Wednesday, June 25, 2014

Never be an analyst during trading

Trading is a full mind and body sprinting marathon that lasts all of about 3 to 6 hours a day depending on which markets you trade and your strategies. I honestly don't care who you are, it takes 100% of your attention to trade any instrument correctly. I'm saying all this because I find that a big problem a lot of people have when learning to trade is that they haven't properly identified the division of labors that should be applied to the operations of a professional trader. For example "buy side" firms have analyst who do the research on particular instruments and they facilitate that information to the traders who in turn give management the best ways to accomplish the goals of the firm. The traders aren't the same guys who determine what to trade, they're too busy making sure they're trading correctly and within their strategies parameters. The fact that they don't have to divert energy and attention to research and analysis during their trading contributes to their lack of emotion and stern discipline. This is exactly why Goldman Sachs can have no losing trading days over a year, or two.
So my advice is to spend part (preferably most) of your work hours being an analyst and the necessary time trading. You should be able to set it and forget after about 250 hours of trading, in my opinion at least.

No comments:

Post a Comment