I want to talk a little more about how conditioned minds can prosper in trading. You’ll be relieved to know that I’m going to use a trader rather than a scientist as the example this time.
Jim Leitner runs Falcon Management in New Jersey. He has taken $2 billion profit out of the market in his career. Jim gave an interview to Steven Drobny for his book The House of Money. Jim’s mind has been conditioned by a huge amount of experience in trading, as follows:
- While studying international finance and Russian at graduate school, Jim worked half days as a “monkey” – a money broker trainee adding data from around the world to the big board for the brokers to see.
- While still working as a monkey, he started broking – calling small banks in the Midwest. He did this for two years.
- He then took a big salary cut to get more experience, working at J.P. Morgan, trading the Eurodollar market. Jim became an expert on euroswiss francs, eurodeutsche marks and europesetas.
- He then became an FX trainee with J.P. Morgan and then a currency forward trader.
- After a few years, Jim was hired by the Bank of America to run forwards, exotics and all currency trading outside the major currencies.
- He moved to Shearson Lehman as a proprietary trader.
- He moved to Banker’s Trust and spent five years trading currencies.
With all this experience behind him, Jim was asked whether he has an innate trading skill and can “just tell” when prices are out of line. He answered:
“I don’t have an innate skill. It comes from being extremely interested in markets and looking at everything all the time. After doing it for years I’ve developed a mental database of where things should be, such that when something makes an irregular move, it shows up on my radar screen. I used to have so much fun playing around in the market and knowing that I knew my markets better than other people.”
So here again, is an example of a conditioned mind prospering where others fail. Where others might claim an innate skill or a gut feel for trading, Jim Leitner attributes his success to conditioning of the mind – a mental database – built up from many years’ trading.
Jim Leitner’s hedge fund, Falcon Management, has a website. You can find out their address and their phone number but nothing else.
I’m off now to condition my own mind.