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phy begins with learning how to be a defensive trader before going onto offense. We want to prevent you from losing money. We look at a scratch trade as a winning trade. Ninety-five percent of the people on the floor, if they're bidding 11 and somebody sells them 1 at 11, are going to immediately offer it at 12 or hold onto it thinking they are going to make 100 ticks on that one trade. That isn't what we try to get our traders to do. |
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Neal: So if I buy at 11 and the market does not go to 12 immediately, I'm going to scratch the trade immediately? |
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Sid: Immediately. The basic point I'm trying to make is that we really focus on a person learning to be an effective trader. So when the day comes that you buy it at 11 and it goes 12 bid, we want you to sell it immediately and take your profit. We focus on this approach until trainees show that they're capable of handling themselves in the pit without losing large sums of money. |
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Neal: Okay, so that would be called stage one? |
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Neal: How long would stage one last? |
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Sid: Stage one depends on the person's performance. We set a goal. We say our goal is to get you to 20 to 40 contracts a day. Now, that may work in the bond pit, but we have a lot of new traders who are trading in the MidAm grains. If you're able to get up to 5, your goal is to go to 10, again, to just scratch the trades. I'm 95% convinced that you can scratch trades in any market if you don't let your ego get in the way. Let's say you've made three or four trades on a given day and you've scratched them all. You may be up one tick and all of a sudden in the next trade, the market goes against you. You don't want to go home |
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