An excerpt in The New Market Wizards by Jack Schwager, from Randy McKay:
“In 1970, I returned from a tour in Vietnam. Since I didn’t finish school before I left for Vietnam, I needed a job that would allow me to go to school at the same time. My brother, Terry, was a floor broker on the Chicago Mercantile Exchange. He got me a job as a runner on the floor, which allowed me to work in the morning, attend school in the afternoon, and study in the evening. I worked as a runner for a couple of years with absolutely no intention of getting into this business. I was studying to be a clinical psychologist. Just as I was finishing college, in 1972, the CME launched a subdivision, the International Monetary Market to trade currencies. When the exchange started the IMM division, they sold seats for only $10,000 in an effort to try to get bodies into these new trading pits and gave away free seats to all existing members. As a member, my brother had no particular need for this seat at the asked me if I’d like to use it in the interim. He gave me the use of the seat and lent me $5,000. I put $3,000 in the bank to pay my living expenses, and used the $2,000 for my trading account.”
The IMM Launch and Why 1972 Mattered
The International Monetary Market was one of the most consequential institutional developments in modern trading history. Before the IMM opened in May 1972, currency markets were the exclusive domain of large banks trading over the counter. There was no standardised futures contract for currencies, no central marketplace for price discovery, and no mechanism for individual traders to take positions in foreign exchange without going through a bank.
The IMM changed all of that. It created standardised contracts for major currencies, made pricing transparent and public, and opened the market to anyone with sufficient capital to post margin. The CME offered seats for $10,000 and gave free seats to existing members, which is the mechanism that handed Randy McKay his entry point. His brother Terry had a seat he did not need. Randy got the use of it along with a $5,000 loan. He put $3,000 aside for living expenses and traded $2,000. That starting position was not just a biographical detail. The IMM in 1972 was a new market, and new markets create opportunities for early participants who understand the mechanics before most others do.
From Vietnam to the Trading Floor
McKay’s sequence is one of the most unusual in the Market Wizards literature. He returned from Vietnam intending to become a clinical psychologist, took a morning job as a runner on the CME floor to cover school expenses, and stumbled into currency trading because his brother happened to have a spare seat at the moment a new market was launching. There was no plan to be a trader. There was no finance background. The opportunity appeared and he took it.
That sequence, preparation meeting opportunity through a specific and unusual set of circumstances, is a pattern that runs through many of the Market Wizards origin stories. Michael Marcus met Ed Seykota at a broker’s office by chance. Richard Dennis got a floor runner job through his father. The traders who built exceptional careers arrived at the market through a specific and non-repeatable set of circumstances that turned out to be the right starting point at the right time.
Trading as a Floor Trader in a New Market
Starting as a floor trader on the IMM in 1972 meant trading in a pit where price discovery was still being established, liquidity was thin, and most participants were learning the mechanics of currency futures at the same time. A runner who had spent two years watching the CME floor and understanding how prices moved in the established pits had an informational advantage over participants who arrived at the IMM without that floor experience.
McKay was studying clinical psychology while learning to trade, which is an unusual combination. Clinical psychology trains observation of human behaviour, the ability to identify patterns in how people respond under pressure, and a framework for understanding the gap between what people say and what they do. In a trading pit, where price is determined by the aggregate behaviour of hundreds of participants responding to information and to each other, those skills are not irrelevant. The market is people’s behaviour aggregated into prices, which is not far from what John W. Henry described when he said that markets are people’s expectations manifesting as price trends.
New Market Wizards and McKay’s Place in the Literature
Jack Schwager profiled McKay in The New Market Wizards because his career demonstrated something specific: that a trader who started with $2,000 in a new market, with no prior trading experience and no finance background, could build a substantial career through the combination of direct market exposure, disciplined risk management, and the willingness to learn from early mistakes.
Schwager’s methodology for both Market Wizards books was consistent: verified performance, articulable philosophy. McKay met both criteria. His account of how he started, with a borrowed seat, $2,000, and a part-time commitment to a market that had just opened, is among the most grounded origin stories in the series.
Frequently Asked Questions About Randy McKay
Who is Randy McKay?
Randy McKay is a currency trader profiled in The New Market Wizards by Jack Schwager. He returned from Vietnam in 1970, worked as a runner on the Chicago Mercantile Exchange floor through his brother Terry, and began trading currencies on the International Monetary Market when it launched in 1972. He started with a $2,000 trading account funded by a $5,000 loan from his brother. He was studying to be a clinical psychologist at the time.
What was the International Monetary Market?
The International Monetary Market was a division of the Chicago Mercantile Exchange that launched in May 1972 to trade standardised currency futures contracts. Before the IMM, currency trading was conducted over the counter by large banks. The IMM created a public, transparent market for foreign exchange. The CME sold seats for $10,000 at launch and gave free seats to existing members to populate the new pits. McKay’s brother Terry, as an existing CME member, received a free seat he did not need and lent it to Randy.
How did McKay connect to trend following?
McKay is a discretionary trader, not a systematic one in the mode of the TurtleTraders. But his emphasis on reading price behaviour in a new market, cutting losses, and the importance of market experience accumulated through floor trading all connect to the foundational principles of systematic trend following. The TurtleTrader rules are built on the same underlying observation: markets trend, and a disciplined trader who follows price rather than opinion will capture those trends over time.
Why did McKay start with only $2,000?
Because that was what he had. His brother lent him $5,000. He set aside $3,000 for living expenses so that trading losses would not affect his ability to pay rent and tuition. The remaining $2,000 went into the trading account. That sequencing, covering survival needs before risking capital, reflects the same discipline that serious traders apply to position sizing: do not risk money you cannot afford to lose, and keep the trading account separate from the money you need to function.
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