Hi Kids

[Nords]

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Originally Posted by Ponks Have you read either of these books above? What did you think? Have you day traded at all? If so, what did you think? How steep is the learning curve?

I only recommend the books I've read, and even then not all of them-- so you don't have to waste your time reading "The 21 Irrefutable Truths of Trading"... if you're only going to read two books on trading then these are the ones.

Gary's book is a great tutorial of what not to do as a day trader-- don't buy the expensive systems, don't buy the special training or seminars, don't buy anything from a vendor period. He did it all with mutual funds in a brokerage IRA account while videotaping/watching CNBC and the online Reuters news feed.

He's very realistic about indicators, how they work, and what to do when they stop working (and they will stop working). He has the cast-iron brass-plated cojones that enabled him to examine a small fund, decide that it'd go up for a while, and sink his entire account into that one position. His goal was to avoid losing months if only by a dollar or two. He's semi-ER'd now but you might still see him posting at FundVision.com or TradersTalk. It's the most practical guide I've seen in terms of what you do between breakfast & dinner.

Marcel Link's book is the most straightforward and perhaps the most pessimistic. He expects most traders to lose $50K before they turn around. He digs right into the little details of ticks, intervals, contracts, technical indicators, and the psychology. He gives very clear explanations of some of the more arcane technicals like stochastics. He talks about when to trade and, more importantly, when not to trade. He's also more realistic about expecting returns of 10-20% per year instead of per month.

In your first year you should expect a $50K account to dip down as low as $20K before you start clicking. You'll probably end the first year down 10-20% and then start making it back in subsequent years. The day-trading (short-term) investment cycle can be pretty short & brutal (read Gary's book) and it's not for everyone. You're used to having things go against you so maybe your learning curve will be a little flatter.

I was well on the road to day-trading before I read Gary's book. I've spent a couple years trading technicals and momentum and daily positions and... well... it's work. I make money when I'm working at it, and the more I work at it the more money I make, but it's not what I want to do-- I want to spend time with my family and surf. I gradually worked my way around the entire investing spectrum back to fundamental value analysis and that's where I'm most comfortable.

But even that's still work. I've been closing out my remaining positions and plonking it all into small-cap value, international, & dividend-paying ETFs. I'm still struggling with UncleMick's testosterone-poisoned male imperative to invest in individual stocks, but in the long term I'll end up with index funds. Except for our Berkshire Hathaway stock.

And I'll turn off my personal account's shorting & margin features. This time I swear I really mean it...

[Ponks]

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Originally Posted by Nords He has the cast-iron brass-plated cojones that enabled him to examine a small fund, decide that it'd go up for a while, and sink his entire account into that one position.

Sure this is brass plated cojones, but this doesn't seem wise to me. I can recall reading that you should not have more then 1-2% of your daytrading bankroll at risk in anyone one trade, although perhaps this is just in the first year. Preservation of capital is the most important in the first year the book said. Obviously the percent of your bankroll you are willing to risk should be based on the risk and percent chance of success with a little safety added in.

Quote:

I'm still struggling with UncleMick's testosterone-poisoned male imperative to invest in individual stocks, but in the long term I'll end up with index funds. Except for our Berkshire Hathaway stock. And I'll turn off my personal account's shorting & margin features. This time I swear I really mean it...

Heh, goodluck with that.

I wish that day-trading was a more realistic option for myself. With 10-20% per year, it would take quite a few years before one would actually be able to pay their expenses off the returns. I was thinking about trying it out a little this past summer, but I couldn't scrape together $50k, I just kept putting my money into my index funds. I know some poker players that are also day-traders that strive for ~1%/day and hit 300%-450% returns/year in the past, now that sounds like fun.

John

[macdaddy]

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Originally Posted by Ponks LOL, well it's not really that hard. Most of the time it's just fold, fold, fold. I used to play a lot of internet computer games so I have very fast hand speed which helps out as well. Most of the time you're able to play a hand straight through with minimal or no thinking on other tables to effect your concentration on the main table. There are many other poker players I know that do the same thing. I've actually played as many as 12 tables at once without even coming close to missing a turn on a table. I'm sure with time all of you here could do it as well. I have read some books on daytrading and am interested in it, although it seems pretty hard to get started and would also be a huge time committment to dedicate myself to that. My roommate at school worked at the chicago board of trade and I have also thought about getting into that as the guy who mentored him has been there for 20 years abouts and he would be willing to work with me. Other then that, sign me up to be the next crocodile hunter John

From what I read, you are only supposed to play AA, AK, or sometimes AQ, depending on how tight the table is. You just have to sit there and fold until you get one of those on the flop. It's having the patience to wait for one of those, and play like a 10-10, or A-10, that trips most people up.

[Ponks]

Quote:

Originally Posted by macdaddy From what I read, you are only supposed to play AA, AK, or sometimes AQ, depending on how tight the table is. You just have to sit there and fold until you get one of those on the flop. It's having the patience to wait for one of those, and play like a 10-10, or A-10, that trips most people up.

Only playing those 2-3 hands will certainly make you a losing player. You'll get eaten up by the blinds and if you're at a table against players that have half a clue everytime you raise they'll fold. Even adding the top 10 hands is likely barely profitable at the lowest limits and you'd be leaving a ton of money on the table because you would be folding profitable hands.

I actually have my own website dedicated to teaching poker. If you are interested in learning check out http://pokermentor.net - there is a lot of good free info.

John

[riskadverse]

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Originally Posted by Ponks My roommate at school worked at the chicago board of trade and I have also thought about getting into that as the guy who mentored him has been there for 20 years abouts and he would be willing to work with me. John

I would jump at this opportunity. This would teach you more about day trading than you could hope to learn any where else. From the way you describe playing your poker playing, this sounds like a perfect fit.

[macdaddy]

Quote:

Originally Posted by Ponks Only playing those 2-3 hands will certainly make you a losing player. You'll get eaten up by the blinds and if you're at a table against players that have half a clue everytime you raise they'll fold. Even adding the top 10 hands is likely barely profitable at the lowest limits and you'd be leaving a ton of money on the table because you would be folding profitable hands. I actually have my own website dedicated to teaching poker. If you are interested in learning check out http://pokermentor.net - there is a lot of good free info. John

John - that's an interesting site and a very innovative business model. Did you make much from affiliate commissions? I assume that income stream is also a victim of the new law that passed. I used to visit bonuswhores.com somewhat infrequently. I imagine whoever owns that site must be pretty pissed off at the lawmakers who pushed the new bill. I wouldn't be surprised if they were making $500k a year in affiliate commissions...

[Ponks]

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Originally Posted by macdaddy John - that's an interesting site and a very innovative business model. Did you make much from affiliate commissions? I assume that income stream is also a victim of the new law that passed. I used to visit bonuswhores.com somewhat infrequently. I imagine whoever owns that site must be pretty pissed off at the lawmakers who pushed the new bill. I wouldn't be surprised if they were making $500k a year in affiliate commissions...

Hey Mac,

Yes, it is an interesting idea, and it works pretty well. There is one problem with the idea and that is retention of the customers. In order to help combat this we just decided that we would allow anyone to switch over to a rakeback plan whenever they wanted in order to atleast make some money off these players. We did pretty well in terms of affiliate commissions, although a lot of it was from offering rakeback. Yes, the income stream is definitely victim to the new law that passed, although maybe 20% of our clients are from overseas. We are now working with Full Tilt and Ultimate Bet and have managed to salvage some of the business. I'm not a frequent visitor of bonuswhores, but I would suspect as well that they were making $500k+/year. I know some affiliates that managed over a mil/year and bonus whores is pretty big.

John

[Ponks]

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Originally Posted by riskaverse I would jump at this opportunity. This would teach you more about day trading than you could hope to learn any where else. From the way you describe playing your poker playing, this sounds like a perfect fit.

I think that it would teach me a lot as well. My roommate worked there for about 8 months and barely broke even in terms of profit and he's been working there as a clerk / headset operator / signal guy for 3-4 years now. After he graduates with his CPA in the spring, I don't think he will end up back at the board of trade though. His mom has been pressuring him to get a good job at an accounting firm and he's been interviewing with firms all weekend and I suspect that he will end up at one of these. Him and I have talked about getting into real estate after we both have a few years of work experience under our belts, hopefully related to the field. Who knows - I sure don't.

John

[laison612]

John,

If you are indeed what you say you are, you'll do very well in a Wall Street career.
But don't become a quant, earnings of even the best quants are capped (low 7 figures, admittedly still very high by normal standards). And I don't mean day trading as a Wall Street career either.

If I were you, I'd study really hard and try to get into the best MBA program in the
country. It's your sure way of getting into a major Wall Street firm. Once in the door,
your potential is almost limitless. You seem to possess intellegence, ability to reason and most importantly risk taking ability which is a highly sought after skill. People can learn the last one, but only the truly natural are good at it.

Best of luck,

HappyGoLucky

[Ponks]

Hey All,

I haven't posted much lately, but have been lurking nearly everyday. I'm on my Christmas break now, woohooo a month off of school, and have had a few interviews with some companies.

The first one is for an accounting type job with an excellent health-care company called Abbott. I don't really feel that the job fits what I am looking for, but it's always something to fall back on if needed. Then I had a second interview with Northwestern Mutual for a financial representative position. I really liked the way they do business in that they identify people with a problem or with a goal and then strive to help them reach that goal. I don't really want to be a salesmen of sorts, but a lot of these products are indeed "needed" by people, particularly life insurance for a couple having kids. I especially don't want to give any friends or family any poor investing advice or poor products so I'm not really sure how good of a fit I am for this job. I don't think my investing philosophy of indexing really fits so well as they have their own mutual funds to sell. However it does have it's advantages. It does seem like a great way to get started on my career and I would be able to attain some designations while working there that the company will pay for. Also, I may be able to get into a good business school through this as well. Anyone have experiences with this company? What did you think?

As for other possible jobs, I don't have anymore interviews, although Ihave sent my resume out to a few people in the past few days, and over my christmas break I will send it out to many other companies in the investing/finance department.

I was just hoping to get some advice from someone who has been there - done that. I am really torn here and unsure what to do. Only one more semester left of school, ahhh!!

John

[brewer12345]

Northwestern Mutual is a good life insurance company. Having said that, I wouldn't even think about working there. Even the best life insurers (including NWM) would be astoundingly thrilled if 25% of the new agents they sign up are even still around 4 years later, let alone successful.

[Ponks]

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Originally Posted by brewer12345 Northwestern Mutual is a good life insurance company. Having said that, I wouldn't even think about working there. Even the best life insurers (including NWM) would be astoundingly thrilled if 25% of the new agents they sign up are even still around 4 years later, let alone successful.

I've heard similar numbers as well - does this also mean that you think it would be a poor start to a career? I'm not even sure what kind of other job I could get in terms of finance/investing, guess I better get that resume out as soon as possible.

EDIT- It seems like social support is a big part of being a life insurance salesmen, and I can already tell that my parents don't think that I should work there. I'm not really sure where they expect me to work realistically, but they think I could do a lot better then that and so do I as well, but getting started is going to be the hardest part for me.

John

[brewer12345]

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Originally Posted by Ponks I've heard similar numbers as well - does this also mean that you think it would be a poor start to a career? I'm not even sure what kind of other job I could get in terms of finance/investing, guess I better get that resume out as soon as possible. John

Save NWM for a last resort. They will always be there, hungry for fresh meat to feed into the grinder.

[haha]

Quote:

Originally Posted by Ponks Then I had a second interview with Northwestern Mutual for a financial representative position. I really liked the way they do business in that they identify people with a problem or with a goal and then strive to help them reach that goal. I don't really want to be a salesmen of sorts... John

John, there really is no successful salesman who is only a salesman of sorts. All financial service companies are inherently sales organizations, no matter how they spin it to customers or recruits. Face it; any company can copy any other company's products so your products will almost never be exclusive or better in any meaningful way. As the "producers" say, if you try to sell only superior products, you won't sell much.

I would almost say that anyone who shows up on this board is very likely not a good candidate for any of these "rep" positions. You will either get realistic and start pushing product or will flunk out quickly. If you decide to hang around and do it, be sure you have a pretty good capacity for rationalization and self delusion. Without these traits looking out for you, you may find that gastric acidity, headaches, heart palpitations or the heartbreak of psoriasis stalk you.

Ha

[Ponks]

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Originally Posted by HaHa You will either get realistic and start pushing product or will flunk out quickly.

Ugh, I feel this pretty accurately portrays my implicit feelings about the job as well. Heh, back to the drawing board

John