In the domestic investment community, the name Larry Benedict does not enjoy the same level of fame as legendary traders like George Soros, Paul Tudor Jones, or Stanley Druckenmiller, but he is equally a legendary trader. He has a 20-year track record of never having a losing trade, making him a true "ever-victorious general" in the investment world.

The "Ever-Victorious General" Started with Frequent Defeats

In 1984, Larry Benedict began his career as a trader in the stock derivatives market at the Chicago Options Exchange. On his first day at work, he was fired by his boss for lacking experience and not accurately recording trade orders. Despite this setback, Larry returned to the exchange the next day with a strong belief in his ability to be a trader, continuing to learn about trading knowledge and concepts.

In the early stages of his trading career, Larry Benedict could be described as a "trading poison," but he persisted despite repeated failures. During the stock market crash of 1987, Larry lost all the funds in his account in a single day. Although he later received financial support from another company, he soon lost half of the funds and was fired again.

Turnaround and Brilliance: 20 Consecutive Years of Profits

In 1989, Larry Benedict reached a turning point in his life when he became an options expert at SLK. Gradually, he accumulated a wealth of experience and gained a deeper understanding of the market. By 1993, Larry had become a successful trader and a special partner in the newly established proprietary trading department of SLK.

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After SLK was acquired by Goldman Sachs, Larry founded his own trading company. Since 2004, his fund has achieved an average annual net return of 11.5%, with an annual volatility of 5.8% and a maximum drawdown of less than 5%. In the financial crisis of 2008, only Larry Benedict's fund rose by 14%. As of 2011, he had achieved profits for 20 consecutive years.

Larry Benedict's Path to Victory

As an active short-term trader, Larry averages 100 to 200 trades per day. If an ordinary trader engages in such ultra-high-frequency trading, it would be a blessing to avoid a margin call. How does Larry manage to continue making profits under such high-frequency trading conditions?1. Unique Trading Method

Larry's trading method, though unique, is easy to understand: he leverages the correlations between markets to profit from hundreds of trades. He doesn't look at charts or consider fundamentals. The charts are all in his mind, and he "reads" the market solely through price movements.

Contrarian trading is Larry Benedict's main trading approach. He sells when the market rises in the short term and buys when it falls in the short term. His entry timing depends on the market's volatility at the time, his own directional preferences, and the correlations between different markets he trades. If Larry believes that the short-term price correlation is exaggerated, he will go long in one market and short in another positively correlated market, ensuring that the risk of his ever-changing portfolio remains constant while considering both positive and negative correlations.

2. Strict Risk Management

Another secret to Larry Benedict's frequent trading without incurring losses is his risk management method.

When experiencing losses, the trading size should be appropriately reduced until profits are made, after which the normal trading size can be resumed. If the losses for a month approach 2.5%, Larry will close all investment products and start trading the following day as a new beginning with reduced positions. When losses reach between 2% and 2.5%, he will halve the positions in his portfolio or hold positions lower than the normal level.

Larry continues to trade with small positions until he starts making money again. This rapid reduction in risk exposure explains why his monthly losses are never high. Although his risk management method is extreme, it is effective. In 13 years of trading, his worst monthly loss was only 3.5%.

For risk managers, not losing money is more important. Larry knows that as long as he can control the risks, he can make money.