourself out
for the day
there’s going to be so many
opportunities
you have to keep yourself in the game
because there’s just a lot of easy
trades out there
and so
i know that
you all want to flex your muscles and
get big and take on a lot of risk and
think that’s the path to making a lot of
money there are a lot of traders in the
prop space
who
don’t come anywhere near
their intraday loss
i was at dinner with the trader
who made
and i’m gonna approximate
uh over the course of two over the
course of two days about three hundred
thousand
and drew down i made three hundred
thousand over the course of a couple of
days and drew down guess how much
it was his biggest drawdown he made 300
thousand dollars
traded a couple of different stocks
mainly in two stocks guess how much he
drew
one time down 30. okay and that would be
terrific right
that’s still a one to ten ratio
what do you think he drew down
50 max a hundred
five thousand
three thousand dollars in judah
and so
and and swang just had back-to-back
quarter million dollar days
and
it drew down almost nothing
gave it
had some pull-ins where he gave back
some open profit
but there are people that don’t need to
that aren’t taking pain in this market
to make pretty good numbers
um
and i’m not suggesting that
you shouldn’t develop a system where you
draw down a little bit i’m just saying
it’s not true
that you need to draw down and make a
lot of money
um and so
and dr steenberger
said something really interesting
to one of our really good traders the
other day
which is
one of the traders that he works with
who made so much money last year i
actually can’t even say it because the
number is just
ridiculous i mean
the amount of p l that this this
particular trader made
he looks at it this trader looks at it
as and he has risk limits on him as well
he looks at it as
a a challenge
each day
he’s so competitive
that he views it as a challenge never to
get stopped out
in a particular trade just he’s not
going to let it happen if you want to
learn three of the top trading
strategies our new york prop firm uses
to extract big profits from the markets
month in and month out check out our
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workshop just go to tradingworkshop.com
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