Secure your tickets now for London’s best trading event

Annabel Palmer asks Richard Farleigh what to expect from this year’s City A.M. Active Trader

Q What is your trading background?
A I studied economics and maths at the University of South Wales before joining the research department at Australia’s Central Bank. From there, I moved to Bankers Trust Australia, where I designed derivatives and later ran the proprietary trading desk. In the mid-1990s, I ran a hedge fund in Bermuda and was probably the world’s highest-paid hedge fund manager. In my trading career, I have covered all markets, foreign exchange, interest rates, commodities, stocks. My main interest is in macro-economics and government policy, and the long-term rather than short-term market movements that result. My book, Taming the Lion, contains 100 trading strategies I developed, and was a critically acclaimed best-seller.

Q What has changed since you spoke at last year’s City A.M. Active Trader conference?
A The world looks like a safer place than last year, so we have seen some of the riskier asset classes come back in vogue. I won’t disclose my personal investments, but I’m certainly taking more risk than a year ago.

Q You’re taking part in a panel discussion on forex. Are there any topics in particular that you hope the discussion will address?
A It would be good to cover what’s happening to global growth. There is mixed information on US and Chinese growth, and movements in those economies are huge factors in the global market at the moment. It would be useful to discuss the subtleties that may impact on the growth of the major economies, as well as critical attitudes to currencies – the Chinese attitude to their currency is always interesting, for example.

Q You’re known for creating a repeatable trading methodology early in your career. How could it help traders today?
A We are still seeing many patterns that have been around for a while, such as large trends, the market taking time to react to fundamental news, the power of a consensus, and that experts can be wrong. So the methodology I created is as valid now as always. I was initially driven to create a technique that was repeatable rather than based on one-off successes. Even when I was successful, I wanted to know that I had used a technique I could use again, rather than just wondering if I was lucky on one particular trade. It was for my own benefit – to develop a good methodology I could repeat time and again – but also for those working for me, to help them implement my ideas.

Q What are the most common mistakes traders make?
A There are a number. Amateur traders don’t analyse their wins and losses correctly and are often not very disciplined. Many traders don’t have a repeatable methodology, and put luck down to skill. Some don’t let their profits run, or have a fear of being with the consensus. In my mind, contrarian trading is a low probability strategy that can work in certain cases – a crisis or panic can lead prices to extremes and provide opportunities for bargains in the market – but is not something to be used all the time.

Q What is the biggest challenge faced by traders today?
A It’s the same as always – finding a comparative advantage in the market, rather than relying on tossing a coin or random information. Traders have to find something the market has missed, and that can be a challenge.

Q You have a number of beliefs that go against conventional wisdom. Which trading strategies have you found most successful?
A Perhaps my most controversial beliefs are that I don’t believe in day trading, and I don’t believe in charts. I don’t think charts have a scientific basis; and I think it is unlikely that most people would have any advantage when they are day trading.

Richard Farleigh has operated as a business angel for many years, backing more early-stage companies than anyone else in the UK.
www.farleigh.com

He will be speaking at this year’s City A.M. Active Trader conference this Friday at the Grange Hotel, Tower Bridge, London E1 8GP. Tickets are available now for only £65 at cityam.com/activetrader
or by calling 0203 201 8900 in office hours.

How to buy your ticket
City A.M. Active Trader, London’s best trading conference, takes place this Friday at the Grange Tower Bridge Hotel. To see the full speaker line up and to buy your ticket today for just £65, visit: cityam.com/activetrader
or call: 0203 201 8900