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Thursday, August 29, 2013

Paul Rotter Strategy

I share some principles followed by Paul Rotter. He was infamous for his role of Flipper on the Eurex exchange.

Be true to yourself

For us, asset management means more than just tracking indices. We expect more - more of our dealers, our analysts and our back office staff. Our core competence is in trading financial derivatives, especially options and futures. Thereby we do not rely on automated trading strategies but on the market comprehension of our employees. This approach has been successful in the last few years. The results obtained were regularly above the benchmarks.

Wait for the right opportunities

We're not stock market gurus or prophets. We don't have to defend any published opinions or implement any pre-defined strategies. Our independence gives us the flexibility to respond appropriately to the markets - we can exploit market trends by buying and selling faster and more consistently, and allow ourselves the freedom to go against the trend or do nothing if there are no clear opportunities.

Skills

Rotter Invest's traders are known for their outstanding abilities and dealing skills. There is no compromise — being able to master our trading systems and state-of-the-art technologies is a requirement for working at Rotter Invest. Personal discipline is key to achieving this technical excellence.

Precision

Precision calls for detailed knowledge of what's going on right now. For us, this means enabling dealers to concentrate on the right market at the right time, generating a profit from information on market trends by responding quickly and applying our technical edge.

Maintain control

Total control is an illusion. Life is full of surprises, large and small. We have the professional skills to deal with surprises: our risk management tools give us a reliable early warning of negative trends, enabling us to respond in good time.

Interpret the signs

These days, modern asset management techniques rely heavily on complex IT systems. We use them as a matter of course. But machines cannot yet replace highly skilled people. Successful systems will always be copied by others, and even programmed to trade automatically. However, these systems alter the markets themselves, and what was a successful system before becomes average at best over time. In Rotter Invest, we constantly adapt our systems to keep pace with changing markets.

Don't count on chance

We review our positions constantly: Would fresh buying make sense? If not, then the right time to liquidate an investment has probably come. We apply a sophisticated stop-loss philosophy. Sitting out or averaging rarely make good strategies.

Confidence and nerves

Self-confidence and strong nerves are essential personal traits in any successful dealer: for taking on risk at the right moment and implementing ideas without hesitation.

No luck or magic

We consider simple, transparent client relationships to be very important, so that we can concentrate on our craft.

Source: Rotter Invest

You can check more on the Flipper in the link below:

http://www.trading-naked.com/library/paul-rotter-trader-monthly.pdf

1 comment:

Tim Barnard said...

The link to an interview with Paul Rotter "The Flipper" is no longer valid and the site itself has disappeared.