I had never heard of Paul Rotter until I interviewed Rafael Veron (one of his trading heroes). But the more that I found out about him, the more interesting and inspirational it got. I don't know him, nor have I ever spoken to him, so this is just based on my online research.
However, I did my best to piece together his story and find credible resources that could shed some light on who he is and how he has been able to achieve such amazing returns. He trades bonds, not Forex. While I find bonds rather boring, his story is so incredible that I decided to write about it.
After all, trading is trading, right?
While I certainly don't promote trading like Paul, his story serves as an inspiration to what is possible in the trading world. I hope you find this information as interesting as I did.
The Legend
Some consider Paul Rotter one of the best traders in the world. If that is really true or not is anyone's guess. But there is certainly no doubt that he is one of the best.
He became known as “The Flipper” because of his unique trading style on the Eurex exchange that involved placing a huge order on the opposite side of the market that he really wanted to take. Then when other traders tried to jump in to take a ride with the big position, he would withdraw the order and take the opposite side of the trade to suck in all the bad trades and scalp a few ticks.
You could call it scalp trading.
By some accounts, he was trading as many as 180,000 contracts per day in 2005. That made him the largest trader of German debt futures on the Eurex. This “flipping” style was so successful that the exchange may have changed the tick size of their contracts in an attempt to level the playing field.
In 1998, he helped form a Dublin-based prop trading firm that started with $1.3 million. At the end of three months of trading, they were up to $6.5 million.
But this did not come without a scare. Given the size that Rotter was trading at the time, the firm could have gone under if they had one bad trading day. Luckily, things worked out and they were able to build their trading account.
The Myth
For about a year, nobody knew who he was, but other traders just knew that there was an Ireland-based trader out there that had a unique trading style and was making a lot of money trading German bond futures. Rotter was despised by many traders who blamed him for their losses.
Some say that he was making as much as $5 million per month. This cannot be confirmed, but it would make sense, given the size he was trading.
The Man
According to one of his interviews, he is a Czech native who moved to Germany when he was 9 years old. He started his trading career on the bond desk of a German bank and soon after almost going broke, began trading again with Daiwa Securities. Within three months at Daiwa, he was trading 5 lots well, with the help of some trading mentors at the firm.
He mentioned in an interview that is biggest strength in trading is the ability to trade bigger when he has the advantage and to scale back when he doesn't or isn't trading well. This is a trait that I have seen often in very successful traders.
To find out more about Rotter, you can check out this interview on Trader Daily, but I'm not sure how long that website will be around because since being purchased in 2010, nothing has been done with it. You can read the original article about Rotter from Trader Daily here (PDF).
You can also visit his website. In typical investment management website fashion, there isn't much there, but you can get a feel for his investment philosophy.
Or learn German.
Conclusion
I hope that this post has given you some insight into possibly the most successful trader of all time. Even though he is not a Forex trader, good trading is good trading and there is always an opportunity to learn from it. His story is a great example of a small guy who went on to become one of the biggest players in a market.
If his story interests you, then dig into it and find out if anything about his story can help you trade better. Again, I'm not promoting that you trade like him, but extreme success is always educational. Much of this information comes from sources that were written back in 2004-2005, so I'm not sure how he trades now.
Also check out his firm, Rotter Invest. It gives you a little insight into how he trades.
To learn from other professional traders, be sure to listen to the Forex trader podcast interviews.
Do you know anything else about Paul Rotter that you can add to this post?
I met the guy, I was sent out to his house in Switzerland to install some IT equipment by a company called GNI. He was really down to earth and friendly.. his place was built into rock and overlooked one of the lakes.. we chatted about performance cars and he knew quite a lot about them and had owned a few..
Whoa, very cool!
From what I understand, the reason I was sent out there was he was doing so many trades with GNI that they needed a dedicated circuit put in between the two parties. His place was like a James Bond baddies lair with a lift down to the basement where there was a massive garage full of exotic cars… He was very dry… I was looking at one of his little car models surrounding his office and I said .. “that’s about the closest I’ll get to one of these” to which he replied “come with me” down the lift into the garage where the actual car was.. 🙂
Very cool, seems like a nice guy.
I m a trader for many yrs n I personally find wat is said a load of crap.if it can b done nobody needs to work already.
So if you are a trader, then why is it a load of crap? Since you’re trading, so doesn’t that mean that it can be done? Since Rotter is doing it and obviously has a fund, doesn’t that mean it is possible? I look forward to hearing your reply…
Actually who really knows Paul or does Paul really even exist?
He is a real person, for sure.
There’s a book titled “Dark Genius of Wall street: The Misunderstood Life of Jay Gould, King of the Robber Barons”.
Its a Biography of a incredible trader. And his style was quite similar to Pauls. No one says it’s easy, but it can be done.
Oh and Hugh..
Love the podcast man. I’m a trader myself, and I find your podcast invaluable.
All that stuff about ” being the sum of the people you hang out with”..
Well, your podcast makes it easier to put one’s self around others in this field, who are on the up and up.
Thanks Man!
Matt
Hey Matt,
Cool, thanks for the tip. I have never heard of that book, will check it out. Yeah, a couple of the responses to this post have been super interesting. Behind the scenes type stuff…it is certainly possible.
Glad to hear that you like the podcast. Yes, it has been a great experience to meet all these people. It has probably helped me most of all. 🙂
Cheers,
Hugh
Hi Hugh
Here is another interview with Paul Rotter… “Adapting to survive”
https://mahifx.com/blog/an-interview-with-paul-rotter-adapting-to-survive
Also…
It’s been said Paul made $60 million per year for many years!
He says that he sometimes placed hundreds of trades per an hour for just a few ticks.
He was basically doing HFT by hand. LOL
Thanks Gary, that’s a great interview. It IS an amazing story!
Cheers,
Hugh
H Brouk,
I am interested in learning more about Paul Rotter and his trading style coz i am learning to scalp the futures market.
Could you pls give me ur email address?
Hi,
I know Paul Rotter and all other traders he traded with and against personally for years.
if you want to talk send mail.
Best
B.
Hi,
I would love to hear about your experiences, I’ll shoot you an email.
Thanks,
Hugh
Hi I would really be interested in knowing something more about Paul Rotter
best regards
R.
Totally agree Roberto. I emailed the guy who says that he knows Paul. No word back.