The dawn of European day trading

Europeans are embracing day trading. American technology may have created the phenomenon, but it’s growing up all on its own.

Europeans are embracing day trading. American technology may have created the phenomenon, but it’s growing up all on its own.

By Gregory J. Millman
December 2000
Institutional Investor Magazine

Arnaud Fremeaux is on a roll. First, he shorts electronics company Ingenico at E88.95, then he buys the shares back ten minutes later when the price dips, pocketing a neat profit. Four minutes more and he,s shorting GFI Informatique at E38.46 for six minutes before he buys in 20 percent of his position; a two-minute execution delay for the rest nicks him slightly, but he still closes the trade well ahead, at E38.16. Next, he’s on to Cap Gemini, which he shorts for all of one minute before buying back his position for a E0.20 per share profit. Now he decides to stay long Cap Gemini, a position he holds until he collects a E0.70 per share gain.

For four days Fremeaux keeps his winning streak alive, tap-dancing in and out of momentum stock favorites like Altran Technologies, Thomson Multimedia and Transiciel, in a stunning display of market-timing and agility that allows him to chalk up a 115 percent return on his capital. It’s a performance that would be even more impressive had it been for real , and not achieved during a trading contest, held in Paris in July and sponsored by one of France’s fledgling day-trading brokerages. (Fremeaux placed second, behind a law student who recorded a 170 percent gain.)

For Fremeaux, who lists his occupation as conseiller en gestion de patrimoine, or investment counselor, stock trading isn,t just fun and games. He’s one of a new breed of European investors who, like their U.S. counterparts, though in far smaller numbers to date, are developing a taste for the aggressive, even obsessive, rapid-fire buying and selling of shares known as day trading.

“For me day trading is the opportunity of the moment,” says Fremeaux, a native of Lille, where he trades through Dubus, the country’s first day-trading house and the main sponsor of the Paris tournament. “I,ve adapted to the market, and when I find out it,s not remunerative, I,ll quit.”

Such ambition and optimism also marked the day-trading craze in America. It began as the occupation of professional stock traders who, empowered by new technology, found themselves able to fly solo and compete on even terms with established brokerage houses, particularly on Nasdaq-listed shares. As the bull market boomed, and Internet use spread, mainstream investors went online, chasing technology and dot-com riches. Stories of lawyers, dentists, auto repairmen quitting their jobs to trade and become millionaires proliferated; rumors of CEO departures or revolutionary new products spread like wildfire through chat rooms. Day trading quickly became a cultural phenomenon that reached its peak , really, its nadir , in July 1999, when a deranged investor walked into the offices of an Atlanta, Georgia, firm and shot and killed nine fellow punters.

Nothing remotely like this phenomenon has yet come to Europe. And there are many reasons day trading is likely to develop differently and more slowly on the Continent than in the U.S. To begin with, weaker markets in tech shares , and the deflation of the dot-com boom , have erased market fervor, even in the U.S. And European markets can be less hospitable to day-trading techniques: In Germany it is illegal to short stocks, so traders must focus on other securities where they can place bets in rising and falling markets. In the U.K. stamp taxes raise transaction costs for over-eager traders.

Even so, though their ranks remain thin , in London and Milan the number of hyperactive traders isn,t thought to run much beyond the hundreds , day trading is clearly growing in the region and could yet prove a leading edge in a rising equity culture. Some 3 million to 4 million Europeans already have opened conventional online brokerage accounts, and firms like Dubus, though hardly household names, have been organizing and catering to the educational and technological needs of active securities traders. These high-end specialist firms are beginning to proliferate; entrepreneurs are knocking on the doors of first-wave European pioneers for advice and partnership assistance.

“We have had 350 inquiries about cooperation in Europe, in Canada, even in China,” asserts Petra März, CEO of Hamburg-based Actior, a day-trading firm that opened its doors in 1999.

“The European leaders are looking westward to the States to see what innovations prove effective, then harnessing them and bringing them to Europe,” says Huw van Steenis, e-finance analyst with J.P. Morgan Securities in London. Major German online firms like ConSors Discount Brokers, he notes, are creating special clubs for active traders; ConSors calls its club Star Trader. Swedish firms are pursuing similar programs. These efforts, says van Steenis, are at “an earlier stage of development than the States but are growing up very quickly.”

Some top online firms already are nibbling at these markets, although they avoid the D-word, which carries negative connotations in Europe as well as in the U.S. “E*Trade does not advocate day trading,” declares U.K. spokeswoman Bahareh Ajami-Green. “We offer investment tools and education to help investors make informed financial decisions.” But E*Trade did recently introduce a service for advanced traders, described in promotional materials as bringing “the action of the trading floor to private investors.”

The larger firms have good reason to take notice. According to a report on online trading by London-based market research group Datamonitor, “Day traders are the most profitable customer segment for online stockbrokers , provided they are able to provide the fast trading systems needed by these clients.” Technology-laden providers such as Actior, Dubus and Italy’s Twice SIM arrived first on the scene and reaped the benefits. However, Datamonitor warned in its report that such niche specialists as these day-trading firms could lose business to more diversified or established brands, particularly in a prolonged bear market.

Specific numbers on the European market, even accurate counts of day-trading firms or locations, are tough to come by. Researchers have a hard time distinguishing between the hard-core day traders and the merely avid mainstream investors. Indicating the fuzziness of numbers and definitions, a J.P. Morgan research report that van Steenis coauthored estimates that in Sweden alone, active investors , including those who deal by phone , may number 700,000. In France five Internet brokerages, with an estimated one third of total accounts, have an estimated two thirds of online trades. (David Meurisse, the winner of the Dubus contest, usually does his day trading through a mainline discount firm, SelfTrade, which agreed in September to merge with Germany’s Direkt Anlage Bank.) “What we have paints a picture of a number of houses that cater to among the most active traders seen anywhere in the world,” the report says.

In the U.S. the day-trading subculture got its start 12 years ago, thanks in good part to a blustery New Yorker named Harvey Houtkin. By surveying various quotes on Nasdaq’s Small Order Execution System, Houtkin noticed when certain dealers failed to adjust their prices in response to breaking news; he used the system’s automatic execution service to make a profit by exploiting the spread between updated and stale quotes. Houtkin and his fellow SOES bandits led the way to a further democratization of the market and to direct connections between independent traders and exchanges. These actions in turn foreshadowed mainstream e-brokerage, widespread retail investing, heightened competition among securities exchanges, new trading venues such as electronic communications networks and the unprecedented volatility of equities.

By contrast, the European movement can be traced to a technocrat’s vision of prosperity and financial security based on making financial markets and information about them widely available to the investing public. “Investments used to be for rich people. The illusion of social security meant that people had no push to invest,” says Ugo Assi, an erstwhile central banker who might be called the spiritual leader of Europe’s day-trading community. “But the Italian population has realized that social security is a big soap bubble about to explode on their heads. There’s not enough money for everybody in the social security system.”

No one would call Assi a bandit. A former executive with Hewlett-Packard Co., he made a midcareer switch to a technological post at the Banca d,Italia. He ran the central bank’s joint venture with the Associazione Bancaria Italiana, which is responsible for various payment, clearing and settlement systems. During that six-year run he developed, he says, “a passion for electronic markets.”

When Assi retired from the central bank in 1994, at 58, he set out to bring trading to the masses. Even in the U.S. the Internet was just beginning to show up on the financial industry’s radar screens, and online brokerage services through dial-up networks were still primitive. No more than a few hundred thousand “early adopters” were trading stocks electronically in the U.S., and European investors were barely familiar with the concept.

Hoping to create a data network to aid prospective investors and traders, Assi experimented with satellite broadcast technology. Although it successfully delivered real-time price information to computer screens, it was impractical for executing trades. Then Assi happened upon the RealTick system from Townsend Analytics. Integrating highly detailed market information with trading capabilities, RealTick was developed by the Chicago husband-and-wife team of Stuart and MarrGwen Townsend, who later co-founded the Archipelago electronic communications network.

“The Townsends invented the perfect technology, based on the Internet,” Assi explains. “It,s bidirectional. It accumulates data on servers, so whether you crash your PC or change your PC or ask your friend to loan you his PC, you can connect to the server and get all of your data, from anywhere in the world.”

Assi signed on as the European distributor of RealTick. In late 1999 he raised $10 million in venture capital, enabling his firm, InvestNet Holding, to expand its sales effort. Says Assi: “We are a B2B type of company; we serve banks and brokers that want to offer their customers direct-access trading. You enter your order, and it goes directly to the stock exchange via the platform of your broker but without any human intervention, and in two to three seconds, you get your execution.”

The InvestNet platform is not the only one in the European day-trading market. Even as Assi was exploring his relationship with the Townsends and selling his system to such firms as Twice SIM in Italy, other pioneers were opening their doors to active traders. But few identified the opportunity as early as Assi, who dreamed of direct access and instantaneous execution , the prerequisites for day trading , six years ago.

Just as the timing of Europe’s start in day trading differs from that of the U.S., so does its underlying investment culture. Only in the 1990s did the European investment business begin to focus more intently on retail customers , a result of deregulation, movements toward a common currency and connected markets, pension reforms that encourage self-directed retirement accounts and the introduction of Internet services that enabled financial institutions to leapfrog full-service retail brokerage and go directly into online discount brokerage.

The quick embrace of discount brokerage and the adoption of U.S. trading technology have accompanied a sea change in investment attitudes. “The mentality about investing has changed. Now people figure the technology is there, the costs are low, there’s no reason not to do it. Why pay a broker? Why not have control in case you need it?” says Robert Prior, who heads trading technology vendor Timber Hill Europe. In his Zug, Switzerland, office, Prior demonstrates the power of direct access by plugging a laptop computer into his cell phone. Up comes the DAX futures market. “Customers can trade 30 different exchanges through one workstation,” he says. “No graphics. The only thing that changes is the numbers, so it requires very little bandwidth.”

Through its Interactive Brokers subsidiary, Timber Hill makes the technology available to banks, fund managers and what Prior calls semipros, a.k.a. day traders. “There are day-trading firms in Germany, England, Switzerland, France, Italy and Spain, and tremendous possibilities for growth,” he says.

These firms often build their business first by attracting professionals who are renewing skills from prior careers in the financial markets. Eventually, others come in who are rank amateurs. Many will take educational courses and aspire to turn professional.

Ronald Pieters, director of Van Ernst Jakobs Securities in Amsterdam, says, “We prefer professionals who are losing their jobs.” Automation and downsizing by European financial houses have put many skilled traders out on the street, “and we have an alternative,” says Pieters. “The same technology that kicks them out gives them opportunities. I see a future without brokers, when anyone with money can participate directly in the markets.”

The russet-haired, red-faced Pieters got into the business after his previous venture, Goed Gedaan Options, went bust in 1997 with losses of about 100 million guilders ($39 million). He lined up new financing from Dutch venture capital group Vado and set up Van Ernst Jakobs to do private placements, bringing together Dutch investors and American technology start-ups. Then he met Assi and expanded into day trading. Pieters now talks about far-ranging initiatives to serve the burgeoning ranks of active traders, such as cafés where people can play the markets in a social setting or the purchase of a clearing bank to bring down the cost of cross-border transactions.

For now, Pieters and other entrepreneurs are serving relatively small customer bases. But reminiscent of the U.S. scene a few years ago, they are attracting attention disproportionate to their numbers. Their existence , and the clientele they attract , signals fundamental changes at work in public attitudes toward risk and investing.

Just as European day trading differs culturally and historically from its U.S. counterpart, each European locale is developing its own personality , and personalities. Following are a series of brief glimpses of how the phenomenon is taking hold in a number of locales across the Continent.


“He made 66 points Monday , 66 points on one trade!” exclaims Norbirt Herfurth, a neophyte at Trading House, which, at the age of two, is Germany’s oldest day-trading establishment. He is pointing at a 30-something trader dressed in black from head to toe who calls himself Kiro. Just Kiro , he doesn,t divulge much else. He says he used to play with a rock band in Berlin, and somehow day trading seemed like the next best thing.

“I,m a little bit older, and I want a job I can keep doing. This is up and down, but I think that’s normal,” says Kiro. He is convinced that success at trading is mainly a matter of being disciplined and following the rules.

“I think you can win money every day,” he says. “You must be fast, that’s all. Be very fast. You need discipline, but as a musician I needed discipline, too. I used to practice eight hours a day. You need a system. My system is, I try to hold as long as possible. I,ll risk 20 to 25 points, but only when I know why. I will let it go 20 points against me before I sell, but that’s the limit. The most important thing is, don,t think. If you think, you,ll act like a human being and panic when you lose 20 points. Don,t think, just do what your machine tells you.”

In a smoke-filled lounge next to the glass-walled trading room, Herfurth settles back on a vinyl-covered couch. He keeps one eye on a wall-mounted screen that shows the DAX index trapped in a narrow range, looking like the cardiogram of a patient on life support. Tall, balding, with an easy conversational manner, the 40ish Herfurth used to own a restaurant and bar but gave it up because he was tired of working nights and had had his fill of German food. “Trading is very exciting,” he says. “You get very nervous. At first you change your mind a lot. Long or short? After ten or 20 trades, it becomes more normal. You learn from every trade.”

Like Kiro, Herfurth has been at this for about three months and subscribes to the same disciplinary theories. “You learn to regulate your emotions,” he says. “The hardest thing is to hold the position when it goes in your direction. Everybody told me it was very easy to make money trading, and I thought so too.” He says his pattern is ten days good, three days bad, ten days good. “It’s not good enough yet. The trading business is hard, but it is interesting and I like it. Maybe in three to four months more, I,ll make money like a professional.”

Aspiring professionals like Kiro and Herfurth are fueling what is, from all appearances, a booming educational and trading business at Trading House. But the company, like some of its customers, has its own tangled history.

The 35-year-old founder, Rafael Müller, got off to a fast start in August 1998. He originally called his firm Momentum Trading House, copying the first name from a U.S. day-trading company. He started selling franchises almost immediately. As he gained media attention , within months he had been profiled in Der Spiegel magazine , he was sued by another German financial firm that had already registered the name Momentum. Müller renamed the business Trading House, officially; his franchisees seized on the name change to break free and start their own independent operations. Left with his three locations in Berlin, Müller went into partnership with another group to open a trading center in Hamburg. Two weeks after getting that up and running, this set of partners broke with him, too, started a competing firm called Actior and roared ahead to open 17 branches in Germany and Switzerland. The embattled Müller never got further than five: the three in Berlin and one each in Munich and Frankfurt.

Müller makes dark accusations about regulatory problems at Actior and claims to have won a legal judgment against his ex-franchisees. In neither case does he provide evidence to support his statements. He prefers to discuss his forthcoming IPO. He hands over a prospectus that lists five German cities where he plans to open new centers in the last quarter of 2000 and a dozen more locations in Austria, Germany, Liechtenstein, Spain and Switzerland purportedly scheduled for 2001.

Müller’s showcase is the headquarters office on Friedrichstrasse. Classrooms, offices and conference spaces encircle a dizzying postmodern glass-and-steel vortex. At the Trading House educational center, aspiring traders can find a menu of courses to suit every level of expertise and every budget. The merely curious can whet their appetites with a free, two-day introductory session on the basics of futures and derivatives. More-intensive one-, two-, three- and four-week seminars range in cost from Dm612.40 to Dm2,004.40 ($269 to $882). Supplementary special sessions focus on trading techniques (“trend and motion trading,” for example) and on the use of the workstation and trading software.

“We offer two months of electronic paper trading with five seminars in between,” Müller explains. “Most of it is self-taught, but we will give them ideas and strategies. Still, most people just train for a week or two, and then they think they,re kings.”

Most customers arrive with no professional trading experience. When they feel they are ready to try their hand at the huge and highly volatile DAX futures market (it’s illegal to short stocks in Germany, so traders are drawn to the high wire of futures trading and, to a lesser extent, options and warrants), Müller rents them a trading-room seat. For Dm800 a month they get access to real-time market quotes and execution software, the bare-bones basics. They pay more for charting systems, support software and training, bringing Trading House,s average monthly revenue up to Dm2,000 to Dm3,000 per client.

Müller points out that Trading House is not a brokerage and doesn,t make money from commissions. “We educate people and rent out seats,” he says. “We select our clients, taking only those who can fund an account with a minimum of E25,000 to E30,000, and only the active traders. We make money on them.”

That’s more than many traders can claim. Says Dietman Folz, slightly built and soft-spoken, with a worried expression on his face: “I studied architecture. I worked in front of a computer, not trading but painting. This is not the same. Some days you win a lot, some days you lose.”

Nearby, Kiro interjects: “After a really bad day, you need a lot of Viagra. Nothing works.”

Folz continues: “I lost 4,000 marks. I followed my system. Every system gives you signals of bad and good trades. But I made two bad trades, then I tried to beat the market. I wanted to get this money back fast.”

He hopes to make a living from trading by the end of the year, but he’s keeping some perspective: “If the money in my account should be lost, I will stop trading. I won,t have to kill myself. I,ll just have to drive my old car for a few more years.”


In Actior’s main Hamburg trading center, Babak Djafari is smoking, pacing and watching the market fall. He has been doing this all day. “I work with a partner, we have our own software, and we go for two shots a day,” he says.

He is one of the class of former professional traders who are trying to convert their skills into self-employment. But the treacherous futures market, where most day-trading Germans focus their energies, is not for the faint of heart. “You see a lot of new faces here, and you miss a lot of old faces,” he muses. “A lot of people open accounts, and after two weeks you don,t see them anymore. I don,t think people can survive the futures market unless they,ve had one or two years of professional trading experience.”

Yet demand has been such that Actior has been able to open trading rooms throughout Germany and, most recently, in Zurich. Further growth is all but guaranteed, says Petra März, Actior’s 38-year-old founder and chief executive. “We have 250 clients now, the most of any day-trading firm in Germany,” she notes. “There are 300,000 online banking accounts in Germany; maybe 3,000 of those can be traders, and we must be better than the online banks to attract them.” (She underestimates the universe: The country’s biggest online brokerage firms , ConSors, Comdirekt and Direkt Anlage Bank , together boast well over 1 million accounts.)

März, an ex,office administrator who got into this business by working with and splitting from Müller at Trading House, aims for a small group of very active traders. “Today 90 percent of them lose and maybe 10 percent win, but for that 10 percent it’s hard work to find a strategy,” she says. “We give them help, not instruction, because everybody must do it for himself. It’s like training a cat , you try to give them a good atmosphere and help them do what they can.”

The problem with most people is “emotions, too many emotions,” says Christian Stuhlman, the Actior branch,s technology guru. “They forget everything they learned. We put people through simulations, and they make profits because it’s not real. Then they open accounts to trade with real money, and most lose within the first few days.”

Djafari, who is in his mid-30s and is of Iranian ancestry, seems not to need much guidance. After earning his law degree in 1986, he says, he worked his way up to senior trader at a brokerage firm in Germany. He left that company when its U.K. subsidiary ran into regulatory problems. Djafari then moved to a German bank (“I prefer not to mention the name,” he says) as a proprietary trader and spent three years there before deciding to trade for his own account. “In the seven years I worked for a futures broker, I only saw two people make money. One was an American CTA [commodity trading adviser], the other was a Swedish CTA,” he says.

“My system is contrarian,” says Djafari, who seems to be chronically nervous and constantly speaking into a cell phone while he trades. “The computer gives me a signal with a pretty tight stop; on ten trades I may lose seven times, but small losses. I have a target for each day, but I,ll only tolerate two losing trades. If I lose $750, that’s it for the day.”


On an October Friday at Twice SIM, Enrico Bellazzi, its vice director general, is surveying some of his firm’s trading activity , but his clients in this case are nowhere to be seen. They are operating remotely from an apartment in northern Italy, and Bellazzi sees everything on his computer monitor.

Two brothers and a cousin, working together, have logged well over 100 trades , and it is only 10:00 a.m. Their average so far this month is 560 trades a day, down a bit from September’s 775.

“These three guys trade a lot of blue chips. They scalp [profiting on the spread between bid and offer prices] and trade quickly on short moves,” Bellazzi explains. Of his distant and secretive clients, he says, “They spend all day in front of the screen; it,s hard work for them, but they make tens of millions of lire [L10 million equals $4,400] a month, and at the end of each trading day, they have a masseuse in.”

Bellazzi, 36, and Enrico Petocchi, 37, who have known each other since high school and have worked in consulting and brokerage, founded Twice SIM in 1999 to specialize in the active-trading market. “We don,t want 100,000 customers each doing one trade a year,” says Bellazzi. “This morning we had seven customers do more than 50 trades apiece and 20 customers who did more than ten trades each. We want to serve the cream of online trading, the most demanding online traders.”

As a brokerage, Twice earns commission income. It also offers educational programs in well-established digs: next door to the Borsa Italiana in the center of Milan, just across the plaza from the Commissione Nazionale per le Società e la Borsa, the Italian financial regulatory agency. In a structure built around two ancient stones from a Roman theater, Twice offers a full calendar of courses in technical and fundamental analysis, derivatives and the use of Townsend Analytics, RealTick software, distributed here by former central banker Assi’s InvestNet.

Bellazzi often takes his show on the road. Recently, he conducted half-day seminars in about 40 Italian cities. “Some drew 300 people, and others drew only 40,” he says. “When the market goes up, more people come.”


Three months after his strong showing in the French day-trading championship, Arnaud Fremeaux is on the Dubus trading floor in an 18th-century building that once housed a theater. He is perched on a stool, his hands flying, punctuating his enthusiasm: “Every stock has a real life. Stocks are persons. We live with them , but don,t fall in love with them.”

Fremeaux says he is still shorting the tech stocks that he was trading in July, including GFI Informatique, Cap Gemini and Thomson Multimedia. But he expects that soon he will be going long, because the market, he feels, may start moving up.

Alongside him is Edouard Herbo, 21. Herbo also started trading six months ago but has only been able to do it full time in the three months since he graduated with his “Bac.” At an age when most of his peers are getting ready for university, Herbo has no plans to return to school. “Trading is self-taught. Students of finance don,t know the markets,” he declares. Herbo funded two trading accounts at Dubus, each with E7,000, breaking his stake in half for tax reasons. Like his brethren in Italy, he does a lot of very short-term scalping and claims he clears an average of E300 a day.

From this outpost in Lille, the day-trading impresario Claude Dubus stiffens his spine and scoffs at Le Monde, which he says recently opined that it would take another five years before online trading came to France. A onetime government inspector of brokerage firms, Dubus has only contempt for the French establishment. “Do you know the difference between a train and an énarque?” he asks, referring to graduates of the elite Ecole Nationale d,Administration. “When a train runs off the tracks, it stops!”

Dubus lost his regulatory job to budgetary cutbacks in 1983. Then he founded his own brokerage, Dubus Société de Bourse, specializing in northern European stocks. But in 1989 the French equity market went electronic, and banks took over most of the independent firms, business. Dubus elected to stay in the game and placed great emphasis on trading technology, which prepared him well for interactive, and ultimately Internet, opportunities.

“In 1991 we gave laptop computers to our customers so they could access the mainframe,” his son and partner César recalls. “We started working on the Web server in 1996, and our customers were trading online by November 1997.” Computers, routers, servers and ancillary paraphernalia are crammed into the cellars of the Dubus building, where the foundation stones date back to the Middle Ages. Says César: “When we first said we were an Internet broker, people asked, ,What is the Internet?, Now in France everybody is talking about online trading.”


To the uninitiated, the shifting colors and fractions on the day trader’s screen are incomprehensible blurs. The speed needed to keep up with them makes this a young man’s game.

At 48, Alan Rich is not a young man, but the gray-haired, soft-spoken West Londoner is a day trader. More than that, he is a survivor. Back in 1989 Rich collapsed suddenly, only to be misdiagnosed by Britain’s National Health Service. Doctors discovered months later that he had a brain tumor. He awoke three weeks after an operation that doctors gave him only a 50 percent chance of surviving. A used-car dealer when he was stricken, he remembered little about that work or much else about his former life.

“I bought a paper, the guy said 25 pence, and I looked at him blankly. I had no concept of what money was,” Rich recalls. When his wife asked him if he knew what he did for a living, he replied, “I don,t know what you mean by ,a living., "

In 1994, following his recovery after years of therapy, he became interested in the stock market. “It came out of the blue,” he says, “as if it had been in my subconscious waiting for the pathways to join up. I say to myself, ,A few years ago you couldn,t add one and one, now you,re day trading the Nasdaq.,”

He does that every day at the nondescript office suite of InvestIN Securities, next to London’s Cannon Street subway station. He trades Nasdaq because stamp taxes make U.K. stocks expensive, regulations make it hard to go short, Nasdaq’s spreads are tighter, and the Level II screens provide so much information about the stocks.

“It was hard learning fractions,” he concedes. “But now I prefer fractions to decimals. Some days I scalp, moving in and out to catch eighths, and some days I swing trade [taking longer intraday or overnight positions], trying for two points. Everyone loses at first, of course. The psychological turning point comes when you can be quick to take small losses , that’s the discipline you need.”

Through October he had been day trading for six months. He was down about $7,000, which he regarded as the cost of valuable experience. “It’s like riding a bike , you keep trying and falling, and then one day you ride. The whole thing is an emotional roller coaster.”

The independent trader reflects on the fact that he is the oldest person within the InvestIN Securities office. The CEO, Ian Peacock, is 32. Says Rich: “Being older, you know, it’s harder to take a risk. But the kids can,t handle the losses. They,re emotionally immature; it affects their trading. I,m only trading with money I can afford to lose.”

Rich had set a personal deadline of January 1, 2001 , either he is making money by then, or he quits. “But so much is happening now,” he says, noting that InvestIN has just begun offering direct access to continental European markets. “I might add another three or four months so I can tackle those markets.”