How I Started

Why I Chose Trading Full Time As A Career

“Wall Street seemed very much like the place to be at the time.  The world didn’t need another lawyer.  I hadn’t the ability to become a doctor, and my idea for starting a business making little satchels to hang off the rear ends of dogs to prevent them from crapping on the streets of Manhattan never found funding.  Probably, the real truth of the matter was that I was frightened to miss the express bus on which everyone I knew seemed to have a reserved seat, for fear that there would be no other.

I certainly had no fixed idea of what to do when I graduated from college, and Wall Street paid the most for what I could do, which was nothing.” – Michael Lewis, Liar’s Poker

Why I Chose Trading Full Time As A Career

Trend follower and Bestsellers

I’m not sure if I represent most people or only a minority of fresh graduates.  Here’s the truth, despite countless years of formal education, I never really had that epiphany moment when I made a concrete decision as to what I wanted to do in my life. Most of my choices were made primarily by following the conventional wisdom.  I just followed the “herd”, the “experts”, my predecessors and friends.  In short, I was just a trend follower.
For example, the decision to take M or even entering in A was made without even blinking my eyes (Thanks Malcolm Gladwell for pointing this out ).  I simply knew I could never draw or sing for a living.  I couldn’t see myself programming computer softwares because I didn’t want to be an owl nor did I want to learn another language.  I was not beautiful enough for people to just watch me on screen, nor did I have any skill when it comes to dramatic arts.  I just probably know how to rant, cry and memorize lines like a robot.  Who’d pay to watch me do dumb things?  Maybe I could muster a handful of 10 to view me on Youtube?  Still won’t be enough even for my food.  I couldn’t play a sport so well for people to watch me.  I’m no Kobe.  I’m no coach like Phil.  My friends told me I could calculate numbers pretty fast, like some machine so they suggested I take something with lots of Math.  Really weird, if you can multiply 189 and 19 and come up with an answer in less than 1 minute, you can do math?  In hindsight, I guess most people just didn’t know what the hell to do , so any advice was still advice, whether stupid or not.

So here goes, “Indecisive Me“ simply checked where my friends were going, what they ticked as their course option and I took the same path.  I was not thinking whether I would like the curriculum or the professors.  I was in the illusion or presumption that since everyone I deemed “wise” chose this course to be their first choice, and then maybe that’s one of the best places to be.  I was just like a child entering a restaurant not really knowing what to order, so I just chose what everyone ordered.  What’s your best seller? Mildly spicy is fine.  Something sweet and bitter can be added into the mix.

My pattern of making decisions was mostly simple.  I don’t really analyze my choices (Even if my friends would say that I’m one of the most serious analytical people they’ve ever met).    Am I left-brain or right brain?  Words or Numbers?  Black or White?  Coffee or Tea?  English or Math?  Jock or Nerd?

Even if my college boasted of philosophy and theology to help directionless students like me to be more aware of ourselves to aid us in finding our careers, I just remember myself blurting out common passages professors wanted to hear.  I want to be the best I can be.  I want to find my limitless possibilities.  I want to be a “man for others”.  I want to be a social entrepreneur.  Yada yada yada.  Lots of big words, but ambiguous and never really anything much except an idea from the clouds.  Of course I’d insert some concrete lies, but I never really followed through with pretty much most of them.  If you ask me what I said I’d do after college then, and what I really did, they’d probably be like the North and South Poles.  A good friend of mine simply summarized me as someone unpredictable.  He couldn’t tell if I would eventually be an actuarial scientist, a doctor, an entrepreneur or a trader.  My strength and probably my weakness as well was that I was fine with everything.  I was like a “jack of all trades”.  I would never excel at something, but I would be above average with most things.    I guess being unpredictable is really a euphemism to say that I am going nowhere.  I have no plans where exactly I want to be or who I wanted to become. I just knew I didn’t want to be stuck with my family’s business.  I wanted to make it on my own.  I also wanted to be rich.  Who wouldn’t?  I told you I am just your normal kid.

Internships and Job Fairs

You can just imagine me during internships and job fairs.   I was just aloof with the whole world.  The whole world was changing right in front of me and you could see all my peers frantically preparing, submitting all their neat application forms in scented envelopes as if they had conceived this ever since they set foot in college.  If for one second, you could treat the job market as much as the financial markets, I simply found myself chasing after the same jobs most people wanted.  Since I knew pretty next to nothing about which jobs to take, I just followed everyone.  Just as stocks (read as job) could be worth nothing much than people perceive, probably overvalued the job’s good qualities, none of us really knew what we were doing (unless we did NPV analyses, but would you believe in fundamental valuation?  How do you value intangibles like personal growth development?).  Everyone was listening to the same salesperson (read as sell-side analyst) campaign why working for Company X has helped his growth advancement as a person etc.  The more of my classmates passing forms to this company, the more the worth of that job seemed to be.  Price action is far more important than whatever those speeches had to tell us.  Tell me how many from your batch worked for NGOs or social civic work?    I’m not really sure why most of my batchmates (MEAns) wanted a career in finance or marketing.  Prestige? Compensation?  Growth? 

With all my indecisiveness, you guessed it.  I simply passed all my forms to these sectors.  It was simply like a lottery as to which company will have the decency/unluckiness to call me to work for them.

Lottery

I took an internship doing supply chain marketing with a cosmetics company (even if I knew next to nothing about make up) because they were the first one to call me and hire me.   Just as I told you, I don’t think much about jobs.  People treat their internships as something super important for their eventual jobs and resumes, while I just batted my eyelashes and crammed it like most of my projects in the process. 

In any case, I found myself in a place where I didn’t want.  It’s a good thing internships only lasted for 2-3 months.  It was simply not a fit for me.  I have no problems at all with the people, or the management.  I just found myself wanting to do something else.

So how did I end up being a trader today?  What a long introduction right? 

My First Encounters with the Stock Market

I’m not like most of the people who went to work in and for Wall Street.  Most people in this industry have watched Oliver Stone’s “Wall Street”, “Boiler Room” and other popular movies in relation to finance several times.  Others have been trading early on in their lives or have heard about stocks while they were still 12 or 13.  They probably have a father or an uncle who would talk about the markets during lunches.    How I wish I knew earlier that there was such a thing as the stock market, then I would have at least rode some part of the bull market with all the irrational masses from 2003-2007.   I probably would have ended up studying economics and psychology if I had to re-visit college.  That’s the closest thing to behavioral finance, at least here in the Philippines. 

In any case, whether you believe it or not, I only knew much about the existence of the markets and the accomplishments of the market wizards pretty much during the latter half of 2006?  This was my 3rd year already in college.  I’ve always heard about Mr. Warren Buffett, the great sage of Omaha, being the 2nd richest guy before Bill Gates but my knowledge of the stock market was zero. To be fair, I was studying accounting and finance classes, and we’ll talk about the markets lengthily, but I never had any experience of trading it at all.  My definition of the stock market would be what my textbooks would say.  That pretty much sums it all.  Rote memory + numbers + concepts.  Formulas, NPVS, WACC, ROIC, income statements, earnings growth etc.    If I don’t apply it, I’ll quickly forget it after a while.  That’s what happened to my Calculus, Physics and Chemistry classes.  Sorry to those teachers of mine.  I had fun studying them then.  I just didn’t know how I’d use them afterwards.  If I offended anyone, I’m sorry for not being as gifted as you are to understand their importance in my daily life.

I guess a lot of it changed when I got hold of Jack Schwager’s Market Wizards Series, Phil Town’s “Rule # 1”, Benjamin Graham’s “Intelligent Investor” and Edwin Lefevre’s “Reminiscences of a Stock Operator”.  Those books as well as Ayn Rand’s “Atlas Shrugged” have somehow opened up to me the possibility that even without much capital, I could earn my own millions.  Self-made.  Perhaps that’s the best sales pitch anyone’s ever made to me.  Of course Robert Kiyosaki’s popularity with his Rich Dad Poor Dad series somehow made an impact for me to be more non-conformist and try new things.  Be contrarian, as he would say.  Although in a way, he betrayed me by becoming mainstream with all these cashflow games and redundant books spreading all over the world, I heard him once and that is enough.  Writing 6 or 9 books more on the same topic was just milking money from all his followers.

In any case, I wasn’t ever going to be a good real estate agent so I told myself I’d get my hands dirty with a career in finance.  Whether it’s investment banking, quantitative modeling, proprietary trading, research writing, I wasn’t sure.  I just wanted to be in finance, even if I had to start making someone else’s coffee just to be there.

Decisions with no known outcomes

I worked in this private bank for six months before I started proprietary trading.  The firm was touted as one of the best “go-to” places by my batch, so I joined them.  I wasn’t really thinking about the salary even if I heard their bonuses were good.  In fact, I even told them during the interview, I’d work for them even if they don’t pay me a single cent, because I wanted to learn everything I could from them.  I was honest.  I wasn’t making some bullsh*t press that I’d work without pay.  It was real.  Most of the traders I read in Market Wizards talked about working in finance as one of the most fulfilling jobs, they’d work even if they were only paid a dollar a year.  I believed them.  I simply wanted a mentor.  They were the most profitable department in Asia for what they were doing.  I felt as if I was doing the right thing, being in the right hands, so I joined them immediately.  That May of 2007, I was working as a marketing assistant for this private bank.

During those first months, I saw myself watching the movements of Philippine stocks rather than attending to my work.  I was more intrigued with the reports sent by my peers re equities and derivatives than anything else sent in my email.  It was during this time, when I was exposed to interest rate swaps, bonds, forwards and foreign currencies that I reaffirmed with myself that I did want to be in finance, but not in private banking.  No disrespect to my peers and mentors, I simply found myself looking for the kind of “excitement” and thrill felt by fund managers and proprietary traders who would risk their money (or their company’s) with their conviction ideas.  Before I could help and advise clients in private banking, I would first have to equip myself.  I found myself reading about blogs on macro topics, and reading research reports.  I envied the analysts who would have coverage of certain companies, look for value plays and write about them.  I told myself, I wanted to do something like that.

After 6 months prior to the regularization interview, I gave my resignation letter.  I told them that I wanted to work in the equities department, learning fundamental analysis.  My hero at that time was still Warren Buffett’s teacher Mr. Benjamin Graham.  I knew about technical analysis, but my heart was more bent on learning how to value stocks.

The Right Job

I knew exactly where I wanted to work in right after my stint in the private bank.  I wanted to work in brokerage firms.  I want every morning to wake up to Bloomberg and breathe stocks in my life.  It’s easy to understand why I’m currently working for my company because it is where I opened my first trading account in the Philippines.  It’s the largest online trading firm and I heard that the bosses there were really good traders. I wanted to be as great as Jesse Livermore and Warren Buffett so I applied for any job that they would offer me.  Company is vastly different from where I used to work.  I could talk immediately to my research head and my bosses.  The organizational structure was very flat and the atmosphere was very casual.  They still meant business, but it was just more laid-back than where I was used to.  The feeling is much like being back in the neighborhood, after spending some time abroad.  Company felt more homey.   January of 2008 was my first day researching for stocks.  If you still don’t know where I’m working, I don’t know how many clues I have to put in order for you to get it.

Pretty soon, another 6 months would pass by and I would be asked if I wanted to transfer and work instead with the proprietary traders full time.  Instead of researching and writing reports for companies, I found myself watching a quote screen, and working like all the guys out there.  We were all eager to make money and our first million for that year.  There were rumors that there was a trader making a million every month, so if he could do it, why couldn’t we?  It’s just a matter of experience and skill right?  It can be learned right?  I transferred just 3 floors above where I used to work that June of 2008.  Finally in the right job, I say to myself.

I remember waking up every single day thanking God because I’m on my quest to be a super trader.  To make things worse, my overconfidence was fed with a nice compensation check because I’ve made quite a sum for my first two months.  I thought at that time 15% for the month was just ordinary.  I’m really stupid and a new trader, wasn’t I?

2 and a Half Years Later

I guess I should be thankful because my career started in the most historic of times.  I lived a once-in-a lifetime event: The Crash of 2008 and the Violent Rally of 2009.  If I had not made any money on the way down and on the way up, I could still say I had market experience.

If you asked me why I wanted to become a trader then, I would have given you the classic off-the-mill answers of most wannabe traders out there.  I came here to make money.  I was passionate and willing to commit the time and effort to learn whatever I needed to do in order to gain market experience, light years ahead of my age.    The dreams and the fantasies of a self-made millionaire, then possibly work as a hedge fund manager or pay for my college (ala- 21-esque) using my winnings from trading seemed like a nice thing to put on my future resume.  Things seemed easy.  I guess I was really stupid to think of things that way but the fact that most successful traders came from meager backgrounds provided me enough evidence and take that long Hail Mary shot to believe that I’ll be one of those top 8% of traders who become super traders handling millions of dollars for their clients’ accounts.

You only know what you’ve got until it’s gone.

Realization that Trading was never a themepark

I only knew I wanted to become a good trader when I already lost most of my dreams and fantasies that initially tempted me to become a trader.  Ironic or cliché as it may seem, you only know the things that you want to do, or love to do when someone takes out all the perks from you and yet you still continue to do it anyway.  If you’re constantly losing in your trading, and yet you still find yourself charting stocks, reading news reports and watching Bloomberg during your free hours, you are one of two types.  You are either a passionate trader who wants to improve his/her game by being up to date, or a chronic gambler who’s on the verge of lunacy partly due to the staggering amounts of money lost and the inability to get out from one’s hole.

I’m not sure what type I am.  I probably am both.  Still though, despite all the challenges I encounter from trading, I really can’t see myself veering away from it.  I believe trading has that certain hold on people.  Once you pop, you can’t stop.  This blog is certainly one part of me, trying to put a structure to my passion/addiction with the markets.  I want to chronicle my education of becoming a super trader.  Welcome to my world.  It’s hell and heaven at the same time.

Trading for a living is different from trading.  Anyone can trade.  You just simply open an account, buy and sell a stock or any financial instrument, and you can call yourself a trader.  Becoming a trader for a living is an entirely different field.  Becoming a trader for a living means that you are looking for consistency in your life.  Just as most businesses have a stable cashflow, that is the goal of the trader.  You want to trade well and have stability in your account.  You want growth minus the wild volatility.    For a newbie to realize the difference between a senior trader and an amateur, one only needs to see how they both look at the market.  One sees it as a business, while the other sees it as a gold mine or a theme park.

I’m not a hypocrite.  I came to the trading floor because I wanted to handle huge amounts of money, getting myself and my clients as rich as possible, as consistently as possible, and as early as possible.  Timothy Sykes, George Soros, Nicholas Darvas, Jim Simmons, John Paulson, David Einhorn – they were all poster boys of non conformists and I wanted to be included in their pack.  The ability to help people is within their reach because they have the guns, the girls and the gold.  You need to have the gold.  I wanted the gold.

But of course, a few beatings from the market taught me that only those with the proper psychology, mindset and willingness to work hard could have the gold.  Trading, like every other business in the world, is a place to develop your self.  Trading is a means of self development.  You will begin to know your deep seated egos, and know who you really are, your strengths and your weaknesses, by the way you manage your trades.

“If I were a beginning trader and knew what I know now, I’d realize that trading is no less of a business than opening a store or a doctor’s office. It requires talents, developed skills, and a clear plan for success. It requires adequate capitalization, and it requires a firm ability to limit overhead during the early, lean years. Fantasies are exciting, but there is so much more to performance success in any discipline.”  -Brett Steenbarger

If you are past your fantasy stage and seriously looking to be a full-time trader or learn trading the right way (even as a passive trader), follow me in my own journey and let’s share our own stories.

Your fellow market addict,

– DimsumTrader-

Comments
32 Responses to “How I Started”
  1. thermacuts says:

    I am sure that i will come back to your blog. Well written articles !

  2. Very cool website, you have to improve your site graphics

  3. Great story DT! I’ve recently decided as well to chose trading as a career.
    How have you been doing since you started back in 2008? ^^
    Do you have a link to a section of your blog for beginners? I would appreciate it if you can point the way. Thanks!

    • Hmm… I learned a lot ever since I started in 2008. Professionally? as in trading performancE? I’d say dismal haha. I had to pay tuition to the market so many times. I’m being transparent right now, and I post my trades online. You can view it on my preplist sheet, which I update from time to time. I just delete the trading size on some of the scorecards… but I’m willing to share it privately, if I can trust the person with private matters.

      I’ll make a section on my blog for beginners. ok.

      Could you ask me specific questions so I can somehow be able to answer better and more directly?

      -DT

  4. Thanks for the reply DT! I honestly don’t know what the right questions would be. Maybe just an outline on how you got to where you are today? Books you read … and possibly how you transitioned from the Phil. market to trading the HK market as well. That would be cool I think. hehehe.

    Sad to hear that the results haven’t matched up to what you’d like it to be. I hope this year will be a better year for both of us. I’ve actually been investing in the stock market since 2008 as well but it was only on the last quarter of last year that I read about technical analysis. Previously, I would just buy and hold until I’m happy with the percentage gain. hehehe This time I’m more determined to time my buys and sells.

    I hope we can both be successful and make a career out of trading. Good luck to us!

    ^^

    • Ok. I’ll try to write posts re that topic. No problem. I wish you all the success in trading 🙂 Hope you share the wealth and do wonderful things in the Philippines with your gains. 😀

  5. marvin says:

    Hi there! Very nice site…Glad to found this.
    Please post more on Phil stocks. Good luck!
    PD: a market addict too.

  6. hmmm, i’m the 13th? wow, my lucky number 😛

    nice work here and as what you’ll see on my own blog… i had you linked.

    i’ll be joining you on your journey from hereon.

    all the best!

    🙂

  7. There are some attention-grabbing closing dates on this article but I don’t know if I see all of them center to heart. There’s some validity however I’ll take maintain opinion until I look into it further. Good article , thanks and we would like more! Added to FeedBurner as properly

    • sorry i didnt get what you meant about attention grabbing closing dates? huh?

  8. free mahjong says:

    Once I originally commented I clicked the -Notify me when new feedback are added- checkbox and now every time a remark is added I get four emails with the identical comment. Is there any means you may remove me from that service? Thanks!

    • oh really? im not sure…im not really a techie expert. sorry for that. Just bookmark the site I suppose? I’ll try to delete the notification services if I can but no promises

  9. sudoku says:

    Oh my goodness! an incredible article dude. Thank you Nevertheless I am experiencing concern with ur rss . Don’t know why Unable to subscribe to it. Is there anybody getting equivalent rss drawback? Anyone who knows kindly respond. Thnkx

    • i dont know how to fix the RSS. I’ll do what i can.

  10. RSS is working fine for me.
    You can unsubscribe from the list by looking for that confirmation email again and unchecking this feed
    from your subscription list. If you can’t find the email, checking the Notify me checkbox below will probably trigger another email to be sent to your inbox. you can use the link in that email to unsubscribe, I think.

    • thanks 😀

  11. Mr. Market says:

    Great story! congrats on passing lvl 1, i also passed the dec ’10 lvl 1. Did you register for lvl 2 this june?

    Good luck with your trading!

  12. ish palma says:

    what can you suggest in stock picking?

    • I dont get this question. I think I’ve written a lot of posts saying I’m not here to give stock recommendations. I’d rather the person decide this for himself. I present what works in the markets, and from how it is going, i let the readers decide which is best for them.

  13. ScIoN says:

    Wow, great site Dimsum Trader! Now, I’m wondering how I stumbled into this site (forums or maybe while I was bloghopping)… but I’m sure not regretting it. 🙂

    I was kind of surprised when I read through your profile that you are even younger than me for a few years! Nice to see some fellow youngbloods in the market. I am also a market addict, and would like to join the corporate world of finance someday. I am an engineer but I have left the industry to study Finance. Right now, I am *trying* to literally trade for a living as I am now back to being a full time student; relying on my savings and hoping I could get bigger “baons” by the day hehehe.

    Looking forward to more of your posts! 😉

  14. Francis says:

    its funny but i tried to multiply 189 and 19 and i cannot solve it mentally. wow. you are really good in computations

    Cool! A girl trader. I am also a certified market addict. I am still new in the market with 4 months of experience but i am quite aware of what is going on in the stock market. I also want to be a super trader. I want to be like Jesse Livermore. I want to trade for a living.

    I am still in the learning process and still making mistakes in my trades. But it is okay.
    i hope to see you in the future.

    • hello. No problem 😀 Know though that you can learn this by yourself, but I think mentors and trading communities (online or physical) help shorten the learning curve. It’s easier to learn from losses and to stop yourself from making consistent losses when someone who’s been there can tell you that you’re not trading the right way (say you don’t cut your losses etc). In any case, There is no better way except what works for you. I personally know a lot of people who can make money trading penny stocks consistently but it’s a little bit harder to find them. I’m choosing the easier route because this is what suits me. Just trade properly without really sacrificing your own personal trading style. 😀

  15. Hi Dimsum Trader

    Thank you for the courage and generosity to share your ideas and experience with us. You sure have a knack for writing. No, not just that, you’re so masipag. You love Salman Khan din pala, we should try and organize a fans club for him. haha! I’ve learned that he’s Bill Gates’ best teacher so I checked him out and he’s a total brilliant person at tama ka, he has a big heart. I really like your style of writing, parang kinakausap mo lang kami, which is very bihira sa mga finance or trading blogs. Trading in particular, kasi usually I see graphs lang. Not that I’m against it, but yours has the soul aside from the brain and theories. Thanks again for your hardwork and for sharing!

    Jonha

    • nakakataba ng puso ung mga sinulat mo. Salamat. Na-add na ba kita as friend over facebook? If not, can you kindly add me? Re-salman khan. Yeah we can organize a fans club and really try to do something that he does. Looking forward to it. 😀

  16. P.S. Yung mga nagkakaproblema about being notified everytime someone comments on this particular post or others, you just need to un-click the “Notify me of follow-up comments via email.” and ” Subscribe by email to this site”. Unclicking the first is advisable of you don’t wanna get an update on the thread but the latter is definitely advisable to click on so we could automatically have updates everytime DT publishes new articles.

  17. patrick says:

    cool site 🙂
    agree with Johna, para lang kinakausap mo kami. para kang mahiwagang salamin ni Boy Abunda…asa harap lang namin.
    keep writing and keep inspiring people 🙂

  18. Portia Asentista says:

    hi Dimsum Trader,
    Thank you for sharing your experiences in trading. I am just a newbie in the stock market and wanted to know more. As of now, I do the EIP of COL but I wanted to know more about trading. Can you discuss more tips for beginners like me?
    Thank you & God bless…

    • Hello Portia Sentista,

      I’ve stopped posting new content in this blog, but I have an education category here. I also have books that you can read in the trading education page. I think that should be good starting points 😀

      DT

  19. Hello Rich,

    I’m not sure if you’ve read my welcome but I’ve stopped posting in DimsumTrader, though I am planning to probably start a new site, far different and hopefully much better than DT. I wouldn’t want people to associate my new project with DT anymore so I’ll keep it mum. It’s still a work in progress. As for trading HK markets, yep sure. I can help 🙂 It would be great to converse and talk with you. Just add me up via facebook ( I have a dimsumtrader friend account there)… and I’ll try to respond after work 🙂

    -DT

  20. Hello Rick,

    I’ve stopped posting due to a number of reasons. I’m sorry for not disclosing the entirety of it, but rest be assured, I’m actually working on my new project with a couple of friends (far from DT) and yet, still speaks the same beliefs about financial market education and other topics I’m very much passionate about in teaching. It’s still a work in progress. I’ll keep mum about it. Also, I don’t want people to know what my next project is, I’m thinking of keeping myself away from the social media limelight as much as possible, without sacrificing my purpose of providing high quality financial market education here in the Philipppines, which I find still needs a lot of improvement, that I can probably be of use. It’s a work in progress. When it’s out, somehow some way, I’m sure that you’ll see from the content it delivers, whether my name is there or not, you’ll just keep on guessing 🙂

    Hope you’re doing well Rick:D

    -DT

    • Btw, I’m in facebook. You can add me as Dimsumtrader friend 😀 i wont bite.hehe.

Trackbacks
Check out what others are saying...
  1. […] I actually wrote a really long article reflecting my decision on trading full time as a career here  – but basically, Michael Lewis somehow summarizes my feelings with how I got started in trading. […]



Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: