Monday, July 27, 2009

Collins, When Supertraders Meet Kryptonite

Now and then we all succumb to Schadenfreude, pleasure derived from the misfortune of others. At first blush Art Collins’ When Supertraders Meet Kryptonite (Traders Press, 2002) might seem the perfect venue to indulge this perhaps warped hedonism. Watch big guys blow out their accounts, congratulate yourself because you haven’t done it. But a collection of trader obituaries isn’t an idea that any sane publisher would rush to embrace, so figure that you wouldn’t read this book to pat yourself on the back. A more accurate title for this book would have been “When Supertraders Met Kryptonite.” We’re introduced to thirty-five successful traders, many familiar to the online trading community, who at one point or another in their career were severely tested. For some it seemed like Armageddon, for others not quite at the brink of destruction it was still significantly worse than “a bad day at the office.”

This is an engrossing book. Although in an epilogue Art Collins offers some generalized takeaways, the fact is that each trader faced his or her own demons and somehow managed to overcome them. Some traders retooled their methods or modified their position sizes, others expanded their revenue streams. Whatever the solution, they were survivors—and survivors on a grander scale than most.

Each reader will identify with some traders more than others. To give a flavor of the tales told, here’s a sampling of chapter titles: “And then I’d have the ‘walk-on-water’ complex,” “I prayed for one thing—that when I liquidated everything, I wouldn’t owe the firm any money,” “It was like I was tied to a post, and they were shooting at me with shotguns,” and “The market doesn’t stop just because you’re stuck.”

The value of this book is probably best expressed in another chapter title: “I’ve learned more from the mistakes of the big traders than I did from how good they were.” Not all the crises recounted in this book resulted from genuine mistakes; sometimes Lady Luck just dealt the trader a losing hand. Whatever the cause, there were a lot of wrenching consequences. Art Collins’ book testifies to the resilience of these traders and offers the trader who is not yet “super” invaluable insights.

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