Teen Takes Short-Term Investing Approach

Originally published on Globe and Mail, January 6, 2012.

Julian Marchese, 15

Occupation

Student

The portfolio

Short-term trades. (He stays out of the market during the school holidays.)

The young trader

When he was 8 years old, Julian Marchese wanted to help his parents find financial independence. After some Googling around on the Internet, he decided the path lay through financial markets.

At 10, he began making some trades in his parent’s brokerage account (his mom clicked on the “buy” and “sell” buttons for him). At 13, he took a seven-day course at the Toronto office of the Online Trading Academy to deepen his knowledge of stock trading and technical analysis.

How he trades

Now 15 years old, Mr. Marchese aspires to be a trader at a hedge fund or financial institution.

At home, there is a trading desk with three computer monitors that he uses before and after school to trade the markets.

He appeared on Dragons’ Den in the fall. He didn’t get the funding for his trading software but Kevin O’Leary and some of the other Dragons offered him $50,000 to trade on their behalf (not yet received as “we are still going through the legal work.”)

“My usual time frame is from one day to two weeks, as I do not want my capital tied up for lengths of time,” Mr. Marchese says.

“I am a trader who looks to speculate on the price of major markets, not individual stocks,” he adds. That means trading futures contracts on oil, gold and stock market indexes instead of shares in companies such as Apple Inc. He finds individual stocks have a lot of “noise” in them because of the volatility generated by company-specific factors and the trading actions of “Average Joes.”

Over time, a trading strategy loses value as more people adopt it. So, Mr. Marchese is always looking to exploit a new edge until the market discounts the profit opportunity. He also believes in controlling risk by “cutting losses” and using stop-loss orders.

Best move

He bought gold “as it broke above $1,100.”

Worst move

He kept buying oil when prices fell from a high of $115 (U.S.) a barrel earlier this year. “I didn’t respect my rules and did not honor my stop loss.”

Advice

“Study the market. The more time you spend learning, the better you’ll be as a trader or investor.”

Free Class
Online Trading Academy logo