OmegaTrader No Capital, The Devil's Advocate and Honesty

[OmegaTrader]

Hi there.

This is my first thread and I am definitely a beginner.

My situation: I want to be a trader, (cliche alert)

I have no capital and I am the devil's advocate.


I am a recent graduate in economics and finance and genuinely enjoy macro economic debates on markets, and derivatives, but i'm no quant,market wizard.


My main reason for going to the forums is one to gain information, two to help other people in my position , there is a lot hyperbole online and finally I find that reflection on experience helps in the learning process.

To be honest,

At the moment my prospects are not great.

I can't afford to pay and don't want to pay $000's for a training course.

As a beginner I can't start a hedge fund or raise capital haha

Maybe social trading .........the future :alien2:... Not yet anyway.

Quant positions are really difficult to get and I don't have the capacity.Be honest who does really. Be honest

The derivative equations, computer models and programming are crazy.. just saying


Investment banking is also not a realistic option in my opinion.


The only practical other paths I have left are the retail route and proprietary trading.


It sounds negative but I am just being honest.

In my opinion the only opportunities are Propex, Genesis(was Aliom) and maybe one or two more.


I am going to to have an additional thread for proprietary trading company research, preparation resources and my experience.

This will be honest not just hypothesis or biased or self interested opinion.


I am going to try Prop because it provides free education, is more socially acceptable then staying at home saying I am reading about trading and has a asymmetry similar to a call option, in terms of a slim chance of getting access to capital and advancement.

My opinion, I won't make it at the moment at least


From what I have researched,

I will be put on spread trading mainly interest rate derivatives - to have low risk with rebates and desk fees taken from profits to help pay for the training.


- so it's a fair barter in my position, rebates,desk fees on profit if any and time for training

kinda like spending your time on a survey for a free meal.


In terms of retail trading questions and ideas I will leave Pandora's box closed for now...

I look forward to other opinions and objections

Getting my proprietary research thread going

(I know this would have saved me some googling)



and finally one day being able to be a mild representation of that mysterious concept called a trader

a person who actually beats the market return with less risk.


Cheers,

Omega

 

[minwa]

Good luck..if you get in prop then great start but statistically you probably wont last their many trainee cuts.

Another option (better IMO) I think it's better you get profitable yourself on demo/small funds then go for overseas online props who take people in based on results, Aus prop is mainly limited to spreads as far as I understand. Just avoid those that charge you fees just to test you.

 

[CanOz]

Good luck..if you get in prop then great start but statistically you probably wont last their many trainee cuts.

Another option (better IMO) I think it's better you get profitable yourself on demo/small funds then go for overseas online props who take people in based on results, Aus prop is mainly limited to spreads as far as I understand. Just avoid those that charge you fees just to test you.

I agree with Minwa, open a futures account and start getting some screen time....who knows, you might just be one of those dudes that 'gets it' straight away....

Try simple charts, a depth of market and bonds plus equity indices

 

[cynic]

Whichever way one decides to go, one will be gaining some experience. Best of luck with it all ,and please do continue to keep us updated on your progress.

 

[OmegaTrader]

Good luck..if you get in prop then great start but statistically you probably wont last their many trainee cuts.

Another option (better IMO) I think it's better you get profitable yourself on demo/small funds then go for overseas online props who take people in based on results, Aus prop is mainly limited to spreads as far as I understand. Just avoid those that charge you fees just to test you.

I agree with Minwa, open a futures account and start getting some screen time....who knows, you might just be one of those dudes that 'gets it' straight away....

Try simple charts, a depth of market and bonds plus equity indices

Whichever way one decides to go, one will be gaining some experience. Best of luck with it all ,and please do continue to keep us updated on your progress.

Thanks for the replies. I really appreciate it.

I have not thought of overseas props as a future opportunity.

What ones could you recommend later down the track?

minwa or others?

thanks

Omega

 

[minwa]

Thanks for the replies. I really appreciate it.

I have not thought of overseas props as a future opportunity.

What ones could you recommend later down the track?

minwa or others?

thanks

Omega

Can't recommend any never done any of it - just what I'd do if I if I was looking for funding.

I wouldn't worry too much about it for now, it's only an option AFTER you're profitable, that's the tough part. When you are with well controlled drawdowns, along with a track record which will all take time. Years at least.

If you don't get into local props full time, you should work part time at the very least while studying the markets.

 

[OmegaTrader]

Can't recommend any never done any of it - just what I'd do if I if I was looking for funding.

I wouldn't worry too much about it for now, it's only an option AFTER you're profitable, that's the tough part. When you are with well controlled drawdowns, along with a track record which will all take time. Years at least.

If you don't get into local props full time, you should work part time at the very least while studying the markets.

Thanks Minwa, that's the plan.

 

[skc]

I am a recent graduate in economics and finance and genuinely enjoy macro economic debates on markets, and derivatives, but i'm no quant,market wizard.

Quant positions are really difficult to get and I don't have the capacity.Be honest who does really. Be honest

The derivative equations, computer models and programming are crazy.. just saying

Investment banking is also not a realistic option in my opinion.

With a degree in economics and finance surely the options are a bit wider than what you've listed here? Some possible positions that I can think of:

- Graduate positions in large financials - Big 4, credit unions, insurance companies...
- Graduate positions in accounting firms or management consultants
- Finance departments in large corporations
- Government departments like ABS, treasury, budget, forecasting, policies...

Your degree offers you a broad range of possibilities. Some you may not have thought about, and some perhaps you've ruled out without really knowing what they entail. And truth is, you've "ruled in" trading without really knowing what it entails either.

If you think getting a positions in the list above is difficult/impossible... I'd say it would be no more difficult to becoming a successful trader.

I have always think that a young graduate should experience the corporate world at least a little bit when they finish university. It may or may not be what you like, but it will build a lot of real world skills that would be invaluable in all other aspects of life.

Best of luck.

 

[OmegaTrader]

With a degree in economics and finance surely the options are a bit wider than what you've listed here? Some possible positions that I can think of:

- Graduate positions in large financials - Big 4, credit unions, insurance companies...
- Graduate positions in accounting firms or management consultants
- Finance departments in large corporations
- Government departments like ABS, treasury, budget, forecasting, policies...

Your degree offers you a broad range of possibilities. Some you may not have thought about, and some perhaps you've ruled out without really knowing what they entail. And truth is, you've "ruled in" trading without really knowing what it entails either.

If you think getting a positions in the list above is difficult/impossible... I'd say it would be no more difficult to becoming a successful trader.

I have always think that a young graduate should experience the corporate world at least a little bit when they finish university. It may or may not be what you like, but it will build a lot of real world skills that would be invaluable in all other aspects of life.

Best of luck.

Thank you SKC for your comments.

super long post, sorry



I am finding it really hard to adjust to finding a corporate job after graduating university.

I never want to be a metaphorical complaining woe to me martyr ever. I'm in Australia and bloody lucky not Syria or Lybia or Congo, very lucky.

I want to thank God or aliens or Illuminati or Skynet or whatever random butterfly flapping fractal that has let me live in Australia



I am in WA. I have no experience but am/will still keep trying for positions.

Eventually I want to move to Sydney.

I have the debate you are outlined a lot in my mind, kind of like fictitious play, do this then counter measure then counter counter measure etc

What would this look outcome like what are pros and cons etc

Often people will say just be insert XXX financial advisor, stock broker etc etc

I would definitely be learning a lot and gaining professional experience


but what I would be learning may not or may very slightly help me to be the trader I wan't to be in the future.

Honestly I'm really finding it hard to get even work experience.

I think deep deep down I don't want a corporate in the traditional sense and also I am inexperienced

I feel that If I do that I will become path dependant and it will end up mainly about either people, selling or office politics

I know deeeep down I want to trade. That will be in my own way and at my own strategy it could be completely different to your idea of trading or have similarities

I can't lie to myself and I don't want regrets.

When I won my university simulated capital markets trading game I got bitten by the bug. I know it is not the real thing but it started the spark of my interest.

I won the two week trial asx200 game when you have to pick your position size 1 to 50 contracts and where the market will go the next day long or short. Nearly everyone went 50 every day in demo,I wouldn't go 50 in real life haha

I spent time every day to research and win the actual game over about 10 weeks in 10 year bonds, asx200, overall and second in AUD/USD game

I got the highest mark for the year in the subject not because I'm smart or a naturally hard worker but because I really enjoyed it.

I remember talking to the Dux of the university. He was telling me how he studies for 20-30 hours in a week, almost every day and how he thought he won award for the highest mark at around 90%, I beat him by 2%. He was surprised and asked me how I beat him. I said I spent about 15-20 hours a week on that subject.

I looked at the three markets every day, stayed up to 11-11:30 in the night to see the futures trade/result
I researched announcements for the next day and estimated their importance and which way I thought they would/could go.
I spent a bit of time with my father looking at very basic technical analysis 20-30 mins a day on the three markets
I spent 20-30 mins reading up on current market sentiment/news/ what everyone was looking at to try and gauge sentiment.

I did all of this while barely passing some other subjects.

The look on his face was priceless to lose by 2% to an idiot, he thought I was crazy.

I reason that thinking about all these factors really helped me to ace the exam with bugger all formal study because I was able to understand the concepts in my own way.

Trading has taken a back seat in my current personal situation. That situation is almost done now, hopefully

But trading is what I will be doing eventually.

I am going to take the same mindset and vigour before applying as a trainee at prop. 10-15 hours target a week studying spread trading, day trading, the strategies the props use, demos etc.

Then I will move to Sydney then I can give it a damn good shot.



Of course I will still work on my own ideas in the background and try other paths upon failure of prop-ing

lol that’s not a word


I need minimal money at the moment I have no commitments, I have savings and I have immaturity ahaha

If I don't begin soon I will be path dependant and regret it my whole life.

All hyperbole aside it is actually a really hard adjustment to get into corporate.

I always sound negative for ffs but I'm I am being honesty negative

Thanks for your input mate.

P.s you can invest in my hedge fund later if you are still living at 110 years old

 

[CanOz]

Why not trade intraday equities with propex? Skc would love someone to banter with!

 

[OmegaTrader]

Why not trade intraday equities with propex? Skc would love someone to banter with!

slow and steady mate

slow and steady

currently laying odds at 1.01 for me to get accepted as trainee next year.

haha

 

[skc]

If I don't begin soon I will be path dependant and regret it my whole life.

All hyperbole aside it is actually a really hard adjustment to get into corporate.

Good to see that you have a strong passion for trading... but the ultimate test is what you are willing to do to live that passion. Working for a company will help you get there... whether it is the exposure to the industry or just building up your capital.

You are right about path dependency... and the path is much easier to go from having a job/career to being a trader.

You won't regret waiting 2 years to start trading... but you will regret dreaming about trading for 2 years (and having nothing to show for it afterwards) instead of trying harder to find professional employment.

Why not trade intraday equities with propex? Skc would love someone to banter with!

I already have enough people to banter with during the day...

 

[OmegaTrader]

Good to see that you have a strong passion for trading... but the ultimate test is what you are willing to do to live that passion. Working for a company will help you get there... whether it is the exposure to the industry or just building up your capital.

You are right about path dependency... and the path is much easier to go from having a job/career to being a trader.

You won't regret waiting 2 years to start trading... but you will regret dreaming about trading for 2 years (and having nothing to show for it afterwards) instead of trying harder to find professional employment.



I already have enough people to banter with during the day...

I would like a entry level corporate type job I'm not disagreeing it would be really good

but it is taking some time etc

proof is always in the pudding - the outcome


no banter

mummy

skc is in the clutches of the evil Propex enticed by sweet glucose capital syrup

My raw immaturity challenges his world view too much

hahaha

 

[OmegaTrader]

Now we are in 2017.

This we be a long fluffy post, due to overthinking and being a fluffy person

TLDR: Being the devils advocate and procrastinating is stopping me from actually trading.
Self-jeopardising...

I was thinking a lot last night after not being able to sleep.

Because of eating too much as usual at a buffet restaurant as usual...

Nevertheless I digress.

I was thinking about where I was in this supposed journey of mine and where I wanted to go.

This long post is partly a cathartic exercise and probably has little value to anyone reading. But you never know two cents is still two cents.

I enjoy being an armchair critic and being the devils advocate. It is interesting in a lot aspects thinking about finance but not actually risking anything meaningful.

The image represents my thought process,















please excuse the poor quality image

Explanation is below




It is an example of the trading/investing journey as a tree. The idea is from the garden, as everything in the backyard now is green, still a couple of months away to ripen and just starting to grow, pears, guavas, olives, figs especially a lot of grapes.

Anyway..

I will go through the levels and firstly reiterate that I am not an actual trader, (whatever that means) so a lot of this is fluffy thinking..

Level 0: Thinking about trading/ the realisation that it is possible to grow you own fruit.

At a point in time you realise that you can actually grow your own fruit. Yes fruit comes on trees grown by a farmer, not just the supermarket. You think about all of the possibilities that the bare dirt in your backyard could be.

For me it is understanding basic principles. Opportunity cost of capital and labour.
You come to the realisation that you will still have to buy your food from the shop to live but to think about growing your own fruit -it is interesting. You know that your hourly rate would be greater working and that your money is better invested passively but it is interesting. Learning about various assets and finance still as an armchair investor/trader.

Level 1: Learning and developing/ Looking at seeds at the nursery

You start to realise that their are different plants, fundamental, technical, discretionary, algorithmic.
OTC, ETO. Forex, stocks, futures...
You go into bunnings or local nursery looking at seeds, how to grow the plants, different fertilisers. You still do not act on this information. You know a lot more about trading/ investing than before but are still in the metaphorical armchair.

Level 2: Baseline/ planting the seed

Finally you take the plunge. You plant a tree. It doesn't matter that it dies or the fruit gets worms. The seeds were cheap only a couple of cents. At baseline level you are trading at a level you can afford to lose and every time you lose, you can afford to top up the account. You plant a tree it dies. You try a different plant it dies also. This equilibrium continues until you keep going back to level 0 and 1. You might give up on hobby farming, or slog it out. Assessing your priority and developing ideas and learning until you can be profitable.

Level 3: Retail trading/ Hobby farming
Finally you have some fruit. It has been hard but you are profitable. At this point trading/investing is still a hobby. You make more money from your job and you will probably not be making risk adjusted returns. Perhaps the fruit has cost you more than buying it in the shop. Still not enough fruit and veges to live on. But it is exciting, to see what you have grown.

Level 4: Equal opportunity cost/ Farming as a living
Now Your trading is equivalent to a job. You are farming as most of your living. You have the fruit, the veges even some protein. It could be a lot harder than having a job out in the workplace, but that is your choice. You love the produce you have grown and the choice of lifestyle.


Level 5: Self funded trader/ small to medium farming business

Now you have reached a really elite level. You have surplus produce. At this level you can/are working for someone else and you start thinking about getting capital from other sources. The opportunity cost pendulum now starts swings the other way. Why risk your crops dying when you can grow someone elses? Why have one field when you can manage many.


Level 5++: Professional or Hedge fund manager /large farming business

At this point you are uber uber elite. The extreme point explains the rule. Do you think Donald trump/ Warren buffet/Bill Gates would spend time to print and use an ikea coupon. Nothing against eating at Ikea, I like it....
No is the answer.Why waste 30 mins to save $10, when your time is worth $1000's++ per hour. Very few ubers will need their own capital unless they are like Soros or Buffet and have so much money that they don't need it or don't want others to know/compete with their strategies.



Along the way the sun represents failure. The sun kills the plants, hubris destroys a high flying trader/investor and gambling destroys an amateur trade/investor as they become disillusioned with always losing and their plants dying, so they begin to be in denial abut how many fruit they actually have grown successfully or destroy the plants they have actually grown.Now the fruit is gone. But you need the sun to grow because without pain everybody would just invest/trade and be a millionaire. That is the breaks.


So where am I.
I am between level 0 and 1. I secretly jeopardise my own chances by sitting on the fence and also being too critical/ the devils advocate again. I know I should practice at baseline level-what I can afford to lose. I know I have to do this to further my skill set in trading/investing. Intellectually it is easy to never lose. But I discredit strategies without actually trying them in reality. I talk when i should be listening.

hmm...

enough talking about that.

I think along the way most people will never grow their own fruit or just for a hobby. They will prefer to buy it from the shop which is equivalent to a hedge fund manager/ professional level. Why invest when you can just get professionals to do it. Save your money and passively invest. Do your 9-5 and go shopping. every now and then you will get food poisoning but Australia is pretty good by world standards and overall you should be alright. If you can afford then you may even go organic or buy exotic produce that is giving capital to one of the ubers. Whether that works is as the saying goes is in the pudding.

But is is interesting to imagine the possibilities ...


Cheers Omega