132: Mark Gardner – Still Adapting After 80,000+ Hours of Screen Time

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I'm glad to have you plugged in. Thank you very much for joining me on another episode of Chatwith Traders Podcast. On this particular episode, I have with me Mark Gardner. Mark's someone who began working in the field at just seventeen years old, straight out of high school. Initially he began with back office duties before broken on the floor of the Sydney Futures Exchange or SFE.

Then later he was picked up by a very large bank bills trader to exclusively execute trades, and he learned a great deal from this particular trader. Around 2005, Mark began trading his own book. Over the ten years that followed, Mark had only two losing months, and to date he's never encountered a losing year. Though in 2015 he did suffer a substantial blow, losing months and months worth of gains in the space of just a few short hours, which you'll hear more about during the episode.

Today, Mark is also a partner and the chairman of Genesis Trading, one of the larger prop firms in Australia, and he's also leading a new venture. forty two trading as a foray into quantitative trading, which currently consists of himself and a couple others. Also worthwhile of a mention is that Mark is the president of the Australian Securities Traders Association too. Now throughout this episode we speak about Mark's insane work ethic.

And no, that's no exaggeration. We also get into lessons from his past, why he sees a future in quantitative trading, and plenty more. Here is my interview with Mark Gardner. Now Mark, listeners won't know this, but we were actually supposed to record this uh episode uh about twenty four hours ago. Uh so I jumped onto Skype. I was uh hanging around waiting for you, and um you sent me a a message a couple hours later to say that you'd just

Kinda woken up and it was about four thirty PM in the afternoon. Uh and you'd told me you'd just wrapped up a fifty hour or somewhere somewhere around fifty hour stint. I mean, what what's the deal? What essentially it it's a it's a rollover period in the Australian market, which is a fairly profitable period for me generally in the past. And there's a lot of opportunity over that period and and I'm sort of trying to wrap up.

For a basically one of you know one of my first sort of extended three week break for the market in terms of switching the screens off and actually going and and spending a lot of some dedicated time on on the other projects. So there was a s sense of urgency in terms of trying to tie things up towards the end of the week and but you know, it's I've got

four children, which gave me a a good boot camp in in sleep deprivation anyway. But I I tend to do I will do stints and as opposed to if the market's good

I'll keep going and then I'll but you know, I'll I'll conversely have, you know, a long sleep afterwards instead of you know, instead. So it's just uh it's just a different routine. I don't I just that's a that's an extreme example, but I I have a like a strike system where sort of laminated poster on the wall which I you know if if I make three mistakes, errors or poor any sort of poor judgment in even including

Things um you know, if I miss a trade or um I'm I'm starting to to drop in in terms of sharpness, or if once I've got three. three strikes, I I basically wrap up immediately and go. So but I'll I'll I'll try and sort of r like ride ride a hot streak if I can, particularly when it's busy. So I'd I'd you know, I've been in in front of the screens for twenty years and I'd my autopilot tends to tends to be pretty solid.

in terms of instinctive trading. So it's not something that's it's not pleasurable by any means. It's not something I w really want to be doing, you know. So these periods during rollover, these are like prime time opportunity for you?

Traditionally it has been. In the last four quarters, I've it I my performance has actually dropped and it it's mainly technology uh based, um, informs of stops and things. But in doing the analytics, there's there's a certain period where it's started to become

diminishing returns for me. But it obviously with interest rate markets and then having people having to move positions further out the curve or having to having to roll, you know, three year and ten year bond positions, it it's the you know It is an the largest collection of of traders who don't normally trade the market. They're not necess they're on different they're the people who are on different time frames who don't necessarily who aren't necessarily tick sensitive.

So you can get someone who doesn't normally trade our market, who just want and who just wants to roll their position, get out. So, you know, you can I've I've always been a f you know, relative value trader generally. So you can take advantage of those a those short term aberrations where you know, which which have been basically forced by people having to move their positions to the next contract. So And how often is the rollover?

It's every quarter in Australia and it usually it it varies in in length. Sometimes it'll be a a short period of time of maybe four days. It's a you know, FIFA market here, like first in, first out key position sort of thing. So given that I've basically been a screen trader. for twenty years and have a you know, a fairly niche knowledge of the market, it's you know, there's it's a good time to sort of take it's a it's an edge that that I have um because of my experience.

Okay, so I probably should have asked you this prior to asking that last question, but uh just so everyone is is clear on this, what markets are you actually Predominantly trading. Short term interest rate. So I used to trade uh Australian sort of bank bills in sort of butterfly and or double butterfly structures. So essentially um

Yeah, they're fairly non directional and they're essentially they're taking advantage of a price aberration over long periods of time. So you you generally you have zero six to maximum eight point range in these strategies, but they're you know, they're multi they're very much multi legged. So they're they're fairly stable so you do them in larger size, but there's been a um I've sort of moved away from that in the last oh year, year and a half.

You know, the ranges have started to compact a little bit and realistically the um w Australia was pretty late to the party in terms of having um No, HFT and computerized and algorithmic trading come into our market because we're one basis point to a point as opposed to say bonds might be seven or eight. I think tenure notes are two and a half or s or thereabouts. So the cost of execution is too great in in terms of field risk. So whereas in the markets that have got

you know, smaller increments, the systematic trading tends to do a lot better because that reduces the amount of um risk if you have to take another point or if you miss a stop. So we've kind of been insulated somewhat, but it's yeah, there's there's a definite um There's been a definite increase in in that um sort of you know computerized execution and trading coming in the last eighteen months and and I've s I sort of made the decision to to move to a more sort of quantitative and

and statistical based trading. Uh in in line with, you know, what was the the people that I'm competing against. So Yeah, I mean that's something I definitely wanna speak to you about. So

As we've kind of already touched on your work ethic, I actually just want to go into that a lot more and then let's get more into your trading. because I'm very impressed by it. I don't know if it's something that I particularly want to try and adapt for myself and I don't know if it's something that others should should necessarily adapt for themselves. I enjoy adapting to my to my trading either. So that's not an ideal thing and a lifestyle well is obviously not not the greatest thing either.

Have you always had this kind of work ethic, like the willingness to put in such long hours and like excessively long uh stints behind the computer? Is that something that uh you've had kind of since day one when you were starting out trading or is it kind of Just evolved. My parents sort of you know, fairly blue collar, work seven days a week and I guess wasn't really a um I just had that was just what what we did, you know, and I didn't um I don't you know, I I never really

I realised that people went on hold. I you know, I they my father I think took went thirteen years straight or something without a without a sick day or a or a leave day or something, you know, ridiculous. So it's just an example set by very R my parents were you know, were very hard working and then I n actually enjoy what I do as as as difficult it is and sometimes psychologically

debilitating or uh or tough it it can be. I I still enjoy trying to work it out and I'm and it it's also I'm not exactly after twenty one years I'm I'm not like you know, I've seen the the life cycle of traders 'Cause I've only generally worked at smaller shops or prop shops or uh but used to call locals on the floor where it's been all individual traders and you know, there's there's very few that make it into their mid to late forties.

And and or in you know, or beyond. Um I mean there's a and there's a few that do, but it's not the average, so it it sort of is a um trying to take ad you know, take advantage of um it's squeezing the squeezing the last blood out of the stone in terms of um you know, like what I s what I perceive as the winds of change and t and uh with with my edge, like my my execution and my legging skills and things like that have been extraordinarily good over over the years. But

it's you I'm you know, I'm slowly seeing that edge disappear and I'm trying to manage my own trading whilst also um I've got a team of young guys who I'm I'm developing the more systematic stuff with. So it's really a um I mean the fifty hour shift thing that's that's a that's an absolute rarity. But I'm basically I'm almost doing two jobs at the moment and but I I ha that's what I have to do to manage the transition and and it really

Yeah, I've I'm I'm not particularly bothered by it. I enjoy work and it's not really um it's not really um a a chore in terms of I'm enjoying I'm enjoying I'm trying to work out the next phase and things like that. And yeah, it's not not a um yeah, it's not a big deal to me but in it's it it's I get a little lexicus about it but

Yeah, it's it's not definitely not for everyone though. I mean, realistically, a a lot of young guys who've come up um who traded next to me, I'm very wary of that that sort of three strike rule for in particular for them, like their decision making process because old bull syndrome where they you know, trying to keep up and they d it they don't have the uh the I guess the the hardwired experience just to go and autopilot or you know, they all also haven't been been through um

you know, four four babies in the house keeping you up all night either. So it's just it's more something you get used to. Okay, now now speak to us about this autopilot.

you know, how you described this as autopilot because I actually I know a good friend of yours, Darren Reid, who was recently on the podcast also, I told him that I was gonna be interviewing you and this is actually one of the things he told or suggested that might be good to ask you about is like You you've described your trading to him as though you go on autopilot at times when you put in these long hours.

How are you able to do that and and where does that come from? Like w what do you mean when you're trading on autopilot? Basically because it's it's a um you know it's uh more of a high volume, low range sort of scenario. It's very much my mindful of um

even how I've set up my screens in terms of fields of vision, like all the most important things and all the possible cheats of didn't in looking at the market and conditional formatting on spreadsheets and things to give me visual triggers to do a trade very swiftly.

and having making sure that I have things in in the same spots and uh essentially have I mean twenty one years it's I think we worked it out the other night it's like eighty eighty thousand hours plus sitting in front of screens. So it it's just time more than anything else and it's almost like a

say the same about a like a gamer or might be reflexes or or pattern recognition of I've I've got to say you know similar charts. I've had the similar um quite spreadsheet set up that I look at the entire strip and then I've got the same charts next to those and then those have been in the same position on my screens for fifteen years essentially in in in slightly different variations but that consistency of being able to see things out of the corner of my eye and then

then that's you know, that's in the center of my of my vision field and then I'll I'll go further out to um you know, for things that are more that that are sort of second Of second uh secondary importance, like you know, it might be currencies or if we're trading on the back of crude or gold or whatever, and then those charts and

Those indicators will be th that further out and then all my longer term stuff, um, you know, two year charts and things like that on on certain sort of structures will be on peripheral screens. So it basically everything's within reach if I need to and then I've y but all it's the consistency of having the same the same market basically in the same charts. Th the the the the level of pattern recognition I s um um essentially is you know is become fairly instinctive. Okay.

That's really incredible to hear that you've worked out like i an approximate of how many hours you've put in over the last fifteen, twenty years. Eighty thousand hours, that's a that's a lot of screen time. Yeah, yeah. I don't hold out hope too much hope for my vision in my in my sixties, but yeah. What are some of the things you've done to try and avoid burnout? Like is there anything you've consciously done?

Not particularly. I find I've got a you know, I've got an active mind. So I've tried things like meditation courses and et cetera and it it sort of more s it has a almost a reverse effect. Like if I'm stimulated I'd I'm you know, I'm I'm fairly relaxed and as long as I'm you know, I'm spending time with yeah, I have allocate time for for my family and and doing things with my daughters and and it's not um

I'm I'm not this I'm I don't feel comfortable s sitting on a beach or reading a book. Like I I'm actually enjoy being stimulated and learning new things. So it's not it's not a burnout factor for me. It's not it's you know And I'm working for myself. So it's not um there's motivation obviously. If I was working I obviously wouldn't be working anywhere near these hours if I was working for someone. So there's a motivation there to

And to be innovative and try and find new things and improve my you know, improve my trading or and basically uh find new ways. If you enjoy it or I or would I wouldn't say love it. Or but if I I I sort of if you feel as though it's um you know, it stimulates you and it's it's engaging you then I d I I think burnout's less of a f it's well, it's less of a much less of a factor for me.

So but if if I had to do a repetitive a very repetitive job and I was working for someone else and there was, you know, in on a career path then I I would certainly be very susceptible to burnout. So it yeah, it's not

It's it's more the fact that I'm lucky that I found something that it I'm I'm that suits my personality in a way. Now I know you said a little earlier that these fifty hour stints is not something that you do too frequently, but you know, especially round uh roll over periods, it is something that you you do do.

And Tony, one of the guys who works for you, uh, he actually made me aware of you. He he reached out, um, he listens to the podcast and he suggested that you'd be someone well worthwhile speaking to. And he told me he's seen you trade for like three days straight once. You know, how do you actually stay awake for this long? I think three days straight's an exaggeration and he's also he goes home and I get naps, you know. So, you know, on uh

Yeah, power naps essentially. So I I guess the yeah, this the story doesn't really fit the reality in a in a way. But as much as you're focusing on it, it it is definitely not something that most people can do, nor would I recommend it. It's not a um basically due to the there's the the intense repetition over such a long period of time that I can do but it is like I'm I'm not um

it's not definitely not something that I would I I would I would steer people towards. I tend to not potentially not use my time efficiently sometimes or but then I also will take, you know I'll take a d a day off during the week, um, quite regularly after I've done a a long stint. So it's not something I t tend to wear as a badge of honour. I'll use it sometimes for m you know, motivation to the mentees that I'll I'll speak to or whatever, but m nothing more than to

get them to sort of harden up a little bit. But I wouldn't say that it's necessarily the like I wouldn't call it my greatest greatest attribute. It's the having the ability to you know, to basically I almost m almost mindlessly just repetitively execute. It is m basic it's just hours and it's it's experience and and it's and you just get it's like a almost like a fitness. You just get used to it. And like I said, then I and I've got a system for my concentration breaks and things. Um

Just to to make sure that I don't take it I don't take it too far. Which is born out of pushing it too far. Yeah. That system of yours where if you make three reasonable errors I shouldn't call them reasonable errors, but if you make three errors, then you you call it quits for the day or for that that session. You know, even if someone who's listening to this isn't trading for long periods, like you do from time to time,

Do you think that might be something worthwhile adapting for themselves, like maybe a day trader? Yeah, it's it's much more mistakes like if I ev even if I miss something, even in the smallest of trades. Like if it's uh it's basically three almost drops in standard It's not uh d they're definitely not errors.

Or you know, if I miscalculate something or if I scratch a trade I shouldn't have scratched or it it's a really um tight, high standard of things'cause it it it's such an efficient the market's so efficient these days and you can it's like you're competing against and the best people in the in our in the Australia, you know, in the in our market, so you can't really afford to be

half asked. So d it's definitely something you could adapt to, um, a day trading thing. Because I think you probably would for a say for a day trader, I think you probably extend the time frame for d depending on how long the time frame is for your um for your trading.

So just setting setting yourself a a standard essentially and having uh a rules where you you ha it triggers a point of review or a point of um Not necessarily stopping, the point where you have to you have to step away, I think is a is a very good idea because there's there's a definite tendency I've noticed with you know, particularly you know, intense professional traders is that you work harder when you're doing badly.

And you tend to work less when you're doing well. Which in if you think about it it's quite insane because in a period where you're statistically doing worse, why would you um put yourself in front of the screen more? And it's you know, it's um

And have but having those rules um preset to try and avoid overworking when you're when you're not seeing it or your the market conditions don't see you or or actually or getting lazy because things are going well when you should be actually probably putting your foot in the gas and and taking advantage of a of a period where you you're doing really well, you know, is r I think is really important and it's a it's a very common

that that whole reverse hours to to success rate. So Yeah. I really like that idea. I mean it's such a like a simple rule, but it could be also very effective and um I mean I'm sure it's probably saved you a lot of money over the years. Yeah, but it's also it's it's really important to set it like in a neutral state.

Like a lot of people will go and uh a lot of guys are mental they'll you know, you have a bad day and you go and set a whole new bunch of rules. And you tend to do that in a negative f uh frame of mind and you know, even Even I I sort of fixed up some someone sent me through a pr um a list of process um rules the other night and, you know, red red heading and it was all about don't, don't, not and it's not

you know, because you're angry about the fact that you've lost. And So just even, you know, changing the a more passive colour to the you know, to the text and removing the making the um the points a bit more constructive because the next time you need them you y You know, you don't need a piece of you know, you don't need a piece of paper on the wall that's effectively barking at you because you're you're already under the pump.

It would make you feel worse. So it it's I think it's really important to do to do it set these rules in a neutral mindset and not as a not as a reactive a measure. So and People generally are sensible enough to know what to do. I think where people become emotionally unstuck is is is that it's just the assumption that I'm sensible, but you always it's I think Mike Tyson had a great line that

You know, everyone's gonna everyone's got a great um plan for the fight until they step in the ring and get hit. And when you're basically trying to compensate for periods where you're not in your in your best frame of mind. It's best not to make a plan when you're in that mode. Um and and also try to keep positive in terms of your the rules because it you you tend to lean on them when when it's a bad period and you need that little bit of positive light to to help you

just drag you out of a you know p you know bad psychological state. So it's um you know voice like yeah, words like don't do this, d like you know, it's I don't think it very helpful. Are you ready to get serious about trading? Then join Tasty Trade, Investopedia's best platform for options trading in 2026. Stocks, options, futures, and more. Tasty Trade has everything you trade all in one platform. Get low commissions, including zero commission on stocks.

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Well Mark, kinda skipped over this at the start. I normally open the interview by talking about this, but no harm uh switching the order up. So Tell us a little bit about how you actually got into trading,'cause we haven't heard much about your backstory. So I think you got into trading or or financial markets at least.

straight out of high school, I think you're about seventeen years old. Tell us about how you got your start. I mean we won't spend too much time on this, but just for a bit of context, um, yeah, it'd be interesting to hear your backstory.

Uh essentially I you know, in Australia in in your third last year of high school you you know, you have to do work experience and um it was just um uh family connection who knew someone who worked in worked on the trading floor and at now fourteen years of age I walked down onto the floor and and to collect the chits, the doc the dockets that all the traders write on and I'm you know, it's just it's a very much a case of um being in awe of the bright lights and I went

That's this is absolutely what I'm gonna do. So I literally went back every every three to six months. like in school holidays for the next few years'cause I just you know, this is w I was not necessarily obsessed but just enthralled. Everyone always has a you know, romanticizes the floor because it it's exciting, it's

It's chaotic and it's yeah, it's fairly intriguing to most people. Then you know, as a fifteen fourteen, fifteen year old kid and you're just like, Wow So and then I literally five days out of five days after my last exam I'm I'm um I'm obviously I got a job with the company that I'd con done continuous work experience or or short stint internships, I guess you could call it.

Yeah, and started five five days after my last my last high school exam and and I think I was j uh just seventeen and oh what, three months old or something like that. So it was uh I I think I I I got my broking licence before I could buy a beer. So it was strange that I could advise on futures and not buy alcohol, but I think that says a lot that you were doing work experience because I did a stint of work experience when I was still in school.

And I remember when school holidays came up I told them I I couldn't come in because it was school holidays and I didn't want to be going in doing work experience. But Sounds like for you, you know, work experience was unpaid and you were still willing to go there during your school holidays. Did I catch that right? Yeah, yeah. It was something I definitely wanted to do and and you know, small co I grew up in a small country town and and, you know, the the options were were generally like

mm, fairly limited in terms of having to stay stay up there and I'm I wouldn't say I'm the most studious person. I'm I'm I'm I have a very large thirst for knowledge but I don't like reading. So I do a lot of audio books and things like that. But so university wasn't really a um difficult to do a degree when you n you don't like books. Okay. So when you turned seventeen and you got this job after school?

What actually was that job doing? Were you working on the exchange floor or were you doing something else? Initially I was you know, it was mail room. Um it was the time before email, so I so I had to f I had to fold statements into envelopes for the clients and and run errands and be a runner down to the floor occasion and then probably about six months in I because I had one of the old MS DOS computers and when I when I was younger.

we were m you know, in the market was s sort of it was about ninety six I think. So now I'm moving t moving towards screen trading and and I was very quick on on the keyboard. So I I essentially ended up just gradually drifting into the overnight broking department of of the company. And I was I was cheap and took a lot of orders and and with no errors, so that's where I ended up being. So

And in those days no w you know, guys would come off the floor and of and be trading at night time. So no one had their own terminals. And so you as a broker in those days you you actually took quite a you know, a large number of orders because no one's we no one could self execute. So So I believe it at some point after I'm not sure how long you you kept this up for, but at some point

a a fairly big trader, I'm not sure exactly what this what this man traded, but he came along and sort of scooped you up and you started working for him. Can you tell us a little bit about how that played out?

Essentially I was I was executing for this guy on a on a broken disc, on a on a give up basis. Um And he yeah, he but we basically did a deal on exclusivity and I worked basically I worked for him I him and him only. He traded stu yeah, w this what I learned.

um a fair bit of the methodology of what I do. It's the same market, slightly different, you know, over time I've I've sort of developed my own my own style, but yeah, but it's yes short term interest rate, Australian market, bank bills, three year bonds and things like that. So He's a very, very tough um street, which was very good for me because having a you know, being instantly

successful at being quick on the keyboard at a young age, spread a certain uh arrogance, I suppose, and he uh he just he set the standard somewhat higher again. It was a very it was very difficult working for him but it was But if I had my time again, I'd definitely I'd do it you know, I'd do it again'cause it it really taught me about basically you can't ever

you know, you kind of uh let your process drop, you kind of drop your standards, you kind of uh you know, we'd we'd make money in the morning and we'd miss a small trade in the afternoon and he'd he'd be furious and he's like, Well No, you can't b you can't base inefficiency. Just because we did well this morning doesn't mean that y you know, you've got an excuse to miss that, no matter how much it is. Like it's a it's an uncompromising set of standards which I um

Yeah, I'm I've sort of has held me in very good stead, I think, down down in future really. So yeah, but alb albeit very um albeit very very tough, but it was probably it was something I think I needed. Yeah, I mean, obviously looking back on it now, it it seems like something that was very beneficial. At the time, I mean, how did you how did you take it? I did a lot of running.

I d I guess I didn't I I maybe in my heart of hearts I knew that I probably I probably needed a little bit of a like that it was gonna be beneficial down the line. I don't really know, but it was'cause he was he it it wasn't it was a high set of standards, not a it wasn't you know he was a he was a very

good bloke and he was and he and he looked after me but it was just so it was the unpleasant nature of it was not malicious, it was just, you know, watching someone with consistent, significant hunger was you know, it was in hindsight being yelled at for it was was unpleasant but it was you know, in it's it was also fairly inspirational because it was just it was relentless, which was uh was pretty impressive to watch.

What were some of the standards? Like obviously not missing trades and not missing opportunities. I mean, are there any other standards besides what we've already sort of spoken about. It was concentration primarily and essentially always performing at you know, at bad peak level. There's you know there's um when there was time off

There was time off. Have a lunch or something and that was you know, that was but when you're at work it was like No, well m I guess it was almost like I'm a late sportsman in a way, like We if we're here, we're doing this. like uh at a thousand percent and there's there can be no there can be no mistakes and yeah, so it yeah, it was um from anything from just process of managing my book, uh developing um

it was as in his order book. Yeah, developing spreadsheets or um or or ways to to um better represent positions so we could do it that we could do it faster than the rest of the market. Um, making sure that I had uh all you know, just keeping an eye on news, um, having a routine in the morning where you knew what was coming out and I was always over economic releases. And I guess in a way is the the greatness was doing they often say the greatness is doing a lot of Small things really well.

And that was it was it was the little things. There was no significant the trade strategy in itself was wasn't particularly complicated, but it was the um you know, the level in which w we we executed. that w that was our that was our difference. And I think everyone's well aware of the you know failure rates within trading futures and or which or or general day trading. No, it's you know it's if you compare it to say

Elite sport, like you don't you can't expect to win a marathon if you don't train. Like you don't you it's time put in for you know, for what you take out in in terms of you know, if you want to operate at that elite level. If you wanna be in the top ten or five percent or two percent then

you've you basically have to do what other people aren't willing to do. And it's you can't really describe it as a job or a hobby because m in my um experience that's not really a um But that's to say that's my experience though. I dn if anyone Can? I I they can s please give them my phone number. The um it is a zero sum game and and and it's very it's it's tough. I can the top ten percent will always eat the bottom ninety percent no matter what.

So you just gonna make it you're gonna make sure that you're in that top in that top part of you gotta be doing the things that you know, that they do or Or um setting the standards or at least having a you know, a point of difference that that puts you into that that elite category really. So Yeah. So how long did you work with this trader before going out onto your own to to trade your own book?

It was about four or five years maybe, and he decided to have a break and he moved he moved off shore. And essentially, I mean, as much as I um like I wanted to trade, I I was still very good I was very conservative and I kinda didn't have the the gumption to go. So I was I was actually almost he when he was going he was moving, he said, Well, I I don't have I don't have a job for you but you know, you can trade you can trade for me and

And I so I was almost well, I was f I'm not forced'cause I would have found a job broken, but it it I was pushed and I'm very glad I did. Um in in I said I should have done it much earlier. It was certainly not a um I wouldn't call myself a you know, very risk hungry person, and especially at that stage. So as it's not not exactly a uh a glorious story and in terms of how it started, but but that sort of conservative nature and not necessarily fear but But risk aversion is probably what

kept me so consistent over you know the following sort of ten years. So Yeah, well well talk to us about that. Like how how did you go once you actually went out on your own and you were trading your own book? I mean, what were those first couple of years like for you?

Because it had the background and I've been working with a a very good trader, uh my execution and those small things were were already sort of taken care of. Like I had a ten year apprenticeship really, so it um so uh it went very well. I I think I had I really only had maybe two to three losing months in the first ten years that I tried it.

So I was just always very consistent. That was doing those n not and but also not you know knocking it out of the park either. Like I was being slightly risk of you know, slightly risk averse. also has, you know, has the downside. Whilst you don't you don't you don't take the big hits, you're not gonna get the big wins either generally. So but gradually towards the um it's probably about

three or four years ago. You know, the penny dropped to and I had a foundation of capital behind me where I could take I could take on bigger positions and risk and I became confident and was able to psychologically handle those swings. So th the first I mean I obviously I think two thousand five, I think I started trading for myself.

Like so lost into the credit crisis, which was uh like a disaster for in terms of liquidity for this like bank bill and um uh three year markets, so had to change methodology there and then going to the GFC so volumes dropped and you know, it's same thing that and then gradually built up to m two thousand thirteen through two thousand and fifteen in a s in a much more mean reverting range powered markets, which you know, and and size just very exponentially increased. So like by

Yeah, my a thousand percent sort of thing. So but that also led to the Because I lost the uh you know, the the risk aversion and the and but I had the consistency and the track record, it sort of led to a a bit of a The sense of arrogance, basically, which led to my you know, first significant hit, which I thoroughly deserved because it's started to get a bit of a um

uh an assumption that I've you know, I don't lose. And as soon as you start thinking that and you know there's consequences. Okay. Well let let's talk about this a little bit. Um just going off uh something Tony had mentioned to me when he first reached out, he said

You know, just and I just want listeners to understand how consistent you were leading up to this point. You only had two losing months. I mean you can correct me if if this is not true. No one minimal. So what happened in twenty fifteen? What wha what went wrong there? Essentially like I I I was situation in the market probably three months prior and I had been doing very well coming off of my best year ever. And I um

and I s I s took someone on in the market and and I got lucky, basically. Well not didn't yeah I didn't get lucky but I you know I won. And I think that definitely created a A bit of a God complex, I guess, in a way, like and which kind of set me up for the next time, which was in March, like 2015.

where it probably m s made the uh the fall in Margin significantly worse. It was a that you know, that constant run and I also um I'm a very goal orientated person and I you know, I I s I sort of started to feel like I'd achieved I'd bought you know, I'd become my partner and taken over a a prop shop that I that I was at and you know, I'd started the Traders Association and that was going w um in Australia and that was going well and

I was try I'd sort of I'd achieved the things I'd sort of set out to achieve and and without I don't think I realised until after the significance of Yeah, and not having a goal was you know, not only was it fairly hollow. The dream's much better than the uh the maintenance of a dream. So and so I I I think I just I wasn't necessarily bored of a lack of direction.

and and that combined with arrogance and I and I just took on a position far too large for the market conditions and because I was essentially you know, well was um I hadn't had any major hits before. Like even our risk was like, well, you know, it's Um the risk department sort of thing was like it that had never happened before, basically. I mean obviously there was there's Delta loss limits and all those sorts of things, but it it was just a um

Yeah, it it was a the thought that it wouldn't it wouldn't happen to me or didn't apply to me and and which made it you know, made it a a lot worse. And it was half a year, you know, six to seven months. Of a medium to good year in fo lost in four hours. And it it's kind of because I'd never really lost before, it actually hit me probably a lot harder than

um than it would even an amateur trader. It's like because I'd never had to deal with the situation before and so I just was very ill equipped. So how did this trade go so wrong? You you said you took on a very big position, but to lose s uh I think you said sixty seven months of a good year's profit in just a couple hours, I mean that were there any other factors that that played a part in this?

I don't want to sound like I'm making exc excuses for it, but there w I mean there were triggers, but at the end of the day the responsibility lay w lie with me for for the fact that I should have removed myself from the situation. But there was I had a blackout at my house and I lost the the first for probably twenty percent of the evening with basically because

I m I couldn't call out. I in the um it was you know it was a lightning strike and mobile towers went out, so I'd lost a significant amount of money with not being able to cancel my orders. And but went but I didn't calm myself down when I came back on. And got everything back up and running. And, you know, it was just a spy a perfect storm of s you know, of of um bad personality traits. So immediately chasing, getting very angry and thinking that I I'm usually

Quite good. I'm quite good at uh hedging my way out of trouble or whatever and and I I just essentially tried to fix it all i in in too short a period of time in a bad headspace. And you know, then the position gets too large and uh there w then it was large enough that li there wasn't enough liquidity generally for me to get out, being a it was a it was a rollover period as as well when where the correlations um tend to d tend to very much decouple. So

all of my normal hedges didn't didn't exist, so I ended up with an outright position which you know I wasn't an outright trader. Like generally I was a v relative value trader. So It was just it's just snowballed and but it it could have very well easily been solved by if I had someone say

calm down or a or but it yeah, I I let my headspace. Usually I ninety nine point nine percent of the time I'm I'm very level and very calm. So it's almost like Stress thresholds for m the average person are, you know, say they're a twenty oh an inch an inch wide, for instance. But because people, you know, in with a normal stress threshold will regularly

have not a freak out but they'll regularly experience points of where things overwhelm them. But uh there's a disadvantage as well being having a like a a broad stress threshold because the irregularity at which you actually break means that you've you're actually far less capacity to d to deal with it. So it's it's like a a breakout and a standard standard deviation breakouts and in you know in trades and tech'cause like once it you know, once it gets through

the point where it hasn't normally got gotten to. Yeah, there's there's a lot of bad stops. So I should have had the experience or the you know, and or the maturity enough to to walk away and I and but I did the opposite. So that's what I that's what I mean. But I in terms of this you know, the situation surrounding it is that I I don't generally like to talk about

the beginning of the of the situation that night because that happens. Things will always happen to you that you can't avoid. It I really feel uh the need to take you know, complete ownership of the fact that that wasn't that wasn't the reason. Yeah. So let me ask you, I guess two things. Have you done anything to sort of safeguard yourself in the event that something like this happens again in terms of like blackout or, you know, you you don't have access to power.

Yeah, I've I've got two UPSs and uh sitting in in my screens in here and I've got a petrol generator that'll run me for thirty hours. So Okay. And so you got those installed after this f for this particular reason? Yeah, basically So and it really led me to to really tighten up my redundancy measures. So, you know, in terms of I got a sec I got a secondary system in case my my system went down. You know, we're but we were two separate brokers.

And I basically I g I gotta you know, I plug in the f you know, the old the handset phones, the normal, you know, house phones. They don't need electricity. So I actually had to go and

I try and find one of one of those. Which was quite difficult because and and basically make it um make myself a little bit more bulletproof and even to the point of I had a system failure that um a few days ago but I have, you know, a secondary computer with everything very loaded on it that I've just I can literally s like s all I gotta do is switch the screens. And I mean I'm back up. So I mean that's not probably you know, measures that

anyone below a day trader would would necessarily need, but if you sort of think about it like a a redundancy package, which I'm actually I'm actually looking at putting together. Um not not start necessarily as a business'cause this wouldn't be the volume wouldn't be good enough, but like this uh like

if you spend twelve hundred dollars you can you can possi possibly avoid a no five, ten, fifteen, twenty thousand dollar incident. And it I think it's something that a lot of people overlook is that It seems like a lot of money at the time, but it you know, it's it's definitely a um it's yeah, hav having it happen to me probably m or similar situations happened three times.

That you know, it's it's sort of money well spent really. Insurance worthwhile having. It it's it's it's yeah, when you buy insurance for your house or your car. So i it's it's it's a very it's a one off insurance policy, I suppose. Yeah, yeah. And it's probably tax deductible. Yeah, exactly. Another thing I was gonna ask you, how did you Okay, so let's fast forward to the following day or the the next couple days. How did you

move forward from this? Like you'd just taken the biggest hit in your career. Like you said, you you weren't in a good space. How did you handle this event in the in the coming days uh like moving forward and and how long did it actually take you to recover from this loss? Immediately actually that little bit of arrogance or or self confidence or whatever you want to call it, I made a lot back very quickly, like the following day.

And it wasn't really till the weekend w when I just sort of got to s you know, s sit down and take stock when it you know, the the gravity of it hit me. So that was kind of when And also having when you go from being Mr Consistent and people, you know, I you know, you start to doubt you I had my you know, having your first first discussion with with risk. You know, yeah.

in your career sort of thing like it did rattle me a little bit and it probably took probably uh it was about six months, maybe five and a half months, six months to make it to make it back in in full. But it it there was definitely an inconsistency in my uh in my trading, which had never been there before'cause it it was um I couldn't balance the

being a very confident trader and also trying to get back to being a little bit more respectful of of risk management. So I it took me a while to find the balance and yeah, it was the first time I really had probably two voices in my head. instead of, you know, knowing knowing what I needed to do. I think I had up until that was the point where I sort of had the three losing months or two on what I think I had maybe three l three losing two or three losing months over the next

six. So it it definitely affected me. But it also, realistically, it's a strange thing to say, but probably one of the better things that happened to me because complacency in my strategy and things were going well so I wasn't looking at I wasn't looking elsewhere for ways to improve and develop and I basically just didn't s I started to learn how to how to safeguard myself. So I m I you know put in place a routine for when I have

you know, when I have a bad day. I now feel equipped to cope with it and not not in a uh not in the sense of uh I'll be right'cause I mean you know, I've been doing this forever. It's it's uh you know, it's much more of a ref you know, reflective and s you know having regaining your respect for the market a little bit. So Sure. Okay, Mark, well we're getting on a little bit, but there's still one thing I'd really like to speak with you about.

Uh and you've kind of hinted at this a little bit earlier. You said that, you know, you feel that your edge in the market it has gotten smaller over the past, you know, fifteen years and More recently you've been getting into more quantitative methods of trading, you know, pursuing more systematic strategies.

How come? I want to ask you that. I mean, is it just because you feel your edge or or the particular way that you've been trading is getting tougher? W what's the attraction to these quantitative methods of trading? It it's definitely a uh it is a tougher market, but it's it it

you you would generally or I would generally find a way. It's a desire to be a much broader scope of of strategies, uh more scalable strategies. But I guess what it comes down to is that Who I'm competing against now is is people who run systematic and quantity quantity strategies. Uh primarily, you know, it used to be trader on trader generally. And I guess the critical mass of of volume and reaction was we're we're human beings. And that is that's changed.

And I'm I'm not up against a one guy sitting in a terminal now. I'm up against a you know, a team of an you know, an actuary math or a mathematician or a coder and a um uh coder and quant like and looking for, you know, probably significantly less return on capital. than over a broader a broader amount of contracts over free shifts instead of, you know, a human being can do like one or two one or two shifts a day tops in one market, like Yeah, like a quad strategy can do, you know, can trade

twenty markets, three shifts a day and they don't get tired, they don't get emotional. That so and this I just realised that the rule not the rules had changed, the competition had changed and so I had to learn the the new playbook. I I had to um improve myself and and know and really adapt to my methodology to who I'm competing against because it's it's as I keep saying it's a zero sum game. So you've got to be better than the

as people. And now they're those sets of teams are are sort of not necessarily dominating, but they've ta taken advantage of the inefficiencies in of of the hum you know, of human traders. And that's why there's been a large level of attrition. So how have you gone about approaching this? Because, you know, your last fifteen years have you've been primarily a discretionary trader.

I think that's fairly accurate to say, yeah. Yeah, absolutely, yeah. So how have you how have you approached this kind of new way of doing things? There's a quite a good article that um I read recently that explained much more concisely than I'm probably gonna put it now. I think there's a mi very distinct gap in both intuitive traders and logical traders.

or logical strategies because they they both need the uh to be very good though, I think they both need each other, but Yeah we I mean have you ever seen a an IT guy and a trader trying to have a conversation, it's that it's it's quite interesting because they they don't have a level of respect for each other's uh expertise. So, you know, maths g maths guys will always stick to the math and and the the traders will have, you know, more of a

More of an intuitive base. Adaptive unconscious, I think they call it. I mean, I don't like using the word gut feel because I think it really discredits, you know, the intuitive skill that, you know, a um a discretionary trader has or successful discretionary trader has. But you know, abstract yeah, the lease of abstract reasoning, pattern recognition, which is just

Yeah the reason they can't explain it is because it's it's n it's an unconscious absorption over many, many uh hours in front of the screen. Which but the mathematical strategy style job of trading shops or trading groups, they just they don't have.

I'm I'm trying to with the two I've got two young guys working for me, and this is gonna sound strange, but specifically with no previous experience in the particular field, but obviously back um Tony has a you know, he's got a very strong background in maths and um and Michael's got he's um he's very much more that abst you know, abstract or creative

side. So and I'm try and I'm essentially trying to avoid doing what everyone else has done in that space and try and marry up the two, you know, forms of thinking because I I I really think that it there's a definite advantage for Uh and a hu a human trader with armed with the efficiency of an algorithm or an algorithmic team or a mathematical team or statistics would would be quite

um a sight um to behold, I think. And until until I get to a point where I'm stuck, I'm really trying to avoid bringing someone into because I d I don't want to um I don't want to blinker or um uh reduce the scope of uh looking in areas that we um

Yeah, looking at areas that we haven't r you know, that other people haven't looked in before, like that but really avoiding that using the confirmation bias or you know, similarity bias. So people tend to gravitate towards things that are similar and things that back up their argument. So and it's is a great book, uh the new book from Michael Lewis, uh it's uh The Undoing Project and the fur the first chapter's very much about um

But I mean we he found in Moneyball the the um the scouts when they were ch when they were d in the draft they no matter how much they said they were they were but they were being unbiased.

They went through and basically proved that they were. Their first impression was always No, was was always always made they were always made on terms of like they tended to like players that were, you know, that used to play like them or they um I mean on a on a race uh point of view, uh basketball though it was the example they were using, you know, it was

There was never an Indian player in the in the NBA, so the people in trial and they just wouldn't get picked out of um when when in fact their statistics were um were comparable if not better. But it was it was just it was a it's a great insight into

The human brain subconsciously makes a lot of decisions and and th those biases the mathematical and algorithmic side can fix, but the um creativity side realistically only a human can a human can do because the it's the amount of complex calculations

and the the qu the swiftness of you know being adaptive that you know, I think could complement each other. So Yeah, I think that movie or even the book, I haven't read the book, but I've watched the movie, Moneyball is a is a must watch for every trader. For sure. Yeah. It's it I mean, look, it's just m I really try to make an effort to push myself to not surround myself with people of not necessarily people of like mine, but I try to really try to challenge myself to talk to people who

you know, do something different to me. And not not in a d in a dismissive way but and but just to try and get a a different outlook. Particularly like a lot of people I've I've noticed a lot of locals or pro traders, if they're having a bad run, they'll you know, they'll always

cuddle up to someone who's who's having a bad run too. So y it's almost a um you know, oh, it it's okay because everyone else is having a bad run too, but whereas I sort of try and do the opposite. Well if I'm having a a particularly poor runner, I'll really try and force myself and as much as it it can be painful i to someone who's g who's doing really well because I I see it as a as a way of like

You can you can learn what to do to change or uh and or at least you can you can hopefully pull in some of that positivity. Absolutely. Very good, Mark. Well, let's leave it at that for now. I know you don't really have much in the way of like an online presence or online profile. Um

Is there anything you want to mention, like if someone wants to get in touch with you or find out more about you? I I think you're probably on LinkedIn or something like that. Yeah, I mean there's l I've got LinkedIn and I've got no at forty two trading is is a Twitter and I've I've got a

sort of a bit of software, jewelmouse.com, which is uh a jewel cursor product for sort of designed for, you know, for traders essentially, you know, be to be able to be collaborative and and system share and things like that. So What's the link for that? Jewelmouse.com D U A L mouse dot com. Okay. Excellent. And at

forty two trading on Twitter. Yep, cool. Yeah, I thought all right Mark, well well let me just say thank you very much for for doing this. I've enjoyed speaking to you so thanks a lot. I appreciate it. the end of this episode of Chat with Traders. But rest assured there are more episodes. soon. if you'd leave a rating.