Member Profile: Rhody Trader

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Interview
Beginner
5

John Forman

26 Feb, 2015

in Interviews

My Background
Let’s see. Where to begin…
Well, to start, I’m from the States. Grew up and lived the vast majority of my life in the Northeast – Rhode Island and Massachusetts specifically. As a teenager I was heavily into computers, and had originally planned on earning a college degree in computer science. My secondary interest in the markets ended up taking over somewhere along the way, though, and I ended up studying finance instead. That saw me take a job as a junior analyst coming out of school.

My career path since then has been quite convoluted. I wrapped three periods in the employment of Thomson Reuters (originally Thomson Financial) around grad school and a 7 year stint as a full-time volleyball coach. While in the industry I mainly covered forex and the Treasury market, but at times also handled stock and commodities.

Yes, I did say I was a full-time volleyball coach for a while – specifically at the Division I level on the women’s side. It was actually during those years that I joined Trade2Win, eventually working as the site’s Content Editor for a while. That’s also when I wrote The Essentials of Trading. The book came out of work I was doing on a trading class with a professor friend of mine. I looked for a book I could use as supporting material, but couldn’t find one, so I wrote it. I hadn’t really thought about broad publishing, but Brett Steenbarger connected me with his editor and the rest is history.

Coaching just wasn’t paying the bills, though, so I ended up back in the real working world again. Despite some serious changes to the industry, I was in a good position with long-term prospects. After a few years, though, I was feeling the need for a new intellectual challenge.

Most recently I’ve been living in England while working on a PhD. My research focus has been on the performance of retail forex traders. It’s been interesting stuff. Funnily enough, I ended up getting back into coaching volleyball during my time at school. I’d been away from it for about six years at that point, so it came as something of a surprise at how quickly I jumped back in.

Pretty soon I’ll be on to the next challenge. What that will be is unclear at this point.

Trading - the early years
It was the Crash of ’87 that was the trigger for me to actually get into trading, if you can believe that! The big market moves convinced me there was definitely something interesting going on there, especially in the way the stocks of quality companies were crushed for essentially no good fundamental reason. I was still only 17 at the time, but a couple months later when I hit 18 I opened my first trading account. Actually, I still have it!

Like most new “investors” I was all over the place with no real plan or sense of direction. Name a silly new trader mistake or decision and I probably made it. Fortunately, I didn’t really do too much in the way of harm to my account during this time. I wasn’t particularly active as commissions were still at painful levels for the small player back in those days – even for discount brokers. Also, it was generally a bull market period, and I was playing strictly from the long side.

Things changed for me in when I read How to Make Money in Stocks by William J. O’Neil – the original edition. That introduced me to two concepts. The first was having a systematic way of looking at the market rather than being driven by whatever I read or heard about. The second was technical analysis, which not only did that heavily influence my trading from that point on, it also was directly responsible for me landing my first professional market analysis job.

I remember the first trade I made strictly based on technical analysis. I went long NIKKEI put warrants in 1990, which was basically a bet against the Japanese stock market. I bought them somewhere in the $5 range. I think a couple months later the price was up to $9. I took the money and ran. It was a big return, after all! At some point later I checked the price again and saw it had reached $25. Ouch! Early lesson in holding your winners.

During the 1990s I remained primarily focused on trading stocks. I wasn’t super active, but kept my hand in the markets. If I remember correctly, my first real effort at trading something else came after grad school. I don’t remember all that much of the specifics, but there was one day that will forever make me wince.

I decided to trade yen futures using one of the very early web-based platforms, which was really little more than an online version of the telephone order process. I was really nervous. I put in a market order to I think go short. I didn’t get a response (there were long lags in those days) and decided to cancel the order. A short while later I calmed down a bit and tried it again. Do you see the huge mistake I made? Can’t cancel a market order once entered, so I ended up short two contracts without realizing it. The market went against me and basically blew up my $5000 account. I was sick. It was so traumatic I stayed away from futures after that for years.

I eventually got over that, but by about 2000 I was becoming active in the forex market just as retail trading was developing. The years I was coaching ended up being my most active period, in part because I didn’t have to worry about compliance issues. Also, I had noticed that my day-to-day market analysis work tended to mess with my own trading as I was just looking at the market too constantly. Although I traded just about everything at one point or another over those years, my three focus areas were individual stocks, mini S&P 500 futures, and forex. Actually, in the case of stocks I shifted to mainly working in options.

When I first went back to Thomson Reuters in 2007, I was working on an equity market product, so I had to curb my stock trading due to compliance considerations. That saw me increase my focus on forex once more.

Trading now
Honestly, I haven’t traded all that actively the last couple of years. I’ve been working on my PhD – which focuses on trader performance – and living abroad with all kinds of new things in my life claiming my attention. I didn’t want to trade actively while being so distracted and lacking a meaningful income source beyond just what I need to cover living expenses, I took a very conservative approach to my finances. As a result, the small amount of trading I’ve done the last few years has been longer-term, mainly in my retirement account, and focused on the equity markets.

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azedine;2525672
Hey john

Great to read about another regular T2win contributer .........jees never realised you were working on a phd - and on trader performance !
Sounds to me that you could combine those coaching talents and Trading skills into coaching high performance trading ?.............................Steve Ward openly admits he is ok at trading but his real skills were around coaching others to be the best of the best .........and has also published at T2W
anyway good to read about you ...........and you are 100% right about finding your own path ............and also i agree that newbie traders can get distracted in the early years by too much interaction with other traders ..especially if you have somewhat contrarian approaches
regards
Neil
NVP


why was this repeated on the thread by another member ? :eek:

Apr 12, 2015

Member (34056 posts)

Rhody Trader;2496480
Not anywhere near as "regular" as you!



So basically you admit to completely ignoring my threads Forex trader success rates - some real data and What are your questions about trader performance? :p

I'm so looking forward to finishing up the PhD thesis so I can actually work on turning the research - and more like it - into something useful for traders rather than the academic discourse I've had to do up to this point.



But wouldn't that make me vendor (gasp!)? :-0

I definitely have a strong teaching/coaching/educating tendency. I just always seem to be pulled in that direction.



I will rectify that omission when I get more time dude - sorry ! :cool:

................and regarding the Vendor thing...........I'm in the same boat ............I would probably like to share a few ideas one day but clearly at present that would mean sacrificing my presence at T2win so I will focus still on my finance career whilst trading P/T

N

Apr 12, 2015

Member (34056 posts)

Re: Member Profile: Rhody Trader

Hey john

Great to read about another regular T2win contributer .........jees never realised you were working on a phd - and on trader performance !
Sounds to me that you could combine those coaching talents and Trading skills into coaching high performance trading ?.............................Steve Ward openly admits he is ok at trading but his real skills were around coaching others to be the best of the best .........and has also published at T2W
anyway good to read about you ...........and you are 100% right about finding your own path ............and also i agree that newbie traders can get distracted in the early years by too much interaction with other traders ..especially if you have somewhat contrarian approaches
regards
Neil
NVP

Apr 11, 2015

Member (1 post)

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