GANN ARTICLES

one to hire him. He fi nally went to a small
brokerage fi rm. They gave him the test and
he passed it because of the math part. Tim
was very savvy with business and he knew
what these people were looking for. Tim
fi gured he could be hired anywhere if he
was a licensed broker.
To be licensed as a broker, one must
past a diffi cult series 7 test. Tim studied for
this test sometimes eighteen hours a day
for two straight weeks. He tried to cram
all the information into his head. The test
day came and he failed it. He had to wait a
month and took the test again. The second
time he passed the test. After passing he
went back to the big brokerage fi rms. He
was now a licensed broker. He went into
Merrill Lynch and talked to the VP of that
offi ce. He was feeling really good about
himself and told the manager how he had
built his business and of his background.
He really sold himself. He told them that
he was already licensed and that he wanted
to work with a reputable brokerage fi rm.
He felt that the fi rst time he interviewed
with these brokerage fi rms they felt that he
could not pass the test because of his comprehension
level. Tim said to the manager,
“Just give me a chance and I will be the
best broker you ever hired”. The manager
was very impressed and hired him. Later
on the Manager told him that he had been
a manager for 10 years and Tim was one of
only two people he ever hired on the spot.
10 Spring 2001 tradersworld.com
Tim started with just a handful of
accounts. These were people that he knew
and that he had business dealings with in
the past. He called them up and said give
me your money. I will take care of it like
my own. Tim studied very hard trying to
fi nd a good method to trade the markets.
Every other broker there, was just telling
stories to sell the stocks or mutual funds
that the fi rm recommended. After customers
bought the stocks, they would always
go down like clockwork. It was almost
comical. Tim just looked at himself and
said that he could not do that to his clients.
Tim developed great trading skills and he
was profi table. He got a lot of referrals
from clients due to his success and he was
able to build a large book of accounts. He
never did any cold calling.
At Merrill Lynch they ranked their brokers
according to fi rst year, second year,
third year and so on. As a broker you could
go in and see exactly where you were every
month when the production report came
out. Tim would always go in to view the
reports. His goal was to be number one. He
was very determined. Tim was always in
the top one percent. Tim knew that if he
did the same thing that the other brokers
did, he would just be like them. He decided
he would have to do something different.
He fi gured out, he had nothing to loose.
He started developing systems on his own.
He tried different things to trade. He stud-
For more information circle No. 6
ied the mathematics behind the market. He
learned what made the market move. He
started doing better and better. The fi rst
year he was the top broker in the western
region.
Tim was at Merrill Lynch for 3 years
and then management changed. The new
manager went around talking to get to
know the new brokers. The new manager
got to know Tim’s type of trading and the
velocity on his accounts. He felt it was too
high. He also noticed Tim’s own account
had a lot of trading. At that time Tim was
trading really heavy in options. Options
to Merrill Lynch were considered high
risk from the retail brokers standpoint. He
asked Tim how much time he spent on
prospecting customers, like cold calling
and that kind of thing. Tim said that he
never did any cold calling. The manager
said how do you bring in new assets into
the fi rm. Tim said by getting referrals from
his present customers and by doing a good
job managing their money. The manager
said maybe you should stop trading your
own account and spend the time prospecting
for new accounts. Tim did not really
know what to say to the guy. There was no
possible way that Tim would stop trading
his own account.
Other brokerage fi rms were constantly
perusing Tim. They were offering him up
front money with stock options and everything.
They told him to bring his accounts