Meet Dylan The Day-Trader, Or When Fundamentals No Longer Matter

Tyler Durden's picture

Only 25, self-described 'risk-taker' Dylan Collins plays the markets with a pot of more than $1 million - $100,000 of his own money earned from trading over the past two years, the rest provided by his bosses and partners at AMR Capital Trading. As The Washington Post reports, Dylan exclaims, "trading is fun; for me this is the dream job;" but as they note, for most of us, day trading conjures up the image from the dot-com era of some dude in his pajamas with a two-day growth of beard logged on to a Charles Schwab account buying Nortel Networks and Pets.com on margin. But have no fear for - New York-based AMR, a division of G-2 Trading, is a lot more disciplined and sophisticated than that - specializing in “momentum trading,” riding hot stocks up and cold stocks down, taking advantage of the irrational herd behavior that characterizes financial markets. “I understand the idea that maybe you’d want to do something more meaningful, but I don’t think I need to worry about that at my age,” Dylan explains as he exploits momentary mispricings and sudden spikes in volume.

The thing about this kind of trading is that you don’t have to know very much about the companies whose shares you are buying or selling.  “So much of trading is just about intuition,” he adds brushing off how quickly knife-catching turns to blood (as the BTFD strategy backfired on Sino-Forest and Digital Domain).

"This isn’t just an 8 to 4 job. There are a lot of tiny intricacies," he says, "and there are so many others out there doing the easy, obvious trades that they don't really work any more. You have to stay a step ahead of them." On a typical day, Dylan may put in a thousand orders to buy or sell dozens of stocks at prices higher or lower than where the shares are trading at that moment, anticipating movement up or down. Most are never filled - or will be canceled - as prices move in the other direction. By day's end, only a dozen or two trades may be executed.

"Barring some disaster, I can’t imagine leaving this firm,” Dylan declares with the confidence of a twenty-something. "I'm sure this is the perfect career for me." Party likes it's 1999.

Via The Washington Post,

I first recall seeing Dylan Collins years ago on the basketball court of my son’s junior high school,... Twelve years later, I am sitting next to Dylan in a nondescript office in one of those new town centers that have sprouted along Florida’s gold coast. Arrayed in two rows, a dozen men, ages 23 to 36, are dressed in dungarees, T-shirts and flip-flops sitting in front of banks of computer terminals, their fingers flying across keyboards, ...

 

...

 

Dylan is a day trader ...

 

...

 

Only 25, Dylan plays the markets with a pot of more than $1 million — $100,000 of his own money earned from trading over the past two years, the rest provided by his bosses and partners at AMR Capital Trading. While many of Dylan’s high school friends are still grinding it out in graduate school or moving up the ladder of barely paid “internships,” Dylan last year was pulling down a six-figure income.

 

“Trading is fun,” reports Dylan.

 

...

 

It all began with online poker.

 

“In high school, I started playing $5 games on weekends with my degenerate gambler friends...

 

...

 

By senior year, Dylan had given up the “prop player” gig and was simply playing poker for his own account,

 

...

 

“I was always doing the go-for-broke strategy,” he says. “The adrenaline rush of playing for thousands of dollars was crazy.”

 

...

 

So what’s it like telling your parents that you’ve decided to be a day trader?

 

“They hated it,”

 

...

 

For most of us, day trading conjures up the image from the dot-com era of some dude in his pajamas with a two-day growth of beard logged on to a Charles Schwab account buying Nortel Networks and Pets.com on margin.

 

New York-based AMR, a division of G-2 Trading, is a lot more disciplined and sophisticated than that — more like a small hedge fund only without any outside investors. That makes it rather unusual. The New York office tends to specialize in “momentum trading,” riding hot stocks up and cold stocks down, taking advantage of the irrational herd behavior that characterizes financial markets. The smaller outpost in West Palm specializes in looking for large but momentary mispricings of stocks that result when there are sudden surges of buy or sell orders that knock a share price off its trend line — “price-action trading” or “liquidity trading,” it is sometimes called.

 

The thing about this kind of trading is that you don’t have to know very much about the companies whose shares you are buying or selling.

 

...

 

“So much of trading is just about intuition,” Dylan says. He tosses around Wall Street jargon and nostrums (“buy on the bid, sell on the ask”) as if he’s an old hand.

 

...

 

Dylan started at AMR in August 2010. He didn’t have a positive trading month until January. He didn’t “make his bank” and get his first paycheck until May. In June, he lost it all.

 

...

 

“There was this Canadian company, Sino-Forest, that we were all buying,”

 

...

 

Dylan noticed a sharp drop in the stock of Digital Domain, a company founded by director James Cameron to do the special effects for the movie “Titanic.” There was no news that might explain the sudden price movement, so Dylan, like a number of his colleagues, jumped in and waited for the natural reversion to trend. When it didn’t happen, the others sold out at a small loss, but Dylan decided not only to hold on but bought even more as the price continued to fall. The “dead cat bounce” he anticipated never came. What eventually did was an announcement that Digital Domain was filing for bankruptcy protection.

 

...

 

“This isn’t just an 8 to 4 job,”

 

...

 

“There are a lot of tiny intricacies,” he says. “And there are so many others out there doing the easy, obvious trades that they don’t really work any more. You have to stay a step ahead of them.”

 

...

 

On a typical day, Dylan may put in a thousand orders to buy or sell dozens of stocks at prices higher or lower than where the shares are trading at that moment, anticipating movement up or down. Most are never filled — or will be canceled — as prices move in the other direction. By day’s end, only a dozen or two trades may be executed.

 

...

 

“I understand the idea that maybe you’d want to do something more meaningful, but I don’t think I need to worry about that at my age,”

 

...

 

"Barring some disaster, I can’t imagine leaving this firm,” Dylan declares with the confidence of a twenty-something. “I’m sure this is the perfect career for me.”

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W T F II's picture

Sounds sustainable to me...

knukles's picture

Need a Dylan the Day Trader Doll.
Looks like a fleshy colored potato with eyes and ears that pop out when you squeeze its nuts.

Has a matching Andrew Yorks Doll that starts a rumor about the Fed on his plastic Etch-a-Sketch causing Dyaln to have so many bad days back to back he becomes a 24/7 alcoholic and coke snorting bag of quivering protoplasmic jello.

jbvtme's picture

does he have a newsletter?

kaiserhoff's picture

Less than a zero sum game.

   A lot less.  Why is that so hard to understand?

NoDebt's picture

Let's hope Dylan's Dad is a US Senator or somehow connected to Congress.  Otherwise he's going to lose his ass.

 

NoDebt's picture

I also just noticed Tyler only used "Nortel" as the tag word on the article.  That's fucking funny.

TheFourthStooge-ing's picture

Dylan Collins is... Paperboy 2000®

Pure Evil's picture

This guy is still playing in the Pee-Wee league. Let me know when he makes the Pros.

How to lose billions and then love your jail cell

 

BeetleBailey's picture

As some who traded Nortel...and miraculously called the top waaaaaaaaay back in the mid-2000's..that little inclusion had me chuckling too

dracos_ghost's picture

No way. He's Prestige 10 on Call of Duty. Be afraid.

dcohen's picture

Meet Dylan, the Day Trader Troll

angel_of_joy's picture

It's great... and short !

Pretty much like the one of a drug dealer...

Euro Monster's picture

Yep until it isn't, and then comes the noose...

Go Tribe's picture

Trading is just another form of gambling.

HardAssets's picture

Well you could argue that the whole damned world is a rigged casino. You take the 'prudent' path and the banksters & politicians rob you blind in numerous ways. "Fundamentals ?" . . . right. With all sorts of 'changes in accounting rules' they rig the numbers.

The kid in the article is typical 20 something clueless. Just like most of us were at his age. Maybe rolling the dice is the only game left. More people are being forced to do so by the criminals in charge. Some are forced in the markets and hope theyll get out before the bubble pops.  Others, who have fair less funds, go to their corner 7-11 and hope the Lotto ticket they buy will hit. A lot of people in America couldnt come up with $1k in cash to take care of an emergency.

People around the world have been screwed over.

AKrandy's picture

.Gov gets its share is why its legal

Buck Johnson's picture

And when it doesn't work out and his portfolio implodes on him, we will see what he will do.

Dr. Engali's picture

I'm not like the old day traders. This time it's different.

algol_dog's picture

This is what's so frustrating about the markets now. At my age I have the wisdom to be able to hold the gains that dylan will eventually lose, but I don't have the balls ("ignorance is bliss") to risk it all to get that easy money he's making right now. I do daytrade, but I have to stay discipline. As daryl hannah's character said in Wall Street, having money and losing it is worse than never having it to begin with. Some of us understand that sentiment ...

fourchan's picture

you know this kid is a buy the dip dip.

BobPaulson's picture

The kid is making good money and if he loses it all he is back to zero where he started. I actually think if I were him I would consider doing it too. You all say he will lose his shirt but the shirt is borrowed anyway, what the fuck does he care? The joke is on the automatic deposit pension funds that supply the fuel for the HFT algos that fleece them.

Dylan is trading with 100k of his own money and adding to the momenum swarm that the HFT algos use to shave the edges off pennies every millisecond as they frontrun the market and don't get arrested. If I were Dylan I'd be riding that wave too. He may be plugging it all into hookers and blow, or he maybe be salting it away for when this crashes and he has more equity than his sucker friends who bought their quarter million dollar B.A. starting in a country where the middle class got ground up and used for fuel in the Wall Street engine.

gmak's picture

This was mentioned on Ritholz's blog - and as he said: "oh yeah, this is going to end well".

css1971's picture

It's all going to approx zero. 90% loss in the value of everything but paper money over a period of a decade.

Monetative Easing's picture

This time it really is different!

ziggy59's picture

Dylan, the Etrade baby, and Rachel should hook up!

Seasmoke's picture

i am sure he will work there the rest of his life, right up til he jumps out the window

Aeternus's picture

Ahahahahahaha!

 

Comment of the year award goes to Seasmoke.

 

Fuckin' hilarious.

 

http://www.youtube.com/watch?v=deuC8GPr31A

 

 

hairball48's picture

Great video. I'm mid 60's; I can relate.

Rantabulous's picture

Thank you for the vid.

Where I grew up the cops were quite confrontational/aggressive (not having a go at them - just how things were).

Later, I moved to a medium size regional town (not quite small enough to be a place where everyone was on a first name basis). The first time I got pulled over the cop just talked to me like a human being 'look mate, we've had a few accidents along here where people have been hurt and we really want everyone to slow down' - The polite, respectful, sincere way he spoke to me just shook me to my core and had far greater effect on my behaviour than any speeding fine has ever had.

I have from time to time wondered what it was like 'in the old days' when cops more frequently behaved like cops I met in the regional town.

acrabbe's picture

i fucking laughed until i gagged at this comment. i used to be a daytrader way back when i didnt know my head from my ass. it took me a few weeks to lose years worth of profits.and the fucked up thing is that it doesn't even have to be your fault. 1000 things can go wrong. your stops get blown, orders dont execute. power goes out at exactly the wrong time. your clearing firm has some type of tech/mgmt glitch and liquidates you at the worst possible time, or the Fed will come in and do something they've never done before, fucking up all correlations, or it turns out that one million other traders had the same strategy as you and tried to get out at the same time. LOL. he's young. he'll survive. or... he'll jump out the window

Zola's picture

What happened to the other dude Alex Hope! Enquiring minds want to know^^

reload's picture

The  self proclaimed FX guru? Closed down & arrested for running an 'unauthorised collective investment scheme' gone quiet now, but jail likely, small fry - not connected etc. Or he could get a job as David Stolpers understudy.

Aeternus's picture

Alex Hope was actually who I was thinking of when I read the title of this thread and before I even clicked on it I was expecting it to be him using an alias or a derivative of him. Thank you for letting us know what happend to the 'Fx Guru'.

 

What ever happend to that kid squatting in that Bank of America pad in Florida, any updates on that?

Freddie's picture

The kid in Boca was thrown out of the house over 2 months ago.   They supposedly had a security guard at the house 24x7 after the kid was booted out.  Hopefully they deported him back to Brazil but in O Amerika - illegals have more rights than Americans.

babylon15's picture

If he didn't make money on 105% of trading days he can kiss a job offer from Goldman Sachs goodbye.

golfrattt's picture

easy squeezy, lemon peezy.

 

I'mn sure this is the perfect career for me (until it's not, which might be 10 trading days away)

1C3-N1N3's picture

Dammit, Dylan. How about you actually go produce a physical good and sell it, instead?

This guy's quotes make me fucking retch.

Arius's picture

this site is not about producing anything ... is about short cuts ... the only debate is which short cut should we take ...

lickspitler's picture

Dylan should just STACK  that way he wouldn't have worry about taking losses

tyler's picture

Ya he probably did then realized he was stacking stuff that didn't pay the bills.  

WTFUD's picture

Bernanke must be proud of him!

Going Loco's picture

"Barring some disaster"............ 

Something tells me that phrase is going to come back and hanut this young man.

U4 eee aaa's picture

It goes to show he does have trading instincts....

....he's just using them the wrong way

exartizo's picture

day trading = gambling.

 

pure and simple.

 

always has been.

 

always will be.

Clycntct's picture

 "Dylan started at AMR in August 2010. He didn’t have a positive trading month until January. He didn’t “make his bank” and get his first paycheck until May. In June, he lost it all."

Hey I could do  that.

knukles's picture

Think of all the Implied GDP!

W T F II's picture

And the short-term Capital Gains Tax rake for "the House of O"...this can ELIMINATE the deficit in no time, which is, in and of itself, BULLISH....

ps. I am sure 'ol Dylan presciently shorted that spike at Friday's close...

francis_sawyer's picture

These are the articles that the new censors in Switzerland want you to read & regard Dylan with shock & awe... A few more articles like this & the site becomes Marketwatch...