Members in the Press

“The market is not out to get you – it’s just the market.”

This is the comment about the August 10 sharemarket correction by Brenton Hill, a former mechanical engineer in the mining industry who is now a full-time online trader operating from his home in the Adelaide hills.

Hill’s trading style includes 12 systems with which he trades on both the US market and the Australian Stock Exchange. The goal of some of these systems is to identify and buy falling stocks which have dropped significantly and are expected to rebound.

Central to this strategy is the system known as mean reversion – that markets and stocks will eventually revert to their long-term trend line. Hill says reversion to the mean is “the revolution to making money quickly”. Hill tests each system’s performance using data from the past 10 years – a check he calls “back testing”.

“To be a successful mechanical trader, it is important to divorce yourself from the daily happenings in the market so that you consistently follow your system,” explains Hill, who survived the correction while thousands did not.

Using a mechanical share-trading approach (that is, deciding trades only by a set of rules), Hill estimates he has increased his float by more than 200 per cent over the past three years.

In September 2003, the then 33-year-old embarked on what he describes as exploration to learn about trading shares. After less than 2 years of share trading and 2 weeks before his second child was born, Hill quit his job and started trading full-time.

“I had made enough from trading part-time for nearly 2 years to be confident I could trade for a living,” Hill says. This from someone who admits that 5 years ago he “barely knew anything about share trading”.