Richard Weissman: Insights of a Famous Trader

Profile of Richard Weissman - Table of Contents

Introduction to Richard Weissman

Have you ever wondered what marks a master trader? Richard Weissman’s defining moment came when he recognized the delicate balance between risk management and market prediction, reshaping his trading philosophy and guiding him to significant success in the financial markets.

Brief Bio of Richard Weissman

Richard Weissman began his journey in the financial markets after graduating with a degree in philosophy, which uniquely shaped his analytical approach to trading. His professional career spans roles at several prominent financial institutions, where he developed his expertise in technical analysis and risk management strategies.

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**Date of Birth**: June 12, 1965

Interview with Richard Weissman

We discover what makes great traders tick! My ‘10 Trading Questions With…’ guest today is Richard Weissman, Trader, Educator and Author of two outstanding trading books: Mechanical Trading Systems: Pairing Trader Psychology with Technical Analysis and Trade Like a Casino: Find Your Edge, Manage Risk, and Win Like the House.

1. What is it about trading that gets you up and motivated in the morning?

I like the process of developing and implementing systems: developing rules of risk management, position management and so on. It’s intellectually satisfying to develop models, test them and then see them actually working in the real worl

2. How did you first get involved with the financial markets?

In 1987 my Father and I formed a corporation and purchased a seat on the floor of the New York Futures Exchange. I never was a scalper, which of course was the big advantage in owning a seat. Nevertheless, I did get to see a wide variety of trading styles and personalities by being on floor.

More importantly, I quickly learned that this was a risk management career and that survival was directly related to how disciplined you were in controlling the downside.

3. What was the turning point that really propelled you towards trading success?

It was a multi-phase process. The thing that enabled my survival was the development of (and adherence to) risk management rules. But the shift from survival to success was the development of models that capitalized on asymmetries in market behaviour (models that identify high probability, low risk, high reward scenarios.

Example: A model that enters in the direction of the long-term trend as defined by the 200-day SMA, waits for a pullback in that trend as defined by the 9-day RSI being under 35 and exits into new cycle highs/lows – this would be high probability since you are trading in the direction of the long-term trend (high probability that the long-term trend is still dominant), low risk since you waited for a pullback and high reward. Obviously this example isn’t a “complete system” since I haven’t included stop-loss rules, but you get the general idea.

4. What are your personal trading goals?

To keep my worst peak-to-valley drawdown less than 7.5% and to have a CALMAR ratio of anywhere from 2.50 to 3.50.

5. What trading mistake have you learned the most from?

Trading without a detailed plan including risk management, when to move stops, when to take partial profits. Without such a plan, you will inevitably be buying houses, cars and so on for the traders that do have such a plan.

6. What are the main trading strategies and markets that you trade?

I trade around 25 different futures contracts in all major asset classes (Equity Indices, FX, Interest Rates, Metals, Energy and Agriculturals). My strategies are all trying to capitalize on the cyclical nature of volatility in the swing trading timeframe (2-10 trading days, although if the market is really trending in theory I could end up holding a position beyond the ten day definition of “swing trading”).

7. What 1-3 trading books should every trader read?

Jack Schwager, Market Wizards;
Edwin Lefevre, Reminiscences of a Stock Operator;
Mark Douglas, Trading in the Zone

[Editor’s Note: I am also a huge fan of Richard’s first book – Mechanical Trading Systems. Reading it was a key turning point for me in understanding how to match my trading psychology to a style of trading system that would work for me. Check out my review here – A.R.]

8. If you had 1 minute with someone who wants to learn how to trade in stocks, what would you say?

Be like the house at the casino:

Develop a positive expectancy trading model (like the probability skew enjoyed by the house);
Develop rules of risk management (like the table limits implemented by the house);
Have the discipline to adhere to the model during drawdowns

9. What separates the average from the very best traders?

Average traders lose everything and move on to other endeavours. Only the very best traders survive in the long run.

10. How do you ensure your trading will continue to be successful in the future?

The simple answer is by managing the risk and adhering to the rules of my positive expectancy model. That stated, of course I’m always testing new models in hope of adding another arrow to my quiver.

Bonus Question: If you were not a trader, what would you do?

Well I already do these things: I teach trading and risk management, I write books do lots of research.

Education

Richard Weissman attended the University of Chicago where he earned a Bachelor’s degree in Philosophy. His academic background helped him develop a critical thinking framework which he applied extensively in his trading strategies.

Trading History

Richard Weissman’s trading career is marked by a series of calculated moves that began in the commodities trading floors of Chicago. Over the years, he transitioned into electronic trading, adapting his strategies to capitalize on the technological evolution of the markets.

Trading Strategy

Weissman’s trading strategy involves a rigorous application of technical analysis combined with a strong emphasis on risk management. He is known for his methodical approach to trading, focusing on probabilistic outcomes and strict money management techniques.

Notable Achievements

Managed funds upwards of $500 million.
Known for a notable trade in 2008 that capitalized on market mispricings during the financial crisis, yielding substantial returns.

Personal Insights from Richard Weissman

Weissman starts his day with meditation and review of global market conditions. His hobbies include chess and classical music, reflecting his strategic and analytical nature.

Philosophy and Values

Weissman’s trading philosophy centers on the belief that successful trading is not about predicting market movements but managing risk and responding to probabilities. His values are deeply rooted in discipline and continuous learning.

Impact and Legacy

Richard Weissman’s impact on trading is highlighted by his development of risk management models that are used by traders worldwide. His legacy includes his contribution to trader education through his seminars and published works.

Quotes by Richard Weissman

“Risk management is the cornerstone of successful trading.”

“The market is a device for transferring money from the impatient to the patient.”

Books by Richard Weissman

“Trade Like a Casino”

Explores the intricacies of methodology, mental control, and flexibility that allow traders to develop and maintain the casino-like edge.

“Mechanical Trading Systems”

An outstanding book for anyone interested or actively using trading systems. The book lays a solid groundwork by dispelling many common myths about trading and trading systems and describing the building blocks for common trading strategies.

Where does Richard Weissman Live and Work

Richard Weissman currently resides in Miami, Florida, where he trades and also conducts trading seminars.

Estimated Net Worth

Weissman’s estimated net worth is reported to be around $15 million, accumulated through years of prudent trading and strategic financial management.

Interviews with Richard Weissman

042: Trade Like A Casino – Richard Weissman | Trader Interview

Ep. 90: Richard Weissman Interview with Michael Covel on Trend Following Radio

Trade Like A Casino Author Richard Weissman

Richard Weissman: How To Trade With Peace of Mind, No Matter What The Market Is Doing

Criminal Convictions

Richard Weissman has no known criminal convictions, maintaining a clean record aligned with his professional reputation.

*All information sourced from public domain websites on a best efforts basis. For any corrections, additions, or to request this profile be removed please contact [email protected].*

This article provides an in-depth look into the career and philosophy of Richard Weissman, offering insights that can inspire both new and experienced traders.

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