Having a feeling of Dejavu, while I am writing the post Takings from my last post A Prop Trader or Rogue Trader and my past posts on the same topic The Rogue Trader or The Rogue Banks and TO BE A ROGUE TRADER would like to share few more views over them. As I reveled in the past that prop trader don’t trade on behalf of clients but they use institution own money to trade.They speculate and their focus are is emerging markets.
The two principles on which they work :
You need to be dispassionate about your trade, to control your internal hurdles that may attach you to it emotionally.
- You need to have specific knowledge of the asset you’re trading. You must have contacts in the asset’s country that can supply you with information that is open to anyone else (otherwise it’s insider trading) but that is still extremely valuable.
The quality of the management is the best guideline for an asset’s future success. Next you are going to look at the macro environment you are operating in, the political environment, the regulatory environment. That’s how you build a view on an investment and may decide to trade in it.
Fear and greed are a trader’s two worst enemies. “Greed, when things are going better than you expected, and fear, when the opposite happens, are two things that can distract you from your long-term strategy. You panic. This is a very big cliché, but it entraps so many people.