Who moved my cheese?

This past week was a tough week for me. It was my first losing week since probably sometime in late May or early June. I was really fortunate to have a good couple month run there with SLV, but as I mentioned in my last post, I think the party is over. Not that there isn't still a party going on with that stock/ETF. It is very volatile and can make a person a lot of money in a short amount of time. However, the reverse is also true, and that is what seems to happen to me every time I traded that thing now. It isn't as correlated to the futures contracts as it was just a couple of weeks ago, and well, I think I mentioned some of the other problems in my last post as well.

So, what this basically comes down to is: somebody moved my cheese. For those of you not familiar with the book, it is a metaphor on changes in life and how to respond to them. I can't just keep losing money in SLV anymore. I have to move on and find something different. So, once again, it feels like March and April all over again for me, but I guess that is what this job is all about.

And I'm not the only one who is having their cheese moved either. Starting the end of next week, the NYSE is beginning to phase in a new "hybrid" trading system to keep up with other electronic exchanges (such as the Nasdaq). What this means is that there will be much fewer arbitrage opportunities for those traders who are considered hyper-scalpers. Unfortunately, that accounts for probably 60-75% of the traders in the office. The NYSE had a test run of the system on Saturday, and several of the traders came in to check it out. I stopped in as well on my way to a wedding yesterday afternoon. All in all, the outlook appears bleak for a lot of those traders. They are going to have to find something different to trade because it will be harder for them to get the easy 5, 10, or 15 cents they are used to. They used to make money because they were fast on the keyboard, but speed just won't make a difference anymore. Changes are ahead for everyone.

Yesterday at the wedding, I was able to talk with a guy who is a main programmer with Instinet. (Instinet is an order transaction service for trading stocks, to keep things simple.)He has been a programmer in the stock industry for well over a decade. He told me that he used to day trade back in the late 90s during the dot.com days. Back then, making money was so easy and he described to me how he did it. With the advent of electronic day trading, there were numerous arbitrage opportunites that were serious low-hanging fruit. He said he used to make thousands of dollars a day without even thinking or sweating losing any money. Since then though, things have changed, and he said he won't day trade anymore. There are too many things that are stacked against a person, and being successful takes a lot more time, effort, luck, and pain (in handling lossess, that is).

Which makes me feel that, once again, I am late to the game. Had I started trading when I got out of college the first time, I would have been able to participate in the "hey-days" of trading. I also felt like I was late to the game when I made a career switch from Math teacher to Software Engineer. I remember there being hundreds of companies coming to UT to interview students in the late 90s, but then the semester I finished, the market tumbled, all those companies went belly-up and hardly anyone was hiring. Without my volleyball connection at IBM, I would have been without employment. I guess I need to be thankful for the opportunities that have been given to me, but it just seems like I am always a day late and a dollar short.

So where does this lead me -- where is my new cheese? I would be lying if I said I haven't thought about returning to a "regular" job. I have really started to miss the regularity/security of a paycheck. Yet, it seems I hear at least one story a week about someone who has been working their job for over 10 years being let go due to outsourcing. So is there really long term security, or is it just temporary? I know that there is security in what I am doing as long as I can figure out some way, any way, of making money. There will always be a market, and I am my own boss, so I call the shots. Its when the shots are continuously wrong, that really begins to become mentally and emotionally strenuous. I just don't know anymore. Maybe next week will find me some answers to my questions and how I feeling.