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Trader legends you admire

Allright, history is paved with geniuses, including financial ones. Who are your inspirations ?

At the top of my head, I immediatly think of two

  1. Paul Rotter aka “Flipper” (nickname given because he was changing his opinions and flipping bets SO often : very versatile mind !)
    Interest rates / bonds futures (Bund/Bobble/Schatz) trader on the EUREX, he was one of the rare manual discretionnary trader to swing heavily. He would pass massive volume everyday and countless orders, all without much assistance, the “artisan” way. His position book was usually so large that he had full control on the pool of his favourite instruments, i.e. he was owning the exchange. His technic used to rely on “spoofing” back when it was not yet forbidden by regulation. In other words, he was placing very large quantities in the order book in the opposite ways of his bets in order to trigger adverse reactions / executions, then he would back off and trade the other way, or he would spoof in order to trigger volume oriented fills by generating panic attacks towards the other participants. All in all, his overall strategy was playing with mind games, outsmarting his opponents very much “poker face” like, and also toying with others’ emotions, which nowadays could be very hard to mimic, given that the trading volume consist now of being full of bots. :shushing_face:
    Eventually, his ennemies were so pissed off at him mastering his game, that they approached the regulator to request changes at the exchange rules in order to counter him. It was heard and happened, then his “play” slowly vanished.
    Himself, he is the incarnation of the superiority of human behavior when applied without a framework. He won millions along the way, while being independant. To this day, he reconverted / switched of strategies, and still manage funds from Singapore, just with less consistant results.
    Here is one rare interview about him
    https://mahifx.com/mfxtrade/blog/an-interview-with-paul-rotter-adapting-to-survive
  1. Martin Schwartz aka “Pitbull”. VERY different story, very different outcome. Against all odds, Martin Schwartz was a “consistent loser” (@CondorcetInvestment) for his first 10 years of trading. Whatever his trials, he would fail. Then he put some perspective about his experience, rewired all his brain and tactics + routine, he quit his analyst job with $100k savings and decided to risk it all to become serious about this attempt. …and the rest is history : he turned heads by becoming a consistent winner, harvesting a lot of money every year, the exponential way. His main drive has always been passion and he kept a relatively low profile life during his reborn career, trading independantly his own funds principally. He likely maintained more impressive steady results over time than “Flipper”, and since then never stopped, which is the best achievement possible, isn’t it ? He is the living proof that through hard work and dedication, you eventually can put yourself back on the right track, even when your start was deceiving !
    “Recent” interviews
    https://www.youtube.com/watch?v=TAKMRFf0Mb0
    https://www.youtube.com/watch?v=CkDZbGVR7Y8

Why did I start this thread ? To relate of the multiple varied possibilities that a trading “carreer” could bring… and to grow your faith / will about persevering in your efforts !

And…

Because I believe that this is it: Darwinex indeed has the potential (with the ins and outs mastered) to put into the spotlight the trading geniuses of tomorrow. To be honest, even now, I am counting a few members who are following the trend to potentially become our own legends if they pursue and turn their history into a bright future… and that is not an understatement of an event to contemplate ! GL friends :couple:

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Did I forget to insist that these folks are not only myths, but contemporary, still living ?

Martin Schwartz is 73 and it seems didn’t fully retire, still giving it a go occasionnally. Grandpa will give you a beating


http://traderbehaviour.blogspot.com/2012/05/great-quote-by-marty-schwartz-which.html


Paul Rotter is much younger…


https://seekingalpha.com/instablog/696397-traderdaily/85609-insight-from-the-flipper-catching-up-with-paul-rotter


Finally, here is a free book reviewing some more “trading heroes”

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In all seriousness, I’m eager to learn about trading bot legends ? How are they called / what are their playfield nicknames ? Do we have extensive knowledge about their operations in depth ? If anyone can speak about it… it should be interesting!

Ed Seykota

David Winton

Jim Simons

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PR: If I was to start trading today, I think I would even do foreign exchange because I think it is really easy to do the real scalping for a few pips here and there, especially after some number releases or someone’s speech. The (forex) markets can be really choppy.
Of course you must have some feeling for the market. You put in orders in a 5 to 10 tick range and you get filled on the bids and offers in this environment. Of course you must have some tight stop losses.
For retail traders they may not be able to tell where the market is going, but they can use the good short-term volatility for scalping.

Is Paul Rotter talking about THA: your thoughts ? :wink:

PR: I can trade from nothing, just give me a computer and some charts. For instance I can see that some big news release is due, because market liquidity has dried up. I can just trade - I don’t need to study and prepare myself, but of course it is better to prepare.

Eww what a rockstar attitude :innocent:

PR: Many years ago when I was at Daiwa and even when I went off with some other partners we always had someone who looked at our P&L. If you were down a certain amount you would have to reduce your position size and if you were down even more then you have to turn off your computer.
When I was trading on my own I didn’t have the benefit of that person enforcing discipline.
If you have someone to do that then it is fantastic because it is very important. Some days nothing works. And next day you come in and everything is fantastic.
I remember when I was at Daiwa and when I was having a bad day the chief trader would tell me “you have blood in your head” and tell me to go out and get “some fresh air.”
When you have blood in your head you shouldn’t try to make the money back or get angry.
I used to get angry with myself when I made a mistake or something went wrong. But if you follow your strategy and lose then it is bad luck. Sometimes I traded at times when I shouldn’t have traded because it was not my market , but I still traded anyway and lost money.
So in those situations, you must have strict money management, reduce your size or stop trading for a while.
So I think when you are losing it’s good to stop and get some perspective.
Yes, I would say trading is not really for humans. When they’re profitable they become cautious and when they lose money they start taking more risks and lose more, which is the exact opposite of good trading.
So a person must decide if they can take risk and if they can make decisions quickly.

He prolly would have loved to be slapped back from @javicolonbo’s money management filter of Darwinex, benefiting from parachuting a slippery slope :slight_smile:
What about P&L, drawdown hard breakers implementation based on custom will ? The futures broker where I’m at allows me to set a daily loss limit as well as set max order qty and max position, per instrument basis… useful since not relying on algo rules!

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We review our positions constantly: Would fresh buying make sense? If not, then the right time to liquidate an investment has probably come.

Recently I have struggled with greed and setting right profit taking levels - I mean struggled like, +5% becomes 0 or worse because I was greedily waiting for that last small chunk I had originally designated to the order. After some thinking, I had arrived at this conclusion as well.

Perhaps there is a book from a good successful day trader you can recommend @EvidenceAlpha? Maybe I can stop wasting time and money on insights other people have already gained and put out there.

Sorry, I’m not aware of any book writer who would be a longlasting profitable (day)trader. Martin Schwartz wrote a book sharing his life + some hindsight though. Really, it will be easier to find inspirational lectures (Market Wizards series) than full blown set and forget technics. Regarding algo, Kevin Davey has won some competitions like the World Championship www.worldcupchampionships.com a few times repeatidly. I had bought his course and (past) strategies but wasn’t impressed.

Your problem is a common one. :slight_smile: You could lesser the effect by interesting yourself about more complex orders, like ChaseLimit orders, or ChaseLimitIfTouched (in case of partial fill), they’re an alternative to trailingSL. Finally, MarketIfTouched (to guarantee a complete fill). You likely can program those platform side if not readily available. If you trade LMAX or futures, MIT orders are cool, stock them platform side instead of server/exchange to surprise the LPs :wink:
My favorite order type I will later hire a dev to create it: iceberg LimitIfTouched platform side. It will refill only based on available volume at bid/ask so I don’t give up any information too soon to the traders on the book

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Eh, I suppose then it will have to be slow and steady trading and learning along the way.

How does one gauge liquidity availability in Forex? I personally go by looking at how spread is behaving, and some brokers like Dukascopy provide some measure of liquidity around immediate bid/ask prices (though I am uncertain how reflective of overall market that data is)

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Don’t know if it’s relevant, but you can see liquidity on mt5 at least with some brokers.

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This is one of the reasons I 've gone for systematic trading.
I prefer to study from people that have proven to make money with trading, usually those guys either manage a fund or win the World Championship.

There are a lot of books with inspirarional content, but to beat the maket you need a winning strategy, so a prefer books that teach me that.

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He was doing a typical comment regarding the quality of futures’ markets. You’ve got an open order book, with true guenine liquidity (without priviledges acknowledged to market makers or LP. At LMAX for instance, their exchange is only semi-open, because their LPs have advantages over the other retail participants but few people knows it. At LMAX a LP cannot trade another LP unless he’d decide so (unlike on a fully open futures exchanges …usually). That ruling makes up the scene that the retail competes in a fairer environnement, but still against corporate sharks arbitrating and making the markets)

Regarding PR’s comment. At futures trading, you can see the liquidity at different price levels in a transparent way (not only best bid/ask prices aka top of the book like spot fx). So before a news, or if an uncommon event happens, you’ll see the order book empty itself in available volumes, so you know something is going on then you need to pay attention)
There are 3 levels of visibility. L1 is only the top of the book, like retail FX (more ? because you get the quantity info). Then L2 usually grants you to see the 5 best levels of bid/ask, sometimes 10 levels
And now, recently, some exchange created L3, where you can see all the depth of the market (in full), all the limit orders waiting, even far away from the ambient price…
When you subscribe to a datafeed, you pay more to get L2 than L1 (it remains cheap / affordable), and even more so for L3 …that’s not “trading neutrality” but at least transparency is available on request

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[details=Summary][quote=“EvidenceAlpha, post:11, topic:5340”]
without priviledges acknowledged to market makers or LP
[/quote]

Quite close, but false statement. Even on futures exchanges, the richer participants will get some priviledges over the rest of the crowd. For instance some can get filled before you by jumping the waiting queue for being members of the exchange.
You also have what is called “block trading”. The big players trade directly towards the exchange “over-the-counter” (this is a special service). Consequently, there are large quantities which are passed outside of the neutral environnement (open order book), with this volume info plugged backward in time, later. So you can analyse it only after the heat is gone.

What I’m describing are not dominant phenomenas but they exist. Better be aware of them. Futures trading is also not perfectly neutral/fair, still a lot better imho[/details]

[details=Summary][quote=“yhlasx, post:8, topic:5340”]
How does one gauge liquidity availability in Forex?
[/quote]

Another mean, there are platform-independant paid tools that agregate the liquidities available from several sources. Since FX is not centralized, a single broker source info is giving an erroneous view and meaningless. Those tools enable you to get a broader, more comprehensive, picture of the FX volume state. Forgot the name but will retrieve.[/details]

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Great thread :slight_smile:

I’d share Andrew Lo, not as a trading legend, but for his approach about financial markets behaviour.

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I haven’t yet read all your articles but great job :grin::ok_hand: :

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Not that I admire this guy, but I found the biography of Jesse Livermore very interesting.

Its book:

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I want to mention the Japanese legend CIS.

On JapanTimes

Discussion on Elite Trader
On ZH

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I’d like to mention, by the way, his (japanese) book :

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Can you tell, what it is about?