EPTedit:
feel free to ask me questions about anything, or this blog, or trading or investing in general. I assure you that even without having done an economics degree, i'm probably more qualified than any economist, and probably many analysts and researchers in big instutions on this kind of stuff. Though i could always be wrong. It's a traders job to constantly re-assess his opinion on everything all the time, so opinions can change quickly.
So it's been a while
It's only been a few months, but it feels like YEARS. Time changes a lot when you spend 90% of your day focusing on the same numbers over and over again. These days, i watch, live, breathe and dream of numbers all day, every day
So the reason why I made this post is basically because i'm moving to the next stage. I'm going live next monday! My results on have been pretty decent and i'm beginning to show some real consistency
It's been a hell of a journey. The first few weeks were absolutely crazy and intense. Wake up at 5:30am every day, get back at 7:30 in the evening. I pretty much do whatever i can for 2 hours and then sleep like a rock
Where i'm working we trade something called Euribor. This is a STIR (Short term interest rate) future. I can't really delve too deeply into our trading strategy (firstly because it would be giving it away, secondly because it would be meaningless to most of you/too difficult to explain).
Euribor is basically the european moneymarket. What's that you might ask? Well Euribor stands for the european interbank offering rate. This is the rate of interest that banks charge each other when lending or borrowing money in europe. This is of course, of huge issue due to the EU debt crisis.
The way a euribor future works is that there is a contract which tries to predict the euribor, or interbank interest rate, at some point in the future. For example, a mar12 contract expires during march, 2012, and the price of that contract should converge to whatever the interest rate is on that day. What you get paid is 12.50 euros per tick away from where you bought/sold to what the actual rate is on the day.
People use these futures to do all sorts of things. You can use them for example, to hedge off interest rates. If you've lent money at a floating rate, you can use these futures to bet the other side to reduce your risk.
Our job of course, is to gamble on them! We mainly use spread strategies which involve spreads between different months of euribor and all sots of crazy stuff that would be way too complex to explain here. Most of our strategy is day trading styled, though we are basically scalping little half ticks here or there wherever we can (although, at a much slower pace than many other scalping strategies)
Being a euribor trader means that i get to be at the forefront of the action, and i get to understand and see everything that goes on in the market, and why things happen.
One gripe that people have with economists is that they do a lot of theorycrafting and it rarely results in anything useful. Often finance people are blamed for causing the financial crises etc, and people still treat traders like the scum of society.
As a trader, it is my JOB to understand why things happen, and to predict the future. As a trader also, i can't change what is going to happen. People seem to have this delusional fantasy that traders are manipulating the market and making money appear out of thin air etc.
Euribor and futures markets are a zero sum game. The people that get involved are the hedgers who lose money in general (they try to reduce their risk and pay a premium to do so) and the locals (us) and marketmakers, who in general take the other side (The risk) and make money.
One big rule about markets is, you are never bigger than the market. You cannot single handedly manipulate the market no matter how big you are. I've seen some rediculous clip sizes of 20-40k lots go through, or a notional value of 4 billion traded in one go, and the market barely moves a couple of ticks.
Euribor is one of the most liquid and possibly the most efficient markets around. In some ways this makes it extremely difficult to trade, in some ways it makes it very rewarding. The strategy i use now, i can multiply by 10, 100, 1000, 10000 even, and make the same consistent trading decisions.
This job has been my dream and it's been everything i wanted to do and more. Since a little kid all i was ever good at is playing computer games and being unpopular. But over time, i learned and taught myself to master and perfect parts of games that other people would overlook. I had the drive to delve deep into the mechanics and eeke out every little advantage i could. I would play more optimally, faster and better than everyone else
Euribor trading (and trading in general) - it's all one big computer game. The kinds of places you find traders like me are often known as "arcades" - literally. When we make a trade, most of us are playing little arcade game sounds (i have a mario jump, some guys have asteroids zaps and pig sounds lol)
When i get to work every day, all i see is a screen full of numbers. All the different contracts, the spreads, the spread of the spreads, the more complex spreads etc. I rarely use charts. I see the bids and offers, the prices of each spread, the numbers moving around. Eventually you just stare at a sea of numbers, and out of that sea, you filter it out and find an opportunity. Sometimes only once or twice a day. BAM you hit it and the opportunity disappears within seconds.
But it really is just one big computer game, just with vast sums of money at stake.
When i grew up i often had this issue that, other than being very autistic/aspergers, people simply wouldn't understand me. Not in an emo kind of way, but just that the way i thought and processed information was different to other people. In some ways it's a disadvantage, in some ways it's a great asset. Often my thoughts (like this blog) can be extremely scattered because they are so deep and varied, but in my head i can easily process the whole lot instantly. This lends itself to my own personal style of trading greatly.
Well, that was kind of random, but i guess i hit a milestone, so i felt like writing another blog.
One thing i would say to you guys is that, dreams are just dreams. But you have to take action and make it reality. Your dream might not be as glamorous as other peoples. Certainly i expect most of you don't want to stare at a sea of numbers 12 hours a day, essentially taking up the best years of your life, in a role where 95% of people fail.
Some people have unrealistic dreams, and they will never achieve them. Some people undershoot and don't go for the things they could achieve. But in the end, we all end up doing whatever we want to do. Everyone has a life and it gets lived one way or another
Certain things get in the way. Sometimes it's your attitude, your personality, your inability to work hard. Maybe you just wern't given the right opportunities and your circumstances are horrific.
I was lucky in a lot of ways - i had a loving family, i had the money to support myself, i was born in a first world society, i was gifted with the kind of thinking process that lends itself to the things i want to do.
In some ways, i was horrifically unlucky. Most of the guys at work find me incredibly annoying and hate me. Even though i don't talk much, when i do talk it grates their ears because i don't engage in smalltalk, and my thoughts are too scattered for most people to understand. I've suffered from the complete and utter inability to fit into society all my life. I've been constantly rejected from social groups and peers. Worst of all, i understand why i have these problems, and i understand that these are things i can't change about myself. I've tried over and over again, and it simply doesn't fit with me. I just have to deal with the fact that most people find me annoying. Most people WILL at work, not like me. I will never be the popular guy who can get on with everyone. My personality is marred and scarred with constant fears of rejection. When i talk to someone, the words just don't come out right. People don't laugh at my jokes. When i try to join in a circle, somehow i mysteriously end up on the outside
So yeah, i'll never be that nice guy who just gets on and enjoys life. In some ways, this is a dream of mine. I've worked really hard to try and be that nice guy who just has some friends and enjoys himself, and i couldn't do it. It was unrealistic
So everyone has their own path, everyone finds a way. Sure, in a few years i might be a multimillionaire from my job. That's kind of the whole point of prop trading. But the money is just another part of the path. It doesn't mean that i am any more successful than you, or that you have achieved less than anyone else. Just because i quantify my achievements and goals, making them easy to gloat or brag about, doesn't mean they are really any greater than anything you might do. Everyone has their own stories and lives to tell, and every day i am fascinated and surprised by what people have to say.
But you really do only have one life. You might be in a shit position now, and you MIGHT be in a shit position for the rest of your life. But make do what you have and grasp at every last straw you can get.
At one point, i was a skilless graduate with no friends, no jobs, an overqualified CV, and in the middle of a masters which made me so depressed i wanted to kill myself
But in the end, things worked out. I grasped at every last straw i could, so that i could chase my dream.
<3
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