It’s an old adage of storytelling that if you want to understand someone’s motivation, you should get to grips with their formative years – and that is entirely true of FX and equity trading entrepreneur Samuel Leach.
His stratospheric rise over the past seven years, complete with that badge of honour awarded to any business brain that makes people sit up and take notice – a TED Talk – is worthy of some serious examination.
Leach himself has lit the blue touch paper on that process by compiling the lessons he has drawn from his journey into a new book, The Formula for Success: How to Win at Life Using Your Own Personal Algorithm, published in July 2019 by John Wiley & Sons.
In his book, the 28-year-old millionaire explains how his fascination with patterns in the financial system – which led to an obsession with algorithms – has underpinned his path to success. With all the rich seams of career-advice gold that implies, The Treasurer sat down with Sam to ask him about his beginnings, his company and his views on entrepreneurship.
My parents came from a working-class background and worked their way up, but they got divorced and the family hit some real financial difficulties. Both my parents lost their jobs and, at one point, I ended up sharing a single room with my dad and brother. It was almost like a halfway house – a horrible experience.
Before that, we had a four-, five-bedroom house. All in all, it was a shock to the system, and I was quite young at the time – still at secondary school. So I saw that whole side of life up close: all the debt and everything. And I made the decision that I didn’t want to be that person and go through all those struggles.
I also had an early insight into how important it is to be constantly innovative: my dad was a cartographer – he used to draw maps and, when TomTom came along, he thought it was all a fad, and didn’t do any training on the digital or virtual side of his profession to upgrade himself. But cartography jobs don’t really exist now.
After spending most of my academic career being more of a doer than a writer, I really knuckled down on my studies – and, at the same time, I started paper trading: taking speculative punts in the financial safety zones of stock market simulators.
That followed me into college, where my academic skills flourished, and in my final year, the college said to me: “If you get top marks, we will give you a £2,000 bursary to go to the University of Hertfordshire,” which was local. I thought: “All right, that sounds awesome.” So I put my head down, managed to get those top marks, got the bursary approved and then moved on to uni.
Early on, I had a negative experience with an FX trading course – which had nothing to do with the university – that turned out to be a scam. All of the stuff it taught you could easily get off Google. So I thought, “OK, I’m going to have to do this myself” – and started paper trading for 16 to 18 hours a day.
When my bursary cleared, I took the plunge to apply what I’d learned from those simulated trades to the real deal. After 12 to 18 months, I’d turned that £2,000 into more than £170,000. And that was really the start of my journey into the trading world.
In scenes that call to mind The Shawshank Redemption’s indomitable Andy Dufresne, Leach’s dorm room quickly attracted throngs of fellow students seeking his advice on how to get themselves started on the trading circuit. At first reluctant to dispense his wisdom, he soon opened up – and the university brass eventually provided him with a lecture hall where he could hold forth on his specialist subject.
It did. I launched Samuel & Co Trading in 2012. We have 60-odd traders, all trading on live accounts in a 50-50 profit-share arrangement with me and the firm – and we also run accredited training and education courses for new traders.
That has really bridged a gap in the market, because getting into trading is difficult. We even have people coming to us from JP Morgan and Goldman’s saying, “I’m back office, and just can’t get on the trading floor – there’s no way forward for me to do that. Can I come and work with you instead?”
We’ve got a diverse set of individuals. There’s a fireman who works nights, then in the morning, he comes in and gets on with his trading. We have a police officer as well, and a woman who works in recruitment – all from different walks of life, from people who have no degrees whatsoever to people who have top-tier qualifications in economics.
Humans have some basic flaws: we’re too slow, too emotional and need to sleep. Plus, we’re lazy – even me sometimes. You can’t do everything.
But the FX market is open day and night. So if I sleep, I’ll be missing the back end of the Asian and Australian markets before I get back to my desk in the morning. I’ll miss all sorts of activity. And it doesn’t matter how long I try to stay awake to trade – I will start to get sloppy. I will make mistakes. But algorithms don’t do that.
Funnily enough, a lot of this comes from being a big tea lover. When you put a trade on in the FX market, you have to sit there and watch it. You have to pay attention to what’s going on: if some business announcement comes up, or if Trump takes to Twitter, you’re in for a run. So you’ve got to be hands-on. I know what I would do in any given situation – however, I have to be there to implement it.
So I created a very simple algorithm for personal use and called it Mr T. And when a trade was on and I needed to make a cuppa, I’d turn on Mr T – and while I was away from my desk, it would manage my trades for me.
After a while, what I began to notice was that, sometimes, when I came back to my desk one of my trades had paid out in profit during a Mr T handover. And I thought, “Why don’t I put it on while I go for lunch? Or when I go to sleep?” And before I knew it, Mr T started doing more than I was doing.
The traders around me were all trading manually, and they were saying, “Can I have that?” And I said, “No, it’s taken me two years to get it to work as well as that!”
Exactly! But they said, “Name your price.” And at the time, I was quite young and I just said, “OK – give me three grand and I’ll set it up for you.” I knew that I could code the algorithm to work only on specific accounts, so you wouldn’t be able to redistribute it to anyone else. Other people started to use the copies I gave them – and next thing I knew, the algorithm became an actual product, called Fusion, and more and more people were using it.
Fusion now has hundreds of users around the world, including a couple of hedge funds: one in Singapore – a family fund – and one in India. So when that started taking off, we needed to create commercial licences and everything, which is something I would never even have thought of when I first created the algorithm. And that business basically grew itself off the back of my trading.
It all starts with the internet. There’s so much stuff out there. When I was a 16-year-old kid with no money, I thought, how can I turn this around? And one platform I used was Fiverr.com: I would make posters for people for five dollars. The website would get a dollar, and I would get four. And at one point, I was making up to $1,600 a month, just from making posters.
All I did was knock out 10 different template designs for my posters, and then say to my customers, “I have these basic designs – which one would you like yours to look like?” They would choose their favourite design and send me the text, and I’d paste it in. The whole thing took me 10, 15 minutes – that was it. And that’s how I started creating a secondary income.
There was a philosopher called Alan Watts – a mind-boggling chap – and he said: “Do what you love doing.” If you do it well enough, then you can create an audience of people who will pay you to do it.
During our school years, there are people in our classes who are amazing artists, poets, horse riders – you name it. Yet in the everyday world, we’re not paid to be a painter, poet, horse rider or musician. It’s not that easy. However, I believe that to get yourself a strong foothold, you should do what you love doing.
So, for example, let’s say I decide that I want to be a horse rider. I could end up competing – that’s one option. But while I’m trying to do that, I could also teach people to learn how to ride horses, or I could set up a grooming service – and there’s a business there. So it’s about taking what you love and adapting it into a business.
Watts said, “I would rather have a short life worth living than a long life spent in a miserable way,” or words to that effect. That’s really stuck with me.
Doing what we love beats doing things on a day-to-day basis that we don’t like doing, purely to <em>keep on</em> doing things we don’t like doing, and to bring up our children to do things they don’t like doing, either.
For further information about Sam’s book, click here.
Matt Packer is a freelance business, finance and leadership journalist.