John Henry Trading Philosophy

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In the premier issue of CME Magazine several years ago there was a feature story, Fielding a Dream, interviewing John Henry. The following exchange reveals Henry’s trading philosophy which we believe is vital for brokers and investors to understand and embrace in order to be successful investors in JWH Vision! We’ll explain why later in this memo!
CME: You have been described in The New York Times and elsewhere as “a cerebral man with a head for mathematics.” But how did you learn to trade futures – books, trial-and-error . . . ?

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JWH: Early on I read Reminiscences of a Stock Operator, the autobiography of Bernard Baruch, and the writing of W.D. Gann. I was particularly taken with Gann’s philosophy. I had been a student of philosophy and quickly began to find a bias toward trading philosophy over and above results. I always distrusted results in the commodity markets and eventually across all markets. Life is too dynamic to place a lot of credence in the past results of any program or any trader. I strongly felt that the key to success in markets over the very long term was in having a valid philosophy of the markets that could not be shaken by results over the short or intermediate term. I equated this with valid philosophies in other areas such as business principles that endure regardless of cycles. With any valid philosophy in any field, there are going to be periods in which doing the right thing every day appears to be counterproductive. If Keynes said, “In the long run, we are all dead,” I would say, “Remaining true to your principles, if they are valid, will produce great results over the long run.”

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