TRADER PROFILE: Nissenbaum Keys in on Global Money Flows
Futures; February 11, 1997

Chicago-Feb. II-FWN--NEW YORK BASED TRADER ANDREW Nissenbaum, focuses on global monetary flows, as he forms his macro-economic views and makes his trading decisions, he said. 

Nissenbaum, currently an independent trader, at Hypothesis Capital Management Inc., first encountered the global financial markets as an undergraduate at the Wharton School of Business, at the University of Pennsylvania. After attending a lecture by Professor Jeremy J. Siegel, regarding the so-called "January effect" in the U.S. equity market, Nissenbaum was inspired to put on a futures trade. 

"I thought, with all this publicity, it has to occur in December that year," Nissenbaum explained. As a sophomore in college, Nissenbaum "bought a March Russell 2000 calendar spread and sold the December." 

"I started with $2,400 and by the time the spread had settled, I had quadrupled my money," Nissenbaum said. He was hooked and began speculating in the futures markets throughout the remainder of that school year. 

During the summer, Nissenbaum leased a seat at the Chicago Mercantile Exchange and took a stab at trading in the S&P futures pit. "I learned a lot, but the environment wasn't suited to me," Nissenbaum said. For example, "I'm only 5' 6"--so it was hard for me to get executions," he noted. 

After college, Nissenbaum joined Union Bank of Switzerland in New York City as a proprietary currency trader. After trading for UBS, he joined Soros Fund Management for a short stint, before breaking out on his own, with Hypothesis. 

While making his trading decisions, Nissenbaum notes, "I use a combination of fundamentals and technicals...the most important thing is looking at global monetary flows. I like to look at where the money is coming and going." 

In terms of specific technical indicators, Nissenbaum said, "I use basically my own recognition of market patterns...I don't use Fibonnaci or Gann or Elliott Wave or any systematic approach. I am strictly a discretionary trader." 

"I try to pick turning points in the markets. At first, I appear to be a contrarian, but if I still have the position on them I look like a trend follower," Nissenbaum said. "But, I am closer to the contrarian...l try to find bottoms or tops, normally it's when the trend is against me," he explained. 

In terms of average timeframe for trades, Nissenbaum said, "they could last from an hour to a year. I normally have long-term views and intermediate-term views and I try to trade toward those views." 

In terms of futures contracts, Nissenbaum prefers the S&P 500 contract and the T-bond contract. "I enjoy the action of the S&P and the reaction of the bonds," he said. 

Early in his trading career, Nissenbaum said he learned that "leverage goes both ways." 

"One time, I had a very large S&P option position on and the position moved slightly against me and I lost a big part of my profits that month and it humbled me," he said. Also, he learned "that the market is always right and the participants are always wrong." Also, Nissenbaum learned that is important to "try to separate myself from the markets and my last market decision." 

Occasionally, Nissenbaum said he will liquidate all his positions and watch the markets passively. "lf I'm at a point where I feel like I'm getting too close to the markets--if I'm up six days in a row, twenty hours in a day, at some point, I say 'Andy, this is going to be self-defeating,' and I'll liquidate all my positions." 

Nissenbaum believes that successful futures traders need to "have the ability to take risks and they should never monetize a trade. You should never say, 'Oh, I could have bought a new car with that'...think of it as a game...you have to have a love for the markets," he advised. 

Also, Nissenbaum notes it is important to "use stop-losses and watch your risk--because it all looks great when you are making money. But, you need to be disciplined for when there is a drawdown--you need to survive." 

Personally, "I will never let a winning trade turn into a loser. I would just scratch it," he said. "If you don't feel that a trade is right--get out--you can always get back in," he added. 

In terms of risk/reward ratios, "I don't have a standard. l never determine mv profit, I only determine my loss," Nissenbaum said. He tries to limit risk to approximately 1% of his account, per trade. 

"It's dedication. It's love for the markets. I have a love for the markets and for the flow of money," Nissenbaum concluded.