A few weeks ago, I attended a first breakfast meeting of several Dallas-area options traders. We had met the previous month at a recent seminar for traders. Because active traders work in such isolation, I looked forward to sharing tips about entries and exits, worries about current positions and suggestions for new types of options plays. Perhaps you believe that attending such meetings would be helpful to you, too. If so, a few tips might be helpful.
My expectations for that first meeting and the ones that will follow were built on those formulated when I attended critique groups for novelists a few years ago. Some of the same characteristics that made those critique-group meetings so helpful might prove beneficial for those establishing trading groups.
The most important characteristic of those critique groups was that all the participants were writing manuscripts that fit into the same or similar genres. This was an important distinction between successful helpful critique groups and less helpful ones. Writers who primarily write for and submit to publishers focusing on regional literary fiction likely have little knowledge of the marketing realities for those writing Hi-Lo (high-interest/low-reading-level) books for adult literacy classes. Similarly, a group of traders might most benefit from meetings with other traders when they're trading similarly.
The traders who met several weeks ago all trade condors or other combination-type options plays. While the size of our trading accounts might differ, each participant understands several types of combination plays, how they're initiated and how those plays can profit or get into trouble. A day trader who focuses on futures might have little to gain or to contribute to such a group.
Some trading or investment groups make firm rules about who participates. Some have only loose guidelines. Some have none. Which style works best for a club you're considering joining or forming may depend on your ultimate goal. If it's to share companionship with others who understand why you can't "do lunch" during market hours, then few rules are needed. If the purpose is to share specific entry and exit ideas and hone your trading skills, then you might gravitate toward groups that have a specific focus.
Another tip carried over from those writers' critique groups might prove helpful. Critiques were expected to remain respectful, and writers whose works were being critiqued were also expected to be respectful of suggestions for improving their work. Writers who argued with those offering critiques were not likely to benefit from the expertise or experience of others. Sometimes writers do not realize that they haven't adequately developed characters or set the scene. They've known what they intended to accomplish in a scene but might have a blind spot that can best be spotted by others not so emotionally attached to the writing.
Similarly, if traders are to gain from meeting with others who trade as they do, then they must be respectful of those sharing ideas for trading. Those presenting a new idea should be open to critiques, to others who point out the pitfalls of the intended play or strategy.
Those of us attending those writers' critique meetings long ago also understood confidentiality and copyrighting rules. We usually printed up copies of the pieces that were being critiqued, enough for each attendee, but we expected that our work would not be shared with others outside the group. None of us would have considered appropriating someone else's work as our own. Similarly, those traders who share their strategies with others at a group meeting probably expect that those strategies will be kept confidential among group members. I'm sure that a member who shared a strategy at our meetings would be startled to see me expounding upon it in a Trader's Corner article, for example. I've found that traders are generally people who want to help others succeed, but our work should not be shared if we haven't agreed that it be shared.
My writing and trading careers share many characteristics, including working in
isolation. Long ago, my writing benefited from those critique groups, and my
trading will also likely benefit from what I learn by belonging to a trading
group, too. If you're thinking about forming or joining a trading group, decide
what type of group best fits your needs as a trader, and then, just go!