Thread: Newbie Journal...........

Ok, I thought this journal might be helpful for prop traders at the front end of their careers by sharing some of our ups and downs.

So at the start of Jan '10 I managed to get a job as backed trader in a prop house. January was to be spent on the sim and achieve 2000 Euros net profit before going live.

Well, I tickled the target with a few days left but eventually fell short! Month two (20 trading days) and the same target of 100 Euros p/d net (2000 Euros a month) starts tomorrow, Wednesday 3rd feb!

After some self analysis and reflection I felt a missing ingredient was some daily accountability for trades and daily PnL, hence the birth of this Journal!

I will spare details of trading strategy as this isn't what I want this thread to be about but some basic info as follows:

Traded Products: Bund Bobl & EuroStoxx
Contract Size: 2 lots Bund & Stoxx, 3 lots Bobl
Trade Style: Outrights with the odd spread thrown in when the opportunity presents itself!
Roundtrips: Anywhere between 10 - 35 roundtrips per day

I'll update daily (or try to) on PnL and some key trades!

Feel free to fill this thread with anything from newbies like me also starting out or some of you wiser old heads that can remember your sim days and any advice that might help.........

See you tomorrow

End of day 1

I onlytraded the Bund (currently my fav product) today and we had a couple of nice moves. Bearish sentiment in morning as it looked likely that the EU was going to back the Greek deficit plan. Also, maybe some medium term longs flatting their positions ahead of NFP added to the move south ...... thoughts??

I didn't have a short trade on that, but picked up a few ticks as it bounced off yesterdays low (123.18) and fridays low (122.95).

Portugal came in focus and bid sentiment developed early afternoon. Cant see too much action tomorrow going into NFP on friday but we'll see......

Results:

Trades = 16 (Bund)
Ticks = +8
Net Profit = +141.4 Euros

To Target = 1858.6 Euros

Any thoughts on the todays price action in Fixed Income would be more than welcome

The Portuguese story turned out to be a total joke. It's not to say that they're a-ok, but it's just funny how screwed up the mkt is.

IGCP (the Portuguese debt agency) raised €1.25bln in 1yr T-Bills at 0.928% 2 weeks ago & announced a €0.5bln tap of those bills today. The total bids for the tap were €1.195bln, however... the avg. yield was much higher, 1.379%. IGCP, in light of the lower bid prices, decided to allocate only €0.3bln instead of the €0.5bln announced. This is what spooked the market & led to talk of an uncovered auction. In reality, there was enough demand, but the seller, sensibly, didn't want to sell at too low a price. The mkt spun this story into the 'end of Portugal'.

The moral seems to be that, if you're Greece/Portugal/Spain, you just can't win. You get punished if you issue less than the mkt expects and if you issue more.

Thanks for your reply, interesting to see that insight.

So with that lose/lose mentality that the market seems to be adopting towards Greece/Portugal/Spain do you see those spreads widening and Bund pushing 124.00+ medium term?

Don't know about the bund, but, one thing for sure, I wouldn't be short Schatz here...

End of Day 2

Results:

Trades = 28
Ticks = +11
Net Profit = 178.8 Euros
Target = 1679.8 euros

Spanish auction was well taken up but bid sentiment remained on extended 1% eurozone rates for as long as a further 3 years.......

Roll on NFP friday!

Day 3

These sovereign debt issues surrounding "PIGS" really took hold this morning.
Mixed NFP results led to lot of volatility after the numbers.

Trades = 10
Ticks = -1
Net profit = -16 Euros

To Target = 1695.8 Euros

will the 9.7% unemployment rate be enough to stop the march north in fixed income?

Slight change, after a review with management am now live!

Any guys out there that have recently gone from sim to live? Tips, market views and your own stories would be much appreciated!

Live introduces the emotional aspect. It's much easier to be cool, calm, and collected knowing there's no real money at stake on sim.

Try to stay relaxed (easier said than done!), and keep postions so small you don't care about the losses. Think a lot about position size relative to the volatility of whatever you're trading - basically, more volatile should have smaller positions size.

Just my 2 cents...others will, no doubt, have more wisdom to offer - see if you can get ACD to chime in.

Just a couple of things to add that I think are useful on the risk management side.

I like to cut back my trading size as I start losing and then increase it again as I start winning. There are lots of different formulas or methods you can use to do this but I think the principle is the main thing.

Another thing I found particularly useful was having a daily stop loss. That is, if you lose x amount or x percent on a particular day, then stop trading, take the rest of the day off and start fresh the next day.

These are just my opinions and what has worked for me. It may not necessarliy work for you but hopefully gives you some ideas.

Good luck