Saturday, July 07, 2007

Who is Tim Sykes?

Around two weeks ago while scanning through Elite Trader I saw two threads, one titled "Will you buy Timmay's Hedgefund book?" and the other "Hedge Fund Book." In the latter thread I saw a picture of a young guy sitting in his living room wearing a shirt with an imprint, Timmay. I read the first few pages of the thread and I was laughing at some of the jokes that some of the posters made about Tim. I was short on time so I never got to finish the thread. A day or two later I received a comment and it was from none other than Tim Sykes himself. At first I thought it was some kind of sales spam because he talked about his amazing annual returns of over 100%. Sometime later I saw a positive review on Tim's book, the American Hedgefund by Captain Kirk. That piqued my interest so I contacted Tim and he sent me an advance copy.

Tim started trading around 1998 with $12k of his bar mitzvah money. In his book he details how he was able to run up his little startup capital into well over a million bucks, how he started his hedge fund and how he garnered his current media attention. His path was not entirely smooth and there were a bunch of hurdles along the way. He shares the trading lessons and insights he gained from overcoming the setbacks.

I think one of the major theme's of the book is that the market is ever changing. One of the main factors of Tim's success is the ability to find a successful trading strategy or a number of strategies which gave him an edge over other traders. That holds true for all traders. That edge does not last forever because the market is constantly changing. In order to be able to survive a trader must be on a constant lookout for new strategies. During Tim's trading career he came up with a number of profitable strategies which helped him adapt to the changing market. He profited from the bull market rise and the subsequent crash because he was able to see a change and adapt from going long to going short. What I found interesting was his thought process and how he arrived at his strategies.
"Second, trading is a fast paced activity. Traders will pick up on any consistently successful strategy and jump on the band wagon sooner or later. Then it will change. Thanks to the entrance of newer and bigger players, consistently profitable strategies only work for so long. People continually make the same mistake of expecting someone else’s strategy to work for them. By the time they use it, it’s over and they lose. It’s just human nature to want to follow the pack. People will always shoot for greater profits when they think they have a system that seems to be working for everyone else. Stay nimble, focus on your own plan, and be willing to change. If you find a strategy that works, keep your mouth shut and your guard up."
I just finished the book and I feel inspired. I am glad to have found this book because I am at a low point in my trading. I can relate to Tim's experience easily because that is exactly what I am going through now. I did not make a million dollars but I did have some success in my trading. I used to have an edge trading NYSE stocks using tape reading but since the advent of the hybrid that edge is gone. My task now is to find new strategies that can give me an edge in this market. As long as there is volatility there will be opportunities. The book helped open my eyes to the possibilities that are out there.

3 comments:

Dinosaur Trader said...

OBAT,

Does this mean we can expect another name change on the blog? I think the last time you were inspired by a book you changed from One Bad Trade to One Bad-Ass Trader...

I'll check for developments...

-DT

OBAT said...

Last time I made a name change I made a some money, maybe it might be a good idea to do it again.

Ben Storey said...

Re: Sykes amateurish hedge fund book:

Is it more sad or amusing when someone's young ego spurs them to write a book when they possess neither literary skill nor talent? Sykes has commented elsewhere that his goal to become "a great teacher, not a great investor" but in this sad excuse for a tutorial he proves to be neither as his amateurish errors practically drive him from the market, credibility (what little he had) completely shredded. Perhaps, however, it's not truly his fault: let's face it, when it comes to imparting wisdom from Wall Street it is simply not possible that a raw twenty-something simply has much to say.

Not that Sykes doesn't try however. In perusing the "comments" portion of Amazon book reviews, he's certainly not reluctant to chime in and offer a defense at nearly every turn. Find me ONE other author at Amazon that feels so compelled to argue his own incompetence.

Tim Sykes should end his determined quest to become a media personality as his grating manner and decidedly non-telegenic looks suit him far better to shine shoes.

About Me

I have been trading for 5 years. It took close to a year before I became profitable. I find that I am improving gradually each year. My method of choice is scalping. My edge lies in tape reading NYSE stocks and staying on the side of the specialist. That is the method I learned when I started. As I build up my capital I will try new styles and trade new markets. In late 2006 my trading hit a rough patch after the introduction of the NYSE Hybrid system. For most of 2007, I have been on a search for new strategies that would help me adapt to the market.