A TRADING DAY IN THE LIFE OF.....

It was Friday October 6 (2000). I am usually at my trading desk for the London Stockmarket's opening bell at 8am, but what was not usual was that in addition to oversleeping I do not trade on Fridays, because they are notoriously difficult for making a profit, as end of week chaos feeds into intra day movements on the Ftse 100 Future, the main target of my trading day, and the bread and butter of my living.

First thing in the morning I stare at my futures screen which is composed of live bar charts, with contract volumes, for several time frames, ranging from 2 minutes to 10 minutes, from which I endeavour to use my method to read the motion and the mood of the day in hand only, as I am not interested in what might happen tomorrow or the next day.

The first thing to be done was to interpret where the day before finished, to heed the main market trend, if any, then to read the opening bars of the morning and calculate where the market should go in the next hour or so. Although late to my screen that morning I decided the market price would now rise to 6450, and had already decided what to do when it got there, which was to short sell the market with however many contracts my money management system dictated, in my belief that it would then come down sharply, and I would buy the market back later at a lower price, leaving me with all my positions closed for the day.

I always trade smaller than I am allowed, not larger, I do not aim for the sky in any single trade, I aim essentially for a salary, and the money I make over that is either moved over into my share trading, or else goes towards my project development. I do not use investment compounding techniques, so I can never be wiped out overall.

I did NOT (and never do) trade the first move of the day, despite the loss of that trading opportunity, because it is a part of my daily strategy to make that first prediction correctly to confirm that I am reading the market well on the day, but if I get it wrong, the opposite view prevails, and I do no trade the future at all on that day but instead move across to my other screens either for share trading or writing work instead.

Psychologically I had to overcome the negative effects of the previous afternoon's debacle when I had closed my trade and got filled 23 points lower than what was on my screen. To my horror there was a fault in my datafeed and the charts I was trading from were being produced 52 minutes out of date!

Yes, indeed, I had not made the bundle I thought I had (but still made a profit). I turn off the datafeed news and information service (which would have alerted me to the technical fault) as I follow only my charts and my method, I do not want my psychology to be influenced by what anybody else thinks.

Sure enough, by 1245hrs as expected, the market rose to 6449, but as I went to place my short sell orders it quickly fell 10 points and was faster that I was. I got filled by 1246 at 6444.25, the market then bounced back up to 6465 in a flash. Theoretically, I was now 16 points (per contract) the wrong way in the blinking of an eye. Nonetheless, I knew that I could afford any loss which did ensue, because I had already pre-decided my pain threshold and would have had no hesitation in taking a hit on the nose if I felt the market was going too far the wrong way (the first cut is the cheapest).

Normally I am in and out of a trade quickly, but remember I don't usually trade Fridays, and today felt odd because the market seemed to become frozen in time at 6465-7. I wondered if the datafeed was dying again, so I phoned some city trader pals to check the numbers on their screens, but all was well. I was comfortable but sitting in the trade longer than usual and needing to find extra patience because I knew that if I left my desk for even just minutes to go to the toilet, I could return to find myself losing thousands of pounds. For each point the wrong way was £10 per contract I would have to cough up.

The red phone rang, only other traders know that number, I do not take personal calls when I am trading, the street could be on fire for all I care - nothing must interupt me, for I know that concentration, familiarity, method and technique are the only secrets of my success, and one broken link makes the house fall down. Anyway it was Bob, a Trader, asking my view. I explained I was short the market, expecting an imminent downward move, but that I had not got in at the best price. He said, "goodness, I think you've got it wrong anyway Rich - we're all long up here waiting for a shoot up." I replied "well you know me, I follow my method to the exclusion of all other voices, save perhaps for an announcement of a nuclear strike on the stock exchange, I'm staying short. I'm very bearish this month." In my mind I realised that I am not always right, I have losing days too, but I know at the end of most months there is more profit than loss, so I am cool. I could probably always be of more help to another trader who loses all the time than I could to one who only loses half the time, why? Well simple really, because the one who loses all the time has something the other trader does not - consistency! By identifying that consistency, and reversing the element causing the losses, he or she can simply be turned the other way, quite quickly.

I waited and waited and watched and watched, I am used to everything moving at lightening speed, my psychology is trained and tuned to things being that way but, like the sportsman, sometimes you have to change your pace to suit the way the opponent plays his game. Trading is like a boxing match, it's you versus the market, you can win on points but when the market wins it's always by a knockout.

I was getting bored, but no sitting back with a G & T for me, and I could never get "depressed", after all, I am doing what I love to do, analyse and trade, and it pays me too. What more could I ask? There is a local Hospice which takes care of terminally ill children, and I go there to remind myself of how lucky I am, I go there when I have made more money than I need, I go there to be reminded that God has given me a gift to analyse and trade and write, and he didn't give it to me to wallow in wealth and selfishness. Anyway, I stayed glued to the screen, even the slightest half point change was something I could feel move through my soul, yes inded I knew I was one with the motion of the market, I could feel its heart beating and I felt that the upward price move would soon collapse. Of course if I was wrong, I knew there would be no vegetarian chicken for me that night but, like a squirrel in winter, I've got a pile stored up in the freezer in case of a bad patch.

By 1520hrs I was missing lunch and reminding myself why I don't trade Fridays, the suspense was intensifying, calls were coming in with a rumour about this and that. I didn't even listen, I never do, my charts and my methods are my friends and they will take care of me.

1530hrs - BANG, it happened faster than I could turn a tap on, the price dropped like a bomb in the sky, down down and down, 30 points in the next 10 minutes to 6430, then another 22 points in the next 10 minutes to 6408, a rally was attempted, I consulted my method, no it was not time yet. Down next to 6400, I knew this was a psychological zone of support level, but I was getting ready. Then 6398, thank you, that'll do for me.

I closed my positions with lightening speed and got filled by 1650hrs at 6396. In a market which to Joe Public was to hardly move from the close of the previous day to the close of this one (9 points) I had taken 48.25 points out of its futures market (at £10 a point per contract). I switched off my screens, satisfied that the psychological warfare of that day had been won, but I was exhausted and feeling dizzy from the concentration I had to give, and I was annoyed with myself that instead of the usual 20 minutes of actually being in a trade it had this day taken 244 minutes to make my month' s salary, and if I done this when the TV Crew were here they'd have stoned me as either a blag man or a failure. Whatever time of day it is, once there are four figures in my bag, I trade no more that day, for greed is the shortcut to the traders' graveyard.

To the Investor, the effort of the day represented a 32% return on actual capital employed in that trade itself, but percentages don't mean much to me in this game, the only number I looked at was total of pounds and pence and whether it was enough to replace a salary, again, and it was, and so my goal was reached.

Though my trades do not usually take long, the hours I put in to study and method are many. When other "normal" people are relaxing, I am usually to be found at all hours n front of my screens analysing, searching, measuring, calculating, thinking and deciding how to organise my share trading campaigns and improve my emotional control and intra day timing in fast moving futures conditions. I will typically analyse around 400 share charts and come up with say 12 shares for going up and say 6 for coming down, and I will apply method to whittle this number down to a lower manageable level. The isolation and lonesomeness of the task is deep, there will be no one to save my ass if I mess up, there is no sick pay scheme for me, but I love being a Trader and this my motive. Money does not interest me beyond my most basic needs and important responsibilities, I trade because I love to, and being able to earn my living from it and not have to be employed in a job I don't want and don't feel good about, yes indeed, every day like this is another happy day for me.

The above account of one trading day in my life is accurate and truthful, although there has not been enough space here to tell you of my adventures in shares, and not every day is profitable, but that doesn't matter to me, as long as each month is a good amount of net profit and I can repeat it most months, and year in and year out. However, it has taken me years to develop the method and self discipline to do this consistently and repetitively, so nobody out there who reads this should give up their day job to attempt it without first undertaking rigorous training or self development, unless you want to lose all your money and fail, or are prepared to fail and then bounce back. Nobody should have "making fortunes" on their mind for that is the wrong mindset to become a trader, and everybody needs to learn the difference between trading and investment. Personally, I don't know anything useful about investment, other than to pick my entry and exit points from a chart. I only know about trading for a living, and financial analysis of course. Trading works very well for the person who is willing to work hard at learning how to do it properly, but is too dangerous for anyone who is not.

Anyway, I hope this account has given some of you a small but informative insight into part of a working day for a full time trader, and helps you in some small way, if only to put you off!