mickro

Agree. Seriously, who cares about percentages?... You shouldn't. Are you trading to make money, or win a lot of trades? .... THEY ARE NOT THE SAME THING!

The biggest reason for this, is comfort. So get comfortable with you system of trading. The more you know about your own system, the better. This may sound silly because you likely created the system. I assume you do trade journalling and hopefully something more active. So, get to know the statistics of your system. Learn how many trades you are supposed to win/lose, you're avg profit/loss, std deviation of wins/losses.. to name a few... Knowing typical and maximum drawdowns. Personally, I like to perform a Monte Carlo to learn the extremes. Then follow the statistics! If you lose 100 trades in a row, you won't care b/c the typical draw down is much greater. Obviously, this will be specific to your system. Know your leverage! Knowing your leverage will prevent you from going bankrupt waiting for a draw down to be over. Not to mention, black swans. Remember that a lot of the best systems lose more than 50% of the time. This can be demoralizing if you let it. Our society is trained to shoot for percentages, this is definitely not the cause in trading. This provides you the psychological relief of worrying about what's going on around you and you can focus on trading.

Thats the thing too, languages are getting easier. And you can use easier higher level languages anymore. I bet the trend continues. I've seen people using excel to trade, or a matlab, or an R plugin, that's a lot easier to learn than c++. Well, it keeps changing... lol. One of the best reads and a must for anybody who hasn't read it is the concept release from the sec "concept release on equity market structure" (1) the use of extraordinarily high-speed and sophisticated computer programs for generating, routing,and executing orders; (2) use of co-location services and individual data feeds offered by exchanges and others to minimize network and other types of latencies; (3) very short time-frames for establishing and liquidating positions; (4) the submission of numerous orders that are cancelled shortly after submission; and (5) ending the trading day in as close to a flat position as possible (that is, not carrying significant, unhedged positions over-night). I don't do a lot of fancy. I do a portfolio, which is different from a lot of the HFT guys. But I can still do a couple hundred trades a day. Hassle is other peoples money. It's a regulated industry, so you have to pull your pants down in front of Barack to invest for other people... up to a certain point. I'm going the RIA route now. Getting started you can trade a retail account which is easy to set up, but day trading restrictions are a gotcha.

You should start with that quote.... I suppose it depends on definition. Check the SEC definition of HFT and you will be starkly suprised. I was suprised to find out that a system that I designed is considered a HFT system. And I designed it by myself, on X_86 gear. A $500 system that I now make a living off of. Preparing the paperwork now for a fund launch, so it is possible. I designed it in a garage, with a server running in a closet. lol Check out Tradebot Systems in KC Missouri, they pocket $50k a day. Their solo designer started in a basement (no BS) with a $10k investment. I think the big reason that individuals can do this now is solely because of technology. We have access to brokers and DMI. The Primes are still tough, but the small primes and mini primes all offer apis to connect. I think they all offer market data and pretty effecient order routing. Obviously, the primes have the the best algo's but you can't get an account with them without $1B(I think, it's up there) in assets. Government got this one right with reg NMS that actually helped out the little guy.

100% requires automation. Means initate relationship with hardware, kernel, risk controls, position sizing, order routing. Market microstructure and that stuff you never cared about just become important. Knowing how to trade is < 10% how to actually make money.

I stick to an attitude of automate/test everything and use redunduncy, but this goes counter to paper trading systems when I feel I cannot trust their reliability. I feel there has to be a solution for this. Even if you have to roll your own to look closely at book data I think it would be worth it. Right now, I'm just using the Interactive Brokers API and paper trading account for testing new systems... It's good, but does anybody now of a really good system? It doesn't have to be a broker. I'm even welcome to ideas, b/c I'm tempted to roll my own if it'd be considerably accurate to a real trading system.

I'm fully automated and profitable. So, looking back through this thread, it is possible to do this on a live system. 100% is a milestone... Actually, the first automated trade for me was a milestone. You start slow and work up. But I think the real trick is the level of dedication that it takes. You cannot take something off the shelf and make it work because there are just too many pieces moving. I believe you have to roll your own system if you want any real scalability.

As finance, you will learn economics. Remember too that in most schools econ is a Philosophy major, or Arts degree. Finance is a BS. This made it clear for me when I had to decide. It also tells you what they will teach you in school. The problem with dualling in Arts(econ) and then Science(finance) is all the prereqs. You'll be wasting a lot of time. The industry looks a LOT higher on accounting as a second major and it is in the same school and you will need half the total hours. I like economists, (but I'm a nerd) but most the industry doesn't like them unless you are goining into government.

Been trading a paper account for a while with pretty good success. What are some next step's to taking this into really making some money? The real account is really too small to do this organically. I'm thinking joining a prop shop or showing paper trading results and trying to get a job based off of it, to seeking a few private investors and running a small fund. Anybody have some ideas or related experiences?