My History

I have always had a love of the markets. People thought I was crazy when I was the only 8 year old they had ever seen who always had a Wall Street Journal with him. I studied economics in college and got my BA in 1990, choosing not to stay in school longer as I headed straight to Wall Street as fast as I could, where I landed my first job as a broker´s assistant. From there I spent several years as a financial advisor at many of the largest firms before I decided the retail (sales) side of the business was not where I wanted to be, and focused all my attention on getting onto the trading floor. Getting a position as a trader was harder than I thought, usually attained through connections. I learned that retail brokerage had very little to do with trading, but continued to talk with everybody I knew in order to open some doors.

I eventually came to think I would forever be on the retail side, which wasn´t so bad as I was growing my client book, getting nice bonuses, and had a great lifestyle overall. When I decided to move to Florida for better weather, I had all but given up on the trading dream, figuring I was as close as I would ever get. As luck would have it, due to computers and technology, trading floors were moving from the exchanges. One no longer had to live in New York or Chicago, and that is when my big break came. I interviewed and was offered a position at a firm that was doing roughly 7% of the NYSE trading volume daily, as they expanded and opened an office in Florida. I hopped on the opportunity, and thought with my years of experience in the business and my love of studying the markets, I would be a natural and have a very short learning curve. I was told to expect to lose money for at least a year before I would experience any success, but in the back of my mind I thought I would be off to the races in just a few months. Boy, was I ever wrong! It took me over two years to be able to consistently make money, and even then it wasn’t much, but I continued on with my goal. There were many days, weeks and months of frustration as I worked on finding a system that blended with my personality. I kept a trading diary that filled book after book every month, many times it felt like I was going in circles as I discovered something that entirely contradicted something I had learned before. What is all came down to was perception, and when I learned that many trading maxims and rules are not as clear as they seem but very open to interpretation, that is when my results started to really come through. For example, we have all heard to ¨cut our losses, and let winners run¨. Well, I can assure you it is not as simple as keeping any position in which you have an unrealized gain, and sell anything that is down!

To make a long story short, one must learn to incorporate these very solid rules into their own personality and style. I will never forget the first time the owner of my company, now one of America´s richest men, asked me to give a meeting to all the firms traders (about 1,200 at the time) about my recent success and how I was taking money from the markets. I felt I had finally arrived, and that from that moment on I was a printing press, and would always make money easily! What a laugh, that is when I learned my next lesson, that markets are always changing and while the rules are intact, any one winning system might soon turn into a loser for an extended period. All we really have is our discipline, and the ability to study what is working best in the current environment, in order to make money. We can study the past and that is useful, but all that will really matter is what is working now. There are so many experiences and lessons to share with readers that I will just have to do that over time in my posts.

After roughly a decade with this firm I was able to go out on my own. I had enough money to fund my type of trading, and no longer wanted to follow others´rules as I had the confidence that I knew as much as anybody about the business of trading. I also didn´t like that the firm had employees (not traders) that occasionally had to over-ride a trader´s decisions for the sake of the firm. I understand why they had to do it, but it still cramped my style and even results, at times. One example that comes to mind was 9/11, when too many of the firm’s traders were on one side of the market (long) as it became clear America was under attack. The firm decided to pull in it´s risk and limit trading sizes, which helped the firm but tied the individual´s hands. An experienced trader realizes that these are often the times that offer up huge opportunity, thus we want to have the ability to increase bet size if we think it warrants. Then there is the consideration of payouts, and while working with a larger pie but keeping a smaller percentage at a firm can still outweigh keeping 100% of your gains, with my past success it was now becoming worth more to me to manage my own funds and keep all the profits, instead of giving the firm 50-80% of profits (depending on breakpoints, total risk, and various other determinants). Don´t get me wrong, I loved that experience in my life, and will always be grateful for the opportunity given me, along with all that I learned from so many great traders there, all with their own unique processes.

So this is where I have been for the last 15 years, more or less, trading on my own. Looking back, it was a great decision. I have lived and worked from many exotic locations, staying as long or as short a time as I wanted, and always being my own boss. There is a lot of responsibility in being your own boss, but nothing beats it if you ask me. Over time I have adapted my trading style and systems as needed, mostly to make the more easy to follow, so that it is easier to stay disciplined. One should know that trading does not need to be complicated, we should seek to make it easy. Its counterintuitive, but if you can trust me on this, it will save you lots of time, money, and aggravation!

Good luck in your personal journey, and may you gain all the satisfaction I have been fortunate to enjoy!