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Neal T. Weintraub wrote:
>
> Let me know what you think.
> Best
> neal
Neal:
This interview does a great job of capturing the essence of learning to be
a successful floor trader [I know...I held a seat for 6 long months in 1995
and I quickly learned that the ego I had developed from being a successful
off-floor trader kept me from developing into a successful floor trader].
Having read this interview, I wish I had known about the program--I truly would
have tried it.
Although I dabbled with trading silver and gold during college, I learned
to trade as a market maker in the cash currency markets beginning in 1980.
Those next five or six years were great times to be a market maker and now that
I've read the interview, I can tell you the skills needed to be a great market
maker in the cash currencies, when they were as actively traded bank to bank as
they were then, are the same skills you'd learn and utilize as a floor trader.
Before I left the bank world in 1990, I probably taught over 100 traders to be
competent market makers and one of the difficult skills to teach was keeping
only the position you wanted: At a top volume bank, I was making 500 trades a
day
and turning over near $8 billion US. Other banks were calling in constantly,
so I'd have 3-5 other traders answering phones and relaying my two-sided price,
then telling me if I just bought or sold $5 million US or more on each price.
If someone dealt on my price, I'd shade my next price accordingly. If they
passed,
I'd have someone getting me a two-way price back, so I could dump what I didn't
want-- or I would turn the position in the cash brokers or on the IMM floor.
As you pointed out in the interview, it's the dealing without thinking part
that cannot break down. Although I might turn over $8 billion US in a day, I
probably never positions that averaged more than $50 million US in either
direction at one time, and the key to making money was the ability to turn
volume over and over and over, making a pip here and there on all of those
turns. But if you begin thinking you actually 'know' where it's all going to
go while being a market maker, you are in serious trouble.
Well, that was my life as a market maker. I am a trader now, a speculator.
Quite a different exercise. But your interview with the good doctor was quite
informative and spot-on.
Thanks for letting me read it.
Tim
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