Thread by @Ksidiii

When I was a kid trying to get a gig on Wall Street a lot of firms pushed me to the side. But there was one firm that really believed in me, encouraged me and played a big role in my development (even though I never worked there).

This firm is First New York. I am fairly familiar with the culture and the type of traders they push out. Lots of core solid cold blooded killers such as @moreproteinbars and others.

But there was one trader’s story that just always stood out to me. If you guys ever read the last Market Wizards book, the story of Jimmy Balodimas is an extremely unique one.

Balodimas was a trader at FNY who was profitable for years trading an extremely difficult strategy.

He implemented a discretionary based mean reversion strategy fighting against strength.

Although an asset would be trending up, Balodimas traded short around a core position and ended up net profitable each year for 15 years straight.

Balodimas is a great example of a strategy being a “fit” for the trader. There are thousands of strategies that are out there but they have to be a fit psychologically for the manager or they will never work.

This is a crazy fact, but I learned to short a stock before I ever learned to buy one. It’s a weird mentality and I’m not sure why I developed it, but I have a hard time remaining long a stock (thankfully I’m a vol trader). I can comfortably trade intraday momentum flow,

but if you ask me to carry overnight long equity exposure my brain turns to mush and I become uncomfortable doing that. Yet I understand that is wrong, and I am fully outspoken about how investors should participate in this bull market.

I could never be a value investor, nor a trend investor. It’s not that these outlooks are wrong, it just doesn’t fit me personally as a trader.

If you ask me to be short VIX uncovered overnight, or long $KO outright overnight, I’ll explain to you the risk is the same....

Statistically speaking it is evident that one carries a heavier risk profile so this view is statistically incorrect.

However, my discretion as a trader dismisses the data as my mind is conditioned to think “risk management first, everything else second”.

As traders we need to be aware of changes in the market and we should always be thinking about adapting to these changes. We often see others jumping on the bandwagon to every shiny new toy (strategy) that comes around.

There’s a difference between adapting to a change

and constantly switching things just to follow the hottest strategy or trend.

Find an edge, and implement a strategy that works for you. If it’s not a psychological fit... it probably won’t work for you.