Millions by the minute
It seems every now and again a trading documentary pops up now and again on the TV. The most recent one aired last night, click on this link to watch it: –
Traders : Millions by the minute
I thought it was entertaining but quite lightweight in the scheme of things. It was curiously positioned as new and exciting but online trading in financial markets has been around for ages. I liked the way they focused on the psychological side of things and the difficulty some were having with trading, which is quite realistic, but I thought the people they choose to show their skills were a bit limited. I kept thinking through the episode, I wonder if they know what is going on in sports markets? The guy in Amsterdam however was interesting and most definitely not lightweight.
I’m surprised there are many serious traders left on the floor at CBOT, so it was interesting to see the characters that are left. But I thought that $4k was low for a ‘good’ day on the floor. The UK guys were primarily trading news flow, which is pretty old hat. Prop rooms are everywhere in London so a wider view of that industry would be more revealing I think.
My journey through financial markets
I’ve had a curious journey through the markets. I started in gambling before realising that was a mugs game, so I moved into the biggest casino of the lot! As soon as I was old enough I’d already bought some shares, but didn’t do much with them. As my career progressed though, I took a deeper interest in things I placed my first trade through Compuserve to Etrade (how old). As the Internet started to gain traction I started to be an early adopter of web technologies and financial markets. I was the second ever poster on ESI, an early financial trading forum, in 1996. As we approached the millenium online trading had really taken off but the dot com crash of 2000 really reset peoples expectations. By then, I was getting very comfortable with things and looking forward to a future on financial markets, but Betfair came along and distracted me somewhat!
In the late 90’s I had tried hard to trade short term on financials but I was, to put it frank, bloody hopeless. So I settled on long term investing as my path on financial markets. It made a lot of sense to me and I’ve consistently made money on it. It also has the benefits of being fairly a fairly passive way to make money.
My epiphany
A curious thing has happened however since those early attempts to trade short term. My activity on Betfair has taught me a great deal but more importantly, how to trade short term on financials! I had a few barriers to overcome in order to do this but the main ones where psychology, understanding how to react to losses, profits and general market melee. Then risk, a true appreciation that risk can work for and against you but your job is just to deal with the stuff you can influence. It’s been an interesting journey.
On my voyage of discovery I managed to uncover some really interesting things, so I’ve transplanted that back into financial markets. Several models I used to unpick behaviour in betting markets, also perfectly describe financial markets. So that’s been really interesting to see and I’ve worked with some hedge funds to put my knowledge to use. As time has passed therefore I’ve started to mix things up again.
Personally, I still think trading on Betfair is easier than financials. But if you want to be a billionaire then Betfair ain’t going to do that for you. However, if you are happy with less than that, it’s a good place to be and will give you a decent grounding in how to trade.
Category: Alternative markets, Trading strategies
