Hi guys, hi from Andrea Unger! In this post, I will tell you about the choices that made me become a trader.
My First Trading Experience
I’ve often discussed this, but I’m also often asked about it, so let’s go a bit back.
In ’97 I was working for a multinational company and, talking to friends, we started investing in some stocks. I did make money, so, of course, I was happy.
Then, I also purchased some shares of the company I was working for, convinced it was a good company, and it was.
I made money, but then the moment came when I lost money, and it was a lot. Fortunately, I was good enough to apply my first stop loss, because I saw that the situation was very tough and the value of the stocks was very likely to fall even further, so I decided to quit and close the position.
I did it and saved some extra losses. That was my first stop-loss, I stopped the pain by exiting the position and I lost a lot of money.
The Covered Warrants
The time came to figure out what to do. It was nice when I was making money, but it was bad when I was losing it.
I decided to study a bit more. I read about an Italian trading championship in which a guy made a 1000% performance and I found out that he was actually trading a specific instrument: the Covered Warrants.
These Covered Warrants, I found out later, had inefficiencies. There were delays in the quoting. They had options with a delayed quote, so, actually, you could trade the inefficiency in a sort of arbitrage mode and make money. You could buy something that you knew would quote in your favour some seconds later.
That’s what I did and I started making money.
When I Quitted My Job to Become a Trader
After two months, seeing that that was a stable income, I quitted my job.
I talked to Domenico Foti, who was my mentor in those days, and he said: “Oh, you must be crazy!” and I said: “Why? I am making money!”
But he was right, I was crazy!
Today I’m here, so you might think I’m here to say: “I was right!” No! I was crazy, I was crazy to quit my job, a very good position, in a multinational company, about 30 people under me in my sector and I left that job to start trading for a living and to start in a way that is no longer there today, no Covered Warrants are left, not Covered Warrants intended as that kind of inefficiency.
Was I good? No, I was lucky! I was lucky to be in the right place at the right time.
The right time would have been a couple of years before, but okay let’s say it was the right time, because I was able to work on that kind of inefficiency for a couple of years to come.
So, if I met a young Andrea Unger today, talking about that decision, I would say to him: “No, you’re crazy!” Just because it’s true.
Probably, I should have found a parallel way to better evaluate that, two months are not enough and so I was lucky to find the right conditions.
Time To Change Route
What happened after that?
After that, that’s where I was clever and smart enough. I understood that that thing couldn’t last, so I started studying how to evolve and how to really face the real markets, once the Covered Warrants videogame would be over.
So, I started studying automated trading and that’s why I’m still here today.
I was able to go through the evolution in the markets and in my trading style to build my trading skills, the ones I use today.
Don’t Stop Studying
What’s important in this path? It’s important that I consider crazy what I did, I consider how lucky I was and yet I was smart enough to understand that I had to study, I had to build my knowledge, build my culture in trading and I did it.
Thanks to that, which I was doing parallel to the Covered Warrant videogame, I was able to face the markets the way I’m doing today and I will probably do for the next years.
So, actually, the necessity to study in order to keep up with the evolution of the markets is a must for every trader.
So, what about today? If somebody wants to quit the job today and become a trader?
There are no Covered Warrants or inefficiencies, maybe there are some other parts of the trading world, I don’t know that, unfortunately, but today it is true, you don’t have that.
However, you have an enormous amount of information that was not there 20 years ago, thanks to the growth of the Internet and the great bulk of financial information it contains.
On the one hand, this is good, because you have a lot of things to study. On the other, it is bad, because in this lot of things that are also a lot of scams and a lot of bullshit.
So, actually, you have to filter, you have to be careful about that, but you have the opportunity to study. Don’t quit your job, study first.
Studying is always necessary to stay up to date and to stay tuned, in order to face what the markets are demanding. Markets are difficult and are in constant evolution, so we need to keep on studying.
Passion Is What Makes a Good Trader
You must have understood one thing, I was looking for independence, freedom, meritocracy. I found this in trading, but what animated me throughout the path is passion.
I love my job, I love to figure out markets, I love to study what to do to keep on being profitable, what to do to find new edges, to find new ways to trade, because I like it, I really like it and enjoy it.
Without this passion, I would have probably quitted, because the need to study would have been annoying to me. Instead, I love trading and so I like studying and learning new things about it.
Thanks to that, I succeeded in arriving to where I am now. So, if you love the idea of becoming a trader and figuring out markets okay, study the markets, but don’t quit your job, don’t do that today.
Wait, study, try to find a parallel way to study, because it’s important that you build the infrastructures inside yourself first, and then you will take strong decisions such as quitting your job.
That’s it, I hope it helped, just to have a brief look into my past.
If you have any question about some specific points, please write and I will be happy to answer.
Ciao from Andrea Unger, see you next time!