How to be the best trader in the world

Summary

Gary Stevenson presents trading as economic forecasting through markets: traders compare market-implied expectations with their own view of what is likely to happen, then take a position. He cautions that trading is effectively betting or gambling—often with leverage—and says it is phenomenally dangerous and probably best avoided by non-professionals.

His central trading thesis is to look for major economic forces that consensus analysis overlooks. His own focus has been wealth inequality and how economic shocks redistribute wealth. He argues that tracking these effects helped him anticipate prolonged economic weakness after the 2008 financial crisis and inflation, cost-of-living pressures, and rising asset prices after COVID. These are Stevenson’s interpretations and claims about his own track record.

Trading Framework

Stevenson’s approach is to:

1. Identify what markets and the prevailing consensus expect.
2. Ask what important economic factor the consensus may be missing. Stevenson particularly emphasizes wealth distribution and inequality.
3. Consider how a major event or policy response will affect different groups, spending, asset ownership, and the wider economy.
4. Look for a gap between the market’s implied probability or forecast and your own assessment.
5. Take a position when you believe the market is wrong. The potential reward is greater when the market assigns a low probability to the outcome.

Stevenson says his own approach was counter-trend and concentrated in ideas he understood well. He describes placing very large bets on high-conviction views, but gives no general risk-management rules for doing so.

Trades, Markets, and Examples

• Interest rates: Stevenson says his major Citibank trade was a bet in 2011 that rates would stay low for a long time after the 2008 crisis, because he expected prolonged economic weakness. He says he was Citibank’s most profitable trader in 2011.
• COVID-era positioning: He says he bought a large amount of gold and also bought stocks, expecting wealth concentration and resulting inflation and asset-price increases.
• UK Bank of England base rate: In the video, he cites a current base rate of 4% and a market-implied rate of 3.45% at the end of the following year. As an illustration, he says a position worth £100 per 0.01 percentage point would gain £5,500 if rates ended at 4%—55 increments above 3.45%. He warns that if rates instead fell to zero, the loss would be much larger.
• Probability examples: At a 50% market-implied chance, a £100 bet is described as having equal potential gain and loss. At a 10% implied chance, his simplified example says risking £100 could yield £900 if correct. These are illustrations, not recommendations.
• Other examples: He uses rain forecasts and election outcomes to explain market probabilities, including hypothetical bets on Reform winning an election and the Conservatives having roughly 10% odds.

Macro and Portfolio-Related Claims

• Stevenson argues that after 2008, many economists and traders expected a stronger recovery and rising rates, while he focused on financial strain among ordinary households as a sign of persistent weakness.
• For COVID, he argues that government support helped households meet expenses, while spending flowed to owners of housing, businesses, government debt, and natural resources. He says restrictions on luxury spending left wealthy asset owners accumulating cash, contributing to subsequent inequality, inflation, cost-of-living pressures, and asset-price increases.
• He also says his 2020 public predictions included a cost-of-living and inflation crisis, austerity, and rising asset and house prices, contrary to predictions of a broad economic boom or house-price collapse.

Key Cautions and Disclosures

• Stevenson explicitly calls trading dangerous, compares it to gambling, and warns that leverage can magnify losses.
• His examples include highly concentrated, high-conviction positions; the video does not provide a diversified portfolio approach or a detailed risk-management framework.
• He says trading may reward correct forecasts but cannot itself fix the economic problems being forecast.
• No explicit “not financial advice” disclaimer appears in the subtitles.

Presenter and Sources

Presenter/source: Gary Stevenson, Gary’s Economics. Stevenson also refers to his book The Trading Game, his past Citibank trading experience, and an unnamed former trading mentor called “Billy.”