Article Title: Time to look to the futures?
Technology is taking the wheeler dealer world of high finance to ever more unlikely locations. Mandi Millar traveled to the Isle of Skye to find out why Ulster's remoter spots could be the trader's ideal habitat.
Duncan Robertson trades in the high-flying world of the futures market. But his world isn't all tickertape and red braces, chaotic trading floors and stressed-out executives.
The view from his desk is of a ruined castle, crashing waves and the distant peaks of the Knoydart peninsula, an isolated wilderness opposite the Isle of Skye.
And it's from inside his white-washed former crofter's cottage that he plays the DAX futures market in Frankfurt, courtesy of a satellite link.
Duncan (44) is one of a growing number of lone traders who believe their isolation is an advantage for making money.
And there's big money to be made.
Duncan doesn't like talking about the money aspect of his work, but he admits there are few financial transactions which will multiply your investment as rapidly.
In a recent five-day period, for instance, he gained 142 points and lost 25. At around £17 a point that's over £7,000 for a weeks work.
And now, for £5,000 he is offering to train would-be Ulster traders in the timely-balanced art.
Cliff Mackintosh is a former pupil who's taken up trading following one of Duncan's courses. "the £5,000 does sound like a lot of money, but looking at it as an investment, £5,000 investment for a new business isn't that much" said Cliff. He hasn't started live trading yet, but he's still doing quite well and earning in about seven out of 10 deals.
"I haven't given up my day job so I'm not spending as much time as I could trading, so I don't get to feel that isolated, but it wouldn't bother me anyway" he said.
Duncan on the other hand, trades from 7.30am until 6pm, although again he sees his isolation as a bonus.
He lives alone, has no hobbies and rarely switches off.
"It's a little sad I suppose. But it never stops. The trouble is that it is very profitable and very addictive" he said.
And those profits underpin a comfortable lifestyle which includes three houses on Skye, a flat in London and regular trips to New York, Los Angeles and the Far East.
It's a lifestyle which, he believes, is achievable - but only through total commitment.
"I use satellite, but other people use the internet to get their information for the market" said Duncan.
"But its this kind of technology which means people in even the remotest parts of Northern Ireland have the same chance at succeeding as someone on a London trading floor" he added.
Article Title: Time to go solo
EVER since advances in computer technology made working from home possible, there have been predictions of the coming revolution. Instead of battling though commuter misery in order to sit at a desk for nine hours a day, we would all boot up our computers in the bedroom and set to work in our slippers.
The revolution is not exactly happening at a lightening speed, however, and the reality can involve a combination of both office and home-based work, which for many means actually working harder and being constantly on call. But, for a lucky few professions, modern technology has been liberating, and for the high-pressure career of technical analyst in futures trading, the transition from trading floor to home working seems to make sense.
Duncan Robertson started trading from home 12 years ago, after a debilitating hearing loss made his job on the trading floor impossible.
His solution, however, was not to quit the business altogether, but to set up alone, trading from his home by computer. He believes a lone trader has exactly the same chance of success from home as the stereotype of the wired-up city types on the City trading floors.
In Robertson's case there are also other advantages; on leaving the City, he decided that if he was no longer tied to having to live near his work, he could choose where to be based.
Although born in Glasgow, he returned to his family's roots in Skye where the views from his windows are of the Knoydart peninsular and the unspoilt scenery of the west coast of Scotland. He now enjoys the isolation and beauty of the area which is a complete contrast to the cut-throat world in which he is dealing.
Nor is he missing out financially and estimates his annual profits are around L100,000 a year but points out that added perks are no hassles from customers or bosses, which is definitely worth more than money.
Robertson denies that such trading is a risky business. "It can be very boring. Having said that, a big win can be euphoric, but you have to be able to take a crushing loss and pick yourself up again; it requires real emotional stability."
Nor is the working day any shorter than his office based rivals. "I start at 8am when the German Dax market opens and finish at 7pm when it closes. It is difficult to take a break when the information is being updated every five seconds and you could miss so much in a lunch break.
"Having said that, I really enjoy it and am genuinely interested in the markets, so the job really suits me."
It's a lifestyle that he insists is realistic and achievable for many - but first of all, would-be traders need drive and total commitment. Buying and selling futures does not require a big IQ, but the same sort of savvy that allows a kitchen fitter to rightly predict an estimate for a job, according to Robertson.
He also believes that successful trading requires always sticking to the rules and not getting greedy.
"Experience helps, the rest comes from having discipline, patience, intuition and practice, practice, practice. Like a pilot with a flight simulator, only when you have played with losing and winning points and become confident do you commit any money at all. You count on the fact that prices can only go one way for so long, and then they must swing back like a piece of elastic.
"The skill comes in predicting when that will happen."
He believes that the best way to start is by learning from a mentor and he offers courses in lone futures trading to others for a fee of around 5,000.
Robertson insists this is not just for added profit for him, but to help others and help himself retain an edge.
"You only know your subject when you start to teach it. I can point to the footprints left on the market by big companies about to make a move, but only experience will let traders know exactly when to strike. Like a novice squaddie, if you survive the first couple of months then you'll probably do very well."
Although it can be a highly stressful job - he compares the bad days when losses are made to "a punch in the stomach" - Robertson believes he has found an ideal balance between the tranquillity of his west coast life and the buzz of his chosen career.
"My life does look ideal, but I'm not selling this to anyone as an easy option - it's very hard disciplined work, but I certainly could never go back to an office now."
Robertson's website: www.learntotradefutures.com
Article Title: Go from this to this - and still end up making £7,000 every week
PICTURE the scene.You're looking at a remote island off the Scottish coast. It's a cold and windy autumn day.The waves are crashing and foaming against the rocky outcrops at the edge of the island, the gulls are screaming overhead.
The landscape is rugged, and barren, bleak and windswept. There's a ruined castle nearby and you can just make out the distant peaks of the unspoilt wilderness that forms the west coast of Scotland.
Near the castle stands a whitewashed crofter's cottage. It's isolated, but a light shines in the window. Look through the window and you'll see a wood-panelled office containing three of the highest-tech type screens you've ever seen. In front of them is a man, and he is concentrating on these screens with every ounce of his being.
Sounds rather like a scene from the opening credits of a James Bond film, but it is in fact real life and if you happened to be in the right part of the island of Skye, you'd be able to witness this for yourself right now.
Alternatively, you could log on to www. learntotradefutures. com and communicate directly with the man, Duncan Robertson, right now.
Mr Robertson, 44, is one of a growing army of lone traders who believe that isolation is an advantage for making money.
And Mr Robertson makes a lot of money - around £7,000 a week. He used to work for a major financial institution but returned to his Scottish roots when he went solo some ten years ago.
The lines of numbers on his computer screens are relayed by a satellite data feed system that updates every five seconds and is as comprehensive as any you'd find 700 miles south in the City.
Mr Robertson is something of a workaholic. He lives alone, has little contact with the other islanders, and has no hobbies other than walking. He generally works between 7.30am and 5pm, and asks people not to call between these hours because he will be trading.
The name of the game means that he can't just stop for a chat if somebody should call. When he returns from one of his ten-minute walks around his home, he can find he is £2,000 down.
But he is doing what he wants to do and he's doing very nicely. He owns three houses on Skye, a flat in London, and travels regularly to New York, Los Angeles and the Far East. And, as he points out, he's not having to deal with the ordinary stresses of the business world which he describes as a 'no pollution, no aggro and no traffic jams' lifestyle.
Mr Robertson says you don't have to know what futures are, in order to make money from them.
But the market is risky. The odds are stacked against you. For the 20 per cent who do make a profit trading on them, 80 per cent make a loss.
"This is because they have no idea of what they are doing and have received no credible training, " said Mr Robertson.
"The markets are designed for the majority to lose so the minority win.
"You need to receive the correct training to start with and expose yourself to enough paper trading simulation to start with, and thereby prove to yourself that you are correct often enough before committing real cash and joining the 20 per cent that take money out of the markets."
And this is where Mr Robertson can help.
Because of all the publicity he has received, he has now started to run trading seminars. Even before then, he used to teach because people would track him down and ask for help.
The course is not cheap. It costs £5,000 for two weeks, and even then you won't be able to start trading straight away. You'll need all the right equipment and a minimum of £5,000 to open a brokerage account.
Now this might seem a lot of money, but if you'll soon be reaping the rewards of up to £7,000 a week, it doesn't sound such a big investment.
Of course there are no guarantees, but Mr Robertson seems pretty confident that pupils who listen to him, do what he says, and follow his methodologies will be able to follow in his footsteps successfully.
He said: "I don't fall into the nice guy category. I don't tell people what they want to hear, I tell them the way it is. This is a bit like army training where the drill sergeants go a little overboard with their trainees. They mean well, as do I, but I know how easy it is to lose money on the markets."
He says it's not necessarily the people with double first degrees who are good at trading, but those who have an open and quick mind, and he does vet students before taking them on.
We spoke to two of his former students.
Anne Smith, aged 36, from Bristol, is a former secretary who felt her life was stuck in a rut and who wanted to do something different.
"The course was very good and I've been paper trading (practising) ever since, " she said.
"I would have done quite well if I'd been doing it for real, but Mr Robertson made it clear that you have to keep on practising until you learn to read the charts properly.
"The course was quite a lot of money, but I just wanted a change and it was interesting.
"It doesn't matter if you aren't very good with figures, as long as you don't mind sitting in front of a screen all day."
Simon Jones, a former teacher, said: "There is something rather compulsive about it.
"You do have to make yourself take a break and get away from the screen every now and again and not worry if you do miss something, although it can be hard to move once you've started.
Article Title: How trading the office for home brought rich rewards for a broker
Working from home may not be everybody's idea of bliss. But with an NOP survey yesterday revealing that over half the population feel overworked, it seems likely that the number of people choosing to create a workspace in the comfort of their home will rise. Janette Harkess talks to a City Trader who has worked in isolation for a decade, and finds out that, with increasing e-commerce, internet awareness, leaving the office need not mean leaving the job.
Duncan Robertson is a lone futures trader, one of a rare breed of speculators who stake and make thousands of pounds daily on the world's stock markets.
He is a highly successful City Trader who spends his days absorbed in the intricacies of stock markets in London and beyond.
But when he looks up from his computer screen and the blips of the thread-thin blue line pulsing before him, the view from his office window is of the gathering clouds over the distant peaks of the Knoydart peninsula, rather than grey office blocks or busy city streets.
Born in Glasgow, Mr. Robertson - who studied accounting and economics at Robert Gordon University, Aberdeen - has been playing the markets alone for 10 years since leaving a major financial institution for whom he worked in London, Los Angeles and Geneva.
Now 44, he toys with the DAX futures market in Frankfurt, the S&P, or the FTSE - whatever interests him at any given time. But although he sits at his desk in the wilds of Scotland, he is safe in the knowledge that the information he is privy to is as up-to-date as that of any trader working from a stuffy office in the City. His satellite financial data feed system ensures that.
Unlike his office-bound London counterparts who regularly repair in packs to wine bars to toast their success or drown their failures in champagne, he does not seek social interaction and does nothing frivolous to mark the end of a day.
But his lifestyle has certainly paid financial dividends. He owns three houses on his Skye estate, he retains a London flat and he regularly travels to destinations such as Los Angeles, New York, the Far East and "most other places you care to mention". "You need rewards," he says, smiling wryly.
Hunched over his screen, coffee mug at his side, Robertson spends his time trading on the general performance of the market, measuring his success in "points".
In a recent five-day period he gained 142 points and lost 25. At £17 a point, that is over £7,000 for a week's work.
Robertson views his career as high-risk and aggressive and insists that successful trading requires you to stick to the rules and not get greedy. He says "I have a safety-conscious approach - keeping the risk at an irreducible minimum where the reward still looks good."
"Experience helps, the rest comes from having discipline, patience, intuition and practice, practice, practice. I find it a fulfilling life. In the evening there are charts to study - I have to try to figure out what might be happening tomorrow."
And for £5,000 - "cheap at the price" - he will train others to do likewise. It is an occupation Robertson enjoys. He says "it gives me a break from trading and helps me get back to basics." He is, however, choosy about who he takes on, he says: "the people who are good at this are not those with double-firsts from Oxford or Cambridge. They are people with common sense and an open mind. The market doesn't work like a clock - it has an irregular, unnatural beat. I see people in all walks of life who would make very good traders. Like, for example, tradesmen who make quick decisions, who can take one look at your kitchen and quote you a price for linoleum."
But despite wanting to encourage people into the business Robertson says "I don't fall into the nice guy category. I don't tell people what they want to hear, I tell them the way it is. This is a bit like the army training where the drill sergeants go a little overboard with their trainees. They mean well, as do I - but I know how easy it is to lose money on the markets. I know what works and I know what doesn't."
He recalls how he once tied a student to a chair, blindfolded him and stuck a strip of sticking plaster across his mouth. "Well, people have to learn" he says. Being tied up was an allegory for his powerlessness and he was blindfolded because he had no money left to pay for data feed therefore couldn't see the market. The plaster over his mouth represented his inability to complain. The reality is that the market can't hear you and doesn't care anyway."
Remarkable though it may seem, he is still in touch with several of his trainees. He says, "I like them, they like me. But after a little while they don't need me, once they have learnt to fly for themselves."
He takes great pleasure in the fact that through dealing via a computer, the markets can be opened up to anybody, regardless of status or background.
He says: "All my former students are doing well and they all come from backgrounds which are the complete opposite of what you would expect. They weren't necessarily university graduates with particularly high IQs, but they were all open-minded and determined to work hard and be a success."
His own determination to achieve is, he admits, driven by more than the mere pursuit of money. The fact that he suffers from serious hearing problems has played a significant role in it. Since contracting a virus at the age of five, he has been deaf in one ear and has severely restricted hearing in the other. A subsequent aural operation left him with tinnitus - a constant ringing in both ears.
He says "I came to terms with this situation a long time ago. It is no one's fault - its just the way life is and I accept that. But I think people who have something wrong with them try harder. The person with normal health does not seem to have that same big push, the big urge."
"There are periods when things go better than others. There are tough conditions and you have to tough them out. The smart money stays away if things aren't going well. But you get through it somehow. You have to and that can make you a stronger person."
He adds "You know there are more of us around doing this than you would think - I think that we just tend to stay low-profile. After all, the only information that is useful is the hard data coming in and expressing itself on the screen. Why mess around listening to anybody else when that's all you should be looking at?"
Article Title: Splendid Isolation can work wonders
But running your firm from a rural retreat brings its own pressures.
One of the many benefits of setting up your own businesses is the freedom to decide where it will be run from.
While large companies are constrained by having to maintain a big city presence or set up offices near a large workforce, small business owners and freelancers can run thriving businesses from the most beautiful and remote locations.
Shona Munro, 32, runs her greetings card design company, Tartan 2CV, from a converted cowshed on a farm near Loch Lomond in central Scotland. She lives by herself next door in an old stone cottage.
She says: "my studio has the most fantastic views down the valley and there are cows standing outside my window. It takes me about fifteen seconds to get to work. There are a lot of advantages to being here."
The remote location has not held back the business. Since setting up Tartan 2CV three years ago, sales have soared and Shona's cards are sold throughout the world. But being so isolated brings its own problems. "It can be lonely. You can go a bit crazy when you don't see anyone for days apart from animals" she says.
Tom Cowell, 68, runs his estate agency business, Premier Properties Worldwide, from his home in a small village near Bangor, north Wales. He sells properties in Florida, Spain, Cyprus and Portugal to British customers.
He explains: "I live right on the waterfront and when I'm sitting at my desk I can look out across the Menai Straits towards the Isle of Anglesey. It is really inspirational. I feel really lucky to be able to live in this part of the world and work as well. Until I moved here I had always worked in an office."
Since starting to work from home, however, Tom has found it hard to separate his business and home life. "the biggest downside is that I can never get away from the job.
If my phone rings in the evening, I always answer it because it could be a business call. I also occasionally miss the companionship of staff in an office."
Duncan Robertson, 45, lives and works alone in a couple of remote stone crofters' cottages on the Isle of Skye off the west coast of Scotland, where he makes a living as a day trader, buying and selling on the German stock market. The nearest shop is 12 miles away.
"I like silence and it is very quiet here" he says. "I don't have anybody saying, do this, do that. And when I look out of the window I can see mountains and water."
Indeed, he sees his isolation as a bonus to his job because he is not distracted when he trades. "I can take my time and act when it suits me. There is no pressure. I used to miss the companionship of being in an office, but I don't any more. Now I am not surrounded by people and their problems."
But he does find it hard to switch off from his job and admits he has no hobbies. "I have become a bit of a sad workaholic type. My social life is non-existent" he says. He has started running training seminars every few months for would-be traders, partly as a way to get off the island and meet new people.
He says "the isolation can be a killer. I look for an excuse to get away. You have got to take a break because if you are not careful, this stuff can really drive you nuts."
Dr Sandi Mann, senior lecturer in occupational psychology at the University of Central Lancashire, said that though swapping the rat race for the tranquillitty of an isolated stone cottage may sound idyllic, in reality getting away from it all can be just as stressful.
"On one hand you lose the stress of commuting, but on the other you gain other stresses, such as the isolation and the loneliness and the lack of emotional support. People need to have someone to talk to. At the beginning it can be great to get away from office politics and the constant distraction of other people, but after a while the loneliness kicks in and you find people thrilled when the milkman arrives because there is someone to talk to."
Article Title: Private investors pip professionals: Mike the engineer and Vladimir the social scientist beat most US fund managers by following strict rules
And the prize for Best Fund Manager goes to you - the online investor. In second place is the professional fund manager.
The top 100 online investors on Marketocracy.com not only outperformed 99.8 per cent of all US professional fund managers during the second quarter of this year, they outperformed all the main market indices too.
And these extraordinary online investors are not simply out-performing the professionals by taking excessive risks.
Marketocracy.com requires them to abide by strict rules that all online investors should consider.
First, no position can exceed 25 per cent of your total portfolio value. Second, half your portfolio must comprise positions of less than 5 per cent each. Third, you must classify your investment style as growth, value or a blend of the two. This last rule ensures an added professionalism and discipline.
So who are these online investors? Mike is a civil engineer at a water treatment plant. His return in the second quarter of this year was 65 per cent. Michael, a postman, achieved 56 per cent and Vladimir, a social scientist, 40 per cent. The Dow rose a paltry 6 per cent in the same period.
What are these exceptional online traders buying that is producing such outstanding results? Curiously, there are quite a few technology stocks, including Foundary Networks, Advanced Micro Devices, EMC, Juniper Networks, Sun Micro-systems and Priceline.com. Visit marketocracy.com to see what else they hold.
Are you outperforming professional fund managers too? To see individual fund manager performance, visit www.citywire.co.uk. You can find how well funds have been performing by visiting www.moneyextra.co.uk, www.ask figaro.com and ITSonline.co.uk.
Measuring your own portfolio performance is not straightforward. Investors tend to overstate their performance because of mathematical or psychological errors. Mathematical errors include the (in)famous case of the Beardstown Ladies, who included cash inflows as part of their returns.
Psychological errors involve revising history; "Oh, I had an off day when I picked those two stocks, I'll leave those out of my calculations"..
The maths is a little tricky. Imagine your £1,000 investment grows to £1,500 after three months (ie. R1 = a 50 per cent gain). You then add another £1,000. The £2,500 then appreciates to £4,000 over the next nine months (R2 = 60 per cent gain). What is your total return?
Total Return = R1 + R2 + (R1xR2) or 0.5 + 0.6 + (0.5 x 0.6) = 140 per cent. The total return is not simply the profit/capital, ie. £2,000/ £2,000 (100 per cent) because your profit was earned on different amounts of capital over different periods. For instance, if you produced a 100 per cent return on £1,000 and then introduced £10,000 into your account on the last day of the year, your return is still virtually 100 per cent.
Having calculated your performance, how do you beat the fund managers? Exploit the advantages of being small, says Peter Siris in Guerrilla Investing. That often means small cap investments. See specialist site www.itruffle.com..
With billions to invest, many funds cannot invest even 0.5 per cent of their capital without owning the company outright. If a fund manager's minimum investment is £400m and he does not want to own more than 50 per cent of a company, then there are only 200 large cap UK public companies to choose from.
It is also small cap stocks that produce higher returns than large ones over a long time-frame, according to research by Nobel prize winners Merton Miller and Myron Scholes.
Moreover, Ben Warwick, confirms in In Search of Alpha that with more money under management, pension funds confined to large caps find it increasingly difficult to generate alpha:market-beating returns.
How else can you beat the fund managers? By adjusting the number of stocks in your portfolio. Robert Hagstrom's The Warren Buffett Portfolio explains that a portfolio with 250 stocks is less likely to beat the market than one with 15 stocks. But the fewer the stocks the more volatile the returns (the beta) - that is, the greater chance you will trail the market too.
Hagstrom suggests Buffett goes for the latter approach - "put all your eggs in one basket and watch the basket like a hawk".
If alpha and beta is all Greek to you then of course consider investing through a fund manager, as should those who simply do not have the time or inclination to do their own stock-picking.
But do not be surprised if your civil engineer neighbour comes home from work in a Ferrari.
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