to look my best indeed, because today I was going to becomeCharlie Flank.
All Gini knew was that I was following up on a job lead from Craig Tay-lor. Perhaps I could get myself a job on a trading floor. That was everythingthat  she  needed  to  know.  I  didn’t  want  to  tell  her  I  wasn’t  making  anytrades; she asked me twice the morning after our talk when I was going tobe making some money from full-time trading. Now that we had both com-mitted to my career as a trader, she expected that I would work at it like afull-time job.
But I knew that I should obey Craig’s advice. I wanted to trade—afterall,  my  first  two  trades  were  brilliant  successes,  and  I  had  the  AmazingForex software. It was hard enough to explain to Gini that I was going towait a day or two, let alone try to explain it over and over to myself.
The  best  way  to  pass  the  time,  I  decided,  was  to  capture  anotherglimpse of a trading floor. Armed with my list of nine Wall Street trading su-perstars that I had taken from the office, I decided that I had a chance ofseeing at least one more trading operation. If I couldn’t get on the floor atthe first two or three, then I would start begging for a tour. Surely one ofthe firms would allow tours.
It was Friday April 2, 2004. I took the C train to Wall Street, and at8:15 A.M., I entered an emotionless granite building that looked as muchlike a train station as a New York office building, and certainly was olderthan any of its surrounding firms. I knew that U.S. National Bank had atrading  operation  here,  and  because  it  was  located  in  the  heart  of  WallStreet, I assumed these guys were good. There were other firms on mylist that I’d taken from Wakeman on my last day at work; I came to U.S.National first because I wanted to visit Wall Street anyway. If I didn’t likeit here, or they didn’t let me in, I’d have my choice of three or four otherfirms nearby.
When I thought about it, I realized that being the filing manager at alaw firm had paid off in an important way. The Anderson case files werefull of names of Wall Street firms and traders; after all, the case was abouthow much a good trader deserved to be paid, and all I needed to look atwas the research compiled by our firm. The research file was a gold mineof  information.  With  more  time,  I  could  have  stockpiled  a  ton  of  names,salaries, addresses, and probably phone numbers of traders. But I’d onlyhad time to take the names of a few firms and individuals.
I knew that if I could investigate just one of these trading operations, Icould learn enough to convince Craig I was doing my part to be ready tolearn from him or his mentor. Craig had been right when he said that I wasa terrible trader. Who would want to work with me unless I at least learnedmore?
Which was exactly what I was going to do right then at U.S. National
Bank.
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I took the elevator up 20 floors and exited. There I found a front deskthat looked a lot like the one at Ernest Wellington, which protected a largedoor not much different from the steel one that I had passed through to seeAnderson and Craig and 200 other wild traders. I walked confidently up tothe desk and offered a professional smile that said, “You are about to letme in the large door.” But what I really said was:
ME: I have a file to drop off for Mr. Sutherland.
I knew from the Anderson files that Mr. Sutherland was an executive whoworked on the trading floor. My ingenious plan would now unfold like thenapkin on a fancy place setting, or some other thing that unfolds veryclassy-like and easily, without any problems from the police or buildingsecurity.
BORED RECEPTIONIST: Your name. Your firm.ME: Charlie Flank, with Wakeman, Butterman, and Bailey.
I was lying a lot more these days, and getting pretty good at it, or thepeople I was talking to were just getting dumber. Either way, the Bored Re-ceptionist was going to escort me through the trading door any moment. Icould feel it.
She didn’t even verify my credentials. What a pushover! After I signeda guest registry, she stuck a name tag on me that said VISITOR and CHAR-LIE FLANK, and then she unlocked the large door and let me through.
Next time I was just going to tell her to print me off a name badge andput me on the payroll! This was easy! I had assumed that Craig had beena  genius  for  installing  himself  at  a  trading  desk  at  Ernest  Wellington.Not so! I could probably get myself onto five or six other trading floors inthe next week. If sneaking onto trading floors could pay money, I couldmake a living at it for sure. I was the James Bond of sneaking into WallStreet firms!
Before  I  could  complete  my  fantasy,  the  receptionist  led  me  onto  amuch smaller trading floor than the one I had seen at Ernest Wellington.Maybe half as large. Probably 60 or 70 people in this room. But it wasn’t thesize of the space that seemed odd. Here everyone spoke in hushed voicesor  not  at  all.  I  saw  no  sports  sections  from  the  Daily  News. No  messydesks.  Hardly  any  computers!  While  every  desk  had  a  coffee  cup  and  alarge phone with colorful buttons, not every desk had a computer monitor.While there had been three or four screens per desk at Ernest Wellington, Icould count on my hands the number in this room. Dark green carpet cov-ered the floor and stopped at each cherry-wood paneled wall. There werewindows on the western and northern walls, but most of the curtains were
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drawn and the office was lit mostly by floor and table lamps. This lookedmore like an expensive steakhouse than a trading operation.
Perhaps I’d come to the wrong place. Apparently I had walked into agathering of men (no women in sight) who didn’t care what might happenin the markets that day. I’d soon find out I was right.
I  suspected  that  the  average  age  of  the  traders  here  was  at  least  45years. Some of them appeared older than that, maybe as old as 60 or 70.Not one of them wore anything but a blue or grey suit, with the coat stillon. At Ernest Wellington, I’d seen a trader wearing Bermuda shorts and aHawaiian shirt. That person would seem very out of place on this floor.
Each of these men had a spacious work area that was separated fromthe others; they were sitting at their own wooden desks and some of themeven had visitor’s chairs in front of them. Some of them had small televi-sions on a side table. Only a few of them were tuned on, all of them show-ing CNBC. Melissa Francis was reporting from her luxury box above theNew York Mercantile Exchange.
If anyone here traded for a living, he would have a hard time proving itto me. Surely I had stopped at the wrong floor, for retired traders. Thesewere the stables where they put out the old men to pasture and told themto watch some news, visit with old friends, make a few phone calls, andhave a cup of coffee. Perhaps the Federal Reserve was about to make an-other interest rate announcement. That would explain the hush-hush envi-ronment and the focus on the few television monitors.
I also decided that since I had gone to the trouble of sneaking onto thetrading floor, I deserved to know why in the world no one here seemed tobe trading. But I didn’t know who to ask. At Ernest Wellington, with every-one screaming, it seemed natural to talk with the first person I saw. Buthere I was intimidated. No one seemed alive, let alone happy to see a visi-tor. Since the receptionist had left me alone, I didn’t have a tour guide. Iconsidered walking out and moving on to the next firm.
Thank goodness, someone spoke to me first.“Son, you look a mite lost. Who ya lookin for?”The wrinkled face of a man at least 80 years of age smiled broadly at
me. “Not too many of us here, I’m sure I can give you a hand.”
“What’s everyone waiting for?” I asked him. “It’s quiet in here.”He  just  looked  back  at  me  like  my  head  was  on  fire.  “Well,  boy,  it’squiet  in  here  every  day.  This  ain’t  no  two-bit  operation  up  in  Midtown.You’re standing where John Pierpont Morgan himself used to stand, or atleast nearby.”
John  Pierpont  Morgan?  Was  that  long  for  J. P.  Morgan,  the  famous
banker from 10 million years ago?
“Wow,”  I  replied,  hoping  to  appear  as  impressed  as  he  obviously
wished I would be.
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“Well, then, if you’re waiting for someone, come on over here and you
can sit down.”
He  guided  me  to  a  desk  where  a  man  not  much  younger—but  muchbigger—than he was sitting. He towered over the desk in his chair; he wasprobably six and a half feet tall and had massive hands that made the me-chanical pencil in his hand look like a toothpick. He was playing solitairewith a worn deck of cards with the other hand, in between using the pencilto write notes on large sheets of graph paper in front of him. The desks oneither  side  were  empty.  It  was  clear  this  guy  was  a  loner.  I  gathered  upsome courage and sat myself down in one of the guest chairs in front ofhim. The other old man waddled off so weakly I wondered if he could findhis desk.
“Good morning,” he offered without looking up. “I don’t recognize you.
Come here to gamble this morning? You new around here?”
I shook my head, but he wasn’t looking at me. I replied: “Gambling’s
not really my thing. I’m just here to drop off some documents.”
He looked up. “Not dropping anything off on me, I hope.”“Of course not.” I held out my hand to him. “Harry Banes.”He grunted. “Looks like today you’re Charlie Flank.”I looked down at my name tag. “Oh, that,” I replied. “That’s who I was
when I checked in at the front desk.”
He furrowed his brow and looked at me oddly.“I  sneaked  in  here  because  I  want  to  be  a  trader.  That’s  the  honest
truth. But I feel like I just took a trip to another planet.”
Ah, the truth. Telling it gave me the feeling of seeing an old friend. Well,
at least an old friend that I had sold up the river.
He laughed, grinned, and stretched back in his chair and put the pencilbehind his ear. He spoke to me, but he spoke so loudly I suddenly felt veryconspicuous. Not wanting to draw attention to myself, I sunk a bit deeperinto the chair. He boomed: “Sounds like something I would have done fortyyears ago,” he told me. And then he pointed across to the television a fewdesks  away.  Melissa  Francis  was  gone,  replaced  by  a  group  of  talkingheads who were saying things I couldn’t understand. The old man contin-ued: “You picked the right day to come in here. NFP [Non-Farm Payroll re-port] is out in two minutes. You’re gonna to see this place blow up like arock concert.”“Really?”He chortled and the pencil fell out of his ear. I stood up to get it for himbut his arms were so long he could reach down for it on his own. He of-fered his hand to me and we shook, my hand disappearing into his. With acloser look at him, I realized that although he appeared old, he had a sparkand energy that told me there were a lot of years left in him.“Is this place really going to blow up?” I asked again.
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“No, Charlie,” he answered. “It’s not. It’s not going to hardly blow air.”He looked around him. “Half these guys don’t even know what day of theweek it is.”
“Oh, my name is Harry. Sorry for the confusion.” I tore off the name tagsticker, then said, “You mentioned that the NFP was coming out in a fewminutes.”“Yep.”I didn’t know what that meant. Was this a report like the FOMC min-utes? I wished that I could be sitting next to Craig Simpson right now, tosee what he would be doing. This guy wasn’t paying any attention to thetelevision any longer. He had returned to marking up his charts, continu-ally breaking the lead in the pencil. This frustrated him and finally he threwthe pencil in the trash can next to his desk.
“Gotta pen?”I gave him mine.“You don’t seem to be too concerned about the NFP,” I observed.This impressed him. He wanted to be noticed for not paying attention.“I’m working on my charts this morning, like I do every first Friday. Listen,I’ll give you a tip: You don’t trade the day of the report—you make longerterm bets after it’s out. Most of the young guys in this city are going to tradetheir brains out for the first hour after the report is out. They would selltheir own mothers to get this number before it’s released. But they don’thave to sit on the edge of their seats like they do. They can just wait to seewhat the number is, then make a rational plan.”
“From  the  other  trading  floor  I’ve  seen,  rational  behavior  is  in  short
supply. It was chaotic.”
He smiled. He was pleased that I understood him.I stood up and looked down at his charts. There were X’s and O’s allacross his graph paper. It looked like a financial chart that I would see onTV, only instead of lines going up or down, there were X’s and O’s. He couldsee that I was interested.
“Point  and  figure  charts,  my  friend.  No  one  pays  any  attention  any-
more. But I still plot them by hand. Wait, here comes the number.”
The gentleman with the television closest to us turned up the volumeon his set and for a brief moment, most of the heads in the room turned tolook. The shot moved to some massive trading floor somewhere, with a re-porter smack dab in the middle of the room:
RICK SANTELLI: Three-hundred-eight thousand!
It was as if Zeus has called down to his people. And he had told themthat  he  was  coming  to  kill  the  trader  who  acted  the  most  like  a  humanbeing. And that sent everyone on the television screen into a frenzy. The
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sound turned back down on the television, but all around the reporter, theplace blew up. Traders screamed at each other, throwing hand signals toeach other so quickly it was totally impossible to decipher anything. This isprobably  what  it  looked  like  over  at  Ernest  Wellington.  How  I  wished  Icould be there right then!
It was obvious to the old man in front of me that I had no idea whatwas going on. From the reaction in this room, I decided that no one herereally traded, but that they were all retired. We had lawyers like that backat Wakeman—old men who would shuffle around, tell dirty jokes, and gohome at 2:00 P.M. every day.
While Craig at Ernest Wellington was furiously trading, along with allthe people around him, this man and his associates appeared not to belongon a trading floor at all. I got the feeling they had seen a lot of these re-ports, and they no longer held the same interest. He said: “Charlie, whatjust came out is the March jobs number. It tracks how many new jobs werecreated in the United States.”
“Okay. It looks like the people on television really care about it.”“Right. Just like I said. Guys on Wall Street would chop off their feet toget just one of these numbers early. Today we got a good number. A greatnumber for short-term traders. Way off expectations. You can bet that a lotof guys and gals on the street are buying U.S. dollars right now. They’re bet-ting that today the dollar will go way up because of the number. But whatreally matters isn’t what happens in the next five minutes. What matters iswhat happens by the end of the day and then next week.”
“But you aren’t going to trade today?”“Hello no.”“When will you trade?”He enjoyed this question. “I’ll answer you without giving you the infor-
mation you want. Do you have access to charts?”
“Currency charts?”“Sure. Currency charts.”I nodded. “Yes, at home.”“Learn how to use them. But don’t look at the short-term charts. That’swhat the hooligans are focused on right now. You need to watch the longerterm charts.”
He  had  just  called  Craig  Taylor  a  hooligan,  just  because  he  liked  toshort-term trade. He seemed wise and friendly but totally ignorant of howmuch  money  could  be  made  from  the  short-term  trading  that  Craig  did.Maybe I could ask a few more questions and then bail out of here.
“What’s the difference between short-term and long-term?” I asked.“The young guys are all looking at the five-minute charts, or God helpthem, the one-minute charts, or lower. The tick charts even. Maniacs. I amlooking at the daily and weekly charts here.”
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“Should I look at those, too?”“Sure. Do that. And add in the four-hour charts. Can you do that?”“Absolutely,” I answered.Even  though  everyone  here  seemed  out  of  touch  with  the  high-techform of trading, I was at least happy that he was talking to me, and alsoaware that if I had studied some before I had met him, I could be askinghim lots of intelligent questions about the market. Right now, I was posi-tively unable to comprehend anything more advanced than his instructionsto look at the long-term charts. Other than that, he was speaking a foreignlanguage. I knew that everyone on Wall Street (except the men at the RestHome  for  Old  Guy  Traders)  was  making  trades.  I  knew  that  we  had  justgotten a March Jobs Number, or “NFP.”
“You said that everyone who trades in the short term would be buying
dollars, trading currency. What about stocks?”
“Stocks  aren’t  traded  here  on  the  same  floor  as  currencies,  usually.Here we can trade whatever we want. The equities floor would be separatefrom  the  currency  floor  in  most  places.  But  to  answer  your  question,stocks could make a nice move upward today. Stock market likes a strongeconomy.”
I was confused on so many levels. For sure, my brain had melted and
was now draining out my ears.
He could tell I did not understand much of this and that I was totallycaptivated  by  the  chaos  on  the  television.  He  smiled.  “You  are  a  totalrookie, aren’t you?”
I nodded. “With a capital R,” I answered.He looked down at his charts and looked up at me. Then he lookeddown and up again, trying to decide what he was going to spend his time on.“I’d love to help you kid,” he said, “but I’ve gotta get myself ready forMonday. It’s nine A.M. and I’m leaving at noon, and I got twenty-five othercharts to work on. It’s not like I was expecting you. Was I expecting you?”
“No.”“Right. You need to read a book about this stuff.”I was willing to read War and Peace backward if it meant I could better
understand what was happening around me.
“What book?”He  shook  his  head.  I  guessed  that  I  had  asked  just  a  few  too  manyquestions in too short of a time. “I don’t know,” he told me. “I started in themailroom a thousand years ago and learned this stuff by sitting at a deskand asking a guy questions, like you’re trying to do with me. Come back onMonday and you can bother me some more. My name’s Samuel Wilson.” Hestood up, shook my hand again, and that was the sign that it was time forme to go.
“Thank you, Mr. Wilson. I will do that. I really appreciate this.”
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He grinned and now looked happy that he had helped me.Although  he  couldn’t  answer  any  more  questions,  I  didn’t  see  why  Icouldn’t stick around and watch what happened next. He didn’t mind, andhe even said that he’d make sure no one bothered me. I sneaked over to anearby desk that was closer to the CBNC television, and settled in for a lit-tle while. This made me really, really happy. Even if I couldn’t learn muchabout  the  new  methods  of  trading  from  this  old  man,  he  at  least  wouldcover for me while I watched some television to see more of the reaction inthe market.
And I wasn’t going to leave here empty-handed.From just a few moments on this trading floor, I knew about one moreeconomic event that needed my attention: the NFP. I had a lot of studyingto do. It occurred to me, as I saw everyone working furiously on television,that all those people knew what they were doing. They saw that jobs reportcome out, and then they were ready to react. Like tigers pouncing on theirprey. Or bullies on a playground trying to get a piece of a fight. They hadbeen  waiting  for  someone  to  announce  the  number,  and  then  they  knewwhat trades to take.
Even the man next to me, who was plotting away on his charts, had asystem  that  he  was  working  on.  He  wasn’t  reacting  immediately  to  thenews, but he had said that he was going to base some of his trading deci-sions on this report—just not immediately after it was released.
With so much happening at that moment, I decided not to bother any
other traders, but instead make some observations.
Even  though  I  was  sure  these  old  men  had  been  successful  at  somepoint in their lives, I decided that the real trading life for me would resemblethe life of an Ernest Wellington trader. I could see myself with a computer athome,  several  monitors,  the  sports  section  open  next  to  me,  televisiontuned into CNBC in the background. That was more like it, and much morelike my personality. The computer was going to be the most difficult part.
I  couldn’t  believe  how  long  I  had  lasted  at  the  law  firm  with  barelyenough skill to answer my e-mail, pecking on the keyboard one letter at atime. They probably should have fired me long before they did, on the basisof my technological incompetence alone. It was positively going to be thecase that when I started trading for a living, I would receive some kind offormal  training  on  computers.  In  the  meantime,  I  could  get  my  wife  andkids to help me a bit. Maybe I could pay Scott, or at least offer to pay him,to tutor me.
But first, I was going to have to get a whole lot smarter than I was nowabout the basics: the language of trading. I would have to read enough sothat I could at least ask basic questions that could help me start learningthe  advanced  stuff  that  everyone  I  was  watching  on  television—andCraig—knew already.
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CHAPTER  9
Mapping Out aNew Career
Ishowed up at the Barnes & Noble in Rockefeller Center an hour later.
Just around the corner I’d also find Teuschers, the Swiss Chocolatier. IfI arrived home with chocolates in one hand and 1,000 new books in theother, Gini would focus on the chocolates and not on how much I’d spent.And I planned on spending a lot of money on books that day—I was goingto stock myself with books about trading, then hole myself up at home dur-ing the day and study my brains out.
It wasn’t hard to find a clerk who was interested in talking to some-one about something other than travel guides to New York City, and hewalked  me  through  the  investing  section  one  book  at  a  time.  I  foundbooks  on  economics,  on  options,  on  forex,  on  day-trading  stocks—youname it, I found it. The clerk also recommended a few books that werejust  stories  about  traders.  Although  these  books  were  less  relevant,  Ibought them anyway. As far as I can remember, that day I bought bookson day-trading stocks and futures and commodities, books on economicindicators, books on technical analysis (reading charts), and books thattaught me about the currency market specifically. Then there were somebooks on the psychology of trading, or stories about traders. While theyseemed  interesting,  I  knew  that  I’d  be  just  passing  the  time  by  readingthem and that they would be a waste of time. Those would be my rewardfor making profitable trades. I could only read those after I’d studied allthe other books at least twice.
I am sure that I bought at least 20 books. I had so many of them that Icould not carry them by myself and had to arrange for them to be delivered
73
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to my house. They were more than happy to oblige, so I grabbed just one ofthe books—the book about day-trading forex—and I left the store, hoppedon the subway, and headed home.
By the time the subway reached my stop in Queens, I was so wrappedup in the book that I never got off. I stayed on all the way to the end of theline, and although by then I realized what was happening, I stayed on any-way. From what I could tell, the currency market was the most liquid mar-ket  on  the  planet,  and  trillions  of  dollars  a  day  changed  hands  (orcomputer  screens)  in  trading.  The  book  was  written  for  the  guy  tradingcurrency at home, which was perfect for me—and it had systems, it hadtools, it even had advice about how to keep a log of my trades. I had placeda total of three trades in my entire life but I was determined that it wasn’tgoing to be long before I was trading on a daily basis.
When I arrived home, I had two things waiting for me: a frustrated wifeand a box full of books sitting on the porch so heavy that we could hardlymove it. Gini was wondering how on earth I could justify buying all thosebooks when I had just lost my job. It was funny, because I hadn’t thoughtabout my lost job all day long.
Once I ate dinner with my family and put the kids to bed, I rushed tothe computer and fired up the charting program. That was the first thing Iwanted to see: the charts. Mr. Wilson had told me to look at the longer termcharts. So that is what I did (see Figure 9.1).
The daily chart told me nearly everything that I cared to know aboutCraig’s trade. Just the day before, on the first day of April, his trade had
FIGURE 9.1 Harry looks at a long-term chart.
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Mapping Out a New Career
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closed at his profit target of 1.8600. But I needed to see a chart closer upthat would show what had happened today. So, against the wishes of oldman Wilson, I switched over to a 15-minute chart.
From my book on technical analysis, I learned that each of the candlesI looked at represented the movement of price in a designated period oftime. On a 15-minute chart, each candle showed how far the price movedin, well, 15 minutes. Dark candles meant that price had gone down. Lightcandles meant that price had gone up. Easy enough (see Figure 9.2).
Looking at the chart, I realized that the GBP/USD had moved its entiredistance for the day—200 pips—in the first 15 minutes after the report wasreleased. Then it rose back up 100 pips, and then it fell back down 100 pips.What a wild ride! Surely a lot of money could be made in a very short pe-riod of time. That’s where the money was! In the short-term trading, justlike Craig Taylor was doing. If I could react fast enough, I realized, I couldget in on the first move of a currency pair after the Non-Farm Payroll re-port (ah, the NFP!), or the FOMC (Federal Open Market Committee) inter-est rate decision, and then ride it for a quick profit. And what if I tradedmore than just one currency pair?
While I knew I had made a mistake when I traded after the FOMC inter-est rate decision, I now understood that it was more a mistake of how longit took me to enter the trade and for long how I stayed in. It had nothing todo with whether I bought or sold. There were fast profits—even easy prof-its—to be made when these two reports were released. How many more re-ports were there? When did they come out? Would Craig show me how totrade them? I felt badly for Mr. Wilson. That old man was sitting around
FIGURE 9.2 A wild ride.
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waiting for days to trade, while Craig was enjoying freshly baked pips afterjust a few minutes of trading! How on earth was Mr. Wilson going to makemoney by sitting around and not even reacting at all to the economic re-port?
I dove back into the books. I finished the first book that evening, andthen spent the rest of the evening wading through the others. I had four orfive open at a time, and I was sucking in as