Alex Moisseev’s trading station in Geneva, Switzerland, reminds him of a cockpit with its six screens, blinking lights and signals only a pilot can understand.
“I have all the markets right here,” he says. “I can see everything I need right in these instruments.” A 15-year veteran of the markets, and a licensed pilot with his own plane, Moisseev is the trader behind Dighton World Wide Investments AG, a Switzerland-based commodity trading advisor. He’s racked up a 90% annual return against a maximum drawdown of 40.8% since July 2003, when he launched the Swiss Futures Trading Program. The same program is offered by U.S.-registered Dighton Capital for U.S. investors.
Moisseev launched Dighton to service high-net-worth investors in his native Russia, and his trading caught the eye of Jürg Bühler, who used the same clearing house as Moisseev. The two have been partners since 2005, with Moisseev handling the trades and Bühler the marketing, along with Andrey Korobovon, who handles Eastern European sales Moisseev’s trading career grew out of the reforms initiated by former Russian head of state Mikhail Gorbachev in the late 1980s, when Moisseev had begun a career as a chemical engineer.
By 1991, he was Russia’s third-largest importer of coffee from Brazil, and a year later he started to hedge on the Coffee, Sugar, and Cocoa Exchange.
“It was an imperfect hedge, to say the least,” he laughs. “I was hedging instant coffee with Arabica futures.”
Like many cash dealers, he found himself drawn to the pure market risk of futures – as opposed to the non-market risk of the high seas and increasingly corrupt post-Soviet Russia. By 1994, he was out of physicals, trading futures on softs full-time, and splitting his time between Miami and Moscow. In 1997 he began experimenting with currencies and stock indexes, and today he trades everything, but tends to concentrate on just a handful of markets at any given time.
His approach breaks down into two strategies: a short-term, contrarian approach that captures overshoots, and a long-term approach based on macroeconomic analysis for trend and technical analysis for timing. “I apply the short-term strategy in times of extreme volatility,” he says.
A favorite indicator is the rate of change in volatility. “The market needs to digest the rate of the volatility before putting in highs, so you get a sort of volatility consolidation,” he says. “If other indicators are in line, and I understand the fundamental drivers of the move, I will trade against the direction in volatile markets.”
Nine times out of 10, he says, the corroborating indicators don’t materialize. “Usually, you find something doesn’t add up – maybe I don’t have a feel for the macroeconomics of what is happening... . Whatever the reason, volatility alone is never enough to launch a trade.”
But he had all green lights in April, 2006, when volatility on silver was 50% above the historical average and the rate of change in volatility was three times as high as it had been in the wild 1970s. He put on a massive position that went against him by 30% before making 60% in one day. “I was perhaps a bit over leveraged on that one,” he says, adding that such positions are rare.
For longer-term positions, he gauges the situation of the positional market players.
“These longer-term positions build over time,” he says. “I’ll put my feet into the water and see how it feels, and then trade one market or another for years.” In 2003 and 2004, the bulk of his profits came in bonds. Lately, he’s done well in cotton and metals. Now he’s beginning to test the waters on the long side of the dollar, and sees some short-term trades coming in the S&P. “You’ve got 25% on the volatility index, so it’s getting to a point where I can do a lot of short-term trading.”
For risk management, he relies not on price-based stop-losses, but on pattern-based theoretical stops with the occasional long option as a hedge. Likewise, his exit points are determined by market behavior in real time, and not pre-set targets. “Sometimes, I’ll see a market building a huge base over a long period, and begin to get in slowly,” he says. “As the position evolves, I watch the market internals looking at hedgers and other participants and the fundamentals. But I never know when I’ll realize a profit, adjust position size, or just get out of a position. It could be three months, six months, or two years.”
Profits, from both his short-term and long-term approach, have been pretty steady of late for Moisseev.