Hedge Fund Strategy Market Wizard & Risk Management Expert

Steve Clark – Hedge Fund Strategy Market Wizard and Risk Management Expert

Steve Clark is an American investor, founder, and Head of Risk at Omni Partners, LLP. He served as Director, Head of International Equity Trading, and Director, Co-Head Proprietary Trading at NatWest Markets and Nomura Securities, respectively, between the years 1991 to 1997. Also, Clark was the director of Hartford Asset Management Limited from 2000 to 2004.

Steve Clark was featured in Jack Schwager’s Hedge Fund Market Wizards. This short article looks at the life and history of Steve Clark and we end the article by listing a few of the trading lessons and quotes from him.

Steve Clark’s early life and career:

Steve Clark grew up on the outskirts of London, with no father around. With no trading experience, Clark worked installing stereo speakers when his friend told him about trading jobs in the City. Steve graduated with a double major in Accounting and Finance from Miami University. He received an MBA and MSG degrees from Boston College. Clark is a holder of the CIMA®, CFA, and CFP® designations.

Clark took some odd jobs in the city before finally getting a chance at running a market-making book. And his first chance at trade came when he had to fill in for a trader on holiday during the stock market crash of 1987.

Clark learned a valuable lesson in market making during the crash of October 19, 1987. He thought to quote the price so low until all the sell orders diminish, but he lost millions of pounds on his book. Fortunately, he still wound up as the most profitable trader in his group. He attributed his success to his ability to exit losing trades on time. He also makes his trading decisions based on news.

Steve trades on order flow information and filters for stocks with enormous momentum and large volume. He would check the chart to check whether the price had reached a specific high or low from the previous period. He says he’s not a fan of predictive analysis.

He left his market-making job at Warburg for bigger pay at Lehman Brothers. He soon discovered he couldn’t make money at Lehman Brothers after leaving his former employer, an environment filled with order flow information.

Over time he began getting connections with trusted brokers, using their order flow information to track short-term market sentiment on news and event. If his position is not in sync with momentum, he will exit his trade. He believes in buying when the market is in an uptrend.

Clark gives one crucial piece of advice to traders: do more about what works and what doesn’t. Review your profit and loss to see what works and what doesn’t.

In an interview with Jack Schwager on Market Wizards, he talked about his ups and downs, which began when he lost the initial capital used in starting his first hedge fund. When all the odds are in your favor, you need to take advantage of it. However, if your trades start going in the unintended direction, that is a sign that your judgment was wrong. Your job as a trader is to make sure your equity curve goes from the bottom left to the top right.

In his words: “Really good traders are also capable of changing their minds in an instant. They can be dogmatic in their opinion and then immediately change it. If you can’t do that, you will be caught in a position and be wiped out.”

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Trading strategy quotes from Steve Clark

We end the article with some quotes made by Steve Clark. All quotes are taken from Jack Schwager’s Hedge Fund Market Wizards.

Discipline is the bridge between poor trading and pro trading. motivational trading quote about the importance of discipline in trading

I’ve seen this happen to many traders, and I have gone through it sever times myself. When you find that you can’t make any money, smaller and smaller losses take on greater and greater emotional significance, and you lose all perspective

I’m searching to be satisfied by something. Let me tell you the trouble with trading. There is no career in trading. You are only as good as your last trade, and that is it. You build nothing; you just trade. The day you stop trading, it’s gone.

What is Steve Clark’s advice for traders based on his experience and strategies?

Steve Clark advises traders to focus on what works and to review their profit and loss to determine successful strategies. He emphasizes the need for continuous adaptation, especially when market conditions change.

How does Steve Clark describe his trading style and decision-making process?

Steve Clark relies on order flow information, tracks short-term market sentiment, and exits trades that are not in sync with momentum. He is not a proponent of predictive analysis and believes in buying when the market is in an uptrend.

What advice does Steve Clark offer regarding success and the trader’s role in managing equity?

Steve Clark stresses the importance of taking advantage of favorable market conditions and being adaptable. He advises traders to ensure their equity curve moves from the bottom left to the top right.

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