My reflections: Auditioning for 2 professional proprietary trading firms (Part 1)

5:35 AM

Sorry all.

I have not been very active over the past 3 months, the reason being I have been trying out for 2 different prop firms and it has consumed most of my time. One with a global mandate (trade any instrument on the platform, very similar to eToro) and the other futures.

I signed non-disclosures so I cannot say exactly what I did, but I can talk about what I learnt from my experiences.


Games we cannot play: Market timing - A lesson in Oil

I have been an avid supporter of Macro type trading because it is based on principles we can understand. And if we are wrong or when the market has overwhelmed us, we can understand why.

But alas 1H2017 was miserable for me on eToro. So is macro usable by retail traders?

This certainty is something I have taken pride in through my research, but yet I have found timing is always a problem with this type of trading.

An example of this was OIL where I shorted at $46.97, well before the OPEC meeting, it went up to $51 and in between I tried to trade it and got completely wrecked. But was my thesis wrong? Looking at price now, no.

I have learnt over the course of the last few weeks, modern macro traders use options to try and elevate this concern. As retail traders, perhaps an approach could be martingale, it negates the requirement to be correct on completely correct on timing but IF wrong, must exit immediately.

I have been very critical of this method because many eToro traders blow up after using this method but if used correctly, I suddenly find it has its merits.


Games we cannot: Know your role - Outright futures are difficult to play

One of the firms I was trading for used DOMs or Depth of Market, this shows you the order book and you can take positions based on the order book. This method of trading is highly profitable but at the moment is not available to retail traders.

It is not for our purposes but what I have found is that it is profitable on a daily basis. Scalping profits daily.

It is not accessible by retail traders and even for Gold and Oil provide a very different set of data which if one does not have access to puts one at a huge disadvantage.

Looking at Oil, Gold and even indices, is it even fair for us to try and trade these instruments intraday? Probably not. These instruments we have to stay away from in intraday basis, here I will either do daily or weekly candles only.


We all lose

Even at the prop funds where I was trailing for. Psychology of losing is so important.

There will be periods of not making money, but it does not mean you are bad, just conditions maybe have changed or some other reason. 

Part 2 coming soon.

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