INTERVIEW
From Robotics Engineer To Trading Full Time
Suri Duddella Notes
by Jayanthi Gopalakrishnan and Bruce Faber
Suri Duddella is a private trader who has been trading in
the futures, equities, and forex markets full time for the past 12 years
using his proprietary models and methods. He founded a financial research
and analysis company from 1998 to 2005 specializing in financial modeling,
research/analysis, and technology architecture for financial institutions,
investment research, and investment media companies. The company was hailed
as "Best of the Web" by Forbes magazine and featured in Barron's as an
"Excellent Technical Analysis Site" in 2002. In addition, Duddella, who
has published the findings of his work widely, has also appeared on various
TV and radio shows and presented his research at various investment conferences
in the US. Duddella is also a member of the American Association of Professional
Technical Analysts. His first book, Trade Chart Patterns Like The Pros,
was published in 2007.
Technical Analysis of STOCKS & COMMODITIES Editor Jayanthi
Gopalakrishnan and Staff Writer Bruce Faber spoke to Duddella via telephone
on July 10, 2008. For more on his research, visit surinotes.com.
To get in tune with the markets, I meditate and for at least 30 minutes I visualize my trades.
Suri, tell
us how you got interested in trading.
I am originally from India, and I am a trained robotics engineer. Part
of my work involves writing and developing a lot of application software,
which includes graphics and automation. Around 1992 or 1993, I saw that
the Internet was just about to get popular and I knew it would be the future,
so I wanted to get involved. I was retraining myself to do that when luck
brought me to a consulting company in Washington, DC. The company was building
power trading tools for utility companies. This was around 1995, when the
Power Deregulation Act came in. So I became a consultant for them and was
building some of their trading platforms. I was around traders who were
using charting applications and mathematics to actually derive the prices
for power and energy. That's how I got interested in trading. They taught
me quite a bit about how trading works and what goes on in the real-time
markets. That is how I found my true passion. I was with the company till
about 1996. Then I founded my own company, which provided market research
and analysis for the financial industry. I have been trading full time
since then.
JG: You've been a full-time trader for more than 10 years. Have
you had any memorable experiences during your trading career?
I don't have a war story, but what is worth mentioning is how I changed
my career, how I pursued my trading goals, and the types of objectives
I set every day. I also changed my mindset. In the first few years I traded
only equities. Then when I was introduced to the futures markets, I was
purely a countertrend trader. I found countertrend trading to be pretty
effective because I used market patterns to detect tops and bottoms, but
the countertrending mentality is different. So how I switched from countertrend
to the trending mentality is worth mentioning.
First of all, I consider myself a type-A personality. My introduction
to futures was through the Dow Jones emini future (YM). I would wait for
the trend to end and then take a countertrend position. The problem with
countertrending is that once I was in, I would constantly be looking for
a countertrend position. So I was only taking a short time position because
of the countertrend. I made a lot of money that way, but when you are wrong
in the countertrend, you are completely wrong. It will take all your profit.
Countertrend trading is like an addiction. You can't really get out once
you get hooked on it.
Once I realized that, I made a behavioral change. This was around 2004
or 2005. I had started working on my book and was analyzing patterns. I
started collecting hundreds of patterns every day. When I analyzed these
patterns, I would write various pattern recognition algorithms and backtest
them.
BF: What did that do for you?
The research was primarily for the book I was writing, but it changed
my way of thinking about trading. In a trend mode, you can see a bigger
move coming in. You could probably take part in multiple times and take
a bigger chunk. When you are in a countertrend, you take a position and
then get out in a short time because you are always thinking about the
countertrend and whether the trend is on again. My book research
has played a big role in my making the behavioral change from countertrend
trader to trend trader.
During the same time, around 2004 or 2005, I discovered how to set goals
and achieve. One of the books I read about that time was The Hedge Fund
Masters by Ari Kiev, which details a goal-oriented approach to trading.
In it, he describes how you could set goals for your trading. Before that
I didn't think it was possible to set goals, like make $2,500 or $3,000
on any given day. But he described how hedge fund managers set goals not
necessarily per day, but per week, month, or year, and they try to achieve
it. I thought that was an interesting idea, so I started practicing it.
...Continued in the September 2008 issue of Technical Analysis
of STOCKS & COMMODITIES
Excerpted from an article originally published in the September 2008
issue of Technical Analysis of STOCKS & COMMODITIES magazine. All rights
reserved. © Copyright 2008, Technical Analysis, Inc.
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