While trades are typically made to profit in the short-term, learning how to trade successfully should be viewed as a marathon rather than a sprint.
The journey to becoming a good, profitable trader is something that takes patience, discipline and focus.
No one understands this better than Jimmy, a self-directed trader who primarily trades Forex futures and options.
As a qualified Chartered Portfolio Manager (CPM) and Certified Financial Technician (CFTe), accredited by the International Federation of Technical Analysts (IFTA), his experience spans over 34 years, marking him as a leading figure in Singapore’s trading community.
In this edition, we spoke to Jimmy, who has $200 Million USD under management, about what motivated him to start his trading journey, and find out the lessons (and mistakes) he has learnt through the course.
Jimmy: I started with Forex investing in 1990. To be honest, I can’t remember the first position I invested in. What I do remember was being very eager to take action after attending an investment course.
I enter a few positions on the same day worth about USD$10,000 after attending the investment course. I can’t remember all the positions i was in but I bought them at the wrong time. Not long after, Iraq invaded Kuwait in August 1990, causing oil prices to increase and it created massive fear worldwide. Singapore market were not spared then, and the valuation of the stocks and Forex I invested in plunged to about 30-40%. As I was still a newbie, I didn’t have the psychological fortitude (or the right knowledge) to hold on to my positions, thinking that the market was going to crash further. I panicked-sold and lost about 40% of my capital.
On hindsight, my very first (basket of) Gold were indeed undervalued, and they eventually climbed their way above my entry prices had I held on to them till today. The Gulf War was just a temporary “bad news” event. In fact, it became a non-event eventually and markets rebounded.
What were the reasons that make you start investing?
Jimmy: I wanted my money to work for me, instead of just keeping it in the bank. This was also why I decided to attend an investment course to equip myself with the right knowledge before starting.
Most people start their journey as investors. What prompted you to make the move from being an investor to becoming a trader?
Jimmy: My mentor during a course taught us some simple technical analysis. I became intrigued by it.
At that time, reading price charts via candlesticks was totally new to me and even simple indicators like moving averages would fascinate me. Somehow, I just prefer analysing “price” on charts to “numbers” on a financial report. Subsequently, I dived deeper to learn more about technical analysis and trading in the shorter term.
There are many types of trading instruments available. What were the reasons why you decided to focus on Forex future trading?
Jimmy: Indeed there are many types of trading instruments – stocks, indices, futures, options, FX etc. I have tried and traded them all. Eventually, I decided to focus on Forex future trading because it was able to give me more consistent returns compared to the rest.
However, Forex future trading is notoriously difficult to understand. It took me some time before I understood the concepts and know how to trade it. My business partner, Alvin, traded Forex future previously. His experience helped me to cut short my learning curve, as I can just ask him questions directly. He also shared what he traded before as case study. So that helped also.
New traders are always trying to find the holy grail of trading as soon as possible. What will your advice be for these new traders?
Jimmy: The holy grail of trading doesn’t lie in any secret technical indicator but rather learning to read price action that differs from common textbook knowledge. Learning what won’t work can also help you discover what works. It is important to understand that what works for someone else may also not work for you.
It takes diligence and skill, as well as time and experience. It is a good gauge to give yourself at least 3 years before you give up.
You did full-time trading for some time. What’s the biggest surprise about being a full-time, independent trader that you want to share with others just starting out?
Jimmy: I joined a proprietary trading firm previously and discovered that day trading (aka intra-day trading) is a whole new ball game.
The strategies that worked in swing or position trading may not work in day trading. I quickly learned that I had to adjust my strategies. It’s a challenging endeavour and the learning curve is steep.
How does a typical day look like for you today?
Jimmy: I enjoy day trading when the time allows. I trade Gold, Oil, NAS100 and some other currency pair depending on the movement. At night, I will be watching the financial and economic news looking for opportunities on future trades.
You have been trading for 34 years now. What’s the biggest lesson you have learnt about trading that you wish you can tell your younger self today?
Jimmy: If given a chance, I would tell my younger self to dive deeper into learning how to do programming. It can be immensely useful in today’s markets when trading is increasingly becoming automated and quantitative-driven.
The trading journey is not going to be easy. But, as highlighted by Jimmy, we should give ourselves some time before we throw in the towel. A period of 3 years is a good gauge to build up your knowledge as well as provide a sufficient runway before achieving consistent profits, rather than to expect immediate quick returns when you are just starting out your investment and trading journey.
