Being a trader in the Eurodollar futures hall of the Chicago Mercantile exchange, Angelo Reynolds believes the two main factors of success strong nerves and bravery. "I always knew I wanted to be associated with the markets," he says. After graduating from the University of Pennsylvania in 1984, Reynolds began working as a merchant (runner) on the Philadelphia stock exchange (Philadelphia Stock Exchange). Having worked on the trading floor, Reynolds made a career as a broker and became involved in currency options. In 1987, a Chicago trading firm approached him with a proposal to trade bonds in the hall of the Chicago Mercantile exchange. But at the time, according to Reynolds, "the market in Philadelphia was good, and I wasn't ready to move in". A few years later, however, the market of currency options in Philadelphia began to decline. "Once the market began to decelerate, I began to think about moving to Chicago," says Reynolds. In June 1991, Reynolds moved to the Midwest and started a brokerage in the trading room with Eurodollar futures of Quantum.
after a Successfully in this capacity for three years, Reynolds began to think about how to become a trader: "I've been a broker for eight years, and the work of the trader provides more financial opportunities and more interesting". In June 1994, Reynolds took the plunge and joined the firm Deerpark Derivatives for the position of trader in the trading room. "The first couple of months it was a little scary," admits Reynolds. He, however, adheres to several "known to all the basic rules that helped him succeed. "In my type of trading – scalping – you need all the time to go from losing trades and rely on winning," he says. Reynolds every day along with thousands of other people fit into Eurodollar room and looking for an opportunity to use short-term market inefficiencies to their advantage. Another basic rule that should be Reynolds, is the conduct of trading within their own financial possibilities: "it is Impossible to trading up to the size of your capital, trading should be within 5% of the capital. Being a "scalper" that Reynolds uses average time frame within minutes. "As soon as the numbers come, it may be a fraction of a second for the transaction, but can be from two to three hours... on average, out of about five to ten minutes."
Speaking about the transition from broker to trader, Reynolds notes that "requires more intelligence to work as a trader than a broker because you need to understand the underlying causes for market fluctuations". Early in his career trader Reynolds studied a book on basic concepts in order to assess the importance of different economic information received during the month. "I have a lot to look at the numbers. It is inevitable, if you want to be effective scalper. When at 7.30 am on the panel data displayed government statistical reports, then I look at the numbers to see how they can spur inflation". For example, if the monthly report on the producer price index of production 0.2 % exceeded expected performance, "the market will demand caused by inflationary expectations, as the bonds will fall in price". As Eurodollar futures on the Chicago Mercantile exchange often sold in tandem with futures on Treasury bonds, Reynolds observes that during the day, he closely monitors cash prices of Treasury bonds. "If cash bond prices tilted upward, self-employed traders (locals) will come and start buying Eurodollars," says Reynolds.
In recent weeks, Eurodollar futures traded in a very narrow range – the interval, in four or five ticks for the March Eurodollar contract recently not uncommon. The main factor that prevents the price of Eurodollars, according to most analysts, is the willingness of the Federal reserve Bank to keep monetary policy unchanged until the end of the year. Despite this, according to Reynolds, "even within one or two ticks, you can still make money... there's always a demand for 1500 contracts and offer 2000 contracts". Eurodollar futures are known for their high liquidity. "There's always 2000 contracts at any price," says Reynolds. The total number of open contracts on Eurodollar futures is now 2 012 398. So even if the Eurodollars fluctuate in a narrow range, "when they start to move, you can turn up a lot in 1000, and it justifies the wait. I take 700, 800 or 900 contracts, because I know that the following price will be 500. I'm sure I can leave."
Although some traders left the hall early in the morning, concluding a successful deal, Reynolds says: "I am one of those who are willing to stay all day. I love auction". However, on a bad day "I limit losses and go home." Reynolds refers to his point of departure: "This is usually 100 ticks in one direction or another". One tick in the Eurodollar contract is $ 25.
Answering the question of what qualities are necessary for success in the stock room, Reynolds said, "first, the confidence. Secondly, strong nerves. Third, the ability to communicate with people. Fourthly, the understanding of the fundamentals of the market, and, fifthly, — the availability of sufficient capital, and not necessarily in that order".
"Strong nerves are needed in order to in case of error to have the courage to admit defeat," he says. Novice traders Reynolds advises to begin work, as he is with the basics. It is important to have enough time to build the foundations of their understanding of the industry, otherwise you will not last long. I spend one day on something new and then trying to gain a foothold on what I did, and hope that this success will accompany me in the future."
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