Interview with Dan Blystone
Introduction to Dan Blystone
The latest guest that we invite to provide their expert view is Dan Blystone who joined Swedish prime broker Scandinavian Capital Markets as Chief Market Strategist. Dan founded his own website called Traders Log way back in 2008. Besides his own blog, he has contributed to a number of leading publications such as Investopedia, theStreet, SeekingAlpha, FXStreet and of course, Scandex, a recently launched interactive portal for traders created by Scandinavian Capital Markets. Before writing about the markets, Dan spent a decade in the trading industry in Chicago as a floor clerk, trader and broker.
What exactly does a Chief Market Strategist do?
I write about the market for clients, covering currencies, commodities and cryptocurrencies from both a fundamental and technical perspective. I typically scan the charts for the instrument with the most compelling price action that day and then build a piece of analysis from there.
How did you land your first gig at the Chicago Mercantile Exchange (CME)? What was the working environment like? How have things changed since then?
A family friend was the chairman of a brokerage firm with a substantial presence at the exchanges – he offered me the opportunity to begin as a clerk. The size of the CME trading floors was impressive, particularly the Eurodollar pit, almost like a stadium packed with traders, brokers and clerks in their colored jackets. When I was there, things were already beginning to transition to electronic. I worked for a while in the S&P 500 Futures pit and at that time they were beginning to add terminals overlooking the pit for people to trade the E-mini (an electronically traded mini version of the standard S&P futures contract). There was a brief window of opportunity where the E-mini traders were able to trade off what was going on in the pit, sometimes giving them a substantial edge. It’s an example of one of the ephemeral opportunities that arise in the world of trading. The industry attracts some colorful characters and it was an eclectic mix on the trading floor. You’d have an MIT mathematics PhD crammed up against a mafia-type character, both yelling their lungs out. The markets are of course now more efficient than ever, making it harder for speculators to make money. Some things have levelled the playing field though, such as lower barriers to entry and better technology.
How did you move from trading futures (German Bonds) to trading FX and CFDs? What do you think are the most important differences between these asset classes?
FX was a theme since the beginning of my career. I started out as an arbitrage clerk in the currency futures area of the CME. Sometimes the interbank traders would call to see what was going on on the floor of the exchange. I went on to trade Eurex futures (mostly the Bund) overnight at a proprietary trading firm called Altea – named after the town in Spain. Later, I got my Series 3 licence and worked at Infinity Futures, where clients traded futures, futures-options and forex. The sheer size of the spot forex market, with a daily volume of over $5 trillion, creates many interesting trading opportunities – something banks have known and capitalized on for a long time before retail traders entered the market. While the spot market offers great liquidity there is less transparency than in the futures market.
Why have you chosen to be an analyst as opposed to simply trading with the knowledge and insight that you have?
I like writing and connecting the dots. Making sense out of what is going on in the markets can be like trying to solve a massive puzzle and there is intellectual gratification in that. It’s also nice to be part of a team and communicate your ideas to others.
What is your least favourite thing about trading?
The truth is that if you lose money as a professional trader, you really lose in a big way – because you lost the time, the money and have nothing to show for it. On the other hand, you have the cases of tremendous success, which unfortunately are more rare.
When did you first learn about cTrader? What was your first impression like? What is your opinion of the platform today?
I learned about cTrader while at Scandinavian Capital Markets, because of its popularity among clients. My first impression was that the UX is better than MetaTrader. The secure connectivity to FIX API via cTrader and its advanced risk management features make it an appealing choice of platform.
You can follow Dan Blystone’s insights at the Scandex website.