Subscribe to RSS

Michael Platt: One of the Most Effective Risk Managers

INSIGHTS INTO THE MINDSET OF SUPER TRADERS – Part 12

“I am actually trading because I learn a lot of important life lessons from it. Trading helps me get to know myself. It helps me think about why I believe things and why I do things.” – Van Eekelen

Name: Michael Platt

Date of Birth: December 12, 1968

Nationality: British

Occupation: Hedge fund titan

Career

Born in Preston, England, Michael attended London School of Economics and earned a BSc with Honors. He was influenced by his grannie who was an investor. With the help of his grannie, he got his feet wet and was hooked. He began working at JP Morgan in 1991, being a managing director in charge of value investing. He took advantage of challenges and opportunities he encountered at JP Morgan.

He co-founded BlueCrest Capital Management LLP in the year 2000, and that firm is now the Europe’s third biggest hedge fund firm. The firm manages over 30 billion GBP and has 350 employees. They mainly employ systematic trading approaches, using computer programs to facilitate the approaches.

As of April 2015, Michael was worth 1.5 billion GBP (3.5 billion USD). He’s married and currently lives in Geneva, Switzerland. He’s an avid lover of arts and paintings.

Insights:

  1. When you make useful decisions in life, including trading, you’ll simply end up having enough. You’ll not need to be striving after money. You’ll then see trading as an interesting activity, not an onerous task. At the end, you’ll be so rich to the extent that big money would not matter so much to you. For example, Michael Platt has become so rich to the extent that he once turned down an offer from George Soros. The latter wanted him to manage more than $1 billion USD for a 0.5 percent management fee and a 10 percent performance fee. But Michael said his investors were willing to pay management fees of 2% and performance fee of 20%. Many desperate professionals would jump at such an offer.
  1. Please see the quote at the bottom of this article. Risk control is extremely important for your everlasting career as a trader. That’s your life insurance. Michael acknowledges that risk management is the most important thing. In bear markets, many funds crashed and burned, especially when they faced credit crunches in 2008. Yet Michael finished the year with 6%. He avoided loss and even made a small profit. What do you want those who lost to say?
  1. Hear! Hear! Gamblers who think it’s stupid to risk less than 1% per trade. Risk control is something that must be enforced in trading. One of BlueCrest’s secrets is to make sure that each of their traders doesn’t go below 3% drawdown, or they’re deprived of 50% of the portfolio they manage. Another drawdown of 3% (making a total of 6%) would make a trader get their entire portfolio allocation removed. They may even lose their job if it’s found that their trading method is suicidal. I currently risk 0.25% of my account per trader, and so, I’ll need to lose 12 trades in a row before I can go down 3%. This is a good plan for survival.
  1. Many so-called professionals out there give advice that helps others make money, but not themselves. Ideas from professionals are valuable in that you can make profits from them, before the professionals themselves do so (they may not even do so). You can really take advantage of comments that are made by those trading professionals.
  1. There are winning strategies, and you need to find one of those so that you can attain ultimate financial freedom, as a result of consistent profits in the markets. BlueCrest Capital International fund hasn’t had a negative year since it was started – though some years were better than others. For example, the fund made a profit of 41% in 2009, earning hundreds of millions of dollars in fees only.
  1. Leda Braga, featured in one of my past articles, is a partner of Michael at BlueCrest. She manages a fund named BlueTrend. She’s a pro trader, and she has been a blessing to BlueCrest. Great minds think alike, for like will attract like. Do you have a good trader as a partner?
  1. Success attracts more success. The more successful you’re, the more investors you’ll attract and the richer you’re going to be. Because BlueCrest made a profit of 4 billion USD in 2008, they got about 5 billion USD in additional investment. But know this: the more you fail, the more investors you lose and the poorer you become. So you must know what you’re doing.
  1. Michael bets his own money alongside his investors. What a good trading idea! One trading specialist once advised that if funds managers’ money is tied to the portfolios they manage, there wouldn’t be rogue traders. When someone trades a fund which belongs entirely to her/his clients, they may be tempted to be careless because it’s not their money.
  1. Who encouraged you to become a trade? You should be forever grateful to such a person irrespective of what you’re currently facing as a trader. The advice to start trading is really a billion-dollar advice. Michael was inspired and encouraged by his late grannie, and he’s now a billionaire. I’m forever grateful to my uncle who advised me to become a trader.
  1. Michael’s dad was an engineer, and so, Michael wanted to study engineering. Suddenly, he changed his mind and studied Economics instead. This prepared him for the task ahead. Engineers can also become successful speculators; albeit the lesson is that one does not always need to take up a career one’s dad loves, especially if one doesn’t like the career.
  1. Michael started small and he’s now bigger. Please learn from this. When your performance is good, you’ll enjoy so much success in a relatively short period of time. Michael’s firm is now perceived with a higher level of credibility, even more than those who started the fund management business before them. That’s really an ideal achievement.  Learn from that please.

Conclusion: A judicious trader doesn’t act on impulses, whatever they may be. According to Joe Ross of Tradingeducators.com, from a purely physical standpoint, it is essential to minimize the potential impact that a losing trade may have on your account balance. If you lose a lot on a single trade, it will sting. But if you limit the amount of capital you risk on a single trade, it won’t hurt at all. You can pick yourself up easily and put on the next trade. It’s much easier to take a loss in stride when the real impact on your account balance is minimal.

This article is ended with a quote from Michael. Please think about it. Safety first!

“I’ve never hit the 3 percent drawdown… Ego is how you lose money in this business. I put a trade on, and if it doesn’t start working straightaway, I respect the price action and cut it fast.”

Further reading: Advfnbooks.com

What Super Traders Don’t Want You To Know: http://advfnbooks.com/books/supertraders/index.html

Source: www.tallinex.com

0 commentsback to post

Add your comment

Nickname:
E-mail:
Website:
Comment:

Other articlesgo to homepage

$20 Trad able Free Forex No Deposit Bonus – Continue Fx

$20 Trad able Free Forex No Deposit Bonus – Continue Fx(0)

$20 Trad able Free Forex No Deposit Bonus on sign-up applicable on first trading account. Start trading with the $20 Trad able Free Forex No Deposit Bonus amount, you can withdraw you profit amount any time of the day. Link:  $20 Tradable Free Welcome Bonus Available to: All new trading account Bonus offer: $20 Trad

Up to 200% Withdrawable Cashback Rebates – ForexTime

Up to 200% Withdrawable Cashback Rebates – ForexTime(0)

Always aims for profitable promotions for ForexTime Customer, this time they have come up with a 200% Cashback rebate bonus promotion which enables traders to earn up to 10,000 USD withdrawable Cashback bonus. Link:  Receive $30 Tradeable Credit Bonus Link:  FX Circuits Live Trading Contest Link:  Demo Forex Trading Contest Link:  Loyalty Cashback Promotions Link: 

50 USD No Deposit Bonus Trading with Bitcoin – UFX

50 USD No Deposit Bonus Trading with Bitcoin – UFX(0)

Start Forex Trading Bitcoin with UFX and Get a $50 Free Bonus. $50 Free Bonus is subject to your phone verification with UFX Account funding in Bitcoin requires a Bitcoin wallet Link:  $50 Forex No Deposit Bonus Promotion Link:  $50 Free No Deposit Bitcoin Bonus Link:  100% Real Money CashBack Promotion Available to: All new

Start Forex Trading with to get $100 Free Bonus – ACY

Start Forex Trading with to get $100 Free Bonus – ACY(0)

Start Forex Trading with ACY to get $100 Free Bonus. Initial deposit greater or equal to $400, you can claim $100 Forex Free Bonus. Link: Start Trading with to get $100 Bonus Available to: New and Existing clients Ending Date: 31 December 2017 Bonus Offer: Start Forex Trading with ACY to get $100 Bonus to

$888 Extra Forex Bonus Amount Promotions – FortFS

$888 Extra Forex Bonus Amount Promotions – FortFS(0)

$888 Extra Bonus Amount Promotions, All accounts take part in the 888 Extra Bonus Amount Promotions with the exception of Newbie, PRO and STAR live accounts. Link: $888 Extra Bonus Amount Promotions Link: $5 Forex No Deposit Welcome Bonus Link: Up to 50% Bonus of Every Deposit Link: 15% Support Margin Deposit Bonus Available to:

Deposit $500 to Receive a $350 Special Bonus – AvaTrade

Deposit $500 to Receive a $350 Special Bonus – AvaTrade(0)

Deposit $500 to receive a $350 Special Bonus up to 14000. This 35% Special Bonus Promotion is available to USD, EUR, AUD and GBP base currency accounts Link:  100% Bonus to Your First Deposit Link:  30% Sign-up Bonus on your Deposit Link:  30% Enjoy Reduction on Spreads Available to: All new account Ending Date: 31

$50 No Deposit Forex Cash Bonus today – Vantage FX

$50 No Deposit Forex Cash Bonus today – Vantage FX(0)

Open a live trading account and claim your $50 No Deposit Forex Cash Bonus today. $50 No Deposit Forex Cash Bonus is valid for two calendar months from the date it is credited to your trading account. Link:  $50 No Deposit Forex Cash Bonus Available to: New and Existing clients Ending Date: 31 December 2017

Forex Monthly Live Trading competition – Tickmill Ltd.

Forex Monthly Live Trading competition – Tickmill Ltd.(0)

Forex Monthly Live Trading Contest. Put your forex trading skills to test and win up to $1000 every Month! Forex Live Trading Contest is only available for clients of Tickmill Ltd.(FSA Regulated) Link:  Weekly Demo Race Trading Contest Link:  $30 Free Welcome Bonus Offer Link:  Forex Monthly Live Trading Contest Available to: All new traders

50% Deposit Bonus and $30 Free Trading Bonus – XM

50% Deposit Bonus and $30 Free Trading Bonus – XM(0)

Get 50% Deposit Bonus and $30 Free Trading Bonus. XM offers its clients multiple trading benefits to stay at XM, starting with a $30 Free Trading Bonus “No deposit required” Link:  $30 Forex No Deposit Bonus Link:  50% Deposit Bonus up to $500 Available to: All new trading account Bonus offer: 50% Deposit Bonus and

$50 Forex No Deposit Bitcoin Bonus Promotions – UFX

$50 Forex No Deposit Bitcoin Bonus Promotions – UFX(0)

$50 Forex No Deposit Bitcoin Bonus Special Promotion to all new trading account holder. Start Forex Trading Bitcoin with UFX and  Get a $50 No Deposit Bonus Link:  $50 Forex No Deposit Bonus Promotion Link:  $50 Free No Deposit Bitcoin Bonus Link:  Halloween Trick or Trade Competition Available to: All new trading account Ending Date:

read more

Forex Featured Broker

Contacts and information

ForexDepositNews.com Forex Deposit Bonus, Forex No Deposit Bonus, Forex Live Contest, Forex Demo Contest, Free Forex Bonus Forex Brokers Review and Other All Forex promotions.

ForexDepositNews.com

Social networks

Most popular categories