Yesterday night was sharing some past experiences with the friends and the topic was rogue traders. Some people ask why rogue traders still 813530exist. But, that seems as if it’s an easy one to answer. Fool-proof risk management doesn’t exist and never will. At, least it won’t while the rogue traders are being covered by rogue managers.

You see, the definitions at the beginning had one thing wrong. They are definitions of solitary, lone-wolves. But, even lone-wolves belong to a group. They just prefer to avoid the assistance of others in certain matters. The rogue trader’s pack is the howling, fierce management for which he works. Lone-wolves always have alpha members they take orders from, don’t they? Lone-wolves are sometimes excluded from the pack to protect that alpha-male, thus preventing ‘in-breeding’ in the pack. It’s exactly the same in the trading world of finance. The rogue trader is excluded from the pack, forced to work alone, shunned so that if caught, there will be no ‘inter-breeding’. The alpha-male manager won’t be caught and be brought down if the rogue falls!   Continue reading