Power Couple: Prop Trading & Education. Robot Wealth Part 1

Kris Longmore, founder of trading education / prop trading hybrid Robot Wealth (RW), has a unique origin story: teaching English in Russia.

“I started doing it to support my desire to travel to interesting places and was surprised to discover that it was one of the most rewarding things I’d done to that point. It got me thinking that maybe I wanted to teach. I’m lucky to have ultimately found a financially productive way to do that. My mission at RW is to connect with traders and help them on their journeys in a way that indulges my own passions for markets, tech and teaching.”

Longmore says he and co-founder James Hodges have taught collaborative systematic trading to over a thousand retail traders in bootcamps they run twice a year. Graduates are invited to join the RW Pro Community, which boasts over 400 members from six continents. The co-founders share their own trades and strategies in bi-weekly live webinars, and members support each other in ongoing chats.

Like much about Robot Wealth, RW Pro developed organically.

“I started with a blog, mostly to see if anyone would engage with what I was doing. I was surprised at the reaction — a lot of questions came in about a piece of trading software I used at the time. So I wrote a course about it and sold it online, along with access to a membership group.”

That’s how Longmore and Hodges met.

“He was curious about the software, picked up the course and joined the community. From the start he was so generous in sharing his knowledge that I contacted him privately to thank him. We started chatting and quickly realized we shared a lot of values. Over time, it seemed natural to join forces, so we each gradually exited other businesses we were working in and started doing RW full time.”

A sentence on the RW website hints at an unusual part of their ethos: “James & Kris like to wear Hawaiian shirts while they trade.”

Longmore laughs.

“Trading is a very difficult way to make money. You have to take certain things extremely seriously. To counter that, we try not to take ourselves too seriously and have some laughs whenever we can.”

With their shared interest in teaching, the partners decided to start trading bootcamps alongside their existing prop trading business. Longmore cites an example:

“We did a Machine Learning and Big Data Bootcamp where we developed a process for selecting a universe of equity pairs to trade. Building the course yielded a nice trading strategy, and the revenue gave us some capital to trade with.”

Collaboration with members through the Bootcamps and RW Pro has yielded other new strategies. Over time, Longmore and Hodges have hired several community members for their prop trading division. But Longmore says that for him, what gives RW real meaning is teaching and mentoring.

“I have an insatiable fascination with markets, and I love working with tech. I’m immersed in both, most of the time, through RW. And I love teaching,”

He acknowledges that RW Pro is something of a loss leader.

“Our audience is quite limited and probably always will be. We tell hard truths about trading. A lot of people who start out thinking they want to trade either can’t accept those truths or realize trading is a lot harder than they expected and move their lives in another direction. That’s fine because there are also only so many people we can support in a way we feel good about. On the flip side, the traders who stay with us are fellow market maniacs with whom we have a ton in common. RW turns out to be a great filter for connecting with people you rarely encounter in daily life. It also makes for a very enjoyable, diversified revenue stream. We’ve made some great connections through RW Pro in particular.”

For the last couple of years, RW’s main public offering has been their Trade Like a Quant Bootcamp.

“We try to run it twice a year. It’s very interactive and teaches the foundations of what serious trading looks like, the basics of getting an edge in the markets as an indie trader – what good edges have in common, how to find them, test them and incorporate them into a portfolio. It’s very practical, with loads of examples. It’s also essentially a prerequisite for getting the most out of RW Pro. People who’ve done the Bootcamp and join tend to hit the ground running and contribute to the discussion right away. Most importantly, they find new things to trade pretty much as soon as they sign on.”

A self-paced version of Trade Like a Quant is in the works so traders don’t have to wait for the founders to run the bootcamps. The team next hopes to create other standalone courses.

Longmore’s passion for trading and research is clear.

“I love the challenge of figuring things out through analysis and experimentation. The research process often starts with an obscure idea. You have to be creative in figuring out how to isolate an effect and test your hypothesis. As you go down the research rabbit-hole, you discover things that aren’t in line with your hypothesis. You learn a bunch of things that you didn’t previously know. I love that feeling. Trading also forces you to deal with uncertainty in ways that can be useful in real life. You have to make decisions knowing you don’t have all the information, and you learn that even when you’re right, you can still have a negative outcome through chance. In a funny way, trading can be very good for the soul. It helps you develop tools for navigating decisions, trade-offs and consequences in outside life.”

Longmore and Hodges share priorities that are somewhat unusual for prop traders.

“Quality time with our families is extremely important to us, as is our mental and physical well-being. In practice, that means we each get away for weekends, pick our kids up from school and take time away from the screens as needed.”

He acknowledges that these priorities have had an effect on the business.

“There are periods when trading is really intense and time-consuming. But we’re OK with taking downtime and trading slower-moving things that are less operationally intensive. If that means leaving money on the table, so be it. We aren’t looking to maximally exploit our edges 24-7-365. We’ll always be able to find opportunities to make money. In terms of collaboration, we share pretty much all the jobs (we’re a very small team), though certain things are more in James’ wheelhouse and other things are in mine.”

To learn more about Robot Wealth’s bootcamps, blog and RW Pro Community, visit https://robotwealth.com/.

Coming in Part Two:  Ideas and Edges — Robot Wealth’s approach to collaborative systematic trading.