Randy Mckay
$2,000 to $20,000,000+
The incredible performance
Randy McKay is an extraordinary futures trader who has achieved unparalleled success throughout his career. Starting with a modest initial investment, McKay managed to turn several thousand dollars into double-digit million-dollar gains.
What sets McKay apart is not only his ability to generate substantial profits but also his remarkable track record of consistent profitability spanning two decades.
McKay's trading career began in tandem with the birth of currency futures trading. Despite the limited activity in the currency futures market at the time, McKay demonstrated his trading prowess by turning a $2,000 stake into an impressive $70,000 in his first calendar year, an astonishing achievement considering the market conditions.
Throughout his trading journey, McKay continued to build upon his success, surpassing his earnings from the previous year. Even when he transitioned from trading on the floor to trading at home, McKay adapted swiftly and achieved his first million-dollar gain in his second year of trading from home.
Randy continued to increase his winnings each year until 1986, when he faced his first trading loss after an impressive seven consecutive million-dollar-plus years.
In the span of twenty years, McKay maintained profitability for his own account in eighteen of them. 18/20
It is estimated that his cumulative earnings amount to tens of millions of dollars, firmly establishing him as a highly successful trader. McKay's prowess extends beyond his personal accounts, as he has also managed accounts for family and friends. The oldest accounts, initiated in 1982 with a starting equity of $10,000, have each generated cumulative earnings exceeding $1 million or 10,000%+, an impressive testament to McKay's ability to manage and grow investments.
Despite his extraordinary achievements, McKay has maintained a low profile throughout his trading career. Until recently, even within the industry, few people had heard of him. However, with his decision to enter the world of money management, McKay recognizes the need for a slightly higher public profile.
Shaped by the war
A Vietnam War Experience: Before delving into his trading career, it is essential to understand Randy McKay's background and the formative experiences that shaped his mindset. McKay was drafted during the Vietnam War, and his military service had a profound impact on his perspective on life and the world. Initially considering war a matter of civic responsibility, his experiences in Vietnam transformed his beliefs. Witnessing the futility and senselessness of war, McKay became a pacifist and developed a strong aversion to violence and armed conflict.
‘The major change was that I went from being a rule follower to thinking for myself. When I realized that the leaders in the country didn't necessarily know what they were doing, I became much more independent.’
Randy McKay
This experience profoundly changed him into an independent thinker, which he continued to be an exercised against other market participants decades later
The approach
Randy Mckay’s approach is particular to him and can be characterized as follows. Randy focuses on stock and the futures markets, where he trades from short-term to multi month holds.. The system utilizes both technical analysis and fundamental analysis to identify and capitalize on price movements.
I realize his defintion is broad, thus in order to fully grasp his trading style, here are 7 rules and ways Randy thinks about his trading:
Aligning trading style with personality
Recognizing that successful traders match their trading styles with their individual personalities, McKay emphasizes the importance of finding a strategy that suits one's own characteristics.
Objective decision-making
McKay prioritizes staying objective, particularly when facing losses. He believes that being hurt in the market can cloud judgment, leading to less objective decision-making. Formulating a trading plan and journaling helps him stay objective.
“Always have a plan and stick to it.”
Capturing the easy part of the trade
Randy's philosophy centers around entering trades when the move is already underway, rather than attempting to pick market tops or bottoms. This approach reduces the risk of being caught in prolonged market stagnation and maximizes the potential for capitalizing on favorable price movements.
“Don’t be too greedy. Always look for a good entry point and a good exit point.”
Watching market response to fundamental information
While utilizing fundamental analysis as a backdrop, McKay focuses on observing how the market reacts to fundamental factors. By studying market action, he gauges market sentiment and makes informed trading decisions based on real-time dynamics.
Adapting to changing market dynamics
Randy acknowledges the shift from unsophisticated participants to professional traders dominating the markets. He adjusts his approach to account for the behavior of professional traders, recognizing that their actions differ significantly from those of naïve traders.
“The best trades are the ones you don’t make.”
Considering market conditions
McKay acknowledges the impact of market conditions on trading dynamics. He understands that market environments can change, and factors like inflation trends and public participation can influence trading strategies. By adapting to these conditions, McKay optimizes his trading approach.
“The markets are always changing. Be prepared to adapt.”
Effective money management
McKay emphasizes the importance of execution over prognostication and determines why trades are winners or losers. He cuts losses short, reducing the trading size when facing losses to preserve capital and maintain a resilient mental attitude. This approach allows him to withstand multiple losses and adjust position sizes accordingly.
Final thoughts
In conclusion, Randy McKay's incredible performance as a futures trader is a testament to his exceptional skills, adaptability, and disciplined approach. He has achieved great success, turning a modest investment into double-digit million-dollar gains and maintaining consistent profitability over two decades. McKay's ability to adapt to changing market dynamics, his focus on capturing favorable price movements, and his emphasis on effective money management have been key factors in his success.
Furthermore, his mindset of critical thinking and independence has translated into his trading career, where he applies objective decision-making and adapts his strategies to account for the behavior of professional traders dominating the markets.
McKay's trading philosophy revolves around aligning trading style with personality, watching market response to fundamental information, and considering market conditions to optimize his trading approach. He emphasizes the importance of staying objective, not being too greedy, and being prepared to adapt to changing market environments at all times.
Additionally, effective money management is a cornerstone of McKay's approach. He focuses on execution and cuts losses short to preserve capital and maintain a resilient mental attitude. This disciplined approach allows him to navigate losses objectively and adjust position sizes accordingly.
Randy McKays remarkable track record of consistent profitability and his ability to generate substantial profits serve as an inspiration to traders all across the world.
I am glad that the market wizards series picked him to be part of the book. To me, it remains the best source to study Randy to this day.
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Thanks for the write-up Lukas! Have you ever traded futures? I remember from your podcast you mentioned trading forex. I know stocks/equities are your main focus. I was wondering your reasoning behind trading stocks vs futures. It seems many of the market wizards from the books traded futures. Thank you for sharing so much!