ex Goldman Sachs Trader Tells Truth about Trading - Part 1

Summary

Anton Creole, a former Goldman Sachs trader, shares his journey from trading at 16 to being headhunted by Lehman Brothers and JP Morgan. He discusses his early experiences with IPOs and how his university trading success led to a career on Wall Street. Creole emphasizes the importance of real-money trading experience for aspiring traders, highlighting the value of learning through practice and the challenges of entering the financial industry. He also provides insights into the differences between trading in investment banks and hedge funds versus retail trading.

Takeaways

• 🚀 Anton started trading at 16 with his own money, inspired by documentaries about the financial markets.
• 🎓 He leveraged his early trading experience and success to get recruited by Goldman Sachs while at university.
• 💼 Anton's career path included roles at Goldman Sachs, Lehman Brothers, and JP Morgan before he retired.
• 🌍 After retiring, he traveled the world and participated in the TV program 'Million Dollar Traders'.
• 🚀 He has ambitious plans, including a potential trip to space.
• 💼 Anton's early trading involved flipping IPOs and taking advantage of the T+3 settlement period.
• 📈 He caught the tech boom during his university years, which significantly boosted his trading success.
• 🏦 Goldman Sachs offered him a position after seeing his impressive trading track record and performance.
• 🏙️ Anton's time at Goldman Sachs was marked by a steep learning curve, including handling significant capital and participating in major market events.
• 📊 He emphasizes the importance of hands-on trading experience with real money for aspiring traders.
• 🌐 Volatility is key for traders to make money, and Anton suggests that forex might not be the best for day traders due to low implied volatility in recent years.

Q & A

How did Anton Creole get started in trading?

Anton Creole started trading at the age of 16 with his own money, inspired by documentaries about the markets during Thatcher's Britain in the mid-1990s.

What was Anton's trading strategy during his early days?

Anton's early trading strategy involved flipping IPOs, taking advantage of the T+3 settlement period to buy stocks in the morning and sell them at lunchtime if they went up significantly.

How did Anton transition from university trading to a career at Goldman Sachs?

Anton's trading success and track record at university caught the attention of Goldman Sachs during a presentation event, leading to a telephone interview, an invitation for interviews, and ultimately a job offer.

What was Anton's experience like during the official training program at Goldman Sachs?

The official training program at Goldman Sachs involved sitting in lectures in New York and being given a seat on the trading floor. Anton learned more about applied finance and the firm's culture during this time.

What were some of the significant market events Anton experienced while at Goldman Sachs?

Anton experienced the tech boom, the market situation post-September 11th, 2001, the recession periods of 2002, and the market takeoff in 2003 and 2004.

How does Anton suggest aspiring traders stand out when applying to financial institutions?

Anton suggests that aspiring traders should differentiate themselves by applying real trading methodologies and using real money, as this demonstrates practical experience and commitment.

What advice does Anton give for learning to trade effectively?

Anton advises that the best way to learn is by doing it in practice with real money, even if it means losing some, as it provides valuable experience and education in trading.

Why is volatility important for traders according to Anton?

Volatility creates opportunities for traders as it allows for price movements that can be capitalized on. Without volatility, traders struggle to make money.

What is Anton's view on the forex market for traders?

Anton notes that the forex market, particularly the major G10 currency pairs, has been experiencing low volatility, making it difficult to make significant money through day trading.

What was Anton's initial experience like when he started at Goldman Sachs?

Anton's initial experience was intense, with him being given a pot of money to trade and quickly being involved in significant market activities such as IPOs and rights issues.

How does Anton describe the difference between trading in investment banks and hedge funds versus retail trading?

Anton describes the approach to trading in investment banks and hedge funds as very different from retail trading, with professionals having a more structured and institutional approach.

Outlines

00:00

🚀 Early Trading Career and Goldman Sachs

Anton Creole began his trading career at the age of 16, inspired by documentaries about the markets during Thatcher's Britain. He opened a trading account and started with IPOs, leveraging the T+3 settlement period to flip stocks without immediate payment. His success in university during the tech boom led to an opportunity at Goldman Sachs. Anton's trading track record and performance caught the attention of traders, leading to a phone interview and subsequent job offer. The paragraph highlights the importance of hands-on trading experience and a strong track record for breaking into the industry.

05:02

🎓 Challenges in Securing a Trading Job and Goldman Sachs Experience

The paragraph discusses the difficulties of entering the trading industry, especially given the decline in hiring within financial institutions. Anton suggests that having a demonstrable trading methodology and real-money experience can help candidates stand out. He shares his experience at Goldman Sachs, including the official training program in New York and the practical learning on Wall Street. Anton emphasizes the baptism by fire as a new trader during the tech boom, handling significant responsibilities early in his career, and the valuable lessons learned from various market situations, including the aftermath of September 11th and the market recession in 2002.

10:07

💼 Practical Trading Wisdom and Market Volatility

Anton stresses the importance of practical trading experience with real money, even if it results in initial losses, as it serves as a form of education. He advises that showing a track record, even with losses, can be viewed favorably by investment banks and hedge funds. The paragraph also touches on the different approaches to trading in investment banks versus retail trading, and the significance of volatility in creating trading opportunities. Anton notes that while forex is a good market to learn in, due to its low implied volatility, it can be challenging to make significant profits from day trading, suggesting that equities historically offer higher volatility and potential for profit.

Keywords

💡Trading

Trading refers to the act of buying and selling financial instruments such as stocks, bonds, commodities, or currencies in the financial markets. In the context of the video, Anton Creole began trading at a young age, using his own money, and eventually became a professional trader at institutions like Goldman Sachs. Trading is central to the video's theme as it showcases Anton's journey and insights into the world of finance.

💡Goldman Sachs

Goldman Sachs is a leading global investment banking, securities, and investment management firm. It is mentioned in the script as one of the prestigious financial institutions where Anton Creole was recruited. His experience at Goldman Sachs is a significant part of his career narrative, highlighting the competitive and high-stakes environment of investment banking.

💡IPO (Initial Public Offering)

An Initial Public Offering is the first sale of stock by a company to the public. It marks the company's entry into the public capital markets. In the video, Anton discusses his early trading experiences with IPOs, where he would buy stocks in the morning and sell them by lunchtime, capitalizing on the price fluctuations that often occur on the first day of trading.

💡Tech Boom

The tech boom refers to a period of rapid growth in the technology sector, typically accompanied by a surge in stock prices. Anton caught the tech bull market during his university years, which allowed him to profit from the trading of tech stocks. The tech boom is a key element in the video as it sets the backdrop for Anton's early success in trading.

💡Volatility

Volatility in finance refers to the degree of variation in the price of a security or market over time. Traders often rely on volatility to generate profits as it creates opportunities for buying low and selling high. In the script, Anton discusses the importance of volatility for traders and how it has been low in recent years, making it difficult to make money in certain markets.

💡Track Record

A track record in trading refers to an individual's historical performance in managing trades and investments. Anton's trading track record, which includes all his trades and risk-adjusted returns, was a key factor in his recruitment by Goldman Sachs. The concept is important in the video as it illustrates the value of demonstrating tangible trading experience to potential employers in the finance industry.

💡Lehman Brothers

Lehman Brothers was a global financial services firm that filed for bankruptcy in 2008, which was a significant event leading to the global financial crisis. Anton Creole was headhunted by Lehman Brothers, indicating his reputation and success in the trading world. The mention of Lehman Brothers in the video adds historical context and emphasizes the high stakes in the financial industry.

💡Day Trading

Day trading is the practice of buying and selling financial instruments within the same trading day, with the goal of making profits from small price movements. Anton mentions day trading in the context of forex markets, suggesting that while it's a good learning tool, it's currently challenging to make significant profits due to low volatility.

💡Forex (Foreign Exchange)

Forex, or foreign exchange, refers to the global market where currencies are traded. It is one of the largest and most liquid financial markets in the world. Anton discusses the forex market in the video, noting the low implied volatility in recent years, which has affected the potential for profit in short-term trading.

💡Investment Bank

An investment bank is a financial institution that assists individuals, corporations, and governments in raising capital by underwriting or acting as the client's agent in the issuance of securities. Anton's experience at Goldman Sachs is indicative of the role of investment banks in facilitating large-scale financial transactions and providing advisory services. The video highlights the rigorous and competitive nature of investment banking.

💡Hedge Fund

A hedge fund is an investment vehicle that pools capital from accredited investors and uses various strategies to invest in a wide range of assets, often with complex risk management techniques. Anton mentions hedge funds in the context of the competitive job market and the challenges of getting a job in the financial industry. Hedge funds are part of the broader financial landscape discussed in the video.

Highlights

Anton started trading at 16 with his own money and was later recruited by Goldman Sachs.

He was involved in the IPO market, leveraging the T+3 settlement period to flip stocks without paying for them initially.

Anton's experience during the tech bull market in university allowed him to trade IPOs effectively.

His trading track record and performance caught the attention of Goldman Sachs, leading to a job offer.

Goldman Sachs provided an official training program, but real learning came from practical experience on the trading floor.

Anton emphasizes the importance of having a trading track record to stand out in the competitive financial industry.

He suggests that even losing money in trading can be valuable as it provides practical education for a trading career.

Anton's first week at Goldman Sachs involved managing a $10 million portfolio during the tech boom.

His highlights at Goldman Sachs include IPOs, the market situation after 9/11, and the market recession and recovery in 2002-2004.

Volatility is crucial for traders as it creates opportunities; however, low volatility in forex has made short-term trading difficult.

Anton's career progression included working for Lehman Brothers and JP Morgan before retiring to travel the world.

He participated in the TV program 'Million Dollar Traders' and later formed his own company.

Anton is planning to travel to space next year, indicating his adventurous spirit outside of trading.

The interview suggests that hands-on experience with real money is essential for learning trading, even if it involves initial losses.

Anton's advice for getting a trading job involves demonstrating real-world trading experience and learning from practical mistakes.

He discusses the difference between trading in investment banks and hedge funds versus retail trading, emphasizing the importance of understanding professional approaches.

Anton shares insights on the importance of volatility in different markets, particularly noting the challenges in forex due to low implied volatility.

Transcripts

so yeah we're lucky enough to have Anton

Creole here and he started his career

with trading at about 16 with his own

money and then got recruited into

Goldman Sachs headhunted Lehman Brothers

JP Morgan before retiring traveling the

world then he you may know that he also

did a PPC program million-dollar traders

and proceeded to form his own company

and next year he's trying he's going to

travel to space hopefully so yeah it's

pretty ridiculous career I think we're

gonna learn a lot from this interview

and so if we could just have a warm

welcome and a round of applause for

Anton and okay so let's make a start and

how did you get into the world of

trading and started trading pretty young

as you mentioned in the in the

introduction started when I was 16

basically so grew up in Liverpool and

was watching documentaries on television

about the markets said this was like

1994-95 and there was a lot of

documentaries on TV about Thatcher's

Britain and lots of guys in the in the

city were making lots of money so I was

watching these documentaries thinking I

could do it because I'm clever in these

guys so who heard so literally opened

the trading account with a local stock

broker in the north of England and back

then it was all physical stock so you

couldn't leverage or borrow money which

rate so it was 1 for 1 cash trading in

physical shares and really got into the

IPO situations where you could buy

stocks in the morning where you put in

for the IPO allocation a few weeks

earlier you get the IPO allocation and

without even paying for it and then you

can

the IPO like at lunchtime if it goes up

you know 50 a hundred percent with it

because it was all t plus three

settlement so you used to have to send

the check to the stockbroker and then

it'd be settled in three days so you you

were able to flip IPOs are not actually

pay for them so really got into it that

way okay and you continued trading at

university yeah so at university you

know it was 97 to 2000 so I was pretty

lucky I caught the tech bull market the

tech boom so flipping IPOs and trading

IPOs was actually really straightforward

and university day used to be get up at

6:00 a.m. do an hour's research market

with open at 8:00 put on my positions go

to lectures lunchtime go in the computer

room flip them but most of it was

already done over most of it was done

over the telephone so in my day wasn't

so long ago this was the heaven this was

before broadband so everything was

dial-up and you know at home it used to

cost like a pound a minute to plug your

internet in so and you used to only get

quotes online and when you pick up the

telephone to trade the quotes upon the

brokers would be totally different from

what you see on the screen so it was

pretty slow spreads were really wide so

you had to trade very volatile

situations and then go home in the

evening do a bit of research and do the

same again the next day was it that

experience that got you into Goldman

Sachs pretty much yeah the Goldman Sachs

situation was you know typical situation

where they come around on the milk rant

and do presentations so obviously it

first second year university you go to

all of these and you get to know all the

companies I'm sure here you have the

same even today that the track record

which is just all of your trades that

you've ever done and your performance

and your risk over return the track

record would you know I basically told

one of the traders on the desk at the

press

patience you know the amount of money

that I made in university all the

situations I was trading and they were

really interested so I basically had a

telephone interview the next day and

emailed them my track record so the

telephone interview was with the head of

the desk and then I was invited down the

next week to have interviews and then

offered the job on the same day

basically okay do you think that method

still applies for getting students into

the say that for us that want to follow

in the same sort of path do you think

that's the right way to go about getting

a job getting a trading job now one of

the big problems with with applying to

investment banks hedge funds all

financial institutions really is a lot

of the industries of instructional

decline at the moment so you see

investment banks culling tens of

thousands of people in the Western world

hedge funds pulling back on hiring the

insurance industry pretty much the same

but the amount of applications has gone

up exponentially in the last 10 15 years

everyone seems to have an undergraduate

degree now everyone has a masters so who

you know differentiating yourself is

really really hard in my day the way I

differentiating myself was by doing as

well and I think it's still really a

place if you can show something on your

resume and show something in your

experience where you've actually applied

real trading methodologies and use real

money you stand out in a huge way you

know everybody's got an undergrad with a

2:1 everyone's got a master's when I

used to see CVS right now yeah used to

hire a lot of people in the industry

piles of CVS were dropping my desk from

HR HR is really just a filtering process

they don't know what makes a good trader

but they know that people tick all the

boxes so the Seavey's end up on the desk

but there's thousands of them and it's

literally sometimes just taking them and

going to one

masters couple of good place

institutions that you went to nothing

really interesting about this person bin

I mean it that's sometimes that can be

the process

okay so you're already trading once

you're at goldman sachs how did how did

they develop durability and well you

know publicly you know these companies

that these companies are public

companies so they're always gonna say

that they have official training

programs it's something you know public

companies have to show their

shareholders that they're being

responsible in in training they're the

people that they hire so you do have an

official training program that you go on

in New York which is pretty much sitting

in a lecture theatre like we're here now

for a couple of months but also you're

given a seat on on the trading floor on

Wall Street to be honest what you learn

in those in that situation is really

about applied finance more that you

would learn in a masters but also the

culture of the firm and you get to meet

everybody and all the right people in

the US office so you don't really learn

how to trade or learn about your

profession in practice that's when you

come back on the desk and really that's

where you works what you learn okay so

you spend about four years at Goldman's

and what were your highlights highlights

well walking onto the desk in the first

week where it's all hands to the pump

because it was the tech boom so this

would have been a June 2000 and it was

crazy so they just give you a pot of

money with me it was ten million dollars

to start they say

learn how to trade this guy next to you

is going to teach you what to do press

this button to buy press this button to

sell and because it was the tech boom it

was you know every day walking in with

pretty much very little experience

saying right we're gonna we're going to

give you some responsibilities today you

know after a couple of weeks you'll go

to IPO this company and I'm like okay so

I'm on the other side of the IPO now

that I'm used to ahem and then next day

doing a rights issue raising capital for

companies next day selling stake sink

these four large shareholders and

pension funds so yeah I mean the first

couple of months of real baptism of fire

you know I thought I knew stuff I didn't

know anything until I walked onto that

floor I guess big trading situations I

mean there's so many but ones that you

know really stand out probably during

the tech boom doing all the IPOs 2001

September the 11th a huge situation in

the market the recession we periods of

2002 and then the take off of the market

in oh three oh four okay and we'll have

a little pause now and get some audience

questions any so far yeah I really think

so I mean you've you've really got to do

it in practice with real money

if you get the experience doing that

even if you lose a little bit of money

you've got to see it as paying for the

education of trading with real money so

even if you lose money and say to an

investment bank or a hedge fund this is

my track record I lost a couple of

thousand pounds last year trading they

will look at that favorably so you've

got no downside in doing it so as long

as you show that you've done it and

you've traded for a year and they say

well what lessons have you learned well

I've learned not to do this I've learned

not to do this the market last year was

really tough the fact that you're

actually doing it means you're going to

learn faster so you because what you

know there's a great saying you're not

trading until you've got a position okay

or you don't know anything about a stock

until you've got a position you know so

once you have a position in something

you're forced to learn and monitor your

risk so I think it's it's it's really

really important to do it and you know

then going into the investment banking

site it is very very different so the

approach to trade

is very different in investment banks

and hedge funds the way professionals

did it compared to the retail trader or

the man on the street so you'll learn

how to do that but from the ground up

just having a position will teach you a

lot I would say okay in terms of

volatility

you know volatility creates

opportunities for traders over any given

time horizon and that's what traders

live and die on they need volatility

otherwise you can't make money so the

forex market you know implied volatility

over the last couple of years has been

absolutely crushed we've actually seen

it tick up a little bit recently

especially in dollar yen you know huge

moves forex is is good to learn in but

don't expect to make loads of money if

you're day trading because actually the

important of ala Atilla T of forex at

the moment of the major g10 currency

pairs globally is very very low so it's

very difficult to make money over short

periods of time in equities generally

historically volatility is higher than

in forex