On the floor, but still alive
This is the first day of my life as a live day-trader.
As I was about to walk on to the trading floor this time everything seemed different.
I stood at the entrance and took it all in. My senses seemed sharper, somehow. All of the lights were brighter. I took in a deep breath: I was going live.
It had taken me about a week to formally set up my trading account. First I had to share my passport information, resident visa and proof of address documents.
Once those were accepted and approved, I had to fill out a number of forms, including a declaration of responsibility stating. I understood trading risk implications. After that, I had to take a short, mandatory written test.
It primarily focused on my understanding of areas such as insider trading and market manipulation scenarios, as well as their implications. I looked out on to the trading floor, where I hope to remain for a long time to come.
A Bloomberg terminal was blaring out the day's news, charts were forming on screens, computer monitors were buzzing and traders were focusing on their respective trades.
There are about 25 traders on our floor, with a good mix of experienced professionals as well as fresh trainees.
Jay, our floor's technology and part-time risk manager, showed me to my new desk.
It had four monitors where I could view my trading charts, economic calendars, daily news and the order flow for financial products I am interested in, which is namely euro-bund bonds and stocks on the European Index Euro Stoxx.
It had taken me three months to get here. But the question remained: how long would I last?
The month of July and the early days of August have proven to be very choppy in the markets. None of the financial products have been behaving as they did when I started training.
There was considerable uncertainty around the US's decision to raise its debt ceiling, but now that this has been passed, the next focus in the markets is going to be on the potential downgrade of the country's coveted "AAA" credit rating
The level of uncertainty around this issue definitely affects the markets. For example, the euro-bund index recently closed at more than 130, which is the highest I have seen it since I started training a few moths ago.
In fact, when I started out, the index had hovered closer to the 121 mark. On the trading floor, the general understanding is that when bond prices increase, it means investors are unsure of where the market is headed. Before I made my first trade one of the professional traders on our floor passed by my desk and asked: "Going live?" I nodded "Be careful," he warned, before providing some additional advice.
"Take it easy I have yet to come across a trader in my 15-year career who started out and was profitable from day one. It takes a good three months. Just try to keep your head afloat for two to three months, and you will hopefully then be on your way."
Many traders had told me something similar. Their consensus: when you start out, play small - or else you risk busting your account.
Executing my first trade with a bond on the euro-bund was a strange feeling.
I was not on a trading simulator anymore, and I wondered if I would feel any different psychologically I didn't hesitate while executing my trades, nor did I end up feeling all that differently on the whole.
But, by the time the markets closed on my first day, I knew I had to heed everyone's advice a little more carefully: I had ended my first day trading in the red, having lost 2 per cent of my account's equity.
Renee Tauro is chronicling her quest to start a new career as a trader
Published: August 4, 2011 04:00 AM