Lifestyle of an Independent Student Trader

Guest Article written by Jonathan Keag

Media outlets and Hollywood love to glamorize the trading business. It is usually depicted as 20 and 30 something’s wearing five thousand dollar suits, working in a high paced office overlooking major city skylines with an Ivy League diploma on the wall, watching multiple screens with flashing indicator lights. Do these places exist in the real world? Of course; however, that is not a prerequisite for successful trading.

What are the key external factors to trading? Computer, external hard drive, internet connection and that’s it! All of the other stuff is meant to make people feel and appear to be important. Salem Abraham, a very successful trader with a proven track record, runs his operation from a small town in northern Texas in a quiet and discrete office. There are countless examples of people running discrete trading shops making tons of money for themselves and/or clients.

Trading systematically as a student affords time for a traditional job, hobbies, school and time with friends and loved ones. When is a good time to start trading? Now! I began in college. Best job a college student can have. The flexibility trading offers is unmatched.
Here is a routine I have found to work as an independent trader while in college:

• Turn computer on, run job to test systems and database for logic errors and functionality (even this can be automated)
• Activate system, sit on hands and let the system do what it was designed to do.
• Go to class
• Come home
• Review new orders for following days open
• Do homework
• Start all over again the following day

If the trading is disciplined and focused enough, by the time you graduate you can pay off school loans, start a new business, travel Europe, or continue trading for a living. Whichever option you choose will place you many steps ahead of your peers.

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You might like my 2017 epic release: Trend Following: How to Make a Fortune in Bull, Bear and Black Swan Markets (Fifth Edition). Revised and extended with twice as much content.

11 thoughts on “Lifestyle of an Independent Student Trader

  1. Hi Michael,

    You always make it sound like trend following is so easy.
    Don’t listen to the news.
    Cut off the fundamental crap.
    Just follow the tested systems, as it will respond to changes according the the market’s environment.

    Even David Harding employs over 100 employees with Ph.d’s in Mathematics.
    Am I going to make money simply by reading your books and using your systems?

    Dave

  2. What escapes me is where to begin. Commodities, equities, etc., how do you decide your focus, trial and error? Did you have a mentor that taught you the ropes? Trading independently allows you to have 100% of the award, but also 100% of the risk. Would you consider introducing a third party into thee mix? I would be interested on your comments.

    Thanks for sharing.

  3. Dave, my book Trend Commandments says this:

    Who will Trend Commandments: Trading for Exceptional Returns reach?

    This book is for those kindred spirits who grasp there is no secret to trading but rather just knowledge you have not yet discovered. It is for anyone who wants to make the most money possible-without going broke or going overboard on risk.

    It is for investors and traders small and large, young and old, female and male–worldwide. Trend Commandments is also for anyone fascinated by how great trend traders think and act to make a fortune. If you have other reasons for reading this book, that is fine too.

    My words are not a set of magic rules for becoming a wealthy trend following trader with no work on your end. To achieve the pot of gold, you will need more than that. However, to explain all the details you will need, you must know what you are up against.

    The well-constructed fortress of government, media, and Wall Street, all designed to bleed you dry, is “The Wall” (think Roger Waters). None of those players want you to comprehend or act on the contents of this book. If you do get it, those groups lose power and money. They do not want to lose anything. Their grip on you is stranglehold tight.

    Getting rich is a fight; make no mistake about it.

    Nothing in life is easy. All requires effort.

  4. Additionally, example performance track records are in all of my books–the ups and downs. But if you believe you need 100 PhDs to be a trend following trader, guarantee you won’t be one!

    Let me rephrase it: why do you need 100 PhDs to be a trend follower? There are many reasons why a man running a 20B fund might need them, but why would you? What in your trend following understanding could require *you* to need all those people?

  5. @Dave- Trend following has many levels from simple to highly complex systems. You choose where you are able to start, then begin to improve your system with experience and continuing education. Any level of a TF trading system will make money if designed and followed properly.
    Harding is at the pinnacle of trading, as of May this year his fund has over $7.6 billion AUM(fund)and $21.9 billion AUM(company). A student trader would be lucky to have a total of $100,000 AUM. Complexity levels are quite different between those two groups. Remember Winton Capital Management started with only three employees and less than $2 million AUM, not 100 PhD’s.
    Have you tried and failed at trading or do you make this assumption based on a gut feeling?

  6. @Jon- I began researching strategies that had proven track records, tested the strategies, modeled the behavior, executed with discipline and evaluated performance which helped to improve the systems over time. Was it easy? No. If you want it bad enough you will learn the skills required and unlearn the behaviors that prevent success.

  7. Dave,

    Your “argument” is predicated upon a number of faulty assertions.

    First, neither you nor I am aware of what the PhDs that are in Mr. Harding’s employ are tasked with. As such, making the inference that they are the sole reason for his (firm’s) success is, to be polite, something of a stretch.

    Additionally, Mr. Harding’s firm is managing multiple billions of dollars, with that comes the need for additional employees.

    A further thought, with no inside knowledge, would be that the PhDs are tasked with working towards getting orders placed whilst minimizing the impact of HFT (yes they do exist in the commodity world). This would be something of a meaningful role in a fund that has over billions in AUM and is placing very large orders, but somewhat useless for an individual trader of “average” trade size, who has a decent holding period (generally, impact of slippage decreases as length of time in trade increases).

    Lastly, if the fact that Mr. Harding is employing x amount of degreed personnel is your attempt to “discredit” trend following, or trend following by an sole individual (and not a firm), then perhaps you should place yourself on stronger footing when you launch your next stone…

  8. 100 PHDs mean nothing. Needless to say remember the famous Nobel Prize winner in Economics who headed a fund that blew up? The PHDs are there, in my view (and yes a lot of people might disagree) as a marketing pitch.

    Institutional investors love the Oxford ressearch centre bull and the PHDs working on screens. That is one of the main reason that Harding has managed to haul in billions in AUM.

    The most successful traders use a winning system that they stick with. And I would say most of them are Trend Followers. And I would also say, they are people you’ve never heard of, trading mostly their own money and compouding 20 percent a year, not giving a “blank” about sharpe ratios, sortinos, and whatever crap instituional investors masturbate on.

    Best

    jad

  9. Hi Guys,

    firstly, my post was never meant to discredit trend following.

    I also never said that 100 PHDs are solely responsible for Harding’s success. I also do not think that the PHDs are there simply because there is huge amounts of money to be managed.

    I am just giving my opinion that it seems to me that applying a trend following strategy AND MAKING MONEY FROM IT is easyy.. thats all, and Michael reminded me nothing is easy, which I agree of course, but thats just the feeling I get when I listen to trend following proponents..

    @Jad: “”The most successful traders use a winning system that they stick with. And I would say most of them are Trend Followers. And I would also say, they are people you’ve never heard of, trading mostly their own money and compouding 20 percent a year, not giving a “blank” about sharpe ratios, sortinos, and whatever crap instituional investors masturbate on.””

    Can this be substantiated? It would be truly awesome if this is really the case. Gives motivation for small traders like me..

    What makes a trend following strategy superior towards other strategies?
    I am assuming that there are many other nonTF strategies that work, and nonTF funds that have long periods of success too?
    Is it the trader himself that matters more than the strategy?

    thanks.
    dave

  10. “Can this be substantiated? It would be truly awesome if this is really the case”

    No. You’ve never heard of them, because they want it that way. No glory and use in self promotion. Only if you want to raise AUM from outside investors. Unless they are vain, and have a huge ego, in which case they usually crash and burn quickly. Humilty is lesson number 1.

    You will not get in depth answers to your questions using this medium. So your starting point is already wrong.

    Start by reading Covell and Van Tharp.

    Good luck.

    jad

  11. …getting back to the original post: the hard work goes into developing the trading system. The day-to-day implementation of the system is boring…and if it’s NOT boring, odds are, you’re losing money.

    If you want action, go to Vegas…if you want to make money, 90% of it is doing nothing. See, for example, average day of a Turtle in Michael’s “Turtle” book; or average day at the office for Bill Dunn in Michael’s “TF” book.

    Doing nothing is a discipline in itself.

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