Louis Mendelsohn, circa 1971, Boston, Massachusetts
In graduate school while in his early 20s (prior to the 1973 Arab Oil Embargo, the 1974 recession and the invention of personal computers) Louis Mendelsohn traded equities and stock options. He analyzed the markets with hand drawn charts and computed technical indicators like moving averages by hand and later with a hand-held calculator.
Years later in 1977, while working professionally as a hospital administrator in Florida, he tinkered with one of the first personal computers and had an epiphany. He immediately realized that technical analysis and trading would be revolutionized by trading software to help traders like himself make more profitable trading decisions. He immediately began applying personal computers to technical analysis and switched to trading commodities which afforded him greater leverage and higher profit potential.
Mr. Mendelsohn formed Market Technologies two years later for the purpose of licensing the trading software that he developed for himself to other commodities traders. Just after his 32nd birthday, and no stranger to taking risks, he took the plunge and left hospital administration to devote full time (90-100 hours a week) trading commodities and developing technical analysis trading software for the commodities futures markets.
In May 1983, Darrell Jobman, then editor-in-chief of Futures magazine (which at the time was the premier source of technical analysis exclusively for commodities futures traders) published the first article of a series of three ground-breaking articles authored by Mr. Mendelsohn, in which he introduced the concept of strategy back testing for personal computers. Even before his third article was published in the December 1983 issue, Mr. Mendelsohn stunned the financial industry with the release of his ProfitTaker Futures Trading Software. ProfitTaker was the world’s first commercially available strategy back-testing software for personal computers.
Louis Mendelsohn speaking at University of South Florida, Tampa, Florida, 1978
Almost overnight ProfitTaker brought Mr. Mendelsohn worldwide recognition and fame as one of the first pioneers to apply personal computers and trading software to technical analysis and the very first person to introduce back testing into trading software for personal computers.
Before long ProfitTaker was hailed by commodities traders all over the world and written about and praised extensively in technical analysis articles and books on the financial markets. As a result, Mr. Mendelsohn and his company, Market Technologies, were instrumental in transforming technical analysis from its earlier pre-computer days into a multi-million dollar trading software industry that now includes a number of publicly traded companies. Still today, Market Technologies, a multi-million dollar, Inc. 500, company, remains privately owned under Mr. Mendelsohn’s leadership and has been solely focused on developing technical analysis trading software for the financial markets since its founding in 1979.
Many early ProfitTaker users and other traders tinkering for the first time with computers and trading software realized the profound impact that strategy back testing would have on technical analysis and used ProfitTaker as the gold standard by which all other programs were judged. Quickly, Mr. Mendelsohn’s strategy back-testing approach (at the time patents were not granted for computer software processes) was adopted by others who began to develop their own commercial trading software programs modeled on ProfitTaker, including the Volatility Breakout System released in 1987 by two early ProfitTaker customers who Mr. Mendelsohn had introduced to each other years earlier, and TradeStation® which was released eight years after ProfitTaker, to name just two.
Louis Mendelsohn introduces Strategy Back Testing to Trading Software, 1983
But Mr. Mendelsohn didn’t stop there. Since then he has focused all of his attention and passion for the financial markets, his own trading and investing, and his continued development of ground-breaking trading software. In fact, he has continued to be the driving force behind innovations in technical analysis trading software over the past three decades, in which he has implemented intermarket analysis through the use of neural network pattern recognition to create leading technical indicators that now forecast hundreds of global financial markets daily.
John Murphy, in his landmark textbook entitled Technical Analysis of the Financial Markets, published in 1995 said this:
“Louis Mendelsohn was the first person to develop intermarket analysis software in the financial industry during the 1980s. Mendelsohn is the leading pioneer in the application of microcomputer software and neural networks to intermarket analysis”.
As a result of his profound influence on technical analysis trading software development, involving both strategy back-testing and intermarket analysis, Mr. Mendelsohn is without question the single most influential person in technical analysis trading software development in the world since the introduction of personal computers three decades ago. In the early 1990s his biography was selected for inclusion in Who’s Who in the World, Who’s Who in America, and Who’s Who in Finance and Industry. Years later, in 2001, his biography was included in the National Millennium Time Capsule in Washington, D.C. buried for the next 100 years, to chronicle the lives of the highest achievers and most influential American thought-leaders of the 20th century.
Louis Mendelsohn releases VantagePoint, 1991
Due to his desire to maintain a very private lifestyle, coupled with the proprietary nature of his research, many traders, particularly newcomers to trading, are not aware of Mr. Mendelsohn’s influence on technical analysis over the past 30 years – and some may never even have heard of him. In fact, when asked about how and when back testing was introduced in trading software, most traders quickly respond that ‘it’s always been there”. Not true! Airplanes were not there – before the Wright brothers; electric lights weren’t there – before Thomas Edison, and back testing in technical analysis trading software for personal computers wasn’t there – before Louis Mendelsohn – and nor was global intermarket analysis.
Still, Market Technologies’ success and Mr. Mendelsohn’s pioneering role in applying sophisticated mathematical technologies to technical analysis, as well as his decades of experience as a technical analyst, short term trader and longer term investor, has brought him and his family considerable financial wealth and personal independence. He has written numerous articles and editorials over the past two decades in financial magazines warning about the risks that derivatives pose to the stability of the global financial system and the likelihood of frequent and increasingly more severe global financial crises. In fact, in November 2007 SFO magazine published a front cover article authored by him which warned that a global meltdown was imminent, after he had moved millions of dollars of financial assets that he controlled into U.S. Treasuries as a precautionary measure, thereby avoiding the subsequent financial carnage that caught many other traders and investors off guard.
Mr. Mendelsohn, his wife Illyce, and Venturo on their horse ranch, circa 2006
Married to his wife, Illyce, for the past 35 years, they and their three sons have resided on their secluded horse ranch Ramblewood near Tampa, Florida since 1987, where they raise Paso Fino horses and breed livestock for fun.
Mr. Mendelsohn’s adult life is a far cry from the public housing project in Providence, Rhode Island where he was born in 1948, and the triple-decker tenement house (adjacent to railroad tracks where freight trains passed) that was his childhood home in the 1950s, and which was later torn down for urban renewal and construction of Interstate 95.
Mr. Mendelsohn’s rags-to-riches life is tied inextricably to the invention of personal computers, his application of trading software to technical analysis, the transition of previously domestic financial markets into highly intertwined global markets and the emergence of today’s multi-million dollar technical analysis trading software industry. He is one of those rare individuals blessed to be able to turn what was his hobby and passion involving technical analysis and commodities trading, while working as a hospital administrator, into an Inc. 500, multi-million dollar trading software company. For Mr. Mendelsohn technical analysis applied to the global financial markets and commodity trading continues to be an intellectual challenge that keeps him actively involved in the financial markets and all aspects of Market Technologies’ operations.
In today’s warped world of Ponzi schemes and hedge fund fraud making news practically every other day, Mr. Mendelsohn’s passion and unparalleled impact on technical analysis and trading software development, and his personal integrity and work ethic stand out as a demonstration of his lifelong commitment to make sure that Market Technologies (now a second generation family-owned company) maintains its stellar reputation and stays at the forefront of technical analysis, and will continue to provide its loyal trading customers with the absolutely best (but not necessarily the least expensive) analytic trading tools available anywhere on the planet.
A comprehensive collection of Mr. Mendelsohn's published articles and books is available for your review at Louis Mendelsohn's Library.