Trading financials for a living

Long, short, Bitcoin, forex - Plenty of alternate market disuccsion.
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andyfuller
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Joined: Wed Mar 25, 2009 12:23 pm

It seems fairly clear there are a few people thinking about ditching sports for financials in the future so I thought it would be good to start a thread about what it means to become a Full Time Financial Trader.

As is clear, at the moment I don't know too much about this area and there are many others with a much better understanding but hopefully in the coming months I can contribute a lot more as I wind back my input on the racing side and increase my financials knowledge.

There are various things I want to raise and explore on this thread, but to get things kicked off, we are currently in a very volatile period with plenty of movement in prices. But what about during 'normal' times. You aren't going to get so much price movement.

In sports trading there are three ways to earn more:

1. Trade more in terms of time

2. Trade more per tick

3. Trade more ticks, e.g. more volatile markets, do more trades

At the moment in the financials there is plenty of opportunity in number 3. But normally you don't get this kind of movement do you? So what are the options, 1 & 2?

With 1 it brings me on to the hours, with racing the markets are 2pm to 9pm roughly during summer and 1pm to 5pm in the winter. Obviously financials markets follow the sun, but are there better times to trade than others, for example when America and the UK is open? Or does it matter more about what you specialise in?

What hours would you roughly expect to work?

And 2 brings about the discussion of trading bank. Does anyone have a view on the size of bank you need and how much you can expect to make? What are peoples views on leverage?

That will do to begin with I guess but hopefully this thread and others can become a useful tool to play around with ideas and help people thinking of making the switch.

Or I could just be talking rubbish :D
Iron
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Joined: Fri Dec 11, 2009 10:51 pm

andyfuller wrote: In sports trading there are three ways to earn more:

1. Trade more in terms of time

2. Trade more per tick

3. Trade more ticks, e.g. more volatile markets, do more trades
1. Perhaps, but you get far more decent trading opportunities per day on Betfair IMHO.

2. More per tick is the main advantage of the financial markets. If you have an edge and steadily build your bank, then the sky's the limit!

3. The number of ticks you get (or pips, as they're called in the Forex markets) isn't the issue. I could make 100 pips today, but if I risk 10,000 pips to do so, then I probably have a poor strategy! What you need to look at is your risk:reward ratio and your strike rate.

Jeff
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CaerMyrddin
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1. Perhaps, but you get far more decent trading opportunities per day on Betfair IMHO.
That's not true Jeff. A friend of mine is trading for a living and he's kind of using a system. He's monitoring hundreds of stocks and other stuff and it throws lot's of opportunities everyday.

Btw, I rang him when I knew SP cut the US rating and the first thing I heard from him was : 'I'm rich! I'm rich!!'.

Had to ask him, 'Are we going back to Cape Verde at your expense?' :lol:


Edit: Andy, I can't talk as an experienced trader, but this frind of mine is using a 10 times leverage (Is that the way of saying it?). He's going for 3 to 5% moves with 1% stop losses, what means that he's making 30% to 50% on his stake when the trade is positive and 10% down when it fails.
Last edited by CaerMyrddin on Thu Aug 11, 2011 10:25 am, edited 2 times in total.
Iron
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Joined: Fri Dec 11, 2009 10:51 pm

Hi Antonio

I was basing what I wrote on spread betting, where the size of the spread means that there are few instruments that are viable to trade on a 5 minute timeframe.

However, I accept that there may be a cost effective way of trading lots of equities on that timeframe.

Jeff
RafterP
Posts: 133
Joined: Tue Apr 21, 2009 10:41 am

I'd like to get into the stockmarket in the future but for me It would be short-mid term investing not day trading.

When I stop trading on Betfair I'd rather not have to spend hours per day in front of a computer anymore.
PeterLe
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Joined: Wed Apr 15, 2009 3:19 pm

Hi Andy
This is an area that interests me too.
I noticed another of your posts yesterday where you said that you were intended to move on to new things and I wondered what it might be..

I am by no means proficient/experienced at this and many more on here that are by all accounts; but I can contribute a little..

I did dabbled with forex earlier this year and Jeff provided me with some good info. I traded a dummy account for a couple of weeks using a system that monitored various currency pairs and then sounded an audible alarm when 'activity' was happening. This worked fine for me as I set the threshold high (ie less alarms but higher quality) as I am at my system each day anyway doing my day job, so this just run in the background..The system Is tested was the "Black Dog"

I setup a dummy account with alpari and did quite well over a few weeks (Think I posted my results on here somewhere), but ultimately I lost it on one trade! This one trade may have been lack of focus, or the fact that I was being less vigilant as it wasn't real money..who knows. Ether way I do think it is possible to do. (Betfair is much easier in my opinion). On betfair like many others on here I can enter almost any market and start trading confidently; it's a different kettle of fish on the financials imo. The markets turn much faster and travel further. I never use stop losses on betfair...you cant do that on the financials

You may want to read this book. I've read this and it is excellent:-

http://www.amazon.co.uk/Financial-Sprea ... 1897597932

It takes you through the basics and "a day/week in the life of a trader'" which I found interesting

I also had a subscription to sharescope :-

http://www.sharescope.co.uk/

which enables you to filter opportunities (the book will explain more)

I decided that I just didn't have enough time to do this as well as my day job and betfair trading too. You cant do this half heartedly, if you get involved you have to live and breath this stuff

I will def re visit it when I get more time ie redundancy if I can get it!
Good luck and looking forward to hearing others views.

Regards
Peter
PS unlike Betfair; because this market is huge, I think it would be possible to share successful strategies. On betfair if you get a edge you have to keep it to yourself as the market is so small; not so with the financials
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Euler
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I tried trading short term many, many years ago but eventually settled on long term investing as the place that was my philosophical home. Betfair taught me a lot about short term trading though, so I think I may be quite good at it now. However, my investing side has grown to the point where I could just manage that full time on its own. So it's a different situation for me.

One thing I learnt from Betfair was to go where the transaction costs are the lowest. That will have a dramatic effect on your overall profitability on financials.
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superfrank
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Euler wrote:I tried trading short term many, many years ago but eventually settled on long term investing as the place that was my philosophical home. Betfair taught me a lot about short term trading though, so I think I may be quite good at it now.
I pretty sure you would be good at it.

There are no decent futures brokers in the UK - how about setting one up so that we set can set our own transaction costs?!

A broker is essentially a middleman who ties things together with a few relationships that takes a small cut on trades - the exchanges are great and properly regulated, the broker subscribes to a data feed for it's customers, the clearing firm handles all the settlements and account admin, and the trading software is independent. Simples!

Angel Futures!
andyfuller
Posts: 4619
Joined: Wed Mar 25, 2009 12:23 pm

Good replies so far and some useful info.
Euler wrote:I tried trading short term many, many years ago but eventually settled on long term investing as the place that was my philosophical home. Betfair taught me a lot about short term trading though, so I think I may be quite good at it now. However, my investing side has grown to the point where I could just manage that full time on its own. So it's a different situation for me.

One thing I learnt from Betfair was to go where the transaction costs are the lowest. That will have a dramatic effect on your overall profitability on financials.
I want to try and combine a combination of things and will be looking at long term investment as part of the overall picture. One thing I have learnt from the PC is not to have all your eggs in the one basket. Unfortunately I don't have so much money though that I can live off long term investments alone so this is going to be an area for the 'long term funnily enough.

As I earn money in other areas I will be ploughing a good bit of it into longer term investments so that like Peter I can eventually make money while not actively doing anything.

I agree with the other comments that although different I think (hope) there is a lot of cross over in things such as discipline, mind set, work ethic etc that will stand me and others in good shape to take on short term financial trading.

Transaction costs are an area I need to add to the ever growing list of things I need to look at.
Iron
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Be very careful.

I don't doubt that Peter is successful, but IMHO for most people, 'buy and hold' is gambling, plain and simple.

You might take the view that, in the long-term, you'll recover any losses your equities might sustain. However, you might be in for quite a wait. As Keynes pointed out, in the long term, we are all dead...

Jeff
andyfuller wrote: As I earn money in other areas I will be ploughing a good bit of it into longer term investments so that like Peter I can eventually make money while not actively doing anything.
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rhysmr2
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Joined: Thu Apr 16, 2009 1:24 pm

I've also been interested for years but never done anything about it.

I want to give it a go soon though, either futures or forex, I've heard futures is the closest to sports exchange trading, especially the e mini, although I really have no idea. For some reason I'm leaning more to forex.

I need to learn a lot more about it and there's so much to learn!
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superfrank
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rhysmr2 wrote:I've also been interested for years but never done anything about it.

I want to give it a go soon though, either futures or forex, I've heard futures is the closest to sports exchange trading, especially the e mini, although I really have no idea. For some reason I'm leaning more to forex.

I need to learn a lot more about it and there's so much to learn!
Why not trade forex futures and then you'd have the best of both worlds...

This link shows the markets I can trade with Mirus Futures - it also shows the commissions and margin reqs.
http://www.mirusfutures.com/sites/defau ... t_Info.pdf
edwards
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Hi fellas,

I am by no way experienced in financials markets and have only in the last few months started learning about sports trading. At the same time though I have also been learning about Forex markets. I got most of my information from the school section of babypips.com but this starts right from the beginning and may not be suitable depending on your experience, for me it was perfect though.

The forums on there are helpful too and its right that because the market is so huge some people will freely share profitable systems that they use. Theres also a section on automated trading (Expert Advisers in MT4) which I am sure a lot of people think is rediculous but there are people on that site carrying out live testing on some which prove profitable. I have been demo trading 4 myself for the last month and so far 2 have been very profitable. Not sure how some people might feel about these though, probably depends on the individual if you are comfortable having a bot trade your money for you. Im going to try them on a live account in a few weeks anyway so we will see how it works out.

Chris
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rhysmr2
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Chris, good info thanks, I've been on that site babypips, seems good for beginners (like me).

Superfrank,

I didn't even know you can trade fx using futures :?

I didn't know you could trade frozen pork bellies either :)

As someone who actually trades futures Superfrank can I ask what sort of bank I'd need to start with?

I started trading betfair with only £500!
Iron
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Joined: Fri Dec 11, 2009 10:51 pm

I seem to remember reading somewhere that if you buy pork bellies options you risk having a ton of pork bellies delivered to your door unless you sell them in time! :lol:

Jeff
rhysmr2 wrote:
I didn't know you could trade frozen pork bellies either :)
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