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The Prop Trader's Chronicles: Short-Term Proprietary Trading Strategies for Both Bull and Bear Markets

ISBN: 978-1-118-24108-0
155 pages
October 2012
The Prop Trader
A practical guide to profiting from the strategies of professional proprietary traders

Today's technology allows traders to make faster, more price-sensitive trades and to better read the flow of market information and transactions—opening the way to a wider variety of short-term trading strategies. The Prop Trader's Chronicles unveils these strategies and techniques, which have long been the province of proprietary trading firms and other professional stock traders.

This reliable guide describes author Francis Chan's experience as a prop trader in an engaging narrative, but at the same time provides an in-depth explanation of strategies employed by proprietary traders utilizing direct access technologies, Level II quotes, time and sales feeds, and electronic communication networks. Along the way, you'll be introduced to a variety of strategies involved in the rapid day trading of stocks, including: scalping, rebate trading, and advanced reading of time and sales transactions to detect short-term swings. Chang also reveals how to use time and sales data as the modern-day equivalent of 'reading the tape.'

  • Shows active independent traders how they can perform at a higher level by replicating the professional strategies of prop traders
  • Offers valuable insights on how traders can 'read the tape' and better detect short term market swings
  • Describes a variety of prop trading strategies, from electronic scalping to statistical arbitrage

The Prop Trader's Chronicles provides a solid foundation for traders looking to improve their performance. With this book as your guide, you'll quickly discover what it really takes to make it in today's competitive markets.

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Preface ix

CHAPTER 1 Eat a Percentage of What You Kill 1

CHAPTER 2 A Swift Reality Check 9

CHAPTER 3 The Basics of Double Auction Markets in the Real World 21

CHAPTER 4 Introduction to the ECN Platforms and Order Routing 29

CHAPTER 5 Dark Pool Liquidity and Alternative Trading Systems 41

CHAPTER 6 Combining Level 2 and Time & Sales: Reading the Consolidated Tape 47

CHAPTER 7 Week One on Live Trading 55

CHAPTER 8 Losing $30,000 in Under a Minute 71

CHAPTER 9 Trading with a Real Edge 79

CHAPTER 10 The Psychology of Profitable Trading 91

CHAPTER 11 Choosing a Proprietary Trading Firm 107

CHAPTER 12 Strategy Diversification 117

CHAPTER 13 Volatility and the Crash of 2008 127

CHAPTER 14 Building Blocks of Trading Strategies 133

Glossary 141

About the Author 149

Index 151

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Francis James Chan is a Canadian-born proprietary trader who specializes in U.S. equity markets with experience in index futures, foreign exchange (currencies), and options spreads. His career began at Swift Trade Securities in 2006 where he learned the craft of modern tape reading, double auction market theory in practice, and destination selection techniques. Having lived and worked in both Toronto and New York, the major financial centers of Canada and the United States, he has customized and implemented semi-automated trading systems for branches of notable proprietary trading firms including World Trade Securities, Hold Brothers, and Title Trading. Mr. Chan currently lives in Hong Kong where he trades U.S. stocks for Delta Capital Group and serves as managing director of Atrium Asset Management.

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January 03, 2013
The Prop Trader's Chronicles: Short-Term Proprietary Trading Strategies for Both Bull and Bear Markets

Today's technology allows traders to make faster, more price-sensitive trades and to better read the flow of market information and transactions—opening the way to a wider variety of short-term trading strategies. The Prop Trader's Chronicles unveils these strategies and techniques, which have long been the province of proprietary trading firms and other professional stock traders.

This reliable guide describes author Francis Chan's experience as a prop trader in an engaging narrative, but at the same time provides an in-depth explanation of strategies employed by proprietary traders utilizing direct access technologies, Level II quotes, time and sales feeds, and electronic communication networks. Along the way, you'll be introduced to a variety of strategies involved in the rapid day trading of stocks, including: scalping, rebate trading, and advanced reading of time and sales transactions to detect short-term swings. Chang also reveals how to use time and sales data as the modern-day equivalent of 'reading the tape.'

  • Shows active independent traders how they can perform at a higher level by replicating the professional strategies of prop traders
  • Offers valuable insights on how traders can 'read the tape' and better detect short term market swings
  • Describes a variety of prop trading strategies, from electronic scalping to statistical arbitrage

The Prop Trader's Chronicles provides a solid foundation for traders looking to improve their performance. With this book as your guide, you'll quickly discover what it really takes to make it in today's competitive markets.

See More
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The Prop Trader's Chronicles: Short-Term Proprietary Trading Strategies for Both Bull and Bear Markets (US $90.00)

-and- The Risk of Trading: Mastering the Most Important Element in Financial Speculation (US $75.00)

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