Peter Brandt is the CEO of Factor LLC, a global trading firm he founded in 1980 that trades proprietary capital, forex, futures, fixed income and equity markets. He has been a futures/FX career trader since 1975 and publishes the Factor Report.
Factor Research Trading Services is a company focused on nurturing the strategy of individual traders.
With 45 years of experience, the CEO, Peter Brandt, believes that no one can succeed in the markets by shadowing the moves of others. Instead, each trader needs to formulate their own unique approach. To that end, Factor aims to teach traders about the process of market speculation and help traders overcome the challenges that come with it.
Factor Members have access to private Twitter alerts, a weekend market brief, known as the ‘Factor Report’, and an extensive knowledge base focused on classical charting, risk management strategies, and how to manage human emotions.
Early in Peter’s trading career, he admits that he struggled with both the process of market speculation and a way to control his emotions. A mix of doubt and over-confidence lead to a lack of risk management, which led to him blowing through several accounts.
He believed that trading was primarily about trade identification; where is the next trade going to come from? However, he now knows the way a trade is managed is far more important than how a trade is identified.
Thankfully, Peter found technical charting early in his career which gave him the perfect way to not only identify trades but, more importantly, manage risk. Since then, he has viewed himself as a risk manager rather than a trader.
To manage risk, Peter implements a set of techniques and tools to help him avoid big losses, which he believes is the primary reason for ending the careers of most traders. Peter flows all decision-making through a pyramid structure that starts with the philosophy of speculation at its base. Decisions then pass up through a set of principles and guidelines, and finally into the tactics he implements in the markets. Based on that decision pyramid, Peter is able to create trading rules that focus on capital preservation.
Alongside his risk management techniques, Peter finds trades and manages trades through technical charting. He openly admits that price charts fail more often than not, but they do offer two major advantages for traders that are open to using them.
Firstly, Peter believes that charts show where a market has been, where it is now, and the path of least resistance moving forward; a powerful tool when forecasting markets. Secondly, he credits charts with providing opportunities for highly skewed, asymmetrical, reward-to-risk ratios; points in a market where the potential reward is far bigger than the amount of risk required. For him, that is where the edge of charting comes from.
Finally, Peter thinks that there is not enough emphasis placed on the human element of trading, which in his opinion is strange because trading shows the good, the bad, and the ugly side of individuals. Focusing on his emotions and who he is as an individual, Peter is able to compensate for weaknesses that can affect his trading habits.
For a detailed insight into Peter’s philosophy and trading strategy, we recommend taking a look at Peter’s
Some of the best trades in Peter’s life relate to the milestones in his career rather than specific bets within the markets. From this point of view, one of his best trades was the gamble that he took to learn the commodity markets in the 1970s.
After being introduced to the commodity markets through a friend, Peter quit his job at a successful advertising agency to pursue a career in trading. At the time, Peter knew nothing about the markets and had two kids at home to provide for. From the very start, his back was against the wall. However, Peter was extremely determined to figure it out and find a way to succeed, regardless of what it took. He credits his entrepreneurial spirit as the driving force behind him taking the leap.
He eventually managed to secure a low-level position with a grain company called Continental Grain, where he had the capacity to enter orders. From there he worked his way up. Alongside securing large customers for Continental Grain he began learning the process of trading.
However, it wasn’t until he was introduced to technical charting that Peter’s trading game changed. From that moment he knew that, one day, he wanted to run his own proprietary trading firm. A dream he went on to realize in 1981.
Peter believes that he is extremely fortunate to bookend the final chapter of his trading career with the cryptocurrency markets.
In the past, Peter has called himself a “narrative bull” when it comes to Bitcoin and finds the idea behind it fascinating. After being introduced to Bitcoin by our very own Raoul Pal in March 2016, Peter believes that in the future the digital asset could become either a global reserve currency or find itself as a recognized currency, traded against the likes of gold and crude oil.
However, Peter makes it clear that he does not “HODL” bitcoin due to the history of 80% declines. He also does not have a “buy the dip” mentality due to a sacred trading rule he follows of never adding to a losing trade. He openly admits that there is nothing to stop Bitcoin from falling and remaining low for decades before moving higher once again; just like silver did in 1980.
Peter believes that Bitcoin investors need to have a long-term view, and not get dragged into the hype that can sometimes revolve around the market. However, he believes Bitcoin has a promising future ahead of it and, in the past, he has held more Bitcoin than any individual stock in his portfolio.
