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Tuesday, 27 October 2015

An Evening With A Senior Pro Trader



Several months back, I had the pleasure of spending one evening with a Director of Futures from one of our local brokerages.

He's an interesting character! 

Speaks England with heavy Singlish and lots of Hokkien phrases peppered for added spiciness!

Yup, not a graduate by any stretch of the imagination.


Like most street urchins made good, he stumbled onto the then Simex as a local with $30,000 Sing dollars (his life savings) when he heard how much a local could make from his friends working inside Simex.

He was in his late 20s when he became a local.


Fast forward to today, he's one of those locals who have successfully made the transition from the trading pits to electronic trading as a scalper. (Have you noticed most professional traders are intraday traders?)

It's not easy. Many of his local pals have dropped out of trading altogether as they find it hard to adapt in an environment where they can't read the body language of their competition, and where machines from high frequency trading firms are able to run circles round them...

Now he's 50 plus years young; still trades his own account and mentors the other prop-traders working for his broker.
  

Not one to let this opportunity go to waste, I asked him for his views (note: I never said advice, I'll come back to it later on) on what's interesting to both of us:


Is that a flick knife?

Right off the bat he was making fun of those "traders" who think they can "trade" with a tablet or smartphone. Limpeh have a 6 screen trading setup! You want to trade against me on the beach? He roared with a throaty laughter.

I reminded him his brokerage has mobile platforms for retail customers. He rolled his eyes, and I nodded with a smile. 






Free where got edge?

He was sharing with me excitedly how his US based trading platform is able to put a volume condition to his price stops. For example, most platforms only allow us to put our stops at a specific price level - for eg, 1.35.  So even if this 1.35 gets done with one contract, our stop will be triggered.

This US platform allows him to put another variable like >500 contracts at 1.35 - meaning only more than 500 contracts have traded at price 1.35 would his stop be triggered.

And he is paying for this platform out of his own pocket for several thousands a month. 

No, I didn't ask him why he didn't consider the "free" professional trading platforms used by the other prop-traders at his brokerage? That would be a dumb question.


CFDs or Futures?

He was dissing traders who trade with CFDs...

Of course he is biased. Taking into account his Simex background and his current position as Director of Futures.   

How many big time pro traders trade CFDs? He challenged me.

Well, I know my missing-in-action coconut commenter trades CFDs with hundreds of thousands...

But I know what this Futures senior is driving at. 

I started with CFDs before moving on to Futures trading when my trading account got bigger.

The funny thing is next day, I saw in the papers his broker advertising the merits of CFDs. I wonder what the Director of CFDs will think if he knew his Futures colleague is saying behind his back. Talk about internal rivalry! LOL!


2 traders talking shop

Why not advice but his view?

Although this pro trader is many leagues above me in trading account size, we are still 2 traders bantering as peers.

Humility yes. But notice how many wannebe traders and investors advertise themselves as sheep wherever they go?

Do this too often you'll invite the attention of wolves.

I may be less skilled; but I don't let others patronise or talk down to me without me giving them a poke or kick. 

Think about it. Why would land owners want to have a conversation with sheep? 

Want to mix with other shepherds and land owners? 

Respect yourself and your craft first.




22 comments:

  1. Hi SMOL,

    I do encounter people who "see me no up", but the person who always put me down is myself.

    As for chat, usually unless there is a difference in values or interest, people who are "higher up there" usually do not talk Down.

    Ya, I am kinda of worried missing coconut too. Where is he? Lol

    ReplyDelete
    Replies
    1. Sillyinvestor,

      As a cheerleader, if I can't cheer and motivate myself, how can I expect others to do the same?

      Modesty is not self-deprecating, and self-deprecating is not the same as self-flagellation!

      I'm lucky I'm not a perfectionist; I'm a "agar agar du hor" kind of guy.

      That's why I say I want to improve my craft; I don't say I want to perfect my craft ;)


      Don't you worry about coconut. He's like the cat. Feels like it he will come and avalanche us with his thoughts. Don't feel like it he'll do his MIA thing from time to time ;)

      Delete
    2. hey guys, sorry to hear that but i try not to blog anymore, really trying and the reason is simple, too many noise already.

      what i mean is the more i read the more i get frastrated, i only stick to a very few like smol one.

      Delete
    3. but this being about trading and a pro one, how can i take a miss haha.

      Delete
    4. coconut,

      Thanks for making this exception!

      I hear you. Too many noises and half-truths out there.

      This senior pro likes and embraces new technology - he knows coding too; self taught one.

      He goes for the 7 pips quick profit multiplied by many time in the day. That level of focus and concentration is mind boggling!

      At his age? Respect!.

      Delete
    5. i guess 90% plus for the pro they are scalping the market, i have not seem or hear one that is system based traders, or i like to call it positioning trader. (system based trading is very misleading term).

      Delete
    6. all you read in the web the so call "pro" using FA or TA or whatever magic, they are not system based trading. they just tikam.

      Delete
    7. i'm not saying there are anything wrong with them, i sometime tikam tikam also. but thats not "professional" trading.

      Delete
    8. coconut,

      And that's the irony!

      If only the wide-eyed newbies knew what they have paid to learn are nothing more than "glorified" tikam tikam...


      Delete
  2. Hi SMOL,

    Hmm, interesting...so how did the two traders meet in the first place? You go up the mountain or he came down? Hahaha

    ReplyDelete
    Replies
    1. LP,

      Very perceptive!

      Neither.

      We met in the ocean. He was there much earlier than me ;)

      Delete
  3. The big boys have bigger toys to play with!

    More details on how he climbed his mountain would be nice :)

    ReplyDelete
    Replies
    1. RetailTrader,

      What more do you need when I've said he's a scalper and he survived (and prospered) while most of his peers at the SIMEX floor have left the industry...

      Surely you know what are the scalping strategies out there and the odds of failure in the trading industry ;)

      A very gentle poke - would you be willing to throw away your own Trading Methodology if you meet the senior pro trader yourself?


      It's not about big boys with big toys. It's more about the right tools for the right strategies.

      If anyone out there wants to be a retail INTRADAY trader, well, you better make sure you don't bring a flick knife into a gunfight!

      For the sake of disclosure, I've doubled and then tripled my trading account with just an 11.6 inch APU netbook (not even a proper i3 notebook).

      As a discretionary trend follower, I don't need speed. i just need the market to bloody trend!

      My broker is definitely not happy with the trading volumes I'm generating!

      LOL!


      OK, I'll be upgrading to a proper i7 notebook this Christmas as I'll be transitioning from my trusty browser based platform to a more resource hungry applications based platform.


      Delete
  4. i'm not missing, i just being a read only blogger haha, i really miss this one thought.

    i'm against trading CFD my friend! especially those who trade short term, you are giving the only edge you have away.

    i trade CFD in only one of their product, that is stocks CFD and have to be DMA CFD, thast way you are not giving that edge away. i want to make it very clear again.






    ReplyDelete
    Replies
    1. thats about the only product you can trade sucessfully (like a pro) being not a professional.

      Delete
    2. coconut,

      I've guessed as much!

      I did scratch my head the first time I heard you were trading CFDs???

      Then we are on the same page :)

      Delete
    3. yap, suprisingly not many traders including the pro like fat know about this product. i guess you have to be the first to explore it to be profitable.

      it however has its downside, all depends on what strategy one employed.

      Delete
    4. coconut,

      I have no need for this super duper platform as when my stops were hit, the price usually went way past them by a lot!

      LOL!

      But I guess when you are scalping for 7 pips profit, the last thing you want is to be stopped-out by some retail idiot who hit our stop price with 1 measly contract!? Ouch!


      He trades the Nikkei 225 like most ex-locals do. Shared with me how they used to arbitrage/hedge with the Osaka exchange in the good old days.

      He finds the China A50 contract too small, and don't like the liquidity in Simsci. I felt like a small boy in his presence...

      Bloody hell! Now Simsci is going to be split into a lagi smaller contract :(

      Never a good sign when SGX is going for those retail punters with less than $5,000 in their trading account.

      Fighting back against CFD operators?

      Delete
    5. yap, now my stocks trading also face the same problem, lots of partial fill orders. liqudity went down instead of up. i have to reduce the counters that i trade and more concerntareted with larger positions. risk also went up ofcos.

      frankly why we even allow CFD provider, they used to be what we call bucket shop style brokerage, taking both side of the trades and leave us eating grass.

      Delete
    6. just like the casino operator, everyone want a piece of the pie, they are cutting each other throat over our dead body!

      Delete
    7. coconut,

      SGX lost out to the broker; single stock futures failed miserably....

      CFD is like Uber - under cutting SGX with lower transaction costs mah. And you know how retail is like ;)

      Want cheap, want fresh, want big papayas!


      OTC is not the same as exchange traded ;)

      Delete

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