At first glance, the only connection that one may safely infer between drinking and trading is the activity you engage in at the end of a great trading day. Well, let’s be honest, at the end of an awful trading day too. Fine, let’s be brutally honest, those two types of days pretty much fill up your entire social calendar. Still, we have a theory that at the core of every trader is a cocktail that matches his or her trading style. Seems far-fetched? Well, the idea was conceived upon reaching the bottom end of our respective cocktails. But still, hear me out.
The Fundamental Trader – The Old Fashioned Scotch on the Rocks
The fundamental trader is the solitary guy in the office who still rocks up to work in a suit and tie… holding his briefcase. Yes, they’re a rare breed nowadays. The Fundamental trader is a man of principle who looks purely at the news cycle to determine whether to make a certain trade. He examines the macroeconomic figures and reads the FOMC meeting minutes. Most typically, he is a buy-and-hold type of guy. It obviously goes without saying that this stoic character orders the Old Fashioned drink that holds the essential characteristics of what makes a drink work; a stimulating liquor from a seasoned spirit, on occasion, a dash of water and some well-timed ice cubes thrown into the mix. It’s the drink his grandfather had, and if it worked for the old man, it’s guaranteed to work for him.
Noise Trader – Ramos Gin Fizz
Everyone knows who the biggest noise traders are in the office. Why? Because they’re so ridiculously melodramatic! Noise traders make their decision to buy and sell without any fundamental data, preferring to trade based on market activity, price history and volume. Then they make short term trades where getting the timing right is the primary challenge. Possessing heaps of foam and not much drink, the Ramos Gin Fizz, a cocktail including cream and an egg white blended to oblivion, would be their corresponding cocktail. 90% fluff and 10% actual drink – we think this ratio is fairly representational.
Sentiment Traders – Negroni
Not surprisingly, the sentiment Trader focuses on trading market sentiment. Like the Noise trader, the sentiment trader also tries to identify and exploit market trends, but ensures that they work the momentum of the trend. They do this by utilising both fundamental and technical analyses, to get a more holistic picture of which pair to trade. Highly balanced, the drink of the Sentiment Trader is the Negroni. Blended with a touch of bitter and a bit of sweet and a great deal of herbal complexity, they enjoy results that are often highly refreshing.
Market timer – Bloody Mary
The market timers attempt to anticipate the direction of a security, and then make a move in order to benefit from that fluctuation. To do this they might look at economic forecasts or technical indicators (like Fibonacci) and try to make a prediction on the movement of the pair. While it goes against the conceptions held by many a financial expert who believe that it is impossible to predict market movements, they hold strong to their short-term trading successes. The market timers tend to be the ones sitting right at the bar, drinking their blood red Bloody Marys. Let’s face it, tomatoes are not the go-to ingredient for a chic cocktail, but they’re sticking to their guns and defiantly drinking what they love.
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