It’s monsterous.

Most times hype and hopeful anticapation turns into disappointment when confronted with stark reality.

The Blackening, Machine Head’s sixth album release, is one of those exceptions. After a great return to form on their last album, Through the Ashes of Empires, I had pretty high expectations for this new album. Not only have my expectations been met, they’ve been bowled over.

You don’t have to take just my word for it either. The reviews for this album are incredibly positive. I particularly like the Maximum Metal review which starts out:

And so it is. Finally the age old question is answered. After years and years of speculation and intrigue, the final piece of the puzzle is laid before us.

What is the greatest heavy metal album of all time?

The answer. Machine Head’s “The Blackening”.

The members of Machine Head have had their ups and downs. They’ve certainly faced a lot of adversity in their thirteen year musical career. What impresses me about them is that they have a high degree of integrity. They’ve stuck to their guns through thick and thin. They’ve followed their hearts, and believed in themselves when no-one else would.

While they might not be related to trading or forex in any way, they have still served as an inspiration to me for many years.

When I first thought about creating a Hall of Fame category for this blog I initially thought that it would just be populated by great traders. More than likely, it will end up being predominantly filled with master traders, but I don’t think I have to restrict myself in that way.

There are many things in life that inspire me and drive me to be a better person. Music is one such thing.

If you enjoy listening to rock or metal music and you haven’t already picked up Machine Head’s The Blackening, which was released last week, then you need to visit your nearest music retailer or online store to remedy this situation pronto.

Knowing about such people can be a source of inspiration to the aspiring trader as well as a lodestone pointing towards success. As in just about any other field of human endevour, a groundwork for success has been laid down; there is no need for us to reinvent the wheel. All you have to do is stand on the shoulders of these giants to reach even greater things.

One such titan of the forex world is Bill Lipschutz.

Back in the 1980s he helped create one of the most powerful trading groups on earth: the Salomon Brothers FX department. Lipschutz was a key player in the currency-option market on the Philadelphia Stock Exchange. Often times he was the market, sometimes holding 80% of the open-interest.

When holding so much sway it is not surprising that in an article in Trader Monthly Lipschutz remarked:

“Underlying fundamentals often didn’t matter. It was about who blinked first.”

After leaving Soloman Brothers in the early 1990s, Lipschutz formed his own currency management company which was initially a subsidiary of Merrill Lynch. The company later evolved into a completely independent venture called Rowayton Capital Management. In 1995, Lipschutz left Rowayton to help form Hathersage Capital Management, where is still currently working.

Bill Lipschutz’s performance results over the past 15 years speak for themselves.

He has kept a low profile for much of his career, although he garnered a lot of attention after being interviewed for The New Market Wizards by Jack D. Schwager

In the interview Bill offers some valuable insight into his trading methodology. I found the following passage particularly interesting, especially given my view that forex markets are very random at short time frames, thus making it all but impossible to have pin-point entries and exits:

You have to trade at a size such that if you’re not exactly right in your timing, you won’t be blown out of your position. My approach is to build to a larger size as the market is going my way. I don’t put on a trade by saying, “My God, this is the level; the market is taking off right from here.” I am definitely a scale-in type of trader.

I do the same thing getting out of positions. I don’t say, “Fine, I’ve made enough money. This is it. I’m out.” Instead, I start to lighten up as I see the fundamentals or price action changing.

On the flip side, in his very next comment Bill describes how he very much in the ‘let your winners run’ camp, which I don’t really follow at all:

I don’t have a problem letting my profits run, which many traders do. You have to be able to let your profits run. I don’t think you can consistently be a winning trader if you’re banking on being right more than 50 percent of the time. You have to figure out how to make money being right only 20 to 30 percent of the time.

Of course, the winning percentage rate of your system does not solely determine if you’ll be profitable or not. To figure that out you need to calculate the expectancy of your trading system.

Bill Lipschutz is one of the world’s great currency traders, which is why he is richly deserving of being the first inductee into this website’s Hall of Fame.