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Saturday, 26 July 2014

The perfect trader: cold and compassionless?

by Beecher Tuttle
 
Successful traders tend to have very particular personalities. Good ones are compulsive, methodical, intelligent contrarians. Being a great trader, though, that requires you to leave your heart and compassion at home, so says former hedge fund trader Turney Duff.

In an op-ed for CNBC, Duff opines on the learned ability of taking emotion out of trading – way, way, way out of it. To the point that you equate catastrophe with opportunity.

Duff, who lost his millions to drugs and bad investments, details his maturation, if you will, as a trader. In 1999, he was appalled as colleagues digested the news of the Columbine High School massacre by immediately jumping into a discussion on whether they should go long or short on gun stocks.

A half-decade later, as he became a more seasoned trader, Duff focused every minute of every day looking at ways to unlock opportunities in the market as fear of the SARS virus overtook Asia.
“And by being in front of SARS; we got off to a great start and a very profitable year at Argus Partners,” he wrote for CNBC.

Y2K, Hurricane Katrina, the Boston Marathon bombing – they were all opportunities for traders, he says. Duff recalls one unbelievable anecdote where a friend was in Tower 7 when the second plane hit during 9/11. As he ended his phone call to evacuate, his hedge fund client on the other line yelled: “buy oil!” according to Duff.

Emotion, it seems, has no place anywhere near the trading floor.

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