Euan Sinclair's Interview
A Blend of Intuition and Quantitative Analysis in Options Trading
👋 Hey there, Pedma here! Welcome to the 🔒 exclusive subscriber edition 🔒 of Trading Research Hub’s Newsletter. Each week, in this series, I share my personal trading experiences and journey, offering you the behind the scenes into how I manage my own portfolios, my trading performance, new research for trading strategies and general content aimed at helping traders with the experience I’ve accumulated for the past 6 years.
My mission is full transparency by building a public track record of my performance. As I navigate through the markets, I'll be sharing every step of the journey – the ups, the downs, and everything in between. It's not just about trading; it's about growing together as a community.
Introduction
In the dynamic and often enigmatic world of trading, Euan's journey unfolds like an odyssey through the tumultuous seas of market volatility and strategic innovation. Hailing from the serene landscapes of New Zealand, where the 1980s offered little glimpse into the vibrant world of stock trading so prevalent in America, Euan embarked on a path less trodden. His initial intrigue, sparked by the dramatic narrative of Nick Leeson in 1995, led him down the rabbit hole of options trading—a realm where theoretical values intersect with real-world market movements.
Euan's narrative is not just a story of financial transactions; it's a tale of evolution, adaptation, and introspection. From the early days of navigating market making and quantitative position trading to his later endeavors in risk management and personal trading ventures, Euan's career is a tapestry woven with threads of resilience, innovation, and relentless pursuit of knowledge.
Key Takeaways from Euan's Trading Odyssey:
The Essence of Trading Lies in Understanding Volatility: Euan's approach to trading, deeply rooted in the principles of volatility, reflects his belief that whether knowingly or not, every trader is engaged in the trade of volatility.
Experience Trumps Novelty: Euan's skepticism towards 'new' trading methods underscores his conviction that most effective strategies are those time-tested, honed by experience rather than reinvented.
Adaptation and Application: His success in applying traditional market strategies to emerging markets like cryptocurrencies demonstrates the power of adaptation and the potential of old methods in new arenas.
Simplicity in Complexity: Euan's view of the market, devoid of the noise of economic theories and corporate narratives, emphasizes the importance of seeing the market as a matrix of numbers and patterns.
Balancing Science and Intuition in Portfolio Management: Euan's portfolio management style, blending mathematical models like the Kelly criterion with instinctual judgment, highlights the synergy between analytical rigor and experiential wisdom.
Risk Management as a Core Principle: His focus on how strategies behave under stress, rather than just their profitability, underscores the importance of risk management in trading.
Euan's story is a testament to the idea that in the world of trading, the greatest asset is not just knowledge or technical prowess, but the ability to evolve, adapt, and view the market through a lens that balances the quantitative with the qualitative. His journey, marked by its unique blend of pragmatism, innovation, and introspective wisdom, continues to be a narrative of perpetual learning and strategic refinement in the ever-changing landscape of trading.