The Joys and Tears of a Trader

December is always the time for reckoning, no matter what kind of a trader you are. It doesn't matter if you are in equities, foreign exchange, bonds, options, or other derivatives, this time of the year will give you a glimpse of how you will be rated by your superiors. If you have met the budget or even exceeded the quota, chances are there is something playing in your mind....maybe a promotion is in the offing plus a six digit performance incentive bonus. However, if you are in the group that did not meet the quota and budget, you are already teary-eyed because it means that you will be in the five digit category when it comes to the bonus area. You know that there is no chance to still meet the budget this time of the year because you are well aware that December is a thin market period where the major market players are already squared and are not open to make positions. There is a very little chance that you can get good rates since the quotes tend to be in the wider spreads.

As I look back on my almost twenty years within the four corners of a trading room, I can't help but miss those nerve wrecking years. Although the job was stressing and nerve wrecking, the years with the trading group were the best years of my life with regards to my profession. Before being a trader, I was with the Cash Management Group, also under Treasury but handling the needs of our overseas contract workers. This position is relatively a very passive and tamed one compared with being a trader. A trader must possess the ability to grasp what is happening at the moment, understand the implication, and act upon the situation that will bring the utmost advantage to the bank, that is profit.

The week starts with a round table discussion of what transpired in the market the previous week and what the group had done, how much profit was made, errors made, problems encountered, etc. and then talk about the possible strategy for the week. Then, each trader is responsible for reading the news specially those that are relevant to the currencies he/she is handling and make a calendar of events that need to be monitored. A trader then looks at the charts and all the indicators ( aside from all the fundamentals needed) that will help him guide his trades. He may be guided by the RSI, MACD or other stochastics at hand. He maybe a strong fan of the Dow Theory or the Elliot Wave, but no matter what he likes, he should be able to use the tools to maximize his profit. A good trader keeps tracks of all his trades because this will help him in his succeeding trades with regards to the strategies as well as errors committed. In our group, early mornings are spent printing news as well as the charts for our respective currencies. With one eye on the screens monitoring the movements, there is the other eye for analyzing the charts. We were all like architects with rulers and mechanical pencils making all sorts of drawings on the charts as well as calculations..... from these we can make out the possible moves of the market. There might be a triangle break-out, a flag formation, a double bottom, a double top, or just trend lines.

As the trading day moves on, a dealer then prepares his Trading Plan for his respective currency/currencies. The trade might be an intra-day, a medium term or long term. He states his intended amount (must be within the bank's set limit for his rank), his entry and exit level and other pertinent details. When executed, he submits this Trade Plan to his/her boss together with the supporting charts and fundamentals for approval. In those days, it is a mortal sin to lose to our Big Boss. If I lost in my position in the night, I already know what she would say... "Haayy...why......bawiin mo yan!" And of course my reply is always....."Yes ma'am!"

As we watch the markets move, the traders are gathered in the round table infront of the big Reuters screens, sipping our coffee from the big coffee mugs. We need coffee to stay awake. When the market is quiet, we tell jokes, laugh out loud and relax. However, when news breaks come out that are affecting the markets, we are like crazy animals running to the dealing screens to either close our positions, open new positions, take profits or cut-loss. What a chaotic place the trading room is when these occasions come.

To be able to watch the markets closely, each of us has a beeper that constantly gives the market movements in the major markets. If Allan Greenspan would be making an announcement in the USA, we are all watching for the time and stay in the office until the wee hours of the morning...Sometimes, a night trader would be the one to wait for the event and executes our orders for trade. If no night trader is available, we can call our counterparty in Hongkong, Singapore, London, or New York via toll free lines to give out our orders. It took me more than a year to normalize my sleeping patterns after I retired from trading. I got used to being awake from 10 to 2 a.m. until NY close and then wake up at 5 am so I can get to the office before Tokyo opens at 7:30 a.m. our time.

There are also joys in being a trader. It is exhilarating when you are able to hit the top of the market movement and make a huge profit. It is a nice feeling especially if you are able to read the market correctly and made the proper moves. However, it is depressing when you lose a trade even if you were able to cut your losses early. OUr group is already happy when our batting average is 70/30. This means that our winnings are almost 70% and our losses are at 30%. It is a very pretty statistics. The other down side is on the traders' personal relationships. Hahahahahaha....One of my traders promised his girlfriend to pick her up for a date at 5:30 and then, when he was about to go to the car parking lot, the market moved because of a major news abroad. It was his currency being affected....so he had to stay a bit in the office and see what would happen. Of course, he just left orders for his position, but the girlfriend was already very angry....Hahahahaha.....

The other bonus you get from being a trader is that promotion is almost within your reach if you always deliver. In times that there are holidays abroad like NY holidays, we can go out and stay out for lunch for hours, going back to the office at around 3 in the afternoon and then sit in the round table to sip coffee. There is however one common ailment traders have......ulcers, ulcers, and more ulcers.........not only from the fact that you are stressed but you cannot leave the trading room especially if the market is going crazy and it is even past your lunchtime.

AAhhhhhhh....such a life!!! No matter what I got from trading.....in my case, a severe case of double pneumonia.... I still love trading. Until now, after all those years of being away from the Reuters screens, I still have the Bloomberg TV and the Yahoo finance to monitor the market movements. To all those TRADERS, keep up the good work but always remember: PRAY, PRAY, PRAY FOR GUIDANCE!!! Only HE can support and sustain you!!! GOD BLESS YOU ALL!! MERYY CHRISTMAS AND A HAPPY NEW YEAR!!! Sana all of you are within budget.