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Market Wizards - Interviews with Top Traders

Tony Saliba: “One-Lot” Triumphs

Tony Saliba worked as a clerk for 6 months in CBOE. He got $50000 from another trader for trading and after losing most of this money, he became a spread scalper trying to make a quarter or an eighth of a point on a trade. He strictly stuck to his goal of earning $300 daily and it was working. This period taught him to be regimented and disciplined. Even today he follows these rules of hard work, homework and discipline.

 

He considers himself a matrix trader. He trades everything on the screen as they are all inter-related to each other. His basic strategy was buying butterflies. Go long on the wings because risk is limited, and if the market does not move widely, time decay works in your favor. He uses butterflies in the front month, where time is working for him, and the explosion position in the mid or back–month. He then scalps the position to help pay for the time decay in the explosion position.

 

He was a millionaire before he was 25 and decided to retire when he was 30. But his retirement lasted for 4 months because he missed the markets and the excitement it brought.

 

He believes that there is a high correlation between the action on a Friday and the follow-through on the next Monday. At least on the opening and he is always hedged and prepared for it.

 

According to him, the elements of good trading are clear thinking, ability to stay focused, and extreme discipline. Discipline is the most important. He says to pick a theory and stick with it and you also have to be open-minded to change if your theory is wrong. One should always respect the marketplace. Do your homework. Recap the day. What do I want to happen tomorrow? What happens if the opposite occurs? What happens if nothing happens? Think through all the “what-ifs.” 

 

Anticipate and plan, rather than react.

 

He is not afraid of hardwork and can do anything. This is what makes him different from others.

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Units 17/19