Futures Radio Show with Anthony Crudele

EP: 123 The Transformation of Hedge Funds

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EP: 123 The Transformation of Hedge Funds
#FuturesRadio

 
 
00:00 / 58:27
 
1X
 

Guest:

Jonathan Schlossberg

233 Tactical Trading

Record Date: 4/12/17 

Traders,

Today I spoke to a man who grew up watching the markets thanks to his Grandpa.  He began his career as a stock broker, but wanted to get away from sales and get into trading.  He designed an Algo at an online brokerage firm that got him promoted into product management and since then he’s designed option spread trading matching engines, worked on electronic options market making desks, built options products at various exchanges, was a COO at Equitec and is now the co-founder of 233 Tactical Trading. His name is Jonathan Schlossberg.

[bctt tweet=”#FuturesRadio ‘The future of technology in this industry is going to be the intersection of experienced traders and computers, we’ve already removed the weight of manual tradin” via=”no”]

Today Jonathan and I had a great discussion about the hedge fund industry.  We talked about the technology problems they’re facing and he explains the intersection of technology and human experience to help solve some of those problems.  We talked about the flaws of some of the metrics that measure hedge fund performance and I asked Jonathan if he thinks there is a cultural shift in hedge funds and if it needs to be revamped. He also talked about the most important aspects of his trading strategy.

I have interviewed a lot of smart people on this show, but Jonathan ranks at the top of the list.  He has worked in many facets of the industry and understands markets as well as anyone…not to mention he is a really good guy.  I know you will learn a lot from Jonathan in today’s show.

Topics:

  1. The hedge fund trends that are plaguing the industry. John sheds light into the 2 technology problems that they’re facing.
  2. John suggests the intersection of technology and human experience to help solve some hedge fund problems.
  3. The metrics used at hedge funds and why Sharpe Ratio leaves out important aspects of performance. Why Sarpino is better.
  4. Why John thinks there will be a culture shift in hedge fund industry. It needs to be revamped. Why hedge funds should be performing better given the 2/20 costs.
  5. Volatility and volume are keys in his trading strategy.

    Rapid Fire:

  1. The moment trading clicked?
    • Back when I was at Daytech when I automated my thought process and took my emotions out of the business.
  2. 1 source you spend your time on?
    • Volume, datasets and quotes.
  3. Favorite Book About Trading:
    • How the human mind works.
  4. Favorite Movie About Trading:
    • Don’t watch t.v.
  5. Best Advice Ever Received About Trading:
    • Know thyself first. Understand how little you understand. Find out where you make money. Avoid what you don’t know. Find something you know. Know your limitations.
  6. Advice to Give to Others About Trading:
    •  Study your ass off. Learn about math, don’t be afraid of it. Learn how to code, or become familiar w/ technology. Find old traders in the industry. Intelligence is not a proxy for experience.
  7. If you weren’t a trader you’d be what?
    • With my brother as a quantum physicist.

Resources:

Quotes:

  • “You’ve got to treat trading and investing like a business, because it is one. Have enough capital, and a plan to execute your process…”6:00
  • “Just because you haven’t seen your strategy blow up yet doesn’t mean it isn’t possible…”53:30
  • “The future of technology in this industry is going to be the intersection of experienced traders and computers, we’ve already removed the weight of manual trading…” 26:30

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