Brent Donnelly is a veteran currency trader who has spent over 25 years actively trading and analyzing foreign exchange and other financial markets. With extensive real-world experience spanning both the institutional and retail trading worlds, Donnelly possesses hard-won insights into the mindset, methods, and mathematics behind sustaining success as a professional trader. His career has had many ups and downs and many of the lessons he now teaches were learned the hard way.
Donnelly grew up in Ottawa, Canada, and was drawn to markets at an early age. Studying books like Reminiscences of a Stock Operator and Liar’s Poker while in high school, he knew early on that he wanted to be a trader. He pursued this track single-mindedly, attending a top-rated business school in Canada (the Ivey School) and he was heavily recruited upon graduation. He chose to work for Citibank’s foreign exchange trading division in 1995 and never looked back.
The NASDAQ Bubble
Initially disillusioned by the boring, flow-oriented nature of the currency trading business in the 1990s, Donnelly left to trade his own money. In a front-page profile featured in Canada’s national newspaper (The Globe and Mail) at the peak of the dotcom bubble, he said this:
“Foreign exchange was kind of like playing blackjack all day. In terms of intellectual growth, it felt like it didn’t offer me anything,” Mr. Donnelly said.
Trying his hand as an independent retail trader throughout the NASDAQ bubble era, Donnelly grew his trading account by more than 10X over two years and later gave back most of that day trading tech stocks. He credits his failure to adapt to the changing markets of 2000 with his future ability to detect regime changes in markets and adapt to them in real time. This intense early success and subsequent failure also gave him first-hand experience into trader psychology and risk management. During this period, he also engaged in more creative pursuits as his cartoon “Daft Planet” aired on Teletoon TV in Canada and he wrote a humor column for the Globe and Mail.
A market maker and leader at some of the world’s biggest banks
Facing the burst of the dotcom bubble, Donnelly returned to a career in institutional finance. He learned currency trading and global macro trading in depth while working as a Chief Dealer and Managing Director at major investment banks including Lehman Brothers, Nomura, HSBC, and Citigroup in New York City. His specialty was discretionary macro trading of G10 currency pairs, but he also learned options trading, systematic approaches, technical analysis, correlation trading, and other methodologies.
Donnelly returned to a different FX market than the one he left. Computerization had automated many of the repetitive hedging and flow-oriented responsibilities of the trader and this left more bandwidth for risk-taking, idea generation, and macro trading. This new environment reinvigorated Donnelly’s love of trading and gave him a chance to utilize his passion for writing as clients valued his macroeconomic and trading insights. He started to write his thoughts and send them to clients in 2003 and continues to do so to this day through his daily newsletter: am/FX.
In reflecting on the many lessons learned throughout his career, Donnelly sought to formally share accumulated personal insights by writing two books. First, “The Art of Currency Trading” (Wiley, 2019), a how-to manual for professional FX traders. Second, “Alpha Trader: The Mindset, Methodology and Mathematics of Professional Trading” a book more broadly applicable to all styles of trading in all asset classes. Alpha Trader explores the trading strategies, and principles of psychology and risk management that Donnelly credits for his longevity navigating complex and ever-changing global markets.
A new chapter: Spectra Markets
Today, Donnelly is President of Spectra Markets, where he advises the largest hedge funds in the world on FX trading strategy and teaches aspiring finance professionals how to succeed in trading and finance. Spectra Markets recently launched Spectra School, a new division which will focus on education and training for aspiring finance professionals.
The first course offered by Spectra School is called “Think Like a Market Professional” and the business will soon offer other courses in backtesting, currency trading, and other topics. Donnelly believes that success in markets requires not just strong theoretical and quantitative knowledge, but a bridge between theory and practice. Spectra School is designed to bridge that gap and offer aspiring finance professionals a series of practical frameworks for financial markets.