Trading: From currencies to commodities, with indices and shares in between, whatever you choose to trade, it’s a total minefield
**Editors note** ForexFlow reader and trader David, asked if he could do a couple of pieces on his trading journey. Those who have been following my writings for a while know I love to hear about the trading tales from real traders who are in the trenches. Not everyone trades full-time and many traders are juggling full-time jobs as well as life’s problems in general. It’s tough going for a lot of people and posts like this show the grass roots of trading, not the false, gaudy images peddled in a this market a lot of the time. We love to hear real stories from real traders as they are an inspiration to us and the rest of the trading community. In almost all cases the stories all follow the same script and realising that you’re not alone, and taht you share the same problems as everyone else can help you overcome those issues and succeed. If you would like to tell us your story feel free to contact us here. Over to Chef;
A little about myself. I’m a chef working for a great company travelling around the south east sorting out problems and covering other chefs. I also have my own catering company on the side. I’m 41 going on 22, my wife swears she married me in anticipation of me growing up… she’s still waiting.. Also, I have a very addictive nature.
I have been trading as a retailer since 2012. Before that I, like most who dabbled in the markets, traded traditional shares. I specialised in oilies on the majors and AIM markets. Information about the companies, I lapped it up. I stumbled across currency trading by accident I think. So, like a West ham fan attracted to jellied eels I immediately loved it. I opened a spread bet account and I was off and away. Traded gold first, sized the per point bet waaay to big, clicked buy and lost £600 in about a minute. Lesson 1 learnt. So, after that I scoured the internet to learn and read about trading in this style. One of the first things I learnt was that Saxo bank reckoned around 95% of its retail traders lost. Game on. I wanted to be the 5%. Didn’t trade with them btw, it was the stat I liked.
My trading was aimless. Winning and losing. Mentality all over the shop. Sat in a losing position for days and then getting out at breakeven relived I hadn’t lost!!! Recipe for more disaster.
I then stumbled across Waldorf and Stadler……. aka Mike P and Ryan L. The help Mike gave me along with Ryan is immeasurable. One thing in life I am is that I’m a great replicator not an innovator. So, seeing and reading how these 2 guys traded, which are very different in style but with the same overall winning outcome, I slowly adapted my trading. Not so much in copying but my handling of risk and rationale for taking a trade out. Did this solve all my trading problems in 1 foul swoop? No, not in the slightest. I still liked to gamble. More on that later. I was picking trades better now and for about 7-8 months I was in profit and gaining back the couple £k I had lost. Then the defining moment which has had an indelible print on my brain for the rest of my life. The SNB.
As many of you know, reading this, The Swiss National Bank on the Sunday before Jan 15th said that their current peg to the Euro was here to stay. On the 15th they, without any forewarning, removed the peg. I was long. Lesson 167 learnt. I was also driving to work and I got a phone call from Mike;
“You seen?”.
“Seen what?”
“SNB removed the peg. Tell me you’re not long.”
I replied yes. I shan’t repeat what was said to me but by the time I had stopped the car and checked my account I was many thousands in negative equity. Shock. Mike and Ryan were a great help through the mess. What it did mean though was I couldn’t trade for nearly a year. Skint you see. However, what I did learn was ever so valuable. Don’t trust a CB. Ok so I got caught up in what was the biggest ever move in such a short space of time and lost a lot of money but how was I going to bounce back?
Well for me it was trade sizing. Because I’m in the kitchen for 60 hours a week working I have to look at the longer time frames on the charts for clues. I don’t have the luxury of being in front of the screens watching things unfold. For me that’s probably for the best. Now, I go small with wider stops and am very comfortable with the positions held. I STILL make mistakes. A good example was short DXY a few weeks ago. Actually, that was a shocker. Not only was I wrong, which one has to accept in trading, but I sized it wrong. So, the loss ate into this year’s profits and not only that I got angry with myself. Being angry with one’s self in trading leads to revenge trading and before you know it you’re in a big pile of do do’s. I stopped myself getting there and shut down every open trade I had. 2 of which were a combined 1800 pips up on short Dow Jones, large profits. Why shut down the profitable ones I hear you ask? Simple really. I had to STOP, take a step back and not look at anything for at least 24 hours. Let the emotions running through me dissipate. If it needed longer I would have stayed away. This is trading discipline I have learnt over the years. 5 years ago, I would have probably blown all my profits for the year. The market does not care for you or your money. Only you can do that.
I can’t stress enough just how much emotion, mentality and all that’s associated with the mind set comes into trading. Very few people have it from the off, most have to learn it and many fail. Am I the finished article? No, not by a mile. Am I a profitable trader, pretty much yes. I still make mistakes, lots. The trading room really helps with many ideas being bandied about with many different approaches.
So, what have I learnt after all these experiences? Self-control. Control your emotions and you can control your trading or in the very least you have a solid base to work off.
Philosophy: "If you like gambling and adrenaline rushes in your life, do base jumping, not trading"
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Welcome to the school of hard knocks Chef. we`ve all been there mate. Great stuff, great piece.
Great piece Chef !
Great post Chef! Of course I’ve been there too going through some of these things. Excluding the jellied eels …
nice one cook…. and as i cant stop saying… “”when man makes plans greek gods laugh””
Since when could the gods serve up a good oil creme brulee? 🙂
since they…”invented” it?
Good read:) MORE PLS..
Morning Chef , great wisdom learnt and told so well 🙂 . atvb mate Chris
I’ve had the pleasure of knowing David for a long time .
Super chap , one of the good guys ;
Anybody new to trading should read this , and us old heads who think we know a few things .
We know him as Cheffers in our room ( Ok – I know him as Cheffers ).
Don’t mention his carrots :))
As I said in the header, these posts are gold to traders of all levels because we all go through the exact same experiences each and every day. They may be at differing levels for some but the underlying story is exactly the same.
Traders I often speak to who tell me their problems think they’re the only one’s who are having them. I can’t stress enough that we’re all suffering and fighting with the same issues and demons. Like Chef’s done today, talk it out and you’ll realise that you’re not alone and that there are people who will have the solutions to your trading problems, and also that you might have the solution to theirs.
Thanks for all the messages chaps. Group hug….
I only deal in bottles forthcoming and your fine cooking ?
great one, Chef.