Martin Kronicle

I’d like to start this post with an inspirational quote for all of you who think that you need a certain amount of assets, or something to be just right before you begin your professional career as a trader.

Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative and creation, there is one elementary truth, the ignorance of which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then providence moves too. All sorts of things occur to help one that would never otherwise have occurred. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents and meetings and material assistance, which no man could have dreamed would have come his way. Whatever you do, or dream you can, begin it. Boldness has genius, power and magic in it. Begin it now. – Johann Goethe

Social Media

I’d start with LinkedIn and get recommendations from previous employers, clients, and senior managers if you can. They don’t have to be about trading specifically and these will become your professional online resume. On LinkedIn, create a unique URL for your name or company, here’s mine:

http://www.linkedin.com/in/martinkronicle.

You can do the same with your Facebook Fan page, once you get 25 or more fans.

http://www.facebook.com/martinkronicle

Having these probably won’t get you an allocation, but it will help you rank higher in natural searches on the internet. And that will make it easier for people to find you.

Also to consider is the fact that you can engage in conversations with your fans and those will be public. This is another way for you to show off what you know, but do it tactfully.

I’d put the LinkedIn URL in your D-Doc and your marketing material. Character recommendations are at a premium these days, so the more people you have saying good and LEGIT things about you, the better. Make sure that they are from Superior Officers so to speak. Having your buddy say “Great Guy. Always a pisser at the summer house” is probably something to shy away from.

Disclosure Document

I’d create Disclosure Document and have one in the spirit of all the NFA rules. That will go a long way and it says a lot about you.

Track Record

Compile your track record in the proper VAMI format. You can get the CTA Guide pdf free from the NFA website.

Once you have 3-6 months of actual trading performance, have a professional look at your performance to validate it. They are not necessarily audited, but are evaluated along the lins of what are known as Agreed Upon Procedures.

Elevator Talk

Is the small talk that leads to bigger things. The best answer I’ve ever heard to the question “What do YOU do?” is “I invest people’s money.”

Marketing

The NFA makes its various membership lists available for sale by registration category. You can bifurcate the lists in many ways according to what your needs are and get the results parsed by zip code. If you’re going to be a CTA, then consider meeting (face-to-face) all the Pool Operators (CPOs), Introducing Brokers (IBs), and Futures Commissions Merchants (FCMs) within an hour or two of where you’re located, for example.

This is another reason why you’d want to be registered with the NFA yourself.

The next addition to this running series will be on Taking Meetings with Allocators.

Victor was in town for business for a few days and while we were at breakfast this morning he mentioned a good book to read. So naturally, I thought I would in turn mention it to you. It’s called Fiat Money in France, by Andrew Dickson White. [I also recorded about 11 minutes of HD video with him that I'll post in the next few days - classic Victor - great stuff. It's just us at the table, not a fancy presentation, fyi, but no one can top his candor.]

I just looked the book up as soon as I got in, and it turns out that the book is available for free on the internet b/c there is no copyright in the US. You can also down load it from Amazon to your Kindle for free also.

Here is an excerpt:

Early in the year 1789 the French nation found itself in deep financial embarrassment: there was a heavy debt and a serious deficit.

Statesmanlike measures, careful watching and wise management would, doubtless, have ere long led to a return of confidence, a reappearance of money and a resumption of business; but these involved patience and self-denial, and, thus far in human history, these are the rarest products of political wisdom. Few nations have ever been able to exercise these virtues; and France was not then one of these few.

Sound familiar?

In 2006 Muhammad Yunus was awarded the Nobel Peace Prize for show(ing) himself to be a leader who has managed to translate visions into practical action for the benefit of millions of people, not only in Bangladesh, but also in many other countries. Loans to poor people without any financial security had appeared to be an impossible idea. From modest beginnings three decades ago, Yunus has, first and foremost through Grameen Bank, developed micro-credit into an ever more important instrument in the struggle against poverty.

Yunus’ concept of the micro-loan and how he envisioned it to change the world inspired Joel Bender and Kayoko Mitsumatsu to found Yoga Gives Back, a non-profit organization that coordinates fundraisers throughout the world.

Yogis Anonymous (YA) will hold its Yoga Gives Back fundraiser Saturday, January 30 beginning at 7:30 pm. Ally Hamilton said in a recent interview, “We’ve been doing a lot of giving back recently, especially with Haiti.” YA held 3 fundraisers for Haiti relief efforts.

The 2-hour Yoga Gives Back fundraiser @ YA will feature 4 esteemed yoga instructors from Yogis Anonymous, besides Hamilton, including Chani Nicholas, Charlie Samos, Meredith Hines, and John Sahakian.

The event will also feature live music through the voice and hands of Hamilton’s YA co-founder (and husband) Dorian Cheah, as well as Daniel Stewart, Emily Kerns, Jeff Harris, and Greg Klimuck.

You are encouraged to register online as space is limited. Refreshments are provided by the awesome generosity of Sambazon Organic Acai Beverages and Whole Foods Market Santa Monica.

Most of the other YA instructors wanted to share their love and compassion with the Los Angeles community, for Haiti, and in support of Yoga Gives Back. Read them, recite them, and see how you might be inspired by them. There are 18 YA instructors who each provided 6 for a total of 108 inspirations – the significance of which is very spiritual. The full list is below.

Mary Beth LaRue (pictured above) said “I want to use my yoga every day, at least once…and use Facebook less” while Chani Nicholas said, “I’m going to practice radical acceptance.”

I loved this from Charlie Samos the most: “to never be forced to take a bow, but rather to surrender, receiving the lesson, and with one breath and beat of my heart, to stand tall, with acceptance and wisdom.”

Brock Cahill added, “Acknowledge the blessing of choice, and make firm decisions based on the the intrinsic and devine wisdom of my soul” while his wife Krista said, “I want to bring more awareness to preventive medicine.”

Ashley Turner mentioned “To be more loving in every moment–most of all to myself — and to practice yoga more…” And this is from an instructor who teaches at several schools…Jai Ho!

There are 108 YA inspirations in all.

Photo of Mary Beth LaRue courtesy of Ashley Turner Photography.

This article originally appeared in the Huffington Post.

If you are self-taught and are want to become a professional trader – either Prop Trader or CTA – you have your work cut out for you. You are unknown and will stay that way unless you go out of your way to change that. You are at a distinct disadvantage to those who’ve been trained at a big firm and have colleagues and relationships they can tap.

That said, the trading world loves a guy coming out of left field with a new slant on things, so don’t be discouraged – you just have to want it more. Also to consider, many folks with a pedigree lack ambition – their character is not fully developed yet b/c they haven’t had to struggle to much.

Most traders are great on the quant side, but they are horrible at marketing – and marketing is how you’re going to get noticed. The good news is that I’ve been there and if you follow the steps below, you will go a long way towards getting noticed, getting an allocation, and saving an enormous amount of time in the process.

Get a professional Head Shot

Pay the money to have it done. Don’t take the best one off of your Facebook page b/c you know how to right-click your mouse or do a Command-Shift-4 screen grab. You will use it for years and the ROR on it will pay for itself.

You can use hypothetical results from your backtesting to market, but you’re better off having at least 3 months of actual trading

Two years ago, I knew of guys raising a few million from allocators based upon their hypotheticals. This is not the market for it right now, however, so IMHO you’ll do much better with at least 3 months of actual trading performance. As long as your drawdowns in within model, that’s ok. You’re not going to get an allocation on the first meeting anyhow – you just looking to get on the allocators’ respective radar screens.

Most importantly, you want their permission for you to send them your month-end numbers. You will do this via email to someone named Britney who is most likely an assistant. Don’t take it personally, and whatever you do, always be very generous with your Thank You’s and Please’s. Be prepared to send data for MONTHS…

You need to get followed like in Social media

There are a few online places that you can upload your data and c.v. to. Online places like AutumnGold and IASG are 2 good places to start. Once you’ve got those covered, look into Altegris Investments in La Jolla, CA.

Biographical Information

You’ll want to have a short bio that gives anyone reading it the meat and potatoes of who you are. IMHO, Less is more. If your bio is 5 pages, it’s a bore and you look full of yourself. In the trading wold, your P&L is your credential – end of story. No one cares how smart you are, especially when you’re starting out. Keep it brief and full of talking points only.

Side Note: If you have one of those moments in life that you’d rather not remember never mind talk about, here’s how to handle it…

Don’t put it in your written bio. During the in-person or phone interview, you’ll sense that there will be an appropriate time to tell who you are speaking with. Most allocators WILL do a full background check, so if you have something to say, you’re 1,000 x better off telling them in person before they see it on some sterile report.

Outcome: If nothing else, you will garner a lot of trust by looking the person in the eye and telling them the story. Everyone knows that it will be hard to do and you score big points for bringing it up and being honest on the onset of the relationship.

Don’t be a cliche

Don’t say you’re the next Bud Fox or whatever or deploy overused quotes from movies or popular culture. You’ll look like a jackass. Be yourself and speak your own strengths – whatever they might be. If you are lucky enough to get an allocation, it will be for everything you bring to the table, and CLARITY of what you CANNOT do. Knowing both is an absolute strength.

In other words, you will be joining a stable of very talented traders who’s collective abilities will play off one another in a portfolio. If you feel like a jerk writing these things about yourself, ask a good friend for 3-5 things that they admire in you, especially about your character.

I’ll have Part 2 for you in the next few days.

I am not affiliated with any of the firms mentioned here.

A judge ruled that Canadian trader Brian Hunter was found to have manipulated the Natural Gas market on the NYMEX. The exchanges now should move in and ban him permanently from trading.

Bloomberg News said on its website, “Hunter knew that New York Mercantile Exchange natural gas prices could be manipulated and set out to do it, the administrative law judge, Carmen Cintron, said in an 80-page ruling issued on a commission docket today. The ruling is subject to review by the full commission.”

“It is found that Hunter intentionally manipulated the settlement price of the at-issue natural gas futures contracts,” Cintron wrote. “His trading was specifically designed to lower the NYMEX price in order to benefit his swap positions on other exchanges.”

Hunter was the head energy trader at Amaranth Advisors LLC, an investment advisory firm, when it ceased operations.

At its peak, Amaranth managed $9 billion in hedge fund assets, but lost $6 billion in natural gas due to highly leveraged trades Hunter amassed for the firm. Hunter reportedly leveraged his trades for Amaranth 8:1. To put that into perspective, at their most aggressive posture, most other traders will not exceed 3:1 leverage over their entire portfolios, never mind one position in their portfolio. [These trades put Amaranth under, but were not part of the recent ruling for market manipulation.]

What Hunter did to warrant the manipulation ruling was what locals refer to as banging the close. By flooding the NYMEX with Sell orders in Nat Gas in the last 10-15 minutes of trading (the Close), Hunter found that he could manipulate the price downward as there were no likely buyers for the type of size he was representing for sale.

Hunter concurrently held similar Nat Gas positions at the ICE that were much larger. Those positions are called look alikes, because they a not physically settled like their counterparts at the NYMEX are. After First Notice, those long contracts can be delivered against. This is true for any commodity.

Conversely, ICE contracts are settled financially, like the S&P 500 for example, so a trader does not have to worry about getting delivered against. Hunter was short his contracts, so he did not have to worry about delivery in this case. His goal, however, was to artificially depress NYMEX Nat Gas contracts so as to lower his larger ICE look alike Nat Gas contract position and burgeon his account balance. Herein is the manipulation.

Hunter was manipulating the price downward, so if anything, it may have benefited consumers. However, manipulation in any market manner is unlawful. He likely affected other traders who might have had to contribute higher amounts of margin (collateral) for their commodity accounts in order to maintain their positions.

Hunter’s attorney Matthew Menchel said, “The FERC should never have presided over this matter, which is outside its competence and jurisdiction. Its decision means nothing in our view, and the FERC will have to accept the consequences when we get to the DC Circuit, which the FERC has been trying to avoid for the last few years.”

I disagree. And arguing some technicality does not vitiate the finding that he deliberately manipulated the Nat Gas market. He has personal responsibility for all his actions at all times.

You have the letter of the law and the spirit of the law. Hunter’s behavior seems to have violated both in this case.