Risk Management in Trading – Traders and investors who have been successful in their careers mostly dedicate their knowledge and time to developing the world of trading and investment such as establishing investment companies, becoming consultants, commentators on various investment and business media, developing trading software, writing books, and so on. We can benefit positively from their career stories and views on the world of trading and investing.
Brian Gelber is the Chairman, President and Chief Executive Officer (CEO) of Gelber Group, LLC., a US investment firm. Although his name is not as big as the world’s top traders or investors, Gelber is considered one of the successful traders who started his career from the bottom. While trading on T-bond futures, Gelber was awarded as a leading local trader, and one of the most respected traders on the Chicago Board of Trade (CBOT).
Gelber started his career as a broker and trader on the CBOT floor in 1977, just before graduating from Northwestern University. He worked at Price Waterhouse from 1978 to 1980 and Thomson Mc Kinnon Securities from 1980 to 1982 before serving as director of QuietAgent, Inc. After successfully managing the funds of a number of clients and also providing investment consulting to several clients of financial institutions, Gelber began trading with his personal funds.
But the price paid is quite expensive. As expected, he lost 3 to 4 million US dollars in the first 6 months. In total 20% of all planned capital for the long term and 80% of daily trading capital (intraday). ‘Probably the biggest mistake I’ve ever made was switching from broker to trader’ he says. But Gelber didn’t give up, he was already wet. Gelber immediately formed a team and changed his trading portfolio, 80% for the long term and 20% for the short term.
Something extraordinary happened on October 19, 1987 when Gelber made a profit of 4 million US dollars in just 20 minutes. At that time Gelber and his team traded only using the Moving Average indicator. However, “The most important indicator for me is the market participants themselves,” he said. Market sentiment is strongly influenced by the actors. Being a good listener and willing to accept losses are 2 main characters of Gelber that make him a smart trader. “Most traders don’t want to admit their mistakes, and many of them fail because they are afraid of losing. If you’re afraid of losing, chances are you will lose for real.” he said.
Mynci successful trading Gelber is the application of risk management. He always teaches risk management to every trader in CBOT. According to him, risk management should be the first thing a trader should know. In addition, the trading approach by forming a team can be very effective. The Gelber trading team consists of 5 traders with their respective specialties, including forex, stock and commodity traders.
Besides risk management, Gelber also recommends that traders not be too influenced by the opinions of experts or analysts. “Focus on the price movement that appears on your computer screen.” he said.