His apprentice scheme aims to create 20 stock market traders – is there a little bit of Sugar in Mike Baghdady?
In 1983, infamous commodities trader Richard Dennis (the “Prince of the Pit”) placed an advertisement in several New York newspapers, looking for volunteers from any walk of life, to take part in a training scheme that would see Dennis giving the participants an account to trade on the markets.
The Turtles, as these volunteers became known, were Dennis’s way of settling a dispute with his friend and fellow trader Bill Eckhardt, who thought that genetics were the determining factor in the success of a commodities trader.
Dennis, however, believed it was a skill that could be taught. An aggregate profit of $175m five years later proved him right.
Mike Baghdady was in New York at the time but for some reason the newspaper advertisement passed him by. He has regretted it ever since but instead of always wondering what would have happened if he had made the shortlist, he is creating his own Turtles.
“We are the only place in the world offering this kind of apprenticeship. I have been trading for years – I’ve traded millions, I’ve lost millions. I’ve been up to the heavens and down to Hell and, having learned from my mistakes, I can put my money where my mouth is and say ‘I can train you’,” he says.
The New Turtle Traders scheme will take 20 successful applicants, train them up and give them each £100,000 to trade. If they lose money he will cover their losses. If they make money they will all share the profits – just like Dennis’s experiment.
So who exactly is Baghdady and what makes him so sure he can emulate one of the greatest traders of all time?
Born in Cairo, Baghdady left his family porcelain business and set off to become a trader, having seen images of the New York Stock Exchange on the television.
Having missed his opportunity to take part in the Turtle project, he found himself under the tutorage of Alan Shaw. Shaw was no Prince of the Pit but, according to Baghdady, is regarded by many as the father of modern technical analysis.
“Working with someone at the top of their profession is of great value. Every day they share a little bit of their experience with you – it may not be intentional or articulated in points – but every time they open their mouths a little gem falls out,” he says.
“I’ve traded millions, I’ve lost millions and, having learned from my mistakes, I can put my money where my mouth is and say ‘I can train you’”
Baghdady should have a few of his own gems, having spent time as head trader on the New York Board of Trade (NYBOT) floor. There he called out trades on the exchange floor and was responsible for training many of the floor traders – moving them from floor trading to trading off charts and computer screens.
His bright blue and green trading jacket hangs next to his desk at Training Traders – a reminder of his days in the pit.
“The trading floor was the most organised madness that you can imagine,” he recalls. “The excitement, the shouting and, above all, the honour… As a trader in those days your word was your bond – there was such respect.”
Although he laments the end of the old style of trading floor, Baghdady’s knowledge of computer-based trading systems helped him to define a clear set of trading rules that allowed him to produce the first pure rule-based trading software.
Baghdady believes that, to become a star trader, you need to apply a specific set of rules, with the key to becoming a good trader the ability to “remove emotion”.
Having held training sessions in technical trading techniques at 50 financial institutions, he set up Training Traders in October 2010 – where he offers online and in-house training programmes. The New Turtle Traders apprenticeship comes off the back of his new company.
Baghdady insists the scheme is not a marketing ploy.
“I’m investing a year of my life and £1m in this scheme”, he declares, “Not only do I hope that we will make a great profit but I want the successful participants to run a hedge fund for me after the scheme. It will be the biggest hedge fund in the world with 20 handpicked, well-trained managers.”
I ask him about the obvious comparison with Lord Sugar and The Apprentice.
“He is a great man. We share a view that we have something to offer. We want to take people and give them an opportunity. The difference is that he is looking for the natural-born apprentice. I am willing to put a bit more work into my apprentices,” he whispers before booming, “It’s nurture verses nature!”