Not everyone graduates college with a Finance major. I certainly did not as I studied Biology/Genetics (was a pre-med major). My favorite class I took at Cornell, and my only finance class, was Investment Management 101 during my 2nd semester senior year. That class jump-started my curiosity of Wall Street and encouraged me to forgo my earlier childhood dream of becoming a doctor. My parents paid for my college tuition so I was extremely fortunate to not have any college debt post-graduation. Straight out of college with only a Bachelor of Arts and still very wet behind the ears, I went head first into a career on Wall Street.
I landed my first job as a stock broker at First Cambridge Securities on NYC's Park Avenue mid-town during the summer of 1996. I didn't know any better at the time but it turns out that this firm was a chop shop like the ones in the Boiler Room movie but with a little more sophistication. Every morning I would wake up at 4:50am EST and take the Long Island Rail Road from North Bellmore to Penn Station and then subway to the office. Each way was a long 2 hour door-to-door trip, so 4 hours was wasted each day on just travel alone. What can you do when you're only getting paid $200 salary per week? You live humbly and keep your head down and just do it. I didn't want to burden my parents anymore so life was tough.
My boss, who coincidentally graduated from Ithaca College which is right next to Cornell, taught me the tricks to cold-calling whales -- an arsenal of rebuttal lines, how to be aggressive on the phone, and how to get around the annoying secretary. Doing this for 3 months straight from 8am to 4:30pm taught me how to talk more assertively and more confidently. But I didn't see a future in this as it wasn't enjoyable for me so decided to look elsewhere for a job in the finance industry. Cornell's online JobTrak, which is similar to today's Monster.com, advertised a position opening for a Proprietary Equity Trader at Worldco LLC located on 110 Wall Street, 22nd floor -- no experience required. Sounded perfect! I immediately landed an interview with my brother the same week and trekked down to Wall Street for the very first time in my life. My interviewer was this charismatic guy named Walter Scott Bruan. If I had to describe him in two words they would be "financial preacher." He was very emotional and intimidating when he talked using his entire face and body to show his full expressions. Walter provided me the enthusiasm and drive to want this job. Anthony and I started our new jobs a few days later.
Worldco was small back then in October of 1996. Only a handful of veteran traders were there who were probably friends of the Bruans, the brothers behind Worldco and PTJP Partners. So the access to knowledge was just a tap on the shoulder away. I learned a lot from informal discussions I had with these veterans ranging from very specific trading strategies (especially a strategy called "bullets" where I ended up making 80% of my money in the first few years) to how to use floor brokers to tick stocks. The downside of the job was that there was no salary. I would get paid 75% of the profits that I generated and take 100% of the losses. My commission rate was $0.02 a share and an $8 ticket charge for each buy and sell order! So in order to buy 1000 shares of $XYZ it would cost $28. Sounds insanely high but that was the going rate back then at prop trading shops. Upon reflection, these high commission rates made me a better consistent and highly profitable trader in the long run as I would be more selective in choosing a trade to get into rather than churning and burning as you see with new traders these days with $0.0025 commission rates.
For the first 3 months at Worldco, I lost money each week. My $25,000 account slowly dwindled down to $10,000. At least at First Cambridge I was paid $200 every week. Since money was even tighter now, I couldn't spend my budgeted $6 each day for lunch. I would make pasta with my brother every night for tomorrow's lunch. It would consist of boiled rigatoni or ziti, which ever one was on sale, with poured Ragu pasta sauce straight from the can on top of it. Surprisingly when we would nuke our tupperwares in the microwave at work, people would all say "Damn boys that smells so good" (and not being sarcastic). Well that was my lunch for probably 6 months straight.
Life starting out as a day trader was rough. I made less than the guy flipping burgers at McDonalds and I was not guaranteed any type of success. My work commute was 4 hours each day. But my diligence and perseverance paid off 6 months later. After this one big short trade in $RDC (Rowan Companies) that I opportunely "manned up" in, was short around 20,000 shares of this $20 something dollar stock when normally I would only do a $50,000 max position at extreme times, I magically made money each week thereafter. The $RDC trade gave me the much needed confidence boost. I made roughly $20k on that trade. I remember all the other new traders were watching me smack this stock down and they were all drooling :).
Winning trades, in other words MONEY, gives daytraders confidence. You got to think of green trades as 'winning' and red trades as 'losing'. Winning is Wall Street. The goal of any new trader should be to get that confidence I had after the $RDC trade. Life will be a little rocky for the newbie but if you ultimately find the path to day trading success, your life will change completely. I am a living example of self-made success. If I can do it, certainly you can too.
- Hubert Tsai