Interview with a Top Trader — Sebastian Valdivieso from Chile
Every month, I shall be conducting an interview with one of the top traders on the Pelican platform. This is to give a deeper and more insightful analysis into the character of the best traders within the Pelican community.
To start off this series, my first meeting is with a trader I have known and greatly respected for the past couple of years. His name is Sebastian Valdivieso and he is currently Chief Market Strategist for a Chilean firm called Mercados G.
For that business he has been providing Trade Ideas for Mercados G’s clients since 2011. During the ensuing years, he has suggested over 900 trades and is showing an uncompounded profit of over 600% with close to 70% being profitable.
He joined the Pelican community in February and since then he is up 88% on his account. He primarily trades long/short across a small selection of FX, Commodities, Indices and US Equities. He is a well-known and respected presence within the financial press in Chile and across Latin America.
What was your background prior to being a Top Trader?
Maybe surprisingly, I studied psychology at Chile’s Top Univeristy, Pontificia Universidad Católica de Chile. I majored in both Clinical Psychology and Business Psychology. After initial spells in HR within the national airline and the largest dairy business, I decided to focus on where my true passion lay — in the financial markets. So I began working at PentaMarkets as an analyst, then as Manager of Trading and now at Mercados G as Chief Market Strategist.
In the meanwhile I studied finance at Universidad Adolfo Ibañez, one of Latin America’s leading business schools, from which I attained a Master’s Degree in Finance.
I am now considering doing a remote program degree in Behavioural Finance or Economics with a leading US or European university, as this would pull together all the aspects further to improve my trading, from Pyschology to Finance.
Where did you develop your love of financial markets?
My passion for financial markets took off in the final years of my studies of Psychology at Universidad Católica. Various family members had successful careers in the financial and real estate markets and I caught the bug! What I completely loved about the markets was that this felt like an intellectual challenge. I’m passionate about chess and strategy. The financial markets are the biggest and most challenging arena of all. I am incredibly independent and have never asked for any help. I simply set my mind to studying and investigating by myself, as well as developing my own theories about the markets and also some strategies. This was all whilst studying for a university degree. But was not until 4 years later when I saw the light and took the decision to dedicate my life to trading the financial markets. I am one of the minority who can say that they truly love their job!
Who are your trading heroes and why?
Well, there are many I admire. I am incessantly focussed on learning more about the top traders and investors. It is a never-ending process. If I had to name some, these four would be top of my list:
George Soros
Not only because his great success, but because his approach to thinking about the markets. He is openly critical of the classical economic theories that are broadly accepted and has developed his own philosophical approach, influenced by Karl Popper’s ideas. What I admire more are not these ideas themselves, but the fact that he wants to develop his own theories about the markets and to be an independent mind. I think that’s critical to achieve success as a trader/investor and I empathise with his mindset.
Bill Gross
With a background in Psychology, with a MBA later, I greatly admire Bill Gross’s success. Despite having studied a subject very different to traditional Wall Street degrees, he has proceeded to become the foremost bond trader in the world. I also respect his deep analysis and views of the markets, but most of all, I love his phenomenal track record.
Sir John Templeton
Probably not a name which would be high on many lists, but I have always admired Sir John’s deep and fundamental understanding that he had about the markets. His talent to be a great stock picker and his deep spiritual approach to investing made him one of the greatest investors of all time.
Paul Tudor Jones
I like his aggressiveness, determination and view of the markets. He has developed many strategies to trade in different markets and different conditions, which is very much the way I like to trade too. I do not believe in the “holy grail” strategy, nor indicator or market, but I think there are so many different market scenarios just like in a challenging game of chess. Every situation is different, so you need different strategies to win with consistency. The only constant is your own ability to evaluate and to make right decisions. In that regard, I think Tudor Jones is one the best.
One unifying trait is that they are or were great philanthropists. That is something I aspire to, as I fundamentally believe that after reaching the top, being able and willing to give back to others is the true sign of a successful person in any given field.
What aspects of the four greats above do you take for your own trading?
It would have to be the analytical minds and philosophical approaches of George Soros and Bill Gross, combined with the deep understanding of the markets and stock picking talent of Sir John Templeton, with the aggressiveness, determination and versatility of Paul Tudor Jones. That is the dream combination.
Do you have any trading superstitions?
None. I think superstitions brings you bad luck…
What is your trading dictum?
I am a contrarian trader. I like to focus on FX, commodities, US indices and US shares. I perform short-term trading with closely-controlled volatility management. With a background in Psychology and a Masters in Finance, I look for a unique approach to market dynamics.
What are your Top Trading Tips?
1 Once you have attained the basics of trading, try to THINK FOR YOURSELF. Never follow the crowd.
2 To succeed as a trader / investor, you need to have a true passion for knowledge, study and information, plus an open mind to use that information smartly. If you think, or want to think, that trading is an easy way to make money, you will find only easy losses.
3 Define your risk and your return…
…and then act upon it.
4The true measure of a trader is his own track record. Understand that to evaluate yourself, where you’ve gone wrong in the past and how you can improve in future…
Speaking of future, what are your dreams for the future?
I want to become a top trader and a successful Hedge Fund manager. My main goal is to accomplish a yet deeper understanding of the markets, which would allow me to manage within a top performance Hedge Fund. I also want to continue developing my career in a major financial hub like London or New York, where I would be better connected to other top managers and traders, from whom I can learn more as well as share knowledge and experience.
What are your predictions for the major markets in the coming months and years?
