Business Insider recently offered the first part in a lengthy interview with the greatest trader “you’ve never heard of” – Peter Brandt, who is also the author of Diary of a Professional Commodity Trader.
Brandt’s 30-year career as a hedge fund trader includes a stunning (and audited) 41.6% compound track record. His best-year returns have topped an astounding 600 percent, while worst-year draw downs were in the single digits, less than 6 percent. That’s consistency and performance. includes a stunning (and audited) 41.6% compound track record. His best-year returns have topped an astounding 600 percent, while worst-year draw downs were in the single digits, less than 6 percent. That’s consistency and performance.
In Part One of this lengthy interview, Brandt speaks about how he got started in trading, how he handled early setbacks, and his first really big win with Swiss Francs that put him on the map as a trader.
Brandt fell into the business while working for an advertising agency in Chicago in the 70’s. A friend worked at the Chicago Board of Trade and invited him to lunch. During visits, he got a close-up look at the trading pits and was simply captivated by the madness and entrepreneurial freedom of the floor traders.
After asking enough people how to break into the business, he ended up at Continental Grain, in a quasi-sales position to help bring in more customers for the firm’s trading business. Once there, he learned the commodity business inside out. Particularly in grains and livestock, for clients such as Campbell Soup Company.
He started dabbling in trading for his own personal account in the late 70’s. He learned the hard way that “bullish” or “bearish” meant little on the markets without a sense of timeframe, profit targets, and the discipline to get out of a trade at a predetermined point.
He learned a lot of lessons the hard way. Listened to as many different traders with different ideas as he could. And generally kept losing money in the early days. But he kept trying.
The turning point came when he stumbled upon technical analysis, charting and trading on patterns, explained thoroughly in a book by Robert Edwards and John Magee called Technical Analysis of Stock Trends, which he highly recommends. Brandt patiently waited until he had accumulated enough to trade effectively using this new approach, roughly $20,000 at the time, and discovered that he could now rack up a consistent series of winning positions.
You can read more on how he turned that $20,000 into a “serious” amount of money in Swiss francs, and made the transition to full-time hedge fund trader on his own, is at Business Insider. It’s an entertaining story in Brandt’s own words.
Have you thought about a career as a commodities or futures trader? Are you in the business now? What advice would you give aspiring traders? Add your comments below.