My History With Trading
I realized how much I loved the exciting world of day trading at the young age of 7. I used to go to work with my father, who was a commodity futures trader. Seeing all of the people on the floor at New York Mercantile Exchange, screaming and carrying on, was intriguing. Every which way, I could hear people shouting out numbers, while others frantically wrote down figures on papers and chalkboards. The energy in the room was overwhelming, but in a good way.
When I got a little bit older, my father started to teach me how to draw point and figure charts. Of course, back then this was done with a pencil and graph paper. I learned how chart formations were created and how they were used to predict the future. It seemed so cool. None of my friends’ fathers had jobs like my dad. I was hooked.
After working in the industry for a while, it came to my realization that my father was one of the purest forms of “day traders” and “swing traders” of his time. These terms were brought about during the online electronic trading era. Just imagine drawing charts by hand, while standing in a pit like my dad did. It doesn’t get any more old school than that!
In 1987, I got my first job working on the floor of NYMEX. I remember it like it was yesterday – it was the Monday right after my high school graduation. Keeping the charts updated was one of my key duties, but a few short years later I was replaced with computerized charting services. The handwritten charting days were gone for good. However, I continued working at NYMEX all the way through graduate school. I was on the floor every summer, winter and spring break.
One memory I’ll never forget took place on January 15, 1991. I was working with a guy in the crude oil pits. Tariq Aziz, one of Saddam Hussein’s right-hand men, had just walked out of a meeting with U.S. diplomats at the UN. This was when Iraq’s deadline for withdrawing from Kuwait had expired. In just two minutes, I watched a barrel of oil shoot up from $27 to $40 per barrel. This was unheard of at this time! Everyone in the trading pit went bananas. Especially the guy I was working with, who had made a whopping $100K that day. Of course, this was short lived – the prices dropped back into the $20s the following day.
Fast forward to the early 1990’s, a friend of mine explained to me that before I go to the NYMEX for good, I need to check out stocks, but from a stockbroker’s perspective. In the early 90s, picking stocks was pretty simple. It wasn’t required for you to learn much about charts or even the fundamentals of trading. As long as you were able to hold on to a stock long enough, you could make profits. This was especially so with technology-related stocks.
When I got into the industry, the dot com boom was just peeking its head over the horizon. This was a great time to be a broker/trader. New investors were easy to find and everyone was pretty much used to the bull market that originated in 1982. At this time, you would see stocks double or even triple quickly. I got into the game at the perfect time.
Unfortunately, less than a decade later, the bubble burst. It happened March 2000, while I was in Hawaii on my honeymoon. Luckily, before I left, I had all of my clients get out of the market, so that I wouldn’t have to worry about them while I was away. Six months before, the stocks were exploding like never before. I bought stocks for clients at 10 a.m. and by 3 p.m., I was selling them off 10% to 25% higher. During those six months before the bust, I was making higher commissions than I had made in one year just 5 years ago. Everyone wanted me trading their stocks for them. My phone wouldn’t stop ringing! People were getting cash advances on their credit cards just to be able to buy stocks. It felt like a dream and I was soon to wake up to a harsher reality.