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The “5 Legendary Commodities Trading Performers" article examines and elaborates upon on the trading strategies and histories of 5 outstanding traders and their experiences with trading in the commodities and futures markets in order to offer insight on how to avoid mistakes and ensure success.
Bruce Kovner
Bruce Kovner is truly one of the giants in the futures trading world. He has perhaps been one of the largest traders in the foreign exchange futures markets. In one year alone, he recorded profits in excess of $300 million for himself and the funds he managed. A graduate of Harvard University, Mr. Kovner originally taught political science. Disenchanted with the academic life, he became interested in financial markets in the mid 1970s. An astute student of the interest-rate markets, Mr. Kovner credits his success to detailed analysis and evaluating risk on a portfolio basis, rather than viewing the risk of each individual trade.
Richard Dennis
A retired phenomenon of the commodities trading markets is Richard Dennis. Starting in the summer of 1970 with $1600 of borrowed family funds, Mr. Dennis managed to produce a fortune in excess of $200 million. His primary strategy was to seek out and profit from major market moves. When he won, he won dramatically. According to his own estimates, his profits arose from only 5% of his trades. This means that 95% of the transactions that he consummated were losses. Mr. Dennis's personal philosophy was not to hold too strict a view of a market, since such a stance can prevent you from recognizing and profiting from a major move. He was also somewhat contrarian by nature, believing that the most important time to think about trading was during losing periods.
Ed Seykota
An insider to the financial community, Mr. Seykota was hired by a major brokerage firm and is credited with developing the first commercial computerized trading system dedicated to the futures markets. He is famed for the outstanding returns he has recorded. For example, in one account funded with $5,000 in 1972, the return was over 250,000% by mid-1988. Holding a degree in electrical engineering from MIT, Mr. Seykota is a strict technical analyst. He has a trend following pattern recognition strategy. One of his most famous quotes is: "Everybody gets what they want out of the market."
Marty Schwartz
Marty Schwartz produced a decade of losing trades before finally becoming one of the most remarkable professional traders. Since 1979, Mr. Schwartz has reportedly never had more than a 3% drop in his equity as measured on a month to month basis. As a participant in the US Trading Championships, in nine out of 10 of such events, Mr. Schwartz made more money than all of the other contestants combined. These contests are of four month duration. His average return was 210% on a non-annualized basis. Mr. Schwartz credits his success to a technical methodology utilizing strict risk control combined with discipline and hard work.
Mark Weinstein
Mark Weinstein began his working career as a real estate broker. Quickly disenchanted by his profession, he entered commodities and futures trading. After an initial record of admirable success, he tasted failure and lost almost everything. With new found humility, he reenergized himself and re-analyzed his methods. Since that time, he has shown successful track records, with a 99% success rates in all of his trades. He credits his success to knowing what technique to use in each particular market. His advice is that strategies must be flexible enough to change when the market changes. He believes that most people make the mistake of using this same strategy all the time. According to Weinstein, it is just as important to know when not to be in the market, as it is to know when to be in the market. The fundamentals of Mr. Weinstein's approach are to be patient and wait for all the proper conditions to be present such that a winning trade becomes inevitable.
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