Monday, September 21, 2009

Becoming a Virtual Member of a Trading Group

Past posts have focused on the value of teamwork in trading and ways of finding teamwork in one's trading. The idea is to be part of a virtual trading group, even as one trades independently. This not only overcomes the problems associated with being isolated as a trader; it also creates a potential structure for accelerated learning.

A number of proprietary trading groups are recognizing the value of "groupness" and extending their work to independent traders. Trading RM in Chicago, for example, is offering a free trial of a service that enables traders to receive the actual trades placed by their prop traders, including stock and options trades. As their post points out, the idea is not to simply mimic their trades, but rather to use the information to highlight stocks showing trading promise. By tracking whether the traders are placing more long or short trades, subscribers gain an immediate measure of sentiment for the broad market.

Perhaps less obvious, such openness helps traders as well. Once all your trades become public, you become desensitized to losing. All your worst trades, as well as your best ones, are out there for the world to see. That goes a long way toward helping traders develop a thick skin during periods of slump. It's also harder for traders to lose discipline and "go on tilt" when they know that they're being tracked by colleagues within the firm and outside!