There is a name that rarely comes up in the standard trading canon, yet his results speak for themselves. Randy McKay, a floor trader at the Chicago Mercantile Exchange, started with a $2,000 seat and turned it into $70,000 within seven months. Over the next two decades, he extracted tens of millions of dollars from the currency futures markets, profitable in eighteen out of twenty years. He's profiled in Jack Schwager's The New Market Wizards, but unlike George Soros or Paul Tudor Jones, McKay's approach gets remarkably little attention online .
McKay's philosophy was built around a simple but brutally effective premise: never try to pick tops or bottoms. He called it the "fish body" strategy. You don't catch the head or the tail—that's where the volatility and uncertainty live. You go for the thickest, meatiest part of the move.
"I never try to buy a bottom or sell a top... You want to wait until the move is already under way before you get into the market."
The Trade That Changed Everything
McKay's defining moment came during the 1976 British pound crisis. The British government announced it would not allow the pound to trade above $1.72. Most traders interpreted this as a ceiling and sold, believing it was "a no-risk trade" .
McKay saw it differently. He watched the market's behavior, not the announcement. When the pound hit $1.72 and didn't break—despite repeated attempts—he concluded that immense underlying demand was absorbing every sell order. The market was effectively locked limit-up against a government cap.
He went long. Two hundred contracts at first, then more—eventually 1,400 contracts in a single 45-minute span. At 5:00 AM one morning, he called the Bank of England for a cash quote, as he did every day. The clerk answered: "The pound is at $1.7250." McKay couldn't believe it. The cap had broken. He watched the pound ride all the way to $1.90, netting $1.3 million .
This trade crystallized McKay's core insight: price action is the only signal that matters. The market's reaction to news or policy tells you more than the news itself.
The "Fish Body" Strategy: Rules for the Middle
McKay's approach is startlingly practical. Here's how it works:
Rule 1: Wait for Confirmation, Then Enter
McKay never tried to anticipate reversals. He waited until a move was clearly underway, then entered. In his Canadian dollar trade, he rode the decline from 85 cents to under 70 cents over five years—profitable in 18 of those years. The trend was obvious. He didn't fight it; he rode it .
"I was able to hold between one thousand and fifteen hundred contracts for virtually the entire decline, which spanned five years."
Rule 2: Watch the Market's Response, Not the Headlines
McKay's most distinctive filter was how he interpreted fundamental news. He didn't trade the news itself; he traded the market's reaction to the news.
If bullish news appears and the market fails to rally—or even falls—it signals structural weakness. The sellers are in control.
If bearish news appears and the market refuses to fall—or even rallies—it signals hidden strength. The buyers are waiting for an excuse to push prices higher .
This is a crucial piece of the "fish body" strategy: the head (the news) matters less than the body (the market's response). By the time the body forms, the trend is confirmed.
Rule 3: Identify When the "Meat" is Over
McKay knew when to exit. In the Canadian dollar trade, the government eventually intervened, opening the market 120 points higher on two consecutive days. McKay lost over $1 million on each of those days. But he didn't panic. He watched. Then, on the third day, Prime Minister Mulroney was quoted saying: "We will not allow Chicago speculators to determine the value of our currency" .
McKay's response was immediate: the easy part of the move was over. He got out.
"When the trade was easy, I wanted to be in, and when it wasn't, I wanted to be out... It's the meat of the move."
The Psychology of Position Sizing
McKay's "fish body" strategy wouldn't work without his second major innovation: dynamic position sizing based on performance.
His first significant loss—shorting the German mark when it went limit-up—taught him a lesson he never forgot. He could have gotten out at the limit-up price. He didn't. The next day, it went limit-up again. He doubled his loss and spent two months recovering. After that, he developed a system :
Rule: Reduce Risk After Every Loss
When trading well, risk 5-10% of account on a trade.
After the first loss, drop to 4%, no matter how strongly you feel.
After the second loss, drop to 2%.
Keep reducing as long as you're losing. McKay went from 3,000 contracts down to 10 when he was "cold"—and then back again .
The psychological logic is sharp: losing impairs your judgment. You start trading based on hope, not analysis.
"When you're trading poorly, you start wishing and hoping. Instead of getting into trades you think will work, you end up getting into trades you hope will work."
Exclusive Perspective: The "Fish Body" in Modern Markets
McKay's strategy was built for the 1970s-1980s, when trends lasted longer and information traveled slower. Today, the environment is different. The SG Trend Index, a benchmark for trend-following funds, delivered just +2.39% in 2025, with a brutal drawdown in April . The "fish body" is harder to catch when the market is prone to headline-driven reversals and "whipsaw" price action.
This doesn't make the strategy obsolete. It means the "fish body" needs a modern supplement: volatility-based sizing.
Bas Kooijman, a hedge fund manager, uses Average True Range (ATR) to size positions based on current volatility . When volatility doubles, he halves his position size. This is a natural upgrade to McKay's system: instead of reducing risk after losses, you reduce it preemptively when the market environment itself is "cold."
A practical hybrid:
This layered approach protects you from McKay's blind spot—a structural change in market conditions that no amount of psychological discipline can fix.
When I Ignored the "Fish Body"
I learned this lesson in a crude oil trade. I spotted what I thought was a bottom—oil had fallen sharply, and I was convinced it would reverse. I bought early, trying to catch the head. The market fell further. I held, convinced I was right. It fell again. I eventually exited at a 15% loss after weeks of agony.
What should I have done? Wait for confirmation. Let the trend show itself before entering. The "fish body" of the move—if there was one—only became visible after I had already bled out.
Conclusion
Randy McKay's "fish body" strategy is a forgotten gem in the trading world. It's not about predicting the market; it's about reacting to what the market is already doing. Combined with dynamic position sizing and a modern volatility filter, it offers a robust framework for traders who want to stop chasing tops and bottoms and start catching what actually matters—the middle.
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