Who is Paul Rotter
In 2005, Paul Rotter is considerably the single largest and most successful individual futures trader in the world, completing trades on the Eurex exchange primarily in the Bund, but also in the Bobl and Schatz interest rate futures. He trades between 200,000 to 300,000 round turns daily using the X_Trader platform, and clearing through GNI Touch.
The purpose of this article is to extract lessons and inspirations from the trading life of Paul Rotter and how his success story can inspire the readers of this website. There was no key event in how Paul started in trading. He bought his first stock because it was a school requirement before. Professional trading came into his life as he began apprenticeship in a German bank. He had to work on the DTB (now EUREX) execution desk for several weeks. This attracted him a lot. During that time he was doing gamble trades on his private account, losing pretty much all of it. When it was deeply in the red, he had to leave the bank but shortly after, he was allowed to start trading in a Japanese bank. He was very lucky here, since he was allowed to gain knowledge through learning by doing. The bank didnt give him any mentor. In the beginning he was exchanging ideas with the chief trader Ajiasaka, who was constantly profitable. The chief trader sometimes even hedged the positions of the his boss, when he thought that his boss was wrong. Paul later had many conversations about market psychology, which proved to be very helpful, especially after bad losing days.
Recalling his early trading days, Paul was doing 100 - 150 round turns a day after a short time. He had no losing month with the first 3 years of his trading. Later on with bigger position sizes he took occasional hits, especially after EUREX allowed terminals in the US and big players like Harris Brumfield from Chicago were entering the field. But like the saying that every trader has to completely blow up his account at least once before he can become successful, Paul had his share as his private account saw some bad times during his apprentice in the bank, although he must admit, that back then he had absolutely no idea that there was something like risk-management. Later on he realized that the 7-digit losses is too cumbering. He had that day where it was a blackout and after losing $2.5 million, he was seriously thinking about stopping. He still had enough capital left to live without having to worry about financial issues then and he just wouldnt want to take those psychological hits anymore. After taking 4 weeks off, he regained his motivation and returned in the ring. This time, he was able to make up the loss in a relatively short period of time, so that he came out stronger than before. This has changed Pauls views of the market. With the experience of bigger losing days coupled with good phases right afterwards, hes not so sensible for losing days anymore. He knows that he can make it come back. This has lead him to being able to switch off the screens on a day with medium/small losses more easily, instead of forcing the way back into positive territory.
With regards to mental preparation, Paul has nothing specific to share. Actually, he is simply motivated all the time. He sees trading more as a sporting challenge and try to erase the thought of the money. To keep him more relax, he does a lot of sports and take lots of vacations. What a way to live life, you would think!
Paul goes on to share his strengths as a world-class trader and where are the differences between him and other traders: "Its the ability to get more aggressive in winning phases, taking bigger risks, and scaling back in losing times. this is against human nature. the best thing is to have somebody around who is neutral to trading, that switches the terminals off, when a certain loss level has been reached for the day", he says. Hen asked if it is possible for a single player to manipulate the market, Paul answered, No. In his opinion, a single player cannot influence the market around the clock. There are always several big players in the market. The BUND is one good example - there are one million contracts traded a day. When a trend starts out of the blue with only slight pullbacks, he could trade against it, but with no effect. He couldnt stop the market from going up, because there would be more money needed that he could bring in. Apart from that, so-called Analytics computerized scalpers have made it tougher for him lately. As far as he knows they are analyzing the behavior in the order book and creating a fully automated system. Since they act in several markets at the same time, he thinks these computer freak come from the fully automated arbitrage- and spread-trading.
When asked to give an advice for the public, especially those interested in trading, Paul says that everything can happen all the time, so you better have your toilet close to your trading desk. Pauls success is a living inspiration for others as he is proof that it is humanly possible for a small trader to build on his success and grow into the biggest most active speculator on the planet.
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