Alpha Trader: The Mindset, Methodology and Mathematics of Professional Trading

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First of all, let me clarify that I believe this is a retail bubble in a specific group of stories, not a broad market bubble.

Specific strategies work in specific market regimes and you need to adapt your overall style to the regime. On the morning of the last trading day of the month, European pension funds execute massive rebalancing trades. tactics, microstructure, market narrative, technical analysis, sentiment, positioning and systematic risk management. The longshot mentality is bolstered by financial media features that shower adulation on tail risk managers in the rare moments their highly-levered insurance bets pay off. A journalist can publish any sort of nonsense on the internet and there is very little consequence if it turns out to be inaccurate.He investigates, with reference both to his personal experiences and a study of the cognitive science literature, which psychological traits are most likely to lead to trading success – conscientiousness and rationality come out on top.

Instead of a bunch of undergrads guessing how many jelly beans are in the jar, imagine 1,000 highly-trained quants who have millions of dollars to invest in jelly bean estimation technology. We didn’t think the bull market was dumb and we didn’t think the internet was a world changing miracle. Keep an open mind and analyze the evidence, then make a rational and unbiased short-term forecast of market direction. If you are passionate about financial markets and have 2-5 years of relevant trading experience in APAC fixed income instruments, with excellent communication and problem solving skills as well as good intuition around data, you could be a good fit. If they are similar, you are probably good but if there is a big difference, then something is up and you need to dig deeper.

The longer you trade, the more you will notice that when news comes out and you are flat, you react quickly and without bias. To succeed in trading, you must learn to accept and deal with the fact that it is a competitive field with few barriers to entry and no specific credentials are required. In contrast, humans are good at evaluating probabilities in the middle of the spectrum (the 25% to 60% zone).

If non-farm payrolls are a few days from now, what might the market do in the days leading up to the release? For example, if you want to get in shape, don’t make yourself decide whether to work out or not each day. To recap: wisdom of the crowds works when the crowd is diverse, unbiased and motivated by aligned incentives.Don’t be one of those people with 1,431 unread messages who I have to contact three times before I get a reply.