Michael, Marcos has a research background. But he was more interested in practical operations. At first, he worked secretly, and then he resigned from the position of the high-paying researcher to engage in foreign exchange and foreign exchange trading full-time. He worked as a trader in a futures company, and for a few years, he made more money than all other traders in the company. In 10 years, his company account has grown 2500 times.
There are many factors to Marcos's success: First, it is personal effort. For some time, he was turning around almost 24 hours a day. The second is the guidance of Master Yuming, from darkness to light. For most master traders, early failures seem to be commonplace. Marcos is no exception; he never made a profit in the first few transactions. What's more, he was wiped out more than once. This shows a truth, early defeat shows that you must have done something wrong, but it does not necessarily prove that you will fail in the future.
Q: How were you interested in doing futures?
Answer: I originally wanted to learn. He graduated from Johns Hopkins University in 1969 with excellent grades and was at the top of the class. Clark University offered me a Ph.D. scholarship in psychology, and I was supposed to be a professor safely. At that time I met a man named John. He claimed that he could help me invest, and he promised to double it every two weeks. I was said to be moved. I had never invested before, so I didn't have any doubts. I didn't even ask him how he could make it so fast. I immediately hired him as an investment consultant with a weekly salary of $30. I put out my savings of $1,000 for futures. The first time I went to a futures company with John, I saw various quotations and didn't understand what was happening. Someone on the company's megaphone suggested buying soybean futures. I asked John if he should buy it and found that he knew nothing. But we still got a buy order. It is strange that as soon as we entered the market, the price of soybeans began to fall as if the market waited for me to enter the market and then went back. But my instinct seemed pretty good at the time. We immediately cut the order and lost only $100. The next one was corn, and the result was similar to the first one. The third deal was wheat, and the result was still a loss. It took us three days to lose all our money. At that time, we measured our success by losing light in a few days. A thousand yuan was lost, and I fired John. He said that I made the biggest mistake of my life. He wanted to go to Bermuda to wash dishes to earn capital, do futures, and retire after becoming a millionaire. I haven't heard from him since then. Later, I saved another 500 dollars, made a few cash, but still lost everything. All of my first eight transactions lost money.
Q: Have you ever thought that maybe you are not suitable for futures trading?
Answer: I never thought about it. I always get good grades in school, so I guess it's just a matter of experience. My father died when I was 15 years old. He left an insurance premium of 3,000 dollars. I disregarded my mother's objection and cashed out the money. This time I learned well. I first read a book on wheat and soybeans and then bought a wheat contract following the advice of an investment consultant and made two hundred yuan. I was so excited that I bought another one when the price fell back and made another profit. The next step was pure luck: I purchased three December corn contracts in the summer of 1970, just in time for the big insect plague that year. I then bought some contracts for wheat and soybeans, and after one summer passed, I made a total of 30,000 U.S. dollars. In the spring of the following year, there was a widely accepted theory on the market: locusts would endanger crops again after they survived the severe winter. I borrowed 20,000 yuan from my mother and invested 30,000 yuan in wheat and corn futures together with my own 30,000 yuan. After I entered the market, the market was neither up nor down. One day the "Wall Street Journal" published an article entitled "There are more locusts on the Chicago Stock Exchange than in the cornfield."
Corn futures began to fall and soon reached the limit down. I was stunned. I wanted to play, but I just watched it stupidly, hoping that the market would reverse. I watched, managed, and I couldn't get out of the field by the time the limit fell. I thought about it all night and had no choice but to cut a single to play. I closed all the orders early the following day. As soon as I settled my 30,000 yuan, my mother also lost 12,000. I was so angry; I decided to find a job. When I work as an analyst at a securities company, I feel itchy when I see others doing orders on the wall. That company forbids analysts to do orders, but I don't care about that much, borrowed some money from my mother, brother, and girlfriend, and started quietly. To keep it secret, my agent and I agreed on some personal words. "The sun is out" means one thing, and "the sky is overcast" means another. I still lose money after doing this. Lost and borrowed, borrowed and then lost, the same cycle is repeated again and again.
Question: Did you know what you did wrong at the time?
Answer: Good question. At that time, I didn't have the principle of making orders, and I did everything wrong. In October 1971, I ran into Ed Sicotta in the agent’s office, and I owed all my success to him. He had just graduated and studied a computer technology trading system. He asked me to do research together with him and do orders at the same time. He is very knowledgeable about the market, and he is also very successful in trading. He takes advantage of the trend to take orders. He taught me how to cut charges and how to make a profit. Although I have Ed's guidance, I continue to lose money, mainly because I am not patient enough and have lousy timing. In the summer of 1972, the Nixon administration began to relax the price freeze. I made a lot of money in the plywood market, from 700 to 12,000. When the price of plywood more than doubled, the timber market hardly moved. I squeezed all the money back like the last time I made corn. At this time, just in time for the government to come forward and issue a series of statements, saying that it was going to crack down on speculators in the timber market, the futures plummeted suddenly, and I was once again in desperation. I have been on the verge of being wiped out for two weeks. I hate myself for making the same mistake again, and since then, I have never dared to do too many orders. Fortunately, the government failed to control prices after all. Two weeks later, the market began to reverse. I turned losses into profits, and I made a double when I came on the market. By 1973, I had increased my account to 64,000 U.S. dollars.
Marcos later worked as a trader at the New York Cotton Exchange for several years. On-site trading cultivated his keen sense of the market. In August 1974, he applied for a futures company as a trader, starting from 30,000 US dollars and rolling to 800,000 after ten years. During this period, the company only increased his principal by 100,000, and for the rest of the year, he withdrew 30% from his account every year. In the past ten years, his average annual income exceeded 100%. In 1979, gold rose from 400 US dollars to 900 US dollars annually, and Marcos made significant profits. On the day of the Soviet invasion of Afghanistan, he first saw the news on TV. He called Hong Kong and found that the price of gold had not moved. He immediately bought 200,000 ounces. After a few minutes, the news spread, and the cost of gold rose sharply. He made tens of millions of dollars in one fell swoop. US dollars. So far, when Marcos visited Hong Kong, he did not dare to see the gold exchange. Anyone who suffered a loss that time still remembers him. Marcos has a more profound understanding of the foreign exchange market. He said: For a while, I did a lot of foreign exchange. For example, in the years after Reagan was elected president, the U.S. dollar was firm, and I often shorted hundreds of millions of marks. Such large orders were rare at the time. Since the foreign exchange market operates 24 hours a day, it is very tiring. When I sleep, I always get up every two hours to watch the market. The Australian, Hong Kong, Zurich, and London markets are all evenings. I watched every set, and the marriage broke down.
Q: When you wake up to look at other markets at night, are you afraid that you will turn the other way when the New York market opens?
Answer: Yes. Although it doesn't happen very often, you should always be vigilant. This can prevent the loss of eating gaps. I remember one time, around the end of 1978 when the US dollar was killed in a mess. I worked closely with Kovner and talked about the trend of the dollar every day. One day we noticed that the U.S. dollar was strengthening inexplicably, and there was no news to explain the price movement. We hurriedly closed all foreign currency purchase orders. That weekend, President Carter announced his plan to support the US dollar. If we waited until the New York market opened, we would be dead. That incident proved one of our ideas: big players, including the government, always have gossip. If we find unexpected price fluctuations that are unreasonable, we always go out first and then investigate the cause. I mean, out of courtesy, the US government informs the European Central Bank of the news in advance, and they often take action before the US policy is announced. Therefore, the price always moves first in the European market, even though our side proposes the new policy. If the Europeans initiated it, then the price would naturally move first in the European market. I think the best trading time is often the European market.
Question: In addition to losing money early, what other lessons did you fail?
Answer: The worst was the case when the German Central Bank interfered in the market. I did an excellent job at the time and bought a lot of marks. The German Central Bank suddenly decided to enter the market to punish speculators. I called and learned that I had lost 2.5 million in 5 minutes, so I hurriedly cut the order to play instead of waiting for the 2.5 million loss to become 10 million. But all that fell after half an hour rose back.
Question: Did you follow up again?
Answer: No. By then, I had no fighting spirit.
Question: In hindsight, do you think it was right to cut the order at that time?
Answer: That's right. But afterward, all walked back, constantly feeling uncomfortable.
Question: Do you think being a master is an inherent skill?
Answer: I think that to become a top player does require inner skills-talent. This is like a great violinist. But being a competitive moneymaker is a skill that can be learned.
Q: After experiencing the turning of defeat into victory, what advice do you have for beginners or traders losing money?
Answer: First of all, the risk of each order entry must not exceed 5% of the principal so that you can make 20 mistakes. Second, there must be a stop-loss order and an actual entry.
Q: When you enter the order, do you also hand the exit order to the agent?
Answer: Yes. One more thing, if you feel bad after entering the order, don't be afraid to be embarrassed. If you don't step in your heart, go out first and get a good sleep. I often do that, and it becomes clear the next day.
Q: Do you sometimes enter the arena soon after you play?
Answer: Yes, it is usually the second day. You can't think after you enter the field. You can think clearly after you play.
Q: What advice do you have for newbies?
Answer: Perhaps the essential principle is to hold the winning order and cut off the losing order. Both are equally important. If you don't have the winning charge, you can't afford to lose. Make orders according to your judgment. Many of my friends are talented masters. I often remind myself that I will lose money if I blindly follow them. Some of them guarded the wins well, but they might have guarded the losses too long; some of them cut the orders very quickly, but they also went fast when they won. You stick to your style; you may be both good and bad. If you learn the technique of others, you may catch up with the shortcomings on both sides.
Question: What concept is most likely to be fooled.
Answer: You think the expert's advice must be reliable. If you are an expert, you can help. For example, if you are the barber of Paul Jones and he happens to be talking to you about the market, you might as well listen to it. Generally speaking, so-called experts do not make orders themselves. The average broker can never be a master trader. It's easiest to lose money if you believe the broker. Making orders requires personal hard work, and you have to do your homework.
Question: Are there any other illusions?
Answer: There is a stupid idea: the market is full of conspiracies. I know many big traders in the world. It can be said that in 99% of cases, the market is more significant than anyone else, and sooner or later, it will go where it wants to go. There are exceptions, but they last for a while.
Q: How important is intuition to making orders?
Answer: Critical. The masters are very intuitive. Courage is also essential: you have to dare to try, dare to fail, dare to mix and be able to hold on when things go wrong.
Q: What should you do when you encounter consecutive losses?
Answer: I have tried to increase the order in the past, but it didn't work. Later, I tried to reduce the order volume as much as possible. If it is too bad, I stop doing it. But it is often not so bad.
Question: Few people are as successful as you. What makes you different?
Answer: I am very open-minded. I don't care whether I can accept it emotionally or not, as long as I think the information is correct in my mind.
Q: Do you record your actual capital every day?
Answer: I used to keep records. This is very useful. If your capital has a downward trend, it is a signal to reduce the number of orders to be re-evaluated. Or if you find that you lose faster than you earn, that is also a warning.
Q: How much does the market have in common with the demand? For example, can you do foreign exchange and bonds like corn?
Answer: I think it's a pass, Belden. The principles are the same. Ordering is a kind of emotion, popular psychology: greed and fear. It's the same thing in any case.