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Thursday, May 8, 2014

Leda Braga: A High Earning Hedge Fund Manager

LEARN FROM THE GENERALS OF THE MARKETS - PART 48

“I’d never work for anyone else again.   Plus, I love what I do.” – Dr. Van. K. Tharp (Trading specialist)

Leda Braga, a female trader, is one of the highest paid funds mangers in the world. Holding a PhD in engineering, she’s the president of BlueCrest Capital Management (which was founded by Williams Reeves and Michael Platt in 2000). The firm has offices in a number of counties.

Leda manages the firm’s biggest portfolio which is worth $16,000,000,000, using a proprietary trend-following approach. BlueCrest itself has a total of $37,000,000,000 as a portfolio. She’s an active researcher; always looking for better investment opportunities and strategies. She’s gained an estimated 16.67 per cent per annum since the year 2005.  She’s personally earned about $5,000,000 as a result of her trading activities.

Her firm’s official website is: Bluecrestcapital.com/

Lessons
Here are some of the lessons that can be learned from Leda:

  1. Leda uses trend-following approaches to tackle the markets, which means that trend-following methods work.

  1. No trading method is perfect. The portfolio managed by Leda sometimes reaches break-even or flat performance. When your trading method performs below expectation, you’d need to take it as a normal thing. It happens to expert traders as well; so it doesn’t mean you’re not a good trader.

  1. Leda first worked as a lecturer and researcher before she inadvertently dived into the ocean of trading. She’s never regretted her decision. Before she joined BlueCrest, she didn’t place real trades (though she’d been exposed to the markets). No matter what you’re currently doing for a living or as a hobby, you’ve the potential to become a great trader. The seed is in you. The fact that you’ve not placed real trades now doesn’t mean you can’t be a great trader in future. Trading would become more and more interesting in future, and you merely need to adapt so that you can survive. Many talented students with mathematical and scientific backgrounds are showing interest in trading and hedge fund world. They can certainly make great contributions to trading. This profession is highly competitive and hard. Therefore you must find ways to become better than others and have an edge.

  1. According to one source, Leda’s passion is the continual testing and refining of selected trading systems. Her firm emphasizes research and analysis. If you’ve great trading systems, you might want to find ways to improve them. No matter how good you’re at trading, there’s always room for improvement.

  1. Mighty oaks from little acorns grow. There was a time when BlueCrest’s fund was only $300 million; now it’s worth $37 billion. Try to be successful on smaller accounts first, then you may be worthy to handle much larger accounts. Your success with smaller portfolios would surely take you to greater heights.

  1. Technological advancement has made trading more enjoyable. There have been structural changes in the markets, including the way traders speculate. There are more transparency and better quotes. Electronic trading has been a boon to serious traders.

  1. Leda thinks that technology will keep on playing vital roles in the trading world. She forecasts that in future, science and technology will have a great influence on trading.

  1. Should funds managers try emerging markets? Yes, but they need to weigh their pros and cons. There are good market names in South America, Africa and Asia. These markets should be watched for excellent investing and trading opportunities, for they’ll become very attractive as they grow and stabilize. But there are some hitches to be wary of: tradable products, changing regulations, liquidity, opening/closing hours, sizes limitations and other restrictions.  Truly, regulations on emerging markets keep changing just like a highway code that keeps changing while one is driving, it would make safe driving difficult. You must make sure you know what you’re doing – most traders don’t.

Conclusion: Author Dennis Fisher wrote that at the first battle of the Marne during the First World War, French lieutenant general Ferdinand Foch sent out a communiqué saying: “My center is giving way, my right is retreating. Situation excellent. I am attacking.” Dennis went on to say that the lieutenant general’s willingness to see hope in a tough situation eventually led to victory for his troops. (Our Daily Bread, January 4, 2014). You may even experience negativity with your first trade ever, yet you can become a good trader in future. Many experienced pros can testify that they’ve been trading for 40 years or 50 years and they still love the markets. There will be the trial of our commitment to trading success; it happens to the pros of the markets, and it will happen to us. The markets are full of rewarding experiences that can satisfy our hearts and make us happy, rich and good examples in the trading industry.

Leda Braga, who believes that the basis of successful trading is backed up by mathematical justification, says white box trading is better than black box trading. Her quote ends this piece:

"We're actually a white box, the white of the mind. We are fully auditable. If you are a pension fund with long-term liabilities, you want some reassurance that the business is sustainable. The hedge fund business is filled with very talented people, but talented people retire. What we do, this effort to articulate the investment process through algorithms, though equations, through code, means that the intellectual property exists in its own right. If I disappear tomorrow, it's fine."




Eye-opening trading lessons: Lessons from Expert Traders

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