This Week’s Battle Plan
The
Making Of Two Professional Traders
One of the highlights of having this site is the opportunity I get to
meet many other traders. These traders range from rank beginners up to
people who have 30-40 years of professional Wall Street experience.
Part of the fun of meeting the newer traders is that I sometimes get
to watch the amazing progress and transformation as they make their
way from “trainees” to becoming full time successful
professionals.
Two of these people who have made this trek will be introduced to you
in a few minutes. They are Mark Angil and Rob Davenport. Both
gentlemen are in their early 40’s, both are highly intelligent, both
were very successful before making the decision to change careers and
trade full time, and both have a good story to share for us all to
learn from.
By way of background, both Mark and Rob are Navy men. Mark is a Naval
Academy graduate and he and Rob were both assigned to the USS
Carl Vinson, a nuclear aircraft carrier. Upon leaving their
positions with the Navy, they moved on to Applied Materials where they
became executives during the time the company had its most explosive
growth. About a year and a half ago they both made the decision to
retire from the corporate world and begin their new career as
professional traders. I got a chance to meet and spend time with both
of them for the first time in May 2002 at Kevin Haggerty’s seminar.
Both had a set goal that they hoped to accomplish, and both are now in
the midst of accomplishing this goal. And, what you will soon learn,
is that the difficulties and pressures of working on a nuclear carrier,
and then working for one of the great growth companies in Silicon
Valley, is incredibly, in their words, less pressure than the
pressures of becoming a professional trader!
I’ll let Rob and Mark pick it up from here…
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial”> Hi
guys. Real briefly, can you share your background with everyone?
10.0pt;mso-bidi-font-size:12.0pt;font-family:Arial”> Hi Larry, sure. I
went to school at Oklahoma State University and got a degree in
Mechanical Engineering back in 1984. From there, I immediately joined
the Navy and became an officer with the intention of getting nuclear
power qualification in the Navy. That was one year of school that you
go through, basically, like a Masters in Nuclear Engineering, before
they ever send you to a ship.
(
AMAT |
Quote |
Chart |
News |
PowerRating). I worked for 13
years for Applied Materials, primarily in marketing-type roles as an
executive, a director in the company, and then decided it was time to
do my third career, which was trading. In between, I got an MBA and
that’s actually where I had my first exposure to technical analysis,
although it was very limited.
mso-bidi-font-size:12.0pt;font-family:Arial”> Thanks
Rob. Mark, go ahead and do the
same thing.
mso-bidi-font-size:12.0pt;font-family:Arial”>: My degree is in Electrical
Engineering from the Naval Academy. I went to Navy Nuclear Power
School, same as Rob. And we were on the same ship, the USS
Carl Vinson, so that’s how this whole journey together started.
mso-bidi-font-size:12.0pt;font-family:Arial;color:blue”> Mark, you
turned down a chance to go to Harvard and some other schools for
athletics, is that right?
font-family:Arial;color:blue”>Angil
mso-bidi-font-size:12.0pt;font-family:Arial”> When
did the two of you decide you were going to make a run at trading on a
full-time basis?
Davenport: I decided in late 2001 that I was going to
quit my job and trade full time.
mso-bidi-font-size:12.0pt;font-family:Arial”> What do you think, Rob
— about the same time, right? I knew I was going to leave the company
and start this third career in late 2001. It took me until late 2002
to have a decent jumping-off point. I did a lot of reading in that
year too, to prepare myself for leaving. A lot of research to figure
out if I really wanted to do it.
mso-bidi-font-size:12.0pt;font-family:Arial”> At
the time you guys decided to do it, did you think it was going to be
easy?
Davenport: I didn’t think it was going to be easy,
but I certainly didn’t think it was going to be as hard as it
ended up being. We figured that with our background, and
perseverance, and everything else, we figured six months to a year and
we’d have this thing nailed. That wasn’t the case.
Connors: Mark,
you once told me that this was the hardest and most challenging thing
you’ve ever done in your life. Is this still true?
Angil: Absolutely. I thought it
was going to be difficult because all the reading that I had done
indicated that the failure rate is over 90%, but Rob and I had been
— we thought we had dealt with some of the most challenging stuff
out there up until that point. We knew it would be challenging but as
it turns out, number one, it wasn’t anything like I thought it was
going to be even after reading about it for a year. Number two, it was
much more difficult when I finally figured out what it was. It turned
out to be much more difficult that I had originally anticipated.
Trading is absolutely the toughest thing I have ever done.
mso-bidi-font-size:12.0pt;font-family:Arial;color:blue”>Why do you
think it’s so tough?
Angil: Davenport: Connors:
12.0pt;font-family:Arial;color:windowtext;font-weight:normal”>
Angil: font-weight:normal”> about two to three years of constant
repetition, every day, four to five hours in the plant, it just
kind of “clicks,†and that was the philosophy I brought
into this. For me, my little mantra is, “Excellence Through
Repetition.†I just keep repeating that to myself every day even
though I feel I could get a little bit bored. I train my mind to
trading, and I’m just trying to stay repetitive, and stay
repetitive.
Connors:
Davenport: mso-bidi-font-size:12.0pt;font-family:Arial”> Arial;font-weight:normal”>
Angil: font-family:Arial;color:windowtext;font-weight:normal”>– and then not
thinking outside the edge. The edge is well defined. And it’s
just having the patience to go through and execute.Connors:
What’s the biggest
trading mistake you’ve made along the way?
Davenport:
Angil: Arial”>Connors:
Simple is better?
Angil: font-family:Arial;font-weight:normal”>
Davenport: font-family:Arial;font-weight:normal”>
Angil: Arial”>Davenport:
font-family:Arial”>Connors:
Angil: Connors:
Angil:
Connors:
Arial”>
Angil: Arial”>
Connors:
Angil: Connors:
Arial”>Davenport: Slightly
different in that I don’t have a specific money target. What I do is
basically say, “I want to trade at the current size well, two to
three months.†I started out with 400 shares that my money
management requires me to cut into quarters and now I’ve tripled
that but with a caveat and that is a layer of complexity in that is I
don’t always take triple the shares. Now I have three different —
five different — positions that I take according to what I perceive
as statistical probability of the trade. So that’s why I’m a
little bit different. Mark is always the same size. For me it’s a
subjective decision: Do I take a full position or a two-thirds
position or a quarter position?
:And that full position — you
anticipate it to be — is it still 4000 shares?
Davenport: Right.
Connors: Mark, you’ve used
money, Rob, you’ve used share size, but the smartest thing you did
is you didn’t dive into this thing full blown. You do the damage to
the least amount of money. You learned how to do it with the smallest
amount of money and then just gradually keep building up.
Angil:
Connors: Yes. The least amount of damage
and the most amount of knowledge can come into it for the cheapest
price. Do the two of you miss corporate life?
Angil: Davenport: Ditto.
Connors:
font-weight:normal”>
Davenport: Arial”>Connors:
normal”>Same thing for you, Mark?Arial;font-weight:normal”>
Angil: Some Thoughts On
The Interviewlconnors@tradingmarkets.com)
the questions and I’ll do my best to get them answered for you. I hope
you will be able to take some of Rob and Mark’s experiences and
successfully apply them in your own path to succeeding at this
profession!
Research
Test, And Don Miller 1.
A few weeks ago I put out a research challenge to you. I came across a
report published in the late 1970’s that basically showed that when
five different indicators aligned, the market rose the next day 90% of
the time. The challenge I presented was to see if the research has
held since that time.
One of the indicators the test used was the daily TICK levels. What I
did not know is that, good historical TICK data is all but impossible
to find. It’s so bad that not even Bloomberg has clean data. For those
of you who sent me results without the TICK data or variations of the
test, I’ll be sending you a gift certificate for your efforts later in
the week for you to use at TradersGalleria.com.
I’m going to do my best to find a source that has “clean”
TICK data, and I will share the test results with everyone once I do.
2. After this Monday, Don Miller is going to be changing the
nature of his column. Instead of doing an intra-day piece on the
markets, he’s decided to instead write an in-depth weekly column (it
will be published each Saturday morning) that will be fully focused on
trading education. For those of you who have taken Don’s courses
and/or attended his seminars, you know that he’s a man with a great
deal of trading knowledge — and a lot to teach. Beginning next
Saturday, and going forward from there, this knowledge will be brought
to all of us on a weekly basis.
Have a great week trading (and thanks again to Mark and Rob for
sharing their trading journey with us)!