This past week I had the opportunity to attend the Traders Expo in New York City. I find these events tremendously helpful since I get to see face-to-face some of my favorite market personalities and gain valuable insights as to how they approach their craft. If you have not been to one of these shows, I highly recommend it. You can find the organization at http://www.moneyshow.com and they do 12 shows a year all around the globe. Admission is free and while there is plenty of stuff for sale, you can take as much information and learn as much as you can for free in exchange for your contact information.
I don’t know about you, but I labor in obscurity most of the time. I do my day regular job, and take care of business, both home and family. But underlying all that, there’s a part of me that wants to spend all day, every day with people who make their living in the markets. I try to talk about it with my family, but most of the time, they give me a blank stare and change the subject. These shows give you a chance to hear presentations from those who have made it big and how they did it so you can associate with those people - even if just for one day.
So with this post I’m going to start a new “Meet the Trader” series. In each post, I will cover one trader or personality that I particularly enjoy and what I learned from them.
In this post, we meet Hubert Senters from http://www.tradethemarkets.com. Hubert partners with John Carter and others to run the Web site which is an advisory and trading community focused around Futures, Stocks and Options and Forex to a lesser degree. I got to see a presentation by Mr Senters after knowing him for some time through the free daily trading videos you can get from their website. He also hosted a 2+ hour live trading Webcast last year on the Friday after Thanksgiving when opened his trading room to the public via conference call and live meeting. That said, I’m not a customer of their site nor have I spent any money with them.
Anyway, Hubert is a kindly southern gentleman with a disarming personality and a keen sense of humor. He trades Futures only. At the expo one person kept asking him, why not Stocks or Options? He replied he just doesn’t like them and when pressed, he mentioned the favorable tax treatment we get from Future profits in the United States versus stocks. There’s another better reason that I’ll get to below.
Hubert is a self-made man and trades his own account, full-time from the basement of his house. He describes it as the “Bat Cave”, an 1100 square foot space with high security – visitors have to be “buzzed in” from the outside. As for trading platform, he runs Tradestation on Dell Desktops with an array of flat panel displays. He has a device called a TreadDesk where he can walk in place when trading and move the desk up and down as needed. How’s that for a cool way to incorporate our hunter/gatherer roots with a modern way to make a living?
I mention his trading setup because like me he is a bit of a loner and was clearly not comfortable speaking in front of a large group – at first anyway. He was also uncomfortable in a suit and indicates he spends a lot of time trading in just boxer shorts, and sometime goes days without showering – something I can relate to since I work at home a lot – though I usually just skip a day or 2.
As for trading style Hubert is mainly a day trader, but sometimes position trades as well. Here are 3 specific setups (among many) he uses to pull out profits from the markets on a daily basis:
• Scalp against the Opening Gap. Hubert indicates that opening gaps in the futures market will close a high percentage of the time. I saw him do this trade the day after Thanksgiving and he made a few hundred dollars in the first few seconds of the trading day. And he was using reduced lot sizes for the presentation.
• Another trade is to go long or short the futures when daily program trading levels are breached as measured by Cash to Futures Premium as found on http://www.indexarb.com. Hubert prefers the Dow or Russell Futures versus the E-Mini S&P which he calls a “sprinter” meaning it runs up and runs back and is much more whippy and volatile. He makes the analogy – why try to land a crop-duster on a moving aircraft carrier when you can land it in an open field?
• One last trade is more of a position trade and he calls it the “Goodnight Gold” trade. He says he made more money with this strategy than any other in the past 2 years and it goes as follows. Trade the full-size Comex Gold Contract which follows the price of Gold up and down at $1785 per ounce and can easily move $25 in one day. Take the price at 11:30 PM and subtract from the price earlier in the day at 1:30 PM. If the price is more than $3 up or down (but not too far up or down) take a trade in the direction the move. Use a 6 point stop and a 60 point take profit. If the trade loses, you lose $600. If the trade wins you make $6000. This trade can last several days and he sometimes takes profits on the way to 60 points at 18-20 point intervals. Note that with this type of Risk to Reward ratio, the system will lose far more often than it wins.
Hubert makes a lot of money. He has been profitable pretty much since day one and learned to trade from a guy he ran into by accident when he was working as apprentice to be a large animal vet. When he saw the market data screen, and saw the guy had made $150,000 that day, he was instantly hooked. He became the trader’s apprentice and learned from the guy for 18 months before going out on his own. Hubert’s parents worked in a factory, and he could easily make in one day what they make in a year.
Hubert started out with a $5000 trading stake that he pulled together between his wife and some family loans. He turned that into $20,000 in one day, before giving much of that back and ending the day with $11,000. He grew the initial $5000 into 1.8 Million within about 18 months. He tells a funny story about how making all that money messes with your head and makes you buy stuff, houses, cars etc – but remember to put money aside to pay the tax man!
Hubert acknowledges that only a small percentage of futures traders are successful and that the odds are clearly stacked against you. I think the thing I learned most from Hubert is that you don’t need nearly as much capital as I thought to make a living trading. The extra leverage provided by futures forces strict risk management. Someone once remarked that trading stocks is like driving to California, while trading futures is like taking an airplane!
Check out Hubert and John at http://www.tradethemarkets.com and have a great week.