The 4 Principles that Drive Elite Traders Performances

Even tho it sounds gimmicky these 4 principles really do drive success for traders. At least, I can attest it for full-time FX traders – others, I can’t say, that’s not my edge.

  1. Performing from your sweet spot
  2. Acquiring and building a skill
  3. Being able to deliver whenever there’s opportunity
  4. Remaining on top

Those four topics are the pillars for trading success, you want to become a full time trader – focus on those four, in that order!

I’ve just listened to an amazing podcast on chat with traders – Aaron Ffifield had James King on and the conversation was amazing that I’ve decided to make a blog post about it.

You can find the link to the podcast here:

You can also find James A King website here:

Now that we’ve shared this information, let’s dive into it!

What drives elite trader performances?

Ambition? Hard work? Talent? Yeah… But…That’s not the entire story

Neither is the 10,000hour rule, which I guess is rather reassuring for quite a lot of you?

In the point James King shares he makes it clear that he sees excellence as a pyramid, that has four core levels:

Screw using PowerPoint pyramids, might as well use a real one!

Those four principles are key to your success as a trader. As always, the first one, performing from your Sweet Spot is the most important. Since it’s the base, without it, everything would break.


Performing from your Sweet Spot

So what’s a sweet spot? Is it in the kitchen next to the candy jar? Nop, sorry to disappoint! I’ve got bad news, worse than the joke I just made, I actually can’t tell you what your sweet spot is.

You’ll have to ask yourself some questions, but we’ll come to them afterwards, let’s first address why do we need to perform from our sweet spot – it’s easier to perform when the goal you pursue aligns with the quality that makes you unique.

I’m not chasing someone else goal – I’m unique so I’m chasing my own goal and it’ll be way freaking easier if it aligns with things I’m good at.

So what’s your sweet spot? It will depend on your strength, interest and values – and those are not necessarily related to trading at all, it could be things you used to excel at when you were a kid.

What comes naturally to you? Do you like spending time reading news and staying up to date with what’s happening in the world? Are you better at solving puzzles? Are you always up to date on everything?

Once you’ve figured out what comes naturally to you, it could define your trading style, if for instance you love reading news and understanding how countries are being governed, then maybe trading the macro/fundamental side of things could be something you’d be better at that trading technicals? If on the opposite you hate watching news (#WelcomeToTheClub) but you like trying to solve puzzles, build stuff and have a strong imagination it’s likely you’d see better results in your trading if you were a technical trader.

If you are interested in technical analysis and trying to find levels where price is likely going to reverse and can spend a lot of hours without having to be motivated by someone else it’s a good sing – because the truth is, you’ll have to put in the time. So if trading gold interest you more than trading currencies or even equities you should focus on that side of things.

To find your sweet spot and to know what you should focus on to become an elite trader ask yourself, where have you excelled at in your life? What have you been highly responsive to training? What personality do you have (btw I highly recommend doing the Meyer Briggs test, it can help you find your strengths as well as your weaknesses, which is rather important!) What are you always motivated to do? What type of asset class are you the most interest in?

All of this leads to the question what are your values, what’s the most important to you? Is it money? Is it fame? Is it time? autonomy? etc Based on your values you may discover that working at a prop desk or a hedge fund doing research may be a better place than trading your own capital.

Find your sweet spot – and execute from there.

And yes, we’ve spent all this time not even talking about trading or performance but just about figuring out what we want to focus on.


Skill Acquisition

Here’s the good news, you probably won’t need to spend 10,000 hours working your ass off before you master a skill, if you do, it’s probably not your sweet spot or you’re following a shitty methodology 🙂 Let’s dive into the 7 key factors when building a skill to excellence.

Start with the comprehensive foundation

You don’t have to do extraordinary things – you have to do ordinary things extraordinarily well –> think about our friend Bruce Lee 🙂

You want to master the basics, without a mastery of the basics to stand on you’ll go nowhere.

Apparently in Tennis 85% of points are made in the service / return and return service – yet most tennis players only spend around 15% of their time practicing those skills.

You want to find what are the big levers for success, don’t focus on tiny marginal gains, focus on the big levers. That’s where the value is at. In trading it’s probably around entry / stop sizing and exists. That’s where the money is made, it’s not about anything else.

Practice over theory

It’s what you can do not what you know that matters – knowing how to kick a ball the most precisely as possible but not being able to do so in practice is useless. You’re better off not knowing the theory behind it but be able to hit every target that’s set.

Turn your learning into practice, don’t spend too much time on theory you have to think, do and produce –> once you’ve practiced enough you can articulate what happens then that’s fine, but practice over theory.

It’s all on you

I don’t really care if you end up super mega successful, your neighbor doesn’t either, it’s only on you, it’s your future. Don’t expect to be given the answers (well, that’s kinda what I’m doing here on a daily basis) you have to figure it out for yourself.

People can explain to you a strategy, but it’s on you to understand it and develop it. Advanced skills need to be discovered they can’t be taught.

Take responsibility over your future.

We need challenge to change

If we remain in our comfort zone we won’t evolve sadly, heck I wish sitting in my hamac would enable me to improve my 5k time, sadly I need to push myself to be able to build more muscles.

We need to spend as much time as possible in a challenging zone to be improving, you need to be absolutely focused on what’s happening – if you’re thinking about what you’ll be eating at dinner tonight when practicing you might as well stop straight away!

Get uncomfortable, learn to enjoy being challenged, but if you’re at a point where you’re starting to panic, you can take a break 🙂

If it doesn’t happen when you’re competing, it doesn’t matter.

There’s no point in practicing things that will have absolutely zero impact on your trading results – so many kids dream of becoming a football star, they go home and start practicing tricks with the ball, the problem is, being able to do fancy tricks with a football probably won’t win you a championship – being able to shoot straight, run faster, control the ball, tackle is what matters. Well, I think, I’m not a big football fan.

Create uncertainty

It’s nice to practice when you’re comfortable at home with zero stakes where you control all the factors, however you want to have uncertainty. You need to train in the conditions you’ll be executing – and then imagine even more extreme conditions – for instance for traders you may want to focus on extremely hard to trade markets, periods with drawdown, making decisions with a time limit, it’s all well having a backtest tool that you can pause to make a decision, but in live market conditions you’ve don’t have all the time you want.

Learning is the mindful search for solutions

It’s not mindlessly repeating a solution, it’s a mindful search for a solution repeated over and over – for instance think about your phone, to be able to unlock it with your finger you have to scan your finger several times, in different angles / positions –> what it’s doing is that it’s learning through variability to be able to recognise it whichever angle you end up using.

If you only gave your phone 1 try to collect your fingerprint I’m willing to bet your phone wouldn’t open as quickly as it does now, it would reject you quite often as well just because you didn’t train it with different conditions.

Out of every successful trader I’ve met (and the ones James has met) it’s very rare for them to rely on 2 extraordinary things – instead, most successful traders have mastered the basics and just don’t do mistakes that cost them their career.

Anyway that’s enough for our second point – the skill acquisition to become an elite trader.


Delivering on demand

Being able to execute your strategy whenever the time calls for it even tho you’re under pressure is key.

I remember Josh Waitzkin in the art of learning was talking about the ability masters have to switch on and off – for him he could just listen to one song and be pumped up ready to fight.

Outliers are able to flick a switch to regulate their emotions and execute. You want to be able to enter a flow state and have access to all your knowledge and training.

You need to spend time building your skill of getting into the zone – it’s a skill like all the other ones.

Your thoughts + Your actions = Emotional State

If you realize your are in a suboptimal state, think what are you doing, thinking, how you’re sitting, breathing etc.

Your thoughts and actions will change your emotional state.

The sea won’t always be calm. You need to be able to get comfortable even in the worst weather.

If you feel overwhelmed try to break the feeling down – is it because you’re in too many trades? If so only take 1 trade at a time until you’re comfortable. Is it because you’re trading a new asset class? Trade with a smaller risk!

A nice short section, but it’s so key.

Josh Waitzkin recommends listening to a song every single time before practicing – for instance before every single workout for a month listen to the same song. After a few months of that habit it’ll probably pump you up as soon as you hear it.


Sustaining Success

Let’s start this section with dark reminder: More people die going back down Everest than going up.

It’s actually got a name in climbing, the “post summit peril”, you’re tempted to bask in the view, enjoy life, congratulate yourself and switch off your focus really enjoy the moment. When you go back down….

There’s two key biases we need to keep in mind

  1. Continuity bias – We believe the future is the same as what we’ve experienced, we down play the risk since we’ve made it so far, it’ll just remain the same.
  2. Illusion of personal control – We downplay the rate of luck / variance in our success, we forget we were lucky because we had a favorable backwind – it makes us complacent because we believe it’s 100% thanks to us, we forget the circumstances were in our favour.

Those two key biases probably won’t impact us immediately it’s a slow process that will definitely lead to your long term demise sadly.

Although we want to strive to become the best, you can never allow yourself to believe you’re there –> when you’re second you have the drive to keep moving forward, when you’re first it’s easy to loose all motivation.

To do so, develop a comprehensive understanding of what it’ll take to win and a comprehensive understanding of where you are –> that will enable you to find your weak spots and what are the important levers you want to focus on.

If you really understand what is holding you back, the solution will probably fall into your lap 🙂

If you look at the best teams, for instance the All Blacks when we think of rugby, they don’t focus on being the best in the world in their sport, they look outside of their “industry” they are competing to get the best win rate in every sport. They’ve set bigger targets.

Standing on your own success won’t be enough. You need to keep evolving

What you need to keep in mind is that you’re basically evolving in a ever continuing circle of improvement – even tho you’re at the top of the current cycle, you’re not at the top of the mountain, you’re only in a transitional moment towards the next cycle.

That’s it for today!

I hope you enjoyed this one!


Oh and, James A King released a book I’ve just ordered on Amazon so I can’t speak about it, but the podcast was fantastic, you can find it here

Once again;

You can find the link to the podcast here:

You can also find James A King website here:

You don’t really trade the market

Everyone thinks that we trade the market we’re invested in, would that be FX, commodities, stocks etc etc

But is that the case? I mean a market is a market, it’s nothing at all.

It’s not as if you go to a counter and ask for two dozens oysters and some nice smelly cheese, that’s something we can eat and enjoy.

No, we only trade our beliefs.

Currencies are only worth X because of the belief/trust we have that they are worth that much, because someone told us it was the case.

Trading is only a matter of showing our belief that a currency is going to become more valuable / trustworthy for others

Don’t focus on trying to understand how a market moves, it’s only the sum of all the beliefs of the participants.

Instead, try to understand how you come to believe something, and how others change their minds.

If you’re able to understand a change in the mind of the other traders/investors before it takes place you’ll be well off.

You don’t really trade the market. You trade your beliefs about the market. 

~ Van Tharp

Reading habits

The highlight of being self employed and having a large amount of “free” time is the ability to read.

I love reading.

A lot of very successful people recommending reading too, so I’m sticking to it, and would highly recommend you to do so!

But if you don’t currently have a reading habit… Here are a few recommendations I would give myself

Don’t force yourself to read “smart” books

Read to enjoy yourself, don’t force it, you’ll get to a point where picking up a book becomes a habit and you’ll want to learn something new!

Start reading for the fun of it – don’t start reading complicated investment / psychology books if that’s not your cup to tea.

You’ll get to a point where that’s what you want to do,

don’t force it!

However, if you like reading here are a few of my favorite books as a trader

Meditations by Marcus Aurelius

Mental Game of Poker (1&2) by Jared Tendler

The way to Love by Anthony de Mello

Seeking Wisdom from Munger to Darwin by Peter Bevelin

Inside the House of Money / The Alpha Masters / Market Wizards (great collection about hedge fund managers)

There’s no need to read thousands of books

Instead find books that open your mind and read them, make sure you assimilate, take notes, go back, re-read them etc

Don’t rush the process

Don’t read to show off and be the smart ass that tells everyone he speeds read a book a day but doesn’t apply shit

You don’t even need to read books, there’s loads of great blogs

A few blogs I like to follow:

Macro-ops

Collaborative Fund

Paul Graham is a legend

Farnam Street

Does twitter count? There’s a few amazing accounts there!

P.S. Currently reading: The Invisible Hands top hedge fund traders… Steven Drobny

The four pillars for trading success

The four pillars for trading success

We all wish trading came naturally to us; after all that would’ve meant saving countless hours, (a lot of) money, friendships that were broken after having a shitty day in the market

Oh and these reflect my personal views and experiences, I am sure you could argue for something different

What are those four pillars?

(Wish their was like a way to drop a curtain or something)

  1. Persistence
  2. Risk Management
  3. Psychology
  4. Trading Edge
Image

Let’s break these four pillars into a section each:

Persistence

Trading is difficult. Like any other skill it will take time to master, the only way to through the deep water is to preserver, if you haven’t given up you haven’t failed.

As long as you get back up after being pushed back down there is still hope.

That being said, having fallen off (many) horses it does take persistence to get back up on the horse, the same goes with trading, there will be losses, there will be mistakes, but there is a need to continually get back up and get ready for another try.

There is also an undeniable need to spend countless hours in front of charts in order to develop and test an edge and persist until we feel comfortable with our own strategy

Trading is all about survival, protecting the assets we have, making them grow, without getting killed. Keep that in mind.

Image result for persistence quote paramahansa yoga

This point is rather straight forward so there’s no real value spending too much time dealing with it, we are left with

  1. Risk Management
  2. Psychology
  3. Trading Edge

Risk Management

Risk management is probably the first subject new trades should look into, we can break it down into two topics: protecting the initial capital and an understanding of probabilities.

Protecting the initial capital

One of the best ways to screw up your psychology and give up is by taking huge losses that will destroy the size of the trading account

In order to protect the initial capital, it is key for traders to understand how to size their positions and (ideally) maintain a constant risk profile.

Why is it so important to avoid large losses?

If a single trade isn’t properly sized, it is possible for a trading account to be blown – by that I do mean, it is possible with one trade to lose all the money (and potentially more) you have in the trading account…

Let’s dive into “smaller losses”:

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A 10% loss requires you to make 11% back in order to get back to the starting point, which when we think about it, isn’t that bad, it could be worse… However, if you take a 50% loss then you will need to double your account in order to bring it back up to the starting size…

Yep…. Here’s the example:

10,000+10,000*(-0.5) = 5,000

5,000*X=10,000

X= 2

(Mainly wanted to show the benefits of getting a university degree, I can do maths now 😊)

The key lesson here is:

 MAKE SURE YOU DON’T SCREW UP THE POSITION SIZE

The likelihood of you preserving and not screwing up your mental game after such a loss is extremely low so… If you want to have a career in trading, make sure you size your positions correctly.

Image result for it's not about being right or wrong soros

Understanding probabilities

Now this one may seem a bit more obvious, but over many discussions I’ve realized it may not be the case

There will be winning trades, but there will also be losing trades, this is a given, anyone that promises you a 100% strike rate is either into high frequency trading (and works at a huge fund) or is trying to get your money, and the likelihood of the second far outweighs the first…

Now it’s let’s dig into why I think it is key to understand your trading edge and your numbers (more on that afterwards)

If you are a trader you may have a 45% strike rate (it is possible to be profitable with a lower strike rate, as it is possible to be a consistently bankrupt trader with a higher strike rate)

As you can see on the following image, you have a 72% likelihood of taking 6 losses in a row over 50 trades taken, yep a 72% likelihood, that’s freaking surprising eh

The likelihood of taking 7 losses in a row is at a “more acceptable” probability of 49% (which is still super high!?)

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Knowing the probability of taking 7 losses in a row is close to 50%, no better than flipping a coin, how much should you risk?

If you risk 5% per trade, you shall be down 30.2% (assuming you adjust your $ risk after each trade) that means you’ll have to make back 43% to get to the level you were before this losing strike… A rather big number if you ask me – however if you only risk 1% then you’re only down 6.8%

Let’s say you’re trading a 100,000$ account, I would highly prefer being down 6,800$ instead of 30,200$… Can you imagine the impact on your psychology? I would be devasted with a 30.2% loss

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Don’t forget, trading is a survival game, and you can only survive if you protect your initial capital and risk the right amount… Don’t show off… Now onto

Psychology

Probably the less fun part of trading for most of us (I’ll admit, I actually love it!) but you’ve probably heard it from many people psychology is key for traders, it may even represent 80% of the work you need to do to become a profitable trader

Now what are common traps we can fall into

  1. Sticking to our bias
  2. Trying to prove we know better
  3. I can’t lose so risking more
  4. I just need to get even
  5. I’m just one trade away from being profitable this month

I always used to get told off for doing more than five bullet points but there’s so many other examples!

So how can we have a profitable psychology?

  1. Focus on the process – they do not care about being right or wrong
  2. Understanding the numbers linked to your trading strategy
  3. Having strong opinions weekly held and being willing to flip sides
Image result for psychology trading quote

The most important part of trading is understanding that the market doesn’t care about you, and you shouldn’t really care about it. Instead focus on the process, be willing to jump ship and understand nothing is guaranteed in the market.

Instead, focus on yourself, spend time off the charts, recharge, meditate, empty your mind, and execute your trading plan

The worst enemy you have is yourself – and sadly you’ll never really get to beat him to the ground, even the famous Greek philosophers sometimes had urges (some were also doing the exact opposite from what they preached…)

Image result for conquer yourself zeno of citium

Truly believe I can’t make a better point than Yvan:

Confidence is not “I will profit on this trade.” Confidence is “I will be fine if I don’t profit from this trade.”

Yvan Byeajee, The essence of trading psychology in one skill

Try calming your mind, ideally empty your mind from all greed hesitation and passion, instead remain neutral and in control. The best way to do that is to meditate, and if you refuse to do that, go for a thirty minutes walk without your phone, just paying attentions to your thoughts, it should help you drop all those negative charges.

Tihbo puts it beautifully

Now I could spend an entire day ranting about the importance of psychology but I believe this is a journey you alone can take since it is deep inside you and no matter how many quotes I put in front of you the decision to let go and become present is yours.

Having a trading edge

Yep, this is the last point… Not necessarily because I believe it’s the less important, but you can make money with so many different markets and in so many different ways, you can skin the cat yourself.

However, it is extremely important to have identified your trading edge and be able to prove it exist in the historical market without having to adjust it, that’s one of the main problems quants are faced with, they adjust their strategy so it provides great returns in the past but does not work when the market conditions change

So what do you have to do?

Back test your strategy over several years and several pairs, forecast possible moves, use your trading plan with a reduced risk for the first few months in order to make sure the edge is there

Understand that even a profitable strategy will have losses

Here’s an example of my go-to set-ups after having backtested it over a few pairs for 2019

I have come to realize, that two of my favorite set-ups are not very profitable for me (the 3rd rejection and the hover) therefore I will have to adapt, another key point is understanding that my strike rate (without including BE) is of 34% however as you can see the returns are profitable, because my average win is a lot bigger than average loss.

Keep on working, keep on testing your strategy and never become over confident, because that will be your end.

The end 😊

Before I ask you to like this post and share, I would like to thank both Tiho Brkan and Yvan Byeajee I most of the data I used came from their tweets!

What do you think are the key pillars for success in the FX market?

Hope you enjoyed this article!


Onwards,

-Max

Scared of Change?

Change is needed!

Over the last week or so I’ve received a lot of questions asking me about why I left Falcon to work on my own and really focus on my own process…

The truth is, I needed to start accepting change, I had spent too much time focused only on one strategy, and was starting to become blind to outside possibilities, something I never want to be.

Having an open mind is the best way to grow, meet new people and build great businesses (or fine tune a trading strategy with all your knowledge)

Now I was kinda scared of going out by my own

It’s new, I haven’t been “alone” in more than two years now…

Plus I just moved to a new country (Ukraine) where I don’t know anyone…

All of this brought me back to one of my favorite quotes from Marcus Aurelius


Frightened of change? But what can exist without it?

What’s closer to nature’s heart?

Can you take a hot bath and leave the firewood as it was? Eat food without transforming it? Can any vital process take place without something being changed? Can’t you see?

It’s just the same with you—and just as vital to nature.

Marcus Aurelius – Meditations

If you haven’t read Meditations I can’t recommend it enough, I would probably name it as one of the most influential books I’ve ever read – and I read a fair bit.

Now I agree, if you have a winning process in the FX market, why would you want to change it?

Who said I was creating an entirely new process?


What have I changed

The only change I’ve experienced since leaving falcon are the following

  1. I am able to spend a lot more time backtesting instead of watching content
  2. I am now responsible to build my weekly watch list without relying on anyone else
  3. I am more open minded to potential additions to my trading plan

Not much right?

However having taken the step of change I’ve unlocked something powerful inside of myself that will enable me to fuel my progress to the next level, would it be to prove to myself I can do it by myself or others or whatever I do not mind, all I care about is my results

When I think about it, I like to change countries in order to continuously amaze myself and discover new things, new cultures, new people etc, and I truly believe those changes do improve who I am as a human

So why not do the same thing with my trading?

Socrates is kinda smart?

The aim isn’t to look back on the past and fight that, instead it is to adapt and focus on the future, aim to build something new.

Change is the one that links everything in life (aside from death) so don’t hide from it

Let’s talk about life as a person

New born – Kid – Adolescent – Young Adult – Engaged – Married – Father – Grand Father – Death etc

Living with parents – Living with friends – Living by yourself – Moving in with GF/BF – New house – Bigger house – Bigger house etc etc

Everything changes, don’t fight it, just move forward, there’s no point looking backwards and asking yourself what if 🙂


Accept Change, Be Happy, Move on

Okay finding something to say for this section is going to be hard, I think I’ve made my point, change is natural, the only thing you can do is accept it, be thankful for the new opportunities and challenges you’re going to be faced with and move on…

But yep, just gotta stay unemployabled 🙂

Over did the unemployable part that day 🙂

I hope everyone had an amazing week & week-end! Hope you took some value from this post!


Onwards,

-Max

Cost of living as a digital nomad

One of the most frequent questions I get is “how do I afford to travel so much” so let’s dig into my expenses!

Cost of living as a digital nomad in Asia

When I was staying in Indonesia, I spent three months living in Lombok and stayed at a hostel for the entire duration because I loved it there…

The hostel I stayed at was:

Bamba – the best hostel in Kuta, Lombok!

So many amazing beaches close by

You can stay an entire month there for around 400$

The breakfast there is included and it’s amazing – there’s a cool swimming pool but more importantly, I love the team that works there, I made so many friends, and would even consider the staff family 🙂

That being said, if you are on a really strict budget, you can find cheaper, especially if you are willing to negotiate once you are there and go to smaller less well known hostels

Food wise, you can eat for 2$ per meal, but if you’re going to want to have something else than local dishes then it can go up, maybe even as high as 5 to 10$ but you don’t need to treat yourself as a king all the time so let’s say a 12$ average per day (that’s a lot) including coffee and beers?

So let’s say 350$ – which can easily be more or less depending on your lifestyle once again

A scooter rental was 5$ per day if I remember correctly so 150$ per month

Fuel + parking (when needed) could add up to maybe 30$ per month

That’s all you really need

400+350+150+30 = 930

With less than 1,000$

you can (easily) live in Lombok, Indonesia

But… That’s not including day trips if you want to rent a boat, if you want to go surfing, if you want to go trekking and need a guide, etc etc, so in the end it will cost you more – maybe even up to 500$ if you really want to go for it 🙂

So 1.5k and you’re set

From that you’ll need to add plane tickets tho

You also need to keep money on the side to pay your taxes, don’t make them wait, it’s not worth playing with them, especially if you run an online business!

So the truth is,

you’ll probably need to make more than 2k per month


Cost of Living in London

Now, I’m currently in London, so let’s compare 🙂

First off, let me start with:

DON’T STAY IN A HOSTEL IN LONDON

They’re fine if you are staying a few days, but more than that you’ll definitely want to use Airbnb – you want to remain productive while in London, and hostels here aren’t that great because there’s no privacy and not much space to do any work

yep that’s my affiliate link, but let’s be serious, if you don’t have an airbnb account are you coming from Mars?

In my case, the Airbnb is costing me about 1.2k per month, sure I could’ve found something cheaper, but I believe it’s better to stay in a decent place where I can work & cook (without burning the apartment down) than be too cheap

I’ve got a cool view from my Airbnb tho!

I really don’t want to look into how much I’ve spent on coffee, so let’s say that food + coffee + a few drinks ended up around 500$ for the month (wouldn’t be too surprised if it was more)

Probably spent 150$ on “public” transport

So with 1.8k I’ve got my basic living expenses

Then obviously if you want to eat in restaurants, go out and party, visit the UK (the train is bloody expensive), go to museums and all that it’s going to end up being more expensive

So you could live in London on 2k per month if you want a basic lifestyle

If you want something more fun, expect that number to rise very quickly, especially if you want to live in the center of London (I’m in Zone 2 to reduce the cost of rent, no need to commute into the city every day so might as well save money!)

You’ll also need to take into account taxes once again…

So the truth is,

you’ll probably need to make more than 3k per month


The digital nomad lifestlye

So to answer, how much does the digital nomad lifestyle cost:

IT DEPENDS ON YOU.

It depends on where you go

It depends on your standards

It depends if you are going to travel around

It depends on what food you’re eating

If you want to party

If you have loads of taxes to pay

Or you can start hitch hiking around the world and be a true nomad, even better, get yourself a camel, an Indiana Jones hat and hit the road

If you are willing to sleep outside in the nature it will be cheaper, same for a hut, if you want to stay in five star hotels tho… It’ll be different!


I hope that answers your questions!

Sorry I couldn’t give a straight answer but it depends entirely on you!

If you liked this post, it would mean the world to me if you could leave a like 🙂

Onwards!

Work as a digital nomad

Digital nomad & work

One of the most frequent questions I get is: “How do I get work done while traveling?”, so will try to answer this one.

I feel like I’ve already used this photo

I DON’T DO ANY WORK…

I spend my days at the beach taking photos duh.

Okay, that’s a lie (I hope you knew that!)

The truth is, it’s not because you’re a digital nomad that you won’t be doing a lot of work – the amount of work you need to do is the exact same as if you were living at home.

But it does depend on your work, as a FX trader, I spend around three hours a day doing work, but that’s a normal amount of work for any trader? (Do you spend more time on the charts?)

All I need is to forecast, review my past trades, do some backtesting and watch some content in order to maintain my skill at the same level.

That being said, there are days where I spend a lot more time, if I am motivated I can very easily get into a backtesting session and spend around eight hours on it, because I love it.

That being said, if you are not self employed and instead get paid on an hourly basis (which is what I do on the side), you will have to spend hours doing work in order to go paid and finish the task you were assigned, and you’d do the exact same workload as if you were home.

But here’s where the “good shit” comes in…

If you’re in a country where your living expenses are half what you used to spend it’s rather easy to reduce your workload (still recommend getting more hours done than the bare minimum) – so instead of working 8 hours you could work 6 hours rather easily?


Where to work?

That’s the interesting/challenging part, I do try to spend more money on airbnbs where I know I shall be able to get work done in the mornings.

One of the challenges of being a nomad is that you never really have an office, especially if you change location rather often and there’s no co-working space close by that offers a “hot desk” membership.

You need decent wifi in order to be able to do your backtesting and watch content, and that’s not a given sadly…

To be entirely fair, “developing” countries (Indonesia, Poland, Colombia, Lebanon,…) please don’t bully me for putting Poland there… the wifi is a hell of a lot better than in developed countries when it comes to working in coffee shops.

So the answer is:

I usually work at home during my “productive” hours – the first three hours – if there’s a desk, one of my requirements for airbnbs (highly recommend it),

I like outdoor standing (home made) desks

Then go out and do work at a coffee shop, however the work done in coffee shops is a lot less productive than at home, but I need the change of scenery – and it’s easier to keep doing work when you’re not the single one, otherwise the urge to go out and explore is super strong

Be a tourist for the afternoon, then get more work done in the evening at home or with a glass of wine!

That being said, if you are spending a month or more in one location, I highly recommend joining a co-working space, you’ll not only get to meet other self employed individuals and make friends but you’ll also get into a habit of working from there, which is great because you have a separation between home and work, something that’s not really possible when working from home.


Growth as a digital nomad

Now, as I just talked about, it’s rather easy to get work done as a digital nomad, you just have to say “fuck you” to your excuses and remember that you are only able to travel because of the work you do, hence, you need to prioritize the work over being a tourist.

That being said,

I don’t think living as a digital nomad is the best way to grow your business, instead, I would even argue it’s a bad idea

If you are aiming to scale your business, launch a new product, create a new offering, or even increase your returns as a forex trader or even learn an entire new trading style you’d be better off staying in one place

I’m not going to write too much about this, because I think Iman Gadhzi did a great job explaining it in this video, highly recommend it, shows the life about being a digital nomad, but after the six minute mark he talks about the downside of Variation and being a digital nomad.

You want to be repetive, you want to do the same shit, you want to have your routine, you don’t want to do new stuff every day, have a schedule, make sure you’re productive.

Anyway, hope you’re well and enjoyed this blog post!


Onwards,

Oh, and, if you’ve enjoyed this blog post, would mean the world to me if you left a like or a comment 😊

The right questions

That’s a bloody heavy title… Definitely not going to be able to address it within one blog post, but…

I just listened to an enjoyable podcast with Warren Berger and Shane Parish on Fs.blog and they talk a fair amount about questions…

Here’s a quote from Warren Berger that explains why I believe asking the right questions is key

Now, yes, that can easily be understood for engineers, for entrepreneurs and scientists, but what about traders?

Questions for traders

What is the market?

It helps to think about the entire market, what is the stock market? why does the stock market (on average) go up? Why do currencies exist? Why are there several currencies? Why is the price of a certain currency worth more than another one? How can I forecast that?

Now this won’t improve your trading 10-fold I’ll give you that, but having a larger understanding makes the next steps a lot easier…

Plus, the more you learn the more intrigued you’ll be trust me, I’ve fallen into a dark rabbit hole more times than I wish to admit

Why FX?

You can easily ask yourself, why do I trade FX? Why do I trade this way? Why do I need a trading plan? (I hope by now you know why you need one!!!! Otherwise this blog has failed you I’m sorry! :S ) What are the positives and downsides of having a trading plan? What will I learn from my trading plan?

(A previous blog post about trading plans can be found here!)

Knowing the answers will give you the motivation to build one? You can ask yourself the same questions about anything btw, would that be why you want to trade full-time, why you need a routine, why you should eat healthy etc

How do I trade?

How do I build the right foundations to become a full-time trader? What is the process I should follow to achieve my goals? What set-ups am I allowed to trade? Why can I trade those set-ups and not others? Why is limiting the number of trades I take good?

Those questions will probably make you understand that sticking to your plan has way more benefits than downsides, you will understand that the only reason you trade those set-ups is because you are playing out an edge with a positive expected value and you definitely don’t want to start playing around because that will costly…


So many question marks…

What questions to ask?

Now I’m not going to list hundreds (I easily could) questions instead here are a few questions I like to ask myself

Why did I take this trade? Does this trade fit my trading plan? Did I forecast it?

Why will the price go in that direction? What is the structure telling me?

Should I stay out? Why shouldn’t I pull the trigger on this position

What would my mentor say if I took this trade?

Would my mentor take this trade? Does it fit with his previous “behavior?”

Why would this trade turn out to be a loss?

How will I feel after taking this loss?

Am I still happy taking this trade?

Hope those questions help you.

I truly believe that everyone has the answers to the right questions (yes even you!) you just need to ask yourself the right questions…

If you can’t answer a question, then dig into it? Ask yourself what do you need to know in order to answer it?

Ask yourself questions and the following questions


How do you make money trading while traveling?

I trade currencies

How do you I make money trading?

By betting that a currency is going to be worth more than another one

Why are currencies worth something?

Because it’s a store of value

How do we know what value that is?

Ugh… I’m not digging my own hole, I’d need an entire semester to debate this

How can you analyze that one currency is going to be worth more than another?

Well, there’s fundamentals, news, technical analysis, etc

I use technical analysis…

What is technical analysis?

It’s looking at the historical movement of price and forecasting that it will do something similar in the future

How do you forecast it?….

You get it by now right? I can stop this game?

Please.. Say yes…


Ask yourself the right questions and your trading and life will improve. Sometimes those answers will force you to look up something else to be able to answer it but in the end you’ll be better off

It’s easy to make something sound complicated, the truly hard part is to make something that’s really complicated sound simple

Eheh, didn’t use Einstein for this one!

Once you are able to explain your trading strategy, why you take certain trades and not others you’ll have truly mastered your trading plan, and that’s exactly what successful traders do – it makes executing it a lot easier!

It’s only with the right questions that our lives can improve

Most of the biggest discoveries started with why or how, so get used to those two words and use them!


Anyway, I will definitely fall into a rabbit hole if I keep writing this post, I hope you enjoyed it! If you did, please do leave a like or a comment 🙂

Onwards

Fear

Fear in the FX market

Now, it may sound strange, why would a trader be scared? I mean, it’s not like he’s risking his life (Well, make sure you manage your risk…If you don’t then yep… I guess)

A good FX trader executes his trading plan with no fear.

A losing trader does not execute his trading plan BECAUSE of fear

Have you ever not taken a trade because you were scared? Scared of losing, scared of being wrong, scared of not being good enough, scared of losing money, scared of what other people will think of you etc?

Hell, I have…

The main idea behind this blog post comes form the book “Way of Warrior Trader” in it there’s a great section about fear

According to the author – there are three instinctual fears: fear of loss, fear of pain and the fear of the unkown

I mean, why are we scared of getting killed by an alligator?


1- Afraid of the pain you would experience while getting chewed up by the alligator’s jaws

2- Afraid of losing your identity as you’re being digested in the alligator’s stomach

3- Afraid of not knowing where you’ll end up two days later after passing through the alligator’s guts

Way of the Warrior Trader

Makes sense right?

I mean I wouldn’t want to be killed by an alligator (well, definitely would be interesting)…

So why are we talking about this?

(Nearly) all fears we are faced with are either anticipatory or reflective in nature


Fear of the future

We are scared of the unknown, the unknown we are all faced with is the future.

We don’t know what will happen today, and even less so in the markets since we don’t control them (kinda wish we could manipulate them for my own benefit…)

Not being an author I’ll quote the book again because he puts it better than I could:


To render repeated attention to issues that are currently outside our perimeter of control is a waste of life force and a distraction away from the situations we do have an element of control over in the present moment.

Way of the Warrior Trader

Instead of being worried about what will potentially happen in the future, focus on what you can control – and that is the execution of your trading plan.

So what are a handful of tips to control your fear when it comes to placing a trade?

1- Forecast every single morning, and only take the trades you forecasted

2- Have a trading plan – and know the strike rates and expected return every set-up has

3- Backtest, that’s the only way to do the first two points, so keep backtesting

4- Focus on your breath – try to breathe deeply into your abdomen, it’s linked with the vegus nerve that will make you more calm (and also reduce heart beat I believe)

5- Meditate (eheh you thought I’d have given up on this one by now) it will make focusing on the present moment and push away all thoughts a lot easier


Scared of success?

Being scared of succcess, may sound like a strange thing, but it happens to a large amount of forex traders and is one of the main reason why traders blow up their accounts

Ed Seykota is a smart dude.

We all get what we want from the market in the long run

The biggest challenge you will face in the FX market is your mental side. Make sure your mindset is in the right place.

Once again, I swear this is (probably) the last time I quote him for this blog post


Nothing can weaken your resolve to follow through with a plan more than the lack of genuine desire to achieve the end result.

Without such a plan, you can be assured that one or more of the four poisons of doubt, fear, confusion and surprise will eventually infect your mind. Effective planning will always help to minimize (if not eliminate) these poisons.

Way of the Warrior Trader

Accept the loss, understand that you don’t know the future and you’re just playing out an edge, take the position and be happy whatever happens next because you executed your plan.

Executing your plan is the goal, ignore the end result.


Cool video by AK Fallible about fear in the market! Love his channel, definitely would reocmmend

Make sure you’re not afraid to take the trade if it fits your trading plan

Yep, a trading plan, backtesting and forecasting is key, what can I say 🙂

By having a trading plan you outsource the trading (to you) so you get to delegate the responsibility! Definitely checkout the last part of that video tho – one of my fav. scenes in Billions hands down ahah


If you think that it’s the mental side that’s holding you back definitely check out the book, I did enjoy it and hit me up with your questions!

I love digging into peoples brains 🙂


Anyway, have a good one, I hope you enjoyed this blog post! Let me know in the comments if you want me to do more post like this!

Onwards,

Forecasting is key

Forecasting, backtesting and having a trading plan are the three pillars of successful in the FX market.

Do you have a forecasting routine? If so, keep it up! (let me know what it is)

If you want to become a full-time FX trader, you will have to develop a trading plan, backtest it, and forecast potential moves.

That’s (more or less) everything you need.


What is forecasting?

Figured I probably should do a quick explanation of what I mean by forecasting…

It’s basically “guessing” where the market will go next and how…

Sounds rather easy right? It doesn’t even take that much time

Forecast for EUR/CAD on the 11th of September

This is my forecast for EUR/CAD, I just drew on trading-view the potential scenarios that could happen, I know there are many other potential ways the market could evolve during the day, but in my view, this is the most likely.

You could use different drawing colors based on “I’m willing to take this scenario” & “Not willing to take this scenario” (that’s actually a good idea, I should do that)


If it’s this easy what’s the benefit

Let me start this section with: I go a lot more in depth with my forecasting process, just scroll down if you already know the benefits

There’s five key benefits for a trader, but I was lazy while building this infographic so here’s 3 key points...

1- It will increase your confidence, you are able to track whenever or not your forecast actually took place, which in turn will increase your confidence in your ability to be a few steps ahead of the market (which is key to be profitable)

2- You’ll be prepared, doing your forecasting is basically drawing out all the possible/probably scenarios – you’ll be able to decide ahead of time what price action you’ll want to see before taking a trade – all you need to do is execute your plan

3- It’s easier to profit, having done your forecast in the morning you are a less likely going to miss a trade during the day since you are able to place your alerts at all the key areas. Plus, it also increases the likelihood of you sticking to your trading plan

And the bonus two…

4- It will decrease your emotional attachment to potential trades, and trades you are currently holding: by drawing out several possibility you know that there is no guarantee that the price will do exactly what you want it to, it doesn’t care, instead it makes you realize, we are only playing an edge

5- It allows you to switch from analyst to a trader.

It’s really important to be an analyst when it’s the weekend and when doing your forecasting, however, when the markets are live, and there’s a potential trade set-up in the making you need to become a trader, not an analyst. Having done the analysis that morning will help you execute.

Here’s a video explaining it if you don’t like reading…


My forecasting process

Now let’s dig into my process, that’s probably why you’re here (sorry for making you wait)

I recently did a tweak so here’s a breakdown of what I used to do and what I do now, not a huge difference, but really happy so far

I used to draw at least three possible scenarios:

  • Two potential entries, so how the price gets there and where I’d be interest
  • One scenario where I wouldn’t be able to take the trade, either the market goes in the opposite direction or just impulses through everything I was eyeing up

That was done first thing in the morning and last thing before going to bed, because that way I would force myself to think about the possible, the probable and admit, the price isn’t necessarily going to go where I want it to

In the morning it was to plan the day ahead, at night it was to have my subconscious think about the market while I was sleeping, and once again, forecast where the price would go over the next seven/eight hours

It was a really cool exercise, but I wasn’t getting the most out of it…

Now I do my forecasting somewhat differently

I use my trading journal to track those morning forecasts (I keep everything in my excel file, from reason to trade, to monthly asr, to journal, to forecasting etc, I like having everything in one place)

Here’s this week example

So to quickly explain, I track the day of the forecast, the pairs I’m interested in, the direction, then three potential scenarios that could play out (out of many), a screenshot of the potential moves + drawings.

Then here’s the addition, I then come back the next morning and figure out which one happened, sometimes it was a fourth option, that happens.

But here, you can see I had forecasted the move 12 times out of 15 – not picture perfect but pretty darn close.

How do you think that makes me feel? How would that make you feel?

More confident in your skill? Yes

Happy because you get to collect more data? Yes

More likely to execute the next time you see a trade set-up? Yes


I highly recommend you to do the same

It takes less than thirty minutes in the morning, yet you have the entire day planned ahead

You know what you want to see before taking a trade – that’s key, it reduces your hesitation to trigger a trade, and avoids you from taking low quality trades

You are also able to be “free” and that’s one of the main reasons people start trading, they want to have free time. If you don’t know what you want to see in order to take a trade you’ll just stay in front of your computer, and basically be a slave to the market.

Don’t be a slave to the FX market: Forecast in the morning

Anyway,

I hope you enjoyed this blog post! If you did, please leave a like or share it? ❤ Would mean the world to me!

Onwards,