Traders: Millions By The Minute – Some Glaring Problems 2

By | October 10, 2014

I will address the first episode of the BBC Two documentary series, which can be viewed here.

First, we have a lot of advertisement for a proprietary trading firm which also trains traders, called Amplify Trading. Generally speaking, I have a big issue with the whole trading education industry. This is still the wild west, where anyone can get away with making unsubstantiated claims and charging beginners or gullible people thousands of dollars.

We get to see Piers, one of the founders, trading during an ECB meeting. He puts on a trade based on his interpretation of a few words ECB President Mario Draghi said. We’re told he won $8k on the trade that lasted 2 minutes. There’s no mention of the risk taken. It all seems very amateurish to me.

Never trade in situations where you don’t have control. For example, I don’t risk significant amounts of money in front of key reports, since that is gambling, not trading. – Paul Tudor Jones

We also get some glimpses of a 4 months trading course Will and Piers teach to a group of 6 trainees. One of them is Ben, recently married, hopes that at the end of the course he’ll be able to trade for a living from home. I find that very sad on one hand, the fact that he’s so delusional, but on the other, I can’t ask myself, shouldn’t it have been the first lesson of the course, that you can’t trade for a living after just 4 months?

Another trainee is criticized because he only took one trade in a week. Now, why would that be a problem? Opportunities aren’t there every day or every week. The market doesn’t pay you by the number of trades you take. I find that critique ridiculous.

At 48:19 the voice-over says that DAX is the most unpredictable and difficult to trade. (!) We’re not told how she came to that conclusion.

Then we have T3 Trading Group the US registered broker-dealer and Scott Redler, chief strategic officer and one of the top traders there. We’re told that some of the traders make millions trading company’s money. We’re not being told though that they operate on a first-loss basis, that means the trader has to bring his own capital, and what he actually gets is just extra leverage.

I didn’t really find any issues with the hedge fund lady, the floor traders or the HFT guy.