Paul Rotter - aka "the Eurex Flipper"

Paul is arguably the single largest and most successful individual futures trader on planet Earth, executing trades on the Eurex exchange primarily in the Bund, but also in the Bobl and Schatz interest rate futures. He trades between 200-300,000 round turns daily using the X_Trader platform, and clearing through GNI Touch. Every trader can aspire to imitate Paul's success as he is proof that it IS possible for a small trader to build on his success and grow into the biggest most active speculator around. Interview introduction (translated from German language interview with Traders Magazine): Paul Rotter has made it - he belongs to the best traders in the world and counts as a real big player. He usually does 150,000 rt/d, sometimes up to 250,000 mostly in BUND/BOBL/SCHATZ futures. in the hall of fame of celeb EUREX players he's top notch end even leaves Tom Baldwin (bonds) or Lewis Borsellino (S&P) behind. He had to work hard to make it. He blew up in the beginning of his career, which was painful but also educational - he learned his lesson and with lots of research, seeking improvement all the time, he became the man.

Q: Was there any key event that brought you into the game?
A: No, no key event like 'buying my first stock'. Took part in some trading contest while at school.

Q: How did you get to professional trading?
A: When I was apprentice in a German bank I had to work on the DTB (now EUREX) execution desk for several weeks. This attracted me a lot. During that time I was doing gamble trades on my private account, losing pretty much all of it. When it was deeply in the red, I had to leave the bank but shortly after, I was allowed to start trading in a Japanese bank. I was very lucky here, since I was allowed to gain knowledge through learning by doing.

Q: Did the bank give you any mentor?
A: Not, I didn't have one. In the beginning I was exchanging ideas with the chief trader Ajiasaka, who was constantly profitable. He sometimes even hedged the positions of his boss, when he thought that his boss was wrong. I had many conversations about market psychology, which proved to be very helpful, especially after bad losing days.

Q: How was your trading back then? Have you been constantly profitable from the very beginning?
A: I was doing 100 - 150 round turns a day after a short time... I had no losing month with the first 3 years of my trading. Later on with bigger position sizes i took occasional hits, especially after EUREX allowed terminals in the US and big players like Harris Brumfield / Chicago were entering the field.

Q: There is a saying that every trader has to completely blow up his account at least once before he can become successful. What did you learn out of it?
A: Like I earlier said, my private account saw some bad times during my apprentice in the bank, although I must admit, that back then I had absolutely no idea that there was something like 'risk-management'. Later on I found 7-digit losses to be cumbering on day I had a blackout and after losing 2,5 million I was seriously thinking about stopping. I still had enough capital left to live without having to worry about financial issues and i just wouldn't want to take those psychological hits anymore. After taking 4 weeks off, I regained my motivation and returned in the ring. I was able to make up the loss in a relatively short period of time, so that I came out stronger than before.

Q: Has this changed the views of the market in a way?
A: With the experience of bigger losing days coupled with good phases right afterwards, I'm not so sensible for losing days anymore. I know that I can make it back. This has lead to being able to switch off the screens on a day with medium/small losses more easily, instead of forcing the way back into positive territory.

Q: What are your strengths as a world-class trader and where are the differences between you and other traders?
A: It's the ability to get more aggressive in winning phases, taking bigger risks, and scaling back in losing times. This is against human nature. The best thing is to have somebody around who is neutral to trading, that switches the terminals off, when a certain loss level has been reached for the day.

Q: You are known as a order book-scalper, could you please explaining to our readers what you are doing and what your strategies look like? what is your tactic?
A: It's some kind of market making where you place buy and sell orders simultaneously, making very short-term trading decisions b/c of certain events in the order book (level2). For example, I usually have lots of orders in different markets at the same time, pretty close to the last traded price. The resulting trades are usually a zero sum game, but I get a pretty good feeling for what is going on and then ultimately can make a decision for a larger trade.

Q: How long are you usually in a position?
A: Since I do trend plays very seldom and actually scalp the market, i constantly get fills in different markets on both sides which can cause constantly changing positions for hours. Sometimes i change my opinion several times within a couple of minutes, which is not pretty hard for me, since I'm only looking for the next 3-5 ticks

Q: During your professional career, have you always been a scalper or did you try other strategies (momentum/swing) as well?
A: Yes, I have always been a scalper, but I am adjusting my strategies to different market situations all the time. On volatile days I of course have less orders in the market and do more 'single trades', although I usually hold them only for a couple of seconds.

Q: Your strategies only work on electronic exchanges?
A: Yes, b/c you cannot handle that much orders in a pit, looking for counterparties and so on. Computer exchanges grant fast order flow and are not as easy to manipulate.

Q: As a scalper, are you trying to run stops?
A: Well, yes, but because of the increase of liquidity in the last couple of years, the fast spikes caused by stops are not happening that often anymore. apart from that, that stops often are not where you would suppose them to be, because the other market participants are not silly either or learned their lesson in the past.

Q: What role plays risk-management in your trading?
A: I set daily goals for my P&L, whereas the most important thing is the stopping limit, the maximum loss I take, before I switch off the screens. My biggest positions are 5 digit number of contracts. I don't use any specific money-management rules.

Q: What has one to do if he wants to become a scalper?
A: He has to watch the order book for a very long time. When asked for advice for the readers, Rotter says that everything can happen all the time, so you better have your toilet close to your trading desk.