|How many years have you been trading?|
|What inspired you to get into trading?|
|There were two major things that inspired me to get into trading.
1.) I hated my job and wanted to have the freedom to choose how I spend my time.
I grew up in a city where you went and worked in factories after your schooling was finished. For me, when I was finished with high school I went straight into making seat belts at an automotive parts manufacturing company. For 5 years I sweated it out but during that time I was spending any available money I had on anything such as weekend seminars, audio tapes, courses, and books on subjects ranging from how to make millions in real estate, stock trading, options, mail order, internet business, etc. Basically I was trying desperately to find a way out of my current state of unhappiness. I racked up something like 50-100k in debt trying to find the holy grail….which I of course never did find.
Fast forward a few years and I’m now 25 years old. I decide I can’t stand my situation any longer. So I quit my job, pack up my life and all my debt, and move to the west coast of Canada for a change hoping to find something that would make me happier. This is where the next question picks up.
|How did you learn to trade?|
|A few months after moving out west I saw a job advert saying I could make 300k in one year with no experience or knowledge in the exciting world of financial stock trading at a prop firm. I figured I have probably read 100 books on trading stocks, options, and futures so why not apply? Although, I had never actually made a trade in real life before. I applied and someone actually contacted me for an interview a few weeks later.
I show up to the interview which was located in one of the worse areas of the city. I felt silly for being in a suit because I thought I might get mugged. When I approached the building I realize it’s a run down apartment building and not an office building at all. I buzz myself in an head to the apartment where I am to be interviewed for my 6 figure dream job. The door opens and there are literally dozens of computers and screens all over the living room of this apartment. In the interview it was clear I knew more about trading then the boss did and I was offered the job on the spot which I reluctantly accepted.
Day 1: I’m given a seat next to some kid who I was sure was on drugs, shown a trading platform, told which were my buy and sell keys, then given the instructions “If you lose $50 you’re fired”……and that was the extent to my training! Nothing more nothing less. Everything else I have learned throughout my career was through hard work, testing everything imaginable, losing money, and utilizing my perverse obsession to grow and learn everything about the markets I possibly could. Within 3 months I took home $10,000 from my tiny cut of the profit share. Within 6 months I was consistently taking home $20,000-$30,000 monthly. I wasn’t all glorious but it was a hell of a ride.
|What is your trading style?|
|My trading style has changed greatly from when I started trading at the prop firm in 2006.
2006-2011 I trade mostly stocks using statistical arbitrage, price inefficiency strategies, quantitative algo strategies. Back in the early days the US stock markets were so inefficient that money was very easy to make but after the financial crisis of 2008-2009 these strategies became less and less viable which prompted me to look at other markets.
In late 2009 I got involved with a startup Forex brokerage. I was still trading for the prop firm but I was looking to expand my knowledge. During this time I got to see first hand how retail clients trade. It was disgusting and I have never seen such large amounts of money lost so quickly.
My story of starting to trade Forex came from a client who had given his 6.5 million dollar account to a trader to manage on his behalf. Within 2 week that trader managed to bring the cash balance up to $10,000,000 but was holding $9,980,000 worth of open losses. Effectively the account was now worth $20,000 from the $6,500,000 two weeks prior. Just plain horrible destruction of wealth. So the client came to me and asked if I could bail him out of his situation. I felt terrible about what had happened so I made a plan for his account and he let me go for it. My strategy……DO THE EXACT OPPOSITE OF THE CLIENTS. This methodology was so successful I had to leave the brokerage out of conflict of interest.
It’s all fine and dandy when you have access to client data and seeing how they lose money but if I was to make a proper go on my own I had to figure out what the clients were specifically doing and using to trade so badly. From my research it turns out, for the most part, that all retail traders do is focus on technical analysis, some sort of indicator like MACD or stochastics, and they over leverage with little attention to risk management which of course causes them to have terrible trading psychology.
The bi-polar opposite of the style of trading that retail traders use is to focus on fundamentals and sentiment, don’t over-leverage, and build a strong trading psychology.
I now day trade fundamentals and sentiment. I use a mix of at least 90% fundamentals/sentiment and maybe 10% of basic technicals just so that I can time my trades or find good areas to take profits or stop losses. I focus on risk management and psychology exclusively once in a trade. The way I trade is the exact same way that the large player at hedge funds and financial institutions trade to dominate the Forex markets on a daily basis.
|What advice would you give new traders?|
|People never like it when I say this but technical analysis is utterly useless if that is all a trader basis their trading decisions on. This is because its not some piece of spaghetti on a chart or an oversold indicator, or magical system that actually cause the markets to move. Anyone who believes that is blatantly delusional. The real reason the Forex markets move is because of fundamentals/sentiment which are caused by central banks and their monetary policies and economic data that either lines up or goes against what the central bank mandates are. That is of course an over simplification but I’ve never had anyone prove me wrong.
I would tell any new trader to not get sucked into the marketing hype of technical systems or promises of 1,000% per year using a secret indicator. It’s all a ploy to sell you something and nothing more. In my opinion, if a trader truly wants to be successful and change their life for the better I would say to be prepared to learn the correct things then put them into practice over a sustained period of time.
Learn fundamentals/sentiment, proper risk management, mastering trading psychology, and then throw a tiny bit of technicals at your trading. Then you practice practice practice, track your results and make slight adjustments over the coming months.
-If you can, follow a trader that knows what they are talking about or get a mentorship to fast track your learning then do it.
|Please list any resources/websites you would recommend:|
|This is a tough questions if we are talking about education because of course I want to shamelessly self promote my own products. But apart from that:
For complete beginners http://www.babypips.com/school does a great job of giving a broad overview of Forex trading for free.
I’m not a massive proponent of technical analysis but I do really like the way Adam Grimes looks at technicals. http://adamhgrimes.com/TAAS/the-course/ and it’s also free.
I absolutely can not trade without Ransquawk which is a premium paid service for professional traders. The analysts do a huge part of the heavy lifting form me everyday so that I know quickly what is happening. http://ransquawk.com/
Other than that I visit the following sites daily to get up to date information on what is going on in the world of Forex: