Fairfield University business students decisively win global currency trading competition involving 16 schools from three nations
Fall, 2008 will arguably go down as the most volatile time in the history of the financial markets. Despite the wild ride, one that included stocks plunging and global currencies fluctuating tremendously in value, a team of Fairfield University business students handily won the recent annual month-long, real-time Global Forex Trading (GFT) competition. Hosted by GFT and Texas A&M University's Mays Business School, the contest pitted 300 participants from 16 schools from three nations.
The team, comprised of undergraduates and graduate students in Fairfield University's Dolan School of Business, had the highest average growth among the competing schools. Fairfield was also the only team to have a positive average percent return collectively. The Fairfield team included: Patrick Hogan, Adam Favale, Colin Fernandez, Mark Peloquin, Jonathan Burns, Parker Braun, Karen Jaber, Matthew Speed, Gerald Adams, John Driscoll, and Andrew Bonomo.
GFT provided each competing student with a simulated trading account of $50,000. Students used their artificial funds to invest in global currencies using real-time data with the goal of increasing their accounts as much as possible over the course of the competition. "The credit crisis made the markets highly volatile," said Detlef Hallermann, assistant clinical professor of finance at Mays and the contest's coordinator. "This period that the competition took place in was the most volatile month in history. The currencies were bouncing all over the place."
Dr. Michael Tucker, professor of finance at Fairfield, advised students to compete in the Forex contest so that they could learn about global finance in a dynamic way. They had available to them all the same tools as professional traders courtesy of GFT, the provider of real-time currency dealing, pricing and comprehensive services for retail and institutional foreign exchange traders. "In business, and the world, learning how to use information is crucial," Dr. Tucker said.
With 140%, Patrick Hogan, a junior from West Springfield, Mass., had the highest rate of return on the Fairfield team. Understanding how negative events impact the markets, he kept his eye on GFT's live news feed and read the currency financial reports and morning briefs that were provided by Brian Jennings, executive director of Foreign Exchange Distribution at UBS Investment Bank, a mentor to the team.
His first trades were based on the initial proposed bailout bill. "I tried to buy and hold any and every U.S. currency pair. I guessed they would increase in value because the bailout would help the value of our currency," Hogan said. "Hence, everybody would want to get their hands on it. When (the bill) didn't pass, I canceled them because I thought they would go down and I already made a huge gain. But in fact, I was up 60% in my first couple days of trading." He adopted the same philosophy when the bailout bill was voted on the second time, and it paid off again. He finished 13th overall in the individual competition. All in all, Hogan found it a lesson in going with his gut "I learned to trust myself to make the right calls and to use my common sense," he said. "I also had a little luck on my side."
His teammate Adam Favale, an MBA student and vice president of Financial Guaranty Insurance Company (FGIC), said the timing of the contest made for a great learning experience. "With a pending presidential election, global credit crisis and rapid appreciation of the dollar, it was the perfect time to be trading foreign currency."
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Posted on December 17, 2008
Vol. 41, No. 165