Lunch With A Former Trader : Leaving it All Behind

Every year, its the same drill. Bonus day, which we used to call Profit Sharing (PS) day. Some happy faces, some looking doleful and the rest, the impenetrable poker face and then back to the desk to work, screaming down boxes or staring intently at the flashing numbers on the screens.

This year, the fx chaps are going to be looking at changing the Bentleys or booking that new Ferrari F12 with a waitlist that is stretching a few years now. The bonds guys are probably buying more land in India while the equity guys cling to their desks praying their heads are not going to be the next to roll.

How does it feel to leave this life ?

I had lunch with an old buddy of mine, a former big wig trader who had just retired from the banking circuit where he was last based in Taiwan. He had some stern words for me referring to the self destructive streak he noticed in me over the years.

It is hardly a quality to be proud of. But there are others like me, no doubt who self destruct instinctively by taking on too much in their lives and end up affecting themselves and people around them.

Trading, too, on a streak of self destruction, blowing up the profits for the heck of making them back. Sticking on to the good trades for them to turn bad just to prove a point. That is me, not him, by the way.

He is a survivor trader. Emotion free, robotic and controlled. Using a combination of Drummond Geometry and his personal set of indicators, he does not read the news much. It all in the charts, programmed into his MetaTrader 4. Buy, target achieved, sell. Buy, stop loss triggered, sell. No tears, no lamentations, no remorse. There is no talk of the big one or the big one that got away. They lie in the past.

He left the market with the same mindset and the philosophy embedded in his life. Unlike many others that I know who talk wistfully about the good old days and grieve over the loss of the high flying lifestyle.

There are 4 types of trades to him and he will not divulge his trading formula.

1. The Normal Trade – the trending trade which everyone is on about.
2. The Wrong Trade – counter trend trade against the market trend.
3. The Right Trade At The Wrong Time – eventually proven right but after you have been stopped out.
4. The Inevitables – macro trend trades, years in the making.

His take on the EUR/USD is highly insightful that it will take out most amateurs. That the EUR/USD is over valued, the market is sitting short and pretty when it breaks lower to 1.3250 (thereabouts) before a killer rebound to 1.35 leaving a trail of weeping losses. From there, 1.26 would be the target which no one would be prepared for.

I gasped in acknowledgement on hearing that. For I am guilty of cutting the confounded EUR/USD at 1.49 and also, 1.19. That is my claim to fame which few would admit to, and makes the phrase “once bitten, twice shy” almost nostalgic sounding to the ears. All because we have a few pretty boys sitting on the fx desks of big banks just checking out the order books each day and taking out the lambs with the help of hedge funds.

Looking on at this former legend, sitting in front of me, looking far healthier than I have ever seen him before. Yes, the hair is greying, the voice is far milder than I have ever heard and in measured tones of a sage, but the spirit remains the lion guided by a sense of righteousness that is perhaps missing in the market these days. For wont of a new Lamborghini, perhaps ? Yet, leaving it all behind looks like the best trade of all.