Feb

6

While on a trip to Havana in the summer of 2002, I wandered onto the patio of the Hotel Nacional in search of the perfect Mojito, albeit ever vigilant for the perfect senorita, for which to share my refresca. Sitting at a table overlooking the Malecon, was then Governor Jesse Ventura and an armed bodyguard/ Minnesota State Trooper. I was unaware that he was visiting the island for trade talks on behalf of Midwestern farmers, so surprised by his presence, I loudly exclaimed, "Jesse Ventura !!! " "Who are you?", he returned. All I could think of was, "Nobody. Mind if I join you?" He of course, asked me why I was in Cuba, and what I did for a living. I informed I was floor trader, (and with tongue planted firmly in cheek) likened it to being a Navy Seal. This "subtle" segue led to a very long and interesting conversation that was essentially the highlight of my visit.

Later that evening, my cohorts and I, journeyed to La Lisa on the outskirts of Havana to the Makumba nightclub. The club was frequented by the Cuban "elite", and very few if any tourists ever made it there. Once again, sitting at a table was someone I did not expect to meet so serendipitously - Diego Maradona. He was in Cuba for treatment of his cocaine addiction, but nevertheless was in Makumba, famously drunk, partying with his entourage. It took all of about 5 minutes before I was shaking "the hand of God", smoking Robainas, and pounding Cuba Libres, with Diego and some of Cuba's finest mujeres.

The evening I spent celebrating with Maradona was the polar opposite of the afternoon I spent conversing with Governor Ventura. Here were 2 men ( at similar stages in their lives) in 2 very different situations, yet with more in common, than one could see, prima facie. Both of them were particularly outspoken men with a palpable passion for life and drive for success; one had perpetuated these qualities and had manged to maintain his discipline, while the other had lost control of it because of addiction, and slipped through the cracks.

Attitude, emotional control, discipline, and how to handle success and failure, were just as important as knowing how to mange risk, if you were going to be profitable trading on the floor. Ex- athletes, on almost every level, seemed to possess these qualities coming into the (trading) game; others had to acquire these skills. If these traits were non-existent in your personal life, the odds were this shortcoming, would transfer over to your professional life on the floor. Nevertheless, even when an emotionally prepared trader walked into the pit, he had to magnify these extant traits, and step-up his focus and drive.

Attitude, emotional control, discipline, and how to handle success and failure, were just as important as knowing how to mange risk, if you were going to be profitable trading on the floor. Ex- athletes, on almost every level, seemed to possess these qualities coming into the (trading) game; others had to acquire these skills. If these traits were non-existent in your personal life, the odds were it would transfer over to your professional life on the floor. Nevertheless, when a trader walked into the pit, he had to magnify these traits and step-up his focus and drive.

I had begun my career aspiring to become an astute, independent thinking trader, yet had somehow devolved into a momentum chasing, blue collar, bond gladiator. I had morphed into a predatory algorithm programmed to take advantage of my knowledge of, and access to, the customer order flow, and trade in front and all around it. This was in fact, the real and accurate description of a floor trader. Yet somehow, I felt lucky that I had been tenacious enough to secure and hold onto, a valuable piece of bond pit real estate for the viable duration of the contract.

Not that I was complaining mind you, because I was making an inordinate amount of “easy” money. But like any inhabitant of any welfare state, I had become content, and was not prepared for the inevitable move to screen based trading. I underestimated the disconnect between the floor and the screen and it wasn’t until I accepted the reality that I didn’t know anything about electronic trading, was I able to begin to learn how to trade again. Everything I knew as pit trader had to be eliminated from my mind as I began anew, tabula rasa.

The majority of successful floor traders could not transfer their human, pit based “skill set” onto a human-less, computer screen. Being honest with myself and letting go of what had previously worked for me, and had been responsible for my success in the past, was the most difficult part - but it was a start. It was the greatest psychological hurdle I had to overcome on the road back to becoming a successful trader. However, it was a necessary prerequisite if I wanted to provide myself with the best chance for success. In the final analysis, electronic trading has made me a smarter and better trader. No longer playing with the "house edge", it has forced me to relearn my craft, adapt, and re-invent myself. And, it is in the ways, in which we adapt to change, that ultimately defines our success.


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