I will start this thread giving a little background about myself. I have been in the trading world 4 years ago trading with "Swift Trade", I really knew very little about markets, just the basics, and this was a great experience. I traded for 1 year until the trading floor closed because of low volumes after the market crash in 2010. The strategy we followed was mainly tape reading trying to find ranging stocks with very high bids or offers, we entered just one cent before the "bluff" (as we called it) try to get the rebate for adding liquidity and close it with one cent or even at the same rate. Only the rebate trading in low volatile but highly volume markets gave us quite a lot of money per month, specially for a third world country (1000/2000 U$S per month, is quite a nice salary in here). As I was saying, I live in Argentina, so English is not my mother language, so please forgive me any mistake, and please be sure to ask before getting mad at me if something I said sounds rude, it could be only a problem of expressing badly myself. Ok, so going on, we always followed the S&P futures in a chart, and through traders audio. We were trading this day:
That was one of our best day in the trading floor, but after that we really couldnt adapt to have a winning strategy, and we didnt have the correct knowledge. There where not anymore ranging stocks or large bid or ask sizes. And even when we spotted one it was much more common to see a single print in the time & sales blowing it at once.
So I quit my one year of trading carreer, and started playing poker. I have been playing poker for 4 years now, making an steady income of around 700/1500 U$S per month. The biggest drawdown was the Black Friday, when online poker was prohibited in the USA so the players pool reduced significantly. Still it is possible to make profits but I am stuck. I cannot win in higher stakes. Thats the reason I really want to start trading just to see how it goes. But still my main source of income is poker.
Ok, lots of bla bla bla, is for a reason. I have what you dont have and you have what I dont. Poker and trading have a lot of similarities. However in poker is really easy in low stakes to have a winning strategy, its all about simple math, and you compete against low qualified players. In trading whether you enter 0.01 lots or 1000000 lots you are always playing against the sharks. Pros: if you manage to make a profit you can proggresively get in more money doing the same. Cons: you dont have a learning curve and you start playing against the big players. If a player that plays regularly in 2 U$S tables, come to my table of 50 U$S it would be hilarious, I would have an enormous edge against him. If I go to a table of 1000/10.000 U$S they would be laughing at me. In poker you have lots of situations where you can easily calculate your equity and you also have the comission (rake) you have to pay. Its really easier yo calculate equity in poker, in the markets you could have a trading system profitable after doing a backtest but you dont know if its going to work in the future. In poker if you have AA against KK all in pre flop, you have 78%/20% and 2% draw. Period, thats it, do it a few times and numbers will converge. Do it now, or in 2070 years and the maths are the same, you are putting your money in the right place. Obviously everything gets quite a bit more complicated, because you have to talk about ranges, fold equity, and lots of other stuff regarding poker, but you can have a winning strategy pretty easily in low stakes. Now the most important thing (as in trading) and the one thing I master and the one thing that kept me alive is money management and psychology. Its really difficult to deal with a 70% probability of winning and loose 5/10 times in a row. Its difficult to see that the player pool you are playing is completely beatable but you have to go down in stakes in order to have minimum 100 buy ins of the stake you are playing. So as I told you I have been playing this proffesionally for …