Bank Trader: Retail Traders Are Getting Better at Entries But Worse at Everything Else!

People want to ignore the responsibility of trading. People have to take accountability. Oh, it's because of this. Oh, the banks are pushing us. They're not. The market's going to go where the market's going to go. Even if you've got a million pound in your retail banking account, no one's chasing your stop loss. It will feel like that in a moment, but genuinely that isn't the case. People looking to attribute excuse for what's gone wrong when they should be focusing on, okay, what happened there? What can I do to stop that happening again?

Going back to that first bank, they sent me on loads of technical analysis courses because it was becoming a thing and nobody did it. Bear in mind this was a 15-man foreign exchange desk. >> Crazy. >> So I went away and I learned a lot. My chart became something that you just can't ascertain even where the prices because there was it was awful. And then gradually I just stripped things back and throughout that process which did take time took a couple of years I just realized I had more success with.

I'll speak to people and they'll talk about their emotions in a trade and things like that and how they feel around risk and I feel exactly the same. The difference is I don't act on it. Biggest challenge retail traders have is it's their own money and they're not accountable to anyone. You have to just create rules just like I would in a bank. My annual stop loss will be X. A monthly stop loss. That has to be a figure. Then when we come to daily, how many trades do you need? Even though it's my own money, I never break it because the minute you open the door to breaking that rule, you will do it forever.

What I'm learning here today, which is surprising to me, is it's a common belief amongst the audience as retail traders that the institutional guys, the guys behind the banks, they're better than us. They know more than us. They have better resources. They have insider information. And I don't know if it's a coping mechanism, but we just feel like it's different worlds. We're trading the same thing, but in completely different domains. Why do we have this illusion that the banks have got it figured out and we don't? When in the reality is you guys are figuring out alongside us.

Yeah. Uh. Ladies and gents, welcome back to another episode. I'm joined by Duncan. 30 years of experience and a diverse career as managing teams, working in banks, and now managing funds and being an educator. You've had a very broad career and and have unique insights which I'm I'm looking forward to explore. I want to start off with a philosophy of yours which is a huge proponent of success in trading comes down to risk. A lot of people tend to focus on strategies, entries, models, but why is risk the the first place you would begin this conversation?

It it just has to be really because ultimately we we have to learn how to protect what we have. It's all well and good. um having the ability, the tools to make money and and this is what you see specifically in the retail space and and I often say and and Steve Miley who is also featured in one of these podcasts, one of the worst things that can happen to a trader is when they their first go or their first entry into trading goes brilliantly well. Uh what you tend to find is they then chase that success that success just is the only thing in their focus. Uh whereby but Sorry. However, the focus should be on protecting your account or costs.

My background comes from banking. Uh that's where I started. I was I was lucky. I started there really young. Um so I was I think I was about 17 when I got a job. Um >> as a trader or at 17 I mean >> uh 17 I started at the bank. So basically I did work experience I don't have a degree. I I did work experience in just a a typical bank on a on a on a teller. Um so I had a really that I I quite enjoyed it. Um, it wasn't brilliant but I enjoyed it. Um, but they gave me a great reference and they offered me a job to come back and work there. Okay. Um, but obviously the just day-to-day banking didn't really excite me. However, the prospect of being a trader did. So I used the um went to the same bank and said look I'm I'm interested in getting into trading. So what you did in those days you went to their treasury function. Um, I used the reference I had u which got me got me in the door. Um, so I started working in the back office processing trade tickets.

But all the while you have the very exciting looking trading floor which is all glassed or even back in like 9495 this was is all glassed off. So nobody can get in and you need to have permission and everything in there just looked so exciting. Uh back in those days there was so much noise. There was a lot voice broking as opposed to computers and um >> shout you on the phone. >> Yeah. Yeah. So um, but I wanted to get in there so quickly but typically the bank had a rule. You didn't get in the trading room till you were like 21 22 years old. Um, but still I thought I'd chance my arm, push my luck a little bit. Um, and what I did was go to got got started talking about football with the traders, just trying to get a dialogue going.

Um, and then eventually I I I said to them, look, how do I get in what what can I do? Um, and quickly worked out my job started at 9:00 a.m., their job started at 7:00. So I said, look, can I come in and sit on your desk for two hours every day um, just to learn what you're doing? Um, and eventually one of them sort of said yes. So, I was brilliant. This is exciting. I'm going to get in. I'm going to learn how to trade. Uh, and then I discovered the reality of that was I turned up. They sent me out for everyone in the room's breakfast. And then by the time I got back, it was time to go back do my job. But ultimately the relationship was formed and then one of the more senior traders left and a gap formed at the bottom. So, um, that that was brilliant for me. Um, but day one, week one was probably one of the most harrowing experiences of my life. I've never been sworn at in a way where somebody really means it as many times as has happened that week. Um, but um got to the end of the week, my mom's like, "Do you think it's going all right?" I was like, "No, I don't I don't I don't think I'll see the month out." But it turns out I was actually doing a good job and that's just part well in those days that was part of the kind of incubation process.

Um, but yeah, from early on I was put my boss at at that junior level. Uh, I remember a week or well certainly within the first month or so he he's kind of sat me down and obviously from the minute I started on that desk they went right you have to have a position. Um, so I was sat on the this shows how old I am. It was on the dollar mark desk. So I traded the the the like before the formation of the euro I traded for just a year or so. >> Um, but they they said you have to have half a million um dollar mark in it. Um, and now the and it makes sense and this is something I did I I made I I did this with all my trainees make someone have a position um because that it sounds like a lot of money sounds like a lot of risk but in banking terms it wasn't really but what it did was it f I could be long of it I could be short of it but I had to have half a million in it and that just focused me on the markets I had to watch every movement every of the day and it was almost getting to the point where I was fighting just to keep at keep my P&L at zero. Obviously, I wanted it to be PNL positive. But my boss at that time sat me down and said, "Look, >> if you get to the end of this year and your P&L is zero, I'm going to be really happy with you." >> And for me, I thought, well, he obviously thinks I'm useless. He's setting no expectation on me whatsoever. But I now get what he's saying. The point was he just didn't want me to go in and just just swing the bat, miss and end up with basically it was about get getting into the job without making a mistake in it. And that was creating the the building blocks for moving towards being profitable.

That speaks volumes because I think a lot of new traders, especially with the FTMO like prop firms, it's very easy to just get caught up in the numbers and then try to swing for home runs when you haven't even earned your stripes. Whereas this philosophy is instead of trying to have a chip on your shoulder in a new office in a new job and trying to you know prove yourself which is easy to be at especially at that age is that no let's just be a break even trader and then learn the lessons and then build from there which probably would work well if if a new trader would follow same suits but I think actually doing that in real life is is another case. Let's take a moment to talk about a partner of the show a leading prop firm that is funded next. And it's important for me to listen to our community to see who are you working with and how can we make your experience better. And the main feedback I heard is trusted payouts, quick payouts, ability to scale, and affordable prices. And Funded Next has ticked all of those boxes. Not only being a top three prop firm in the industry, but also having on demand payouts, and every 10% you gain on your account, you will double your capital for free. And because in this industry, trust and reliability is the most important factor. An important guarantee that they have is that if you do not receive your payouts within 24 hours, they will gift you an additional $1,000 to your payouts just for being late. So, to unlock all of these benefits and work with a leading prop firm in the industry funded next, check out the link in the description or use the code to t. Yeah.

I'm curious to explore this uh environment first of uh it sounds like a wolf for Wall Street kind of people swearing, shouting and you know, bravado and and whatnot. uh whereas you would expect or I'd expect if I was to read about uh trading floor in a book it would be very calm, stoic, sensible, suited gentleman uh which is completely the opposite of what you faced. Uh how do you have a functioning environment where it's a high stress and and split second decisions with large amounts of money obviously have huge impact. Uh why does it turn into this spit of chaos?

Um well firstly it was roious. It was in some moments it was brilliant. In some moments it was awful. Uh it wasn't quite at the Wolf of Wall Street end but the um but do you know what I I would almost say I would take that the noise the the sometimes the anger the shouting the battle between the the execution and the sales. Um I I found that kind of fed into ability more than restricted it.

Interesting. Um, silence I find harder just be just there not being anything going on. I want someone to be standing up screaming out a piece of news that they've just heard.

Keeping everyone alert, keeping every it's a competitive environment. Uh, and that competitive environment personally I really thrived within it and I enjoyed it and I wanted I wanted to be part of it. When I when I was first starting I knew I wasn't good enough to be part of that environment. I just had to keep my head down, um, get the P&L up, um, earn my right to to find my voice across that room.

Um, but yeah, I I thoroughly enjoyed it. And obviously that's not how it is now. Um, >> okay. >> It's not dissimilar, but it's certainly not at the level, not the not the swearing, not the I'm going to say borderline bullying, outright bullying that existed in those days. So, I'm kind of associating it to, you know, locker room antics. Uh, you know, pregame, postgame, but when it's game time, you're all a team, you're all together. But before and after, anything can happen. Uh, in an environment, obviously, most traders are alone and and it's a lone wolf sport and usually it's from your parents' bedroom where people are trying to make it work. So when you have this environment of competing and then you know you could be at the end of a joke and and if you're losing if you're going through a losing period that's heightened emotions you know all of this uh external pressure obviously team and camaraderie can help at times but it can also be performance anxiety or you don't want to let others know you took a loss cuz you don't want to have the embarrassment. I'm just the word that's coming to my mind is heightened. Everything is heightened and trading is hard enough as it is, but with this heightened environment, it seemed like you rose to it or something that enabled you to thrive.

What was in that environment that that bought the best out of you instead of, you know, spiraling into uh despair.

Um, well, the well competitive I'm a I have a competitive nature. Um, your locker room analogy was spot on. that that's I I've I've played a lot of sport, a lot of football uh even up until I was 40. Um I've always enjoyed that environment. Um I've obviously you can thrive off the positive adrenalines, but one thing you mentioned I thought was was a good point and it's when you're losing you you mentioned that you could shrink into that environment. That can happen but also at the same time uh and this is very specific to retail traders who are at home. One thing that happens when you when you have a bad day in that type of environment, it's not very unlikely, but it's when you're in an environment like that, you can see if it's been a tough day in the markets, you'll see across the room, not just on the product, you the foreign exchange, but on the bond desk, on the on the equity desk, you can see that people are beaten up. And sometimes you think it wasn't just me.

That's reassuring. And but when you're in when you're retail trader trading at home, trading around your job, you will always think it's just you. And it's not. But you're not you can't visualize, you can't see it.

Um, so from a losing perspective, it can be supported. But don't get me wrong, if you can see that you're the lowest P&L on the desk, that's always going to hurt. There's no there's no getting away from that.

So how did that first year end where your goal was just to be break even?

Um, it was it was slightly positive. Uh, but I'd say it not as not nothing significant. But I suppose one thing.

You would have been early 20s, right?

Uh younger than that. Well, just before being 20, but the um one thing to point out is obviously bear in mind I'm sitting in a bank. It's different to when you're trading at home. It's not quite blank sheet of paper trading. You're you're not you have a responsibility to earn money based on your proprietary ideas but you are seeing flow now. So this means clients are coming on um clients can vary in their you have some clients you can take a nice margin on uh obviously a fair margin. You're you're quoting competitively against other banks. You have to you you're always trying to win the business. You're trying to make what you can in addition out of it. And then obviously you're looking to turn it around in the market at small just like any business works. You you're you're trying to take your your commission, but also you have the type of clients that will call you up and literally run you over. They'll ask you for a price, you'll give a price, within two seconds they've been farming it around the rest of the market, hitting them all at the same time, and you are literally chasing your tail, watching the markets fly against you. Now, obviously, as a as a bank, you have the option. you, the salesperson always wants the business. They want that coming in. Um, but as a trader, you have to be aware of the salesperson, who their clients are, making sure they tell you who the client is. Um, because a toxic client could also be an asset, if you're quick enough, if you're good enough. Um, so you you quote it straight down the middle. You want to see the the true side of the business, and then you want to get with that. Um, so so when I say just being at zero is the aim that doesn't mean say just you making and losing money just the sometimes the losing money can come from being sharp enough to get out of these sorts of trades.

Of course, and uh later on you ended up being responsible for others. What was that journey like? So we're talking year one and you're figuring things out and you're enjoying the locker room antics and then fast forward x amount of years you're now responsible. What happened in those years in between?

So I spent 5 years um at the first bank that I was at um which was the Bank of Scotland. Um and the problem I have sometimes you get turnover on desks and you can naturally climb through the desk. Uh at that time we didn't nobody left. it was kind of like a nobody really moved on.

Um, so therefore for me to progress my P&L progressed against the rest. Um, but my seniority didn't and it was it was kind of like I I'm outperforming you through by three times and I'm still having to go out and get your breakfast and your lunch and you just think to yourself I I need to move on. So I kind of took a almost like a side step in terms of bank size. In fact, the bank I went to is fractionally smaller um the cooperative bank. But it allowed me to go there as not a trainee trader, as a trader um and on their own. I I walked into a room where everyone I was a trader. I went there to enhance their team.

Okay.

Um, I wasn't expected to buy any go and buy anyone's breakfast or anything like that. Um, so I was there um for probably I think it's probably two or three years. I did really well those first two two three years. Really really well. Outperformed the whole desk. Um, and then a situation arose where one of the guys kind of had to leave. Um, which followed my boss having to leave a couple of years later. Um, and at that point I was doing as I say I was doing quite well. So the the the head of treasury, sorry, head of trading um wanted to show faith in me um and and and said to me, look, do you want to run the desk?

So So for me, that was that was excellent. I really enjoyed the opportunity. Of course, my first week running the desk was probably one of my wor I had probably one of my worst days ever, but that's just how life is.

The irony of life. Yeah. What was the feeling like of now going from you're performing on your individual level and now you're responsible for a lot more? Um I guess the competitive side maybe made you want to rise to the challenge but nonetheless it's it's it's no small feat. What was that experience like transitioning towards?

It I was greatly helped in that because you get you go right I'm in charge now. We we were making X before next year I want to make double that and I want to and we all have these instincts with us. It's I've leared to control it and one of the best things that happened to me in that scenario was um one of the guy obviously I was we were short if I'm stepping up we had to bring someone else in and they brought a guy who had worked on the spot for an exchange desk at a number of years before across and he was like 10 and 15 years older than me. He he understood what went on the desk. He could do it but he wasn't comfortable with risk. It it wasn't something he enjoyed. he was he was brilliant member of the team to to just churn through what we needed to do in the day. Um, but he wasn't necessarily interested in stepping up and kind of putting his head on the chopping block. Um, but where he added huge value to me was he being kind of more senior than me and me being quite I the first few times it happened I I sometimes I'd kind of push a little bit hard and I'd look around and I'd just get this little stare that was like you're pushing your luck a bit and I was the boss but I I he was he was a really young father. So at that point he was a he was his his kids were almost well his first kid was almost an adult and um, but I came to know the stair and then I kind of just just like anything with training you have to look for patterns more often than not when I got the stair was a very bad day and he he actually helped me a great deal just with this little stair because I knew I was perhaps stepping in the wrong direction.

And as I say, so you can have you can have leaders and people who shape you from above, but you can have them from below as well. It's just looking for the signals and identifying when the signals are positive.

Um, not necessarily positive, but when the when the signal is something you should be watching out for.

Um, so that that was a great help to me.

And at that stage, you're responsible for I don't know even know millions of dollars that are uh flowing through your final decision. when when you have that responsibility first of all how many traders were you o having oversight on?

Predominantly on that desk um on the foreign exchange desk it like I say it wasn't a huge bank but we would have always we always had three um sometimes we pushed to four um but yeah.

And would because I'm sure if they have independent thought independent ideas but shared resources so would it often be that someone could be long and someone could be short on the same thing or would it always be a unified head front in terms of trade ideas.

Um, it kind of when you're running the desk, you you want to encourage people to have their own ideas. Obviously, as the boss, you've got to be kind of o oversight. You you can't all be too we well we had a desk P&L um and therefore we then had to split the P&L between those who it was kind of tiered obviously as running the desk. you want the the biggest um amount of risk available to you.

Um, but the but but generally you looked at it and obviously as a desk we had a rule um in any any bank any bank in any financial sector you have a rule you have an annual stop-loss. So you you have an amount that you can risk in a year then you break that down to fairly logically you break it down to a month to a week to a day.

The hard cut off what would it be as is that as a percent or how how would that be?

It was in all the banks I worked it was just a cash figure. Okay.

So banks tend in those sort of spaces they tend not to work as a percentages because you're not really they're not giving you a >> 100 million pound book. They're just give you're trading the bank's balance sheet but you you get a figure of risk that you're you're allowed to work out. But yeah we'd have uh obviously my job was to keep the risk within reasonable levels. Obviously at times if I was long of DYen and one of the traders wanted to be short, that's fine. That's that's okay. That's his decision. If I've given him a mandate to make X amount of money, he just cuz he disagrees with me doesn't mean to say I have to say, look, no, you can't do that. Uh, because that that just doesn't work. That that doesn't balance things out.

Would that be and I completely get it because you you know people enter at the same time in opposite directions cuz one might be swinging, one might be scalping just as an oversimplification. Um, but when there is a hierarchy almost you're the boss so you're the most senior and then these are uh junior in that sense and they've also seen your performance in prior years there can always be that feeling because I also have it when I was trading with friends um you let others decisions influence your own because you think maybe they know something you don't know or they are better than you so therefore I should listen to them and and it can draw you away from your own edge maybe.

How did you prevent that not just from yourself as a as a boss to others below but also amongst themselves to not uh influence each other too much.

Yeah, you kind of just keep you have to keep an eye on that. Um, we you kind of encourage it by shaping someone. Obviously, I'm looking at what they're doing. We we kind of cut blanch. We could trade whichever currencies we wanted. Well, G20 currencies.

Um, so therefore, you'd kind of encourage someone towards right you could you just keep an eye on the kind of antiodian currencies. You look at the sterling centric currencies, you look at the myself, I would predominantly look at yen, Swiss. Uh, I I just wanted the ones that were moving in the most and in that sort of time period, they were quite good aggressive movers.

Um, but yeah, you would kind of shape things in that direction. Um, and yeah, if you if if two of us or three of us were long of the same thing and somebody else is looking at, you'd be like, look, enough. We can't all be doing the same thing. But we did a lot of team stuff. So, we go we'd have a chat every morning. We'd all go, "Right, what's everyone looking at? What's your where's your lines?" And we'd look at it and then someone would present something and go, you go, "Right, some someone would go, it'd be a good idea." And I would be go if they were going to do a position in say like five million in in Sterling against the dollar or cable as we called it. Um I'd say okay we'll do do an extra three for me as well.

Uh, and kind of it's a I I I thought that was a supportive way of doing it and going I like your thinking there.

Yes.

Let me join you. I'm not going to jump all over it, but I.

I'll come in um and then we can kind of dis discuss it as we go.

When you have this environment of uh shared because your whole trading career started with this bank so you've been coached up by them who I'd like to explore that in a moment but also if you have same resources, same ideas, same mentorship, same guidance, same strategy. Uh do do you end up with a lot of individuality nonetheless or is it very mechanical and methodical?

It's not mechanical and methodical. Um, and I don't trade in a mechanical methodical way. Risk, yes, risk is mechanical and methodical. It can't not be. Um, but no, you kind of you I I always went in the bank where the co-op bank where I was running it, I didn't ever employ an external trader. Um, I always brought people,

I thought that the way I'd come through, it was the right way to do it. I always wanted to give whoever was standing out in the back office, whoever was doing a good job out there. Um, give them the opportunity to come through in the way that I did. Um, I didn't want to take someone on just because they had a degree because they to me that wasn't the way it should or had to be.

That's the way it is now. you you're not getting close to a dealing room without not just a degree but a top degree. Um, so I wanted to give that opportunity but like you say you have to be mindful of just creating mini me uh because.

Yes, it's an echo chamber then.

Because suddenly you're just you might as well if you're going to do that, you might as well just increase your own risk by three or four times and do it yourself. For the last two years, a proud sponsor of the show is a topranked leading prop firm, Alpha Capital. And for the years that I've been working with them and the thousands and thousands of viewers, you guys that have been working with them through the discount codes of Titans of Tomorrow, it's clear for me to see why they are top ranked prop firm in the industry. They have also reached a monumental milestone of $und00 million in payouts. And with the multiplestep plans and the multiple package types they have, there's going to be an option catered specifically for what you're looking for. So you can buy an evaluation account catered to your needs at the most competitive prices. And with our discount code toot for titans of tomorrow, you're able to get the most unbeatable unmatched prices in the industry with a leading trusted prop firm. And with that being said, let's get back to the episode. So what is the benefits of having others? That's exactly where I wanted to get out of if you all have a unified approach where or if you're teaching them, then many use that they're only going to be inferior because they haven't fully mastered what you would be teaching. But it seems like there is always room for individuality.

Completely.

Is that individuality based because if it's not risk, if that's standardized, how is that individuality expressed? Is it based on how they read sentiment and fundamentals or is it their uh how they dissect the technicals maybe differently to yours and how they weight certain things? What is that individual level on a trading floor?

Um, I would say it wasn't necessarily fundamentals, although fundamentals have to play a part in it, but it was probably more technical and time frame. So some of us would be looking at more kind of intraday straight in and out I guess what in the retail space is called scalping.

Um, others would be looking at right I'm going to take this hold it for the time horizon likely to be two to three weeks but that's fine.

So that's kind of how it was split up and like I said across currency pairs as well. Um, and obviously every every currency pair or individual currency has its own.

Um, risks and and volatilities. So that's kind of how we shaped it with different time frames, different types of technical analysis.

Would you leave the final decision of risk to the individual when you were in a in a leadership role or was that something that they came to you with an idea and then you position it against others and and maybe over the over the bank's policy?

Um, well, no, everyone had their own individual risk.

They just allocated allocate. So the reason I asked this because obviously in an individual retail perspective um risk is in our own control. So we can if it's high conviction play should I increase risk or not? If I'm in a losing period should I risk off a little bit to build back my confidence? You know there's all these decisions but most importantly there is the potential for.

A spiral to happen because who's going to stop me from buying more and more and more whereas in in this scenario I would imagine there would be cut offs or monitoring or some overall control. So h how is that managed on a floor level in terms of risk?

Uh on a floor it may be different now um because I've not been working in a bank since 2015 I think it is. Um, but no it was all done by monitoring. It was my job to watch it. Obviously if it went overnight sorry if if the day closed then our middle office would pick up on it but middle office couldn't pick on up on it intraday. So intraday it was my job to do it. Um, so yeah, it was my job to keep an eye on the risk. Uh, obviously I was.

I never really had a battle on this front. Um, it it was the rules and and this is a real key thing when obviously I even when I've traded my own money when I work for asset manager I've never broken a risk limit. Never in my life came close once and that was with a Euro position over a weekend when uh Russia shot down a Ukraine play. Okay. There's not a lot I could have done, but I I stayed in with my risk limit literally by a tiny amount.

Why do you think that is? Is that your personality or is it just years of experience?

It's when when you've come from the the banking or wholesale sector, the um it's the the rules are the rules. It's it's quite simple. If you in terms of stepping over your risk limit, if you work for a bank and you do that, the first time you might be lucky and get a written warning. the second time you've lost your job.

So therefore, and I do feel for retail traders coming to it now, I I never break a limit. I never will break a limit because I've been bred not to break a limit because my job and my livelihood depended upon it.

Kind of when you what makes it tricky in my opinion for when you get to the retail sector um is it's down to the person and it's more more often than not it's the person's money and they'll think to themselves, well, it's my money to lose. when you work for a bank, it's somebody else's money.

And also it's your job.

Yes.

So, I've been I've been bred to work in this way. Uh, and for that reason, I will never reach a limit moving forward. But like I said, when you come to a retail space and they're being stopped out, they're thinking about moving the stop loss by another 10 ticks. 10 ticks equates $50 or something like that. And they think, well, I've got more money than that in my pocket.

But it's a discipline. And a lot when I work the trade day and I do these mentor calls for them, so much of it comes about becomes about risk. Everyone focuses on the um on the building this strategy and creating this. Nobody focuses on the rigidity of risk and and giving them giving themselves the best chance of not blowing their account. M.

Um, in terms of when I was managing a team, if we started a month badly, it was my job to scale the risk back because well, just to throw some hypothetical numbers out month, let's just say our monthly stop loss was £100,000, which to be honest with you, in a bank, it's not really that that that huge.

On a single trade, a single idea.

In in a month. In a month, let's just say you're allowed to lose £100,000 in a month. So, we would have our daily risk limit was £25,000. Now, obviously four days it's done. Um, but 25,000 that's that's kind of that's the extent of the risk. That's not what we want to be within on at the start of the month. We'll probably and towards the end once you've got an established team, you almost you, you know, not to go to the extremes of risk at the start of the month. You want to build into the month slowly.

Uh, because as traders, you do zero them. You zero the P&L at the in your mind. You zero the P&L at the start of the month. You can't say, "Well, I've had a great year." That doesn't matter. It's it's all about this month. Um, now, if we have a bad few days, um, if well, let's just say if I went to the extreme of let's the the hypothetical £25,000 daily stop loss for two for two days, the next day my risk gets cut in half. Everyone's risk on the team gets cut in half.

Okay. Um, and and again, if I carry on losing money at that level, I will go to a court of risk. Um, and this seems kind of self-defeating. You're like, how are we going to get this? How are we going to dig ourselves out? Sorry. How are we going to get all this money back?

Well, firstly, I've always been an an advocate of a high-risisk reward ratio.

So, I know some people use one to three or 3:1. I I always look to make three times more than I'm risking on every trade. So therefore, if I get two trades, two trades in a row long, I only get need to get one out of three, right? And.

Yes, break even.

Yeah. And I like to think I'll get more than that.

Can I put myself in a position where I can't afford to be wrong?

No. Because I'm going to be wrong. Even after all this time, I'm I'm going to be wrong. I've accepted that. It's But it's about how I act when I am wrong. So even now even with my own money I will literally go through this process of half risk quarter risk because the emphasis has to be on stop losing money.

Um.

So some things I want to explore here when when you go through a losing period assuming someone hasn't gone on tilt and they're taking rational decisions the likelihood of three losses in a row turning into four. I guess there's a number for that but then four turning into five to six to seven to eight to 9 to 10 it diminishes and and 10 losses in a row should be pretty abnormal. So when when you are going through a losing period um it's twofold where at some point it's going to turn around but if you've dropped your risk um you're going to be on a whole a lot longer and therefore the recovery is going to be prolonged and and whatever psychological implications that could have. Um, why is the approach risk off and and cool down as opposed to keep chipping away and let the edge, you know, let the numbers and the probabilities do the heavy lifting?

Um, because the way I see it, it's like form in sport. If you're out of form, you need to you you're going to get dropped and therefore no one's getting dropped. But let's let's find our form at a lower level.

And then just as quick as the as the obviously if I have a good day at if let's just say I've gone down to my quarter risk if I have a good day I'm back to half.

If I have a good day I'm back to full.

So I want to get back as as quickly but I cannot and and this this came through everything that I'm talking about from my own experience I'm not saying it's the right thing I'm just saying it's what I've found and how I've coped with it the best way.

But I remember in the first few years there would always be that one month where you just couldn't you couldn't buy a win you couldn't and and always I'd be walking to the station just thinking what am I going to do what am I going to do and it and it came from the fact that I can't just keep throwing x amount away every day trying to be right.

So therefore earn the right to be and it's like I say I I appreciate on the face of it seems self-defeating to be cutting your wrist back stopping the opportunity for the psychological relief or or you know just giving yourself a bit of grace.

Did you ever experience not yourself or maybe witnessed others where you you approach that quarterly risk number and then there are winning opportunities or good opportunities presenting but you're also kind of paralyzed by the situation and and therefore fear takes over instead of greed in the opposite scenario. You're too fearful to then interact with those trades that should recover you. You don't take them. uh and therefore you just worsen your situation through analysis paralysis or just fear of getting in.

Well, this is why I always reduced the amount because it would never because I was trading on a lesser level. It never stopped me doing it.

And that was the important thing because even though yes, I would be walking out I'd be walking to the station just as angry cuz I'd only I'd smashed it and but it was only a quarter risk.

But I proved the process. I've proved that I'm doing it and I've earned the right to increase my risk again.

Um, and but yeah, it like I say it I'm going to be furious about that. I should be on full risk.

But over the years when I know that when I didn't do that, I just went done and done and I never want to get to that point cuz that is the worst. I I got close to being stopped out for the month once um and I got that month back to zero. And yeah, I would have loved that month to be up, but I was so happy with zero.

Because I was at at the depths of despair. And that zero show that it's probably one of my biggest achieve probably one of my best months. Well, best part of months.

Because you your back's against the wall. You're you're obviously your risk is tiny because there's no choice. You've got nothing left. But to fight it back is is I think it's a real skill. Hey Titans, let's take a quick break from the episode to talk about a sponsor and partner of the show that is Ola Prime. Now a lot of traders have been talking about Ola Prime because they were recently the winner of the fastest payout prof here in Dubai. And something that you don't see so often is that they are backed by their own brokerage firm Ola Prime Markets. And a few things that I love about Ola Prime is that they have offers for futures, forex, and crypto traders. And most importantly, they allow you to trade on over eight platforms. And further, they do a 95% profit split. Basically unheard of. Which means whatever profit you make, you keep 95% of it. And most importantly, because of their reward, they're one of the only prop firms that offer a 1-hour payout through a structured 10point 1-hour payout system. Your payouts are practically on demand, which means you can spend more time on the chart trading, withdraw your profits, and go back to the markets. With all these steps, measures, and awards in place, they are truly redefining transparency and trust in the prof space. So, if you want to work with a prop firm that you can trust and a partner of the show, click the link in the description or use the code toot for Titans of Tomorrow to get the best prices and discounts that I've personally negotiated for you guys, our Titans of Tomorrow audience. With that being said, let's get back into today's episode.

Talk me through that time where you were climbing out from almost blowing an account, the the retail comparison, but you know, you're at the limits, quoted limits, uh, and you climb yourself back.

out to the achievement, which is a break-even.

Over what time frame? What kind of thoughts did you have? How did you approach risk or even opportunity?

We, well, there was, it was a, it was difficult because it was a, a desk stop limit, but it was a matter of just like, right, okay, we're, we're, we're down at this level. Nobody wants to be at this level, but it's where we are, and we've, we've got to just be, not be perfect, but just be good at this small level. And then the next day, we can, we can climb it back up and climb it back up. But it's difficult, and especially when you're the boss as well, because someone of the team is going to have lost more than the others, and you've got to manage that. B. It could have been, could have been me, but, um, you've got to manage the balance there. You've got to keep the guy who doesn't deserve to be in this position, but he has to be in this position because we have to fit within our rules.

Is it open books? Everybody knows how everyone else is doing?

Yeah. Yeah. We can see, everyone can see everything about what everyone else.

Interesting.

And you, you see and hear everything. Sorry.

What about, um, on the flip side of, uh, being conservative down in a losing period? What about when there's, whether it's a losing period or in a winning period, but a high conviction play based on the analysis that you have or the playbooks that you may be following that this is aligned to be an A+ setup? Would it be maintained risk and the discipline risk, or is there an opportunity to scale in on high conviction plays?

We kind of, in terms of scaling in, the way I've done it, and the way that the teams have always done it, um, I'm very much in favor of adding into positions as they go. Um, so I use very basic technical analysis. Then I'll look for secondary levels to break. When that secondary level goes, I'll be looking to trail my stop loss in the initial to certainly to break-even, adding in, or well, trailing my stop loss in the initial to break-even, adding in, and so effectively throughout the trade, I could add in three or four times. So, for example, gold, um, at the turn of last year and into the start of this year, I was just adding in every hundred points, and my, my stop loss at any point, I was risking the exact same amount of money.

Okay? But I ended up with a position that was five times bigger. But, but just adding in, and as a desk, that's how we used to approach that. We never risked more than the original amount. But we ended up with a trade. The hard part is, of course, not strangling your trade and being patient enough to wait for the right secondary level. And that secondary level can never just be a monetary point. It has to be a secondary technical analysis level, or a breaking of another previous high, or some past support resistance. um

When, when we explore, um, methodologies that you and other traders on the floor were using, I'm sure there was a mix of strategies, ideas, but also time frame as you mentioned, of someone might be day trading versus another might be holding a long-term position. Just generally speaking, if, if there is any insights here, was there more success in one category over the other, where, uh, this was just more favorable area to be in, more swing trading, for example, or it was basically equivalent?

Um, it's different for the individual. For me, um, I do a lot of analysis on past trades. Um, I keep it really, really simple. Um, but one thing I did, and this is like well over a decade ago, but I actually sat down and looked at my own time frame. I went for probably at least a decade working in a bank with never really looking at what any sort, looking back at anything I'd done. Obviously, I was mindful of what I'd been successful or not, but to say I'd actually sat down and studied it and looked at the stats and looked for the answers. Um, I, being honest, I didn't do that for at least a decade because nobody else did. Um, it was just the time where people didn't do that sort of thing. Um, but then suddenly, when I sat down and looked at where I was getting success by currency pair, by time frame held. Now, what I liked doing the most was having a big position and holding it for an, well, 20, 30 points, which would probably equate to in a typical market, uh, would perhaps equate to about an hour, two hours. That's what I enjoyed, having a big position, looking for this sort of move.

That was what I, that was what I thought was me. But then when I suddenly started looking at when I was holding trades for two to five days, it, it was, I was infinitely more successful. And that was just, it was a horrible realization for me because you think the bit, the kind of sexier bit of trading that I wanted to be doing over here, wasn't serving me as well. M. Um, so, I mean, obviously these days we have machines that work all this out for us, but when I actually sat down and really, and I mean literally drew it all out, um, it was hugely disappointing, but ultimately, you have to focus, you, you have to focus on success.

So, when you had that realization that the data showed you that, uh, day trading or, or lower time frame trading was not optimal for your strategy or your personality, uh, despite what you maybe had intuitively felt. How did you react to that dis, that insight?

Firstly, I just scaled the risk back. So, I didn't stop doing the one to two hour trading. Um, because ultimately, if I just stop doing it, how am I going to know when the market changes? And in two, three months, this is better than that.

So, what I do is just control the risk back down. So, I attribute far greater level of risk, my risk to the two to five day trading. Interesting. And I maintain this, because one, I want to be doing it, but two, at time, the market will move and shift, and how we're doing things in this moment isn't how things are going to be in, uh, two, three months' time, and, and we won't be able to identify what's working in this moment unless we're not doing a little bit of it. Yeah.

That's a very interesting insight because something that a lot of guests have spoken about is, um, you know, 80% of my profits come from 20% of the year, speaking to how, you know, a certain strategy we optimal at a certain point in the year, or a trending market if you have a trending strategy, and a consolidated market, consolidating strategy. Uh, with that being said, just to see everything through, would you deploy multiple strategies throughout the year, or was it similar strategies, just, uh, different time horizons of execution and exit?

Um, I don't have a kind of written, I have a set of rules in my head that I follow. Okay. Um, I don't have the kind of a written defined strategy. Certainly nothing automated. Um, but really across the time frames, the rules are very similar. It's the time frame that differs. I, I don't tweak it to the, um, in terms of entry points, or the, the kind of pips given through the level. That can all be tweaked. That, that, that can literally be tweaked by the product, product, whether it's gold, whether it's equities, whether it's currencies, um, that I'll cons, I'll, I will be looking at kind of, I, I sit down and kind of every two weeks and look at lo my losing trades. Um, and I'm just looking for patterns. I'm looking for the same thing happening to me again and again. I've already lost my money on these trades. So the way I see it is, I, I got to try and get some, some money back out of them. And that money, getting the money back out of them can be learning, because I could do this type of analysis for like the last two years. But can, what if I was analyzing some data from two years ago, or even a year ago? It's sometimes even six months ago. Yeah. I can see that perhaps my entry is too tight, and I'm going in over this last year. That's not helping me about this next two weeks, sorry, this next week. So, I, I kind of do this on a more micro level. I do it every two weeks. Um, and I'm looking to see because what I tend to find is that's telling me what's happening now. And if in the last two weeks, the same thing has happened to me time and again, I can now, I can see a tweak that would have eradicated 70% of these losing trades. If, if it would have eradicated 70% of the losing trades in this last two weeks, it's got a fairly good chance of working in the next two weeks. Like I say, if I analyze a year's data, that's, we're looking at a year-old market, not the market that we're in. Um,

And there would be deviations or changes?

Completely. So, what would have been working for me, that we, we could be looking at a completely different market. Uh, the volatility may be completely different. Um, so again,

How do you stay on top of that, where let's call it the evolution of the market or seasonality? How do you evolve with it, or how do you know how I need to pivot as the market is changing?

This practice. It is literally this practice of looking at, obviously I'm looking at my winning trades because I want to kind of enhance, like I said before, by looking at the time frames, where am I getting success doing that by product, because obviously I'm a bit more diverse now, I'm, I'm not just FX anymore. >> Um, looking at product, look, where am I getting success? Looking at the, then we look at the losing trades. I, I literally will, uh, take a screenshot of every chart before I get into a trade, and I'll, even though the chart should scream at me what, why I'm doing what I'm doing, I'll write two lines. Not, nothing. I can write more if I want, but I just have to write a couple of things. When the trade closes, I will take a screenshot of it, write a couple of lines about why, what happened. Obviously, if it took, if it's made money, great. Wonderful.

If it's lost money, why did it lose money?

Okay. Interesting.

Was it, was I too keen to get in? Was my entry just a little bit too tight that got me in at the top? Uh, did Trump come out with some random comment? Because that's important, because when I'm analyzing losing to Trump, Trump's a nightmare, but ultimately it's the second time. We know that. I've been there before.

Um, but therefore, if I lost a trade because Trump's come out with a random tweet at an unscheduled moment, I can literally take that out of my analysis pile because I physically cannot do anything. An act of terror, an act of nature. There's, and Trump, there's literally nothing we can do about these things. Um, however, if I've held a position into payrolls and it's gone arry, that's on me. That's, that's my rule is never trade payrolls. And again, that's a learned experience. The worst thing that happened to me was when I, it was when I'd taken over running the desk. My best ever day trading by a mile was payrolls. I'd had a really good morning. So, I felt comfortable to have a little bit of a go into payrolls. That went well. I got the ad in right. Uh, so I had an amazing day. And like I say, it's probably one of the worst things that happened to me, because then every payroll was, I was like, row my hands together. Here we go again.

Um, and then when I actually sat down and analyzed how I traded on that day, it really, even with this massive up day, it leveled out and went negative.

Yes.

Um, so from that point, I took my, and but it's so tempting as a trader. So, so tempting.

The volatility. Yeah.

Yeah. So I actually took myself out of the equation. I'd arrange a, a business lunch with a broker or a client, and I'd disappear for the afternoon because I knew if I sat at that desk, the temptation would be too much. Interesting.

So, it's just about finding these little controls.

Can you explore with me and share with the audience how you generate an idea? Like, where does it begin, and walk me through from idea to execution?

So, um, obviously to start with, I've grown my fundamental knowledge as I went, going back to when I was at the first bank. Nobody really helps you as such. Nobody actually sits there and goes, right, CPI means this, and if this figure comes out, nobody really does it. Literally on the first day, the guy, my boss, threw the Financial Times, which obviously is a big, well, used to be this big pink paper. He told me to read it from cover to cover, which I did for months, and I would genuinely say for the first few months, I didn't absorb a single word of it.

Um, but obviously over time, I've built up my knowledge, and I now have a bias towards where I want to sit. Let's just keep using currencies as an example. I'll have a bias of whether I want to be long or short of dollars. That won't stop me being the other way if the technical setup, but if, if I get the double confirmation of a technical setup. So, from a technical standpoint, I'm Mr. Simple. Um, going back to that first bank, they sent me on loads of technical analysis, um, courses, because it was be, it was becoming a thing, and nobody did it. And bear in mind, this was a 15-man foreign exchange desk.

Crazy.

And people weren't using charts at all.

So, I went away and I learned a lot. I learned how to use all these different, and my god, my chart became something that you just can't ascertain even where the price is, because it was so, it was awful.

And then gradually, I just stripped things back, and throughout that process, which did take time, took a couple of years, I just realized I had more, more success with trend line breaks, support resistance. That was it. You can know how to do everything, but the most important thing is finding the right one for you. And this isn't, he's saying that anyone who puts a fibs on a chart is wrong. That can work for them. It didn't work for me.

Um, and so basically, I have a 200-day moving average on my chart. That's about it. And obviously, they don't come into play very often. Um, but yeah, I just keep it very, very simple. So I'll look for a level to break. I want momentum to be with me, which is why I'm always looking for the break. I will, if a, a good level rejects, I will trade on that. Uh, but on a lesser risk, I'll trade 50% risk. If, if I'm fading a level, um, because ultimately I want the break. That's, that's what I want. I want this explosive momentum to it. Like I say, if we, if we fade a level, yes, momentum shifting to the downside. Um, but I, I look to, I look at these levels as big things. So, the reason I trade 50% is because I don't want to miss out. If it comes off it, I don't want to miss out.

But if we do then break, I don't want to spend all the money and have nothing to do what I originally wanted to do.

Okay?

So, it's about being in it, but tempering the, the idea. Obviously, I'm then looking at, um, the time horizon of how I see this trade. Obviously, if I'm thinking, look, we're looking for 150 points in dollar yen. To think I'm going to achieve that in the next three hours, it's not happening.

Yes.

So, and therefore realistically, that's going to take, hopefully sooner, but realistically, that could take two to three days. And then looking at the calendar, what's coming up in the next two to three days? What could mess this up? Um, what I won't do is go into an event. Um, yes, I've got a good economic understanding, fundamental understanding of what's going on. Did, did I know what inflation data was going to be today? Of course, I didn't.

I can have an inkling. I can have, I can work out how I think the market will react to it. I don't know the figure.

So, how do you prepare yourself? Let's say you're getting into a position on Monday because of the technicals and overall sentiment, and, you know, there's something coming up on Wednesday, and you can have an inkling of what it could be, but in reality, it could be one way or the other. So it could ruin your trade or or take you towards your profit level. Would that influence the decision of today, of should I get in or not, or as in, or you get in and find out what happens?

Uh, on the specific example you just gave, of of the Monday to a Wednesday, I would get in.

But I would be very mindful of it.

Yeah. There would be no way I'd be going into a decision that I didn't know or understand, uh, like a, so say Wednesday. So I'll say FOMC statement, or, or an interest rate decision. There's no way I'd go into that with, with the full risk. I'd be looking at either, um, trimming the position down to make it at best. Hope, obviously, if it's, if it's out of, and this has to be solid, whether it's in, in the money or out of the money, because what you often see is, okay, I'll trim it down before the, the FOMC on Wednesday.

That's it. That's, you can do that if it's going your way. If it's not going your way, you won't want to do that. Nobody wants to cut out a position that's out, out of the money. And more often than not, you'll see people just want to me, that's gambling. That's not what we do. This is trading is about thoughtfulness. It's about,

Being being honest about your risk, being disciplined within your risk. Um, if you start to do that sort of thing, then suddenly that's when not only are you losing what you intended, you're taking some slippage because,

Some, and that to me just isn't accept. I, in the early days, I can't say I didn't do it, but I certainly don't do that anymore.

So, but yeah, but if it's like, um, for example, the morning of payrolls, I'll take a position, but I will have to be out before the, the number, and I, I would not run that into it. Um, payrolls. The, the thing you said earlier about whether I sat there with a trader next to me with the wrong position. I remember going into payrolls once before I quit trading them. The guy sitting next to me was long dollar yen. I was shorting. I find dollar yen trades one of the truest things after, after payrolls. He was long, I was short. Five minutes after payrolls, we've both lost money.

It's, I mean,

Yeah.

It's not even casino red or black. Pay it is that you've got these, so many factors. Is you're looking at the, the headline number, you're looking at the revision, you're looking at average, um, sorry, um, the average earning element of it. All of these things come out in that split second, and the market will do this, this, this.

Yes.

It's just, it's just not a day to play.

Um, and, and I'm a big advocate of,

Take time.

Prior think.

What, what I'm, what I'm learning here today, which is, uh, surprising to me, is, as a retail trader, and, and I think it's a common belief amongst the audience, as retail traders, that the institutional guys, the guys behind the banks, they just, they're better than us, they, they know more than us, they have better resources, they have insider information. And, I don't know if it's a coping mechanism, but we just feel like it's different worlds. We're trading the same thing, but in completely different, uh, domains. But it seems like your experience and your journey was, you got to figure out the fundamentals, kind of like a retail trader, by yourself. The technicals were some courses, but you got to navigate it yourself, and it just becomes, and the emotions obviously, with regards to risk and going on tilt, and all these things that you had to navigate, would be basically the same as an individual retail trader. Um, why, why do we have this illusion that the banks have got it figured out and we don't, when in the reality is, you, you guys are figuring out alongside us?

Yeah. Uh, the honest answer to that is quite harsh. It's an excuse.

That's it. At the end of the day, because it's easier to say, and believe me, when I was sitting in a bank, you, you'd go, ah, that's Goldman's or JP Morgan have done that. You look to someone else. You're, you're always looking for an excuse. And, and no matter where you're sat, there's always someone to point that excuse at.

Um, and I don't mean that harshly, but, but it is. And I, I do these kind of mentor calls for, for Trade Day, and, um, I'll speak to people, and they'll talk about their emotions in a trade, and things like that, and how they feel around risk, and I feel exactly the same. The difference is, I don't act on it, because as I mentioned earlier, I was bred not to act, because it lost me my job. That's the difference. People will, and the, the biggest challenge retail traders have is, it's their own money, and they don't have a boss, and they're not accountable to anyone. M.

Um, but they have to be. You have to be. You have to just start going, right, bring, create rules, create, just like I would in a bank, create my, my annual stop loss will be X, whether that's a percent or a cash turn, doesn't matter. Whether a monthly stop loss, again, that has to be a figure, percent or cash, weekly, daily. Then when we come to daily, we can go, right, okay, within a day, how many trades do you need?

So, for example, um, when I was, I had a brief period where I was trading my own money, uh, I would have a daily stop loss. Now, I wanted three trades a day. I, I mentioned that before. If I, three:one risk-reward ratio, yes, three trades a day.

So, therefore, my daily risk has to be split into three. And that, that has to be, even though it's my own money, I never broke it, because the minute you open the door to breaking that rule, you will do it forever. And like I say, it's kind of accountability. Um, people want to ignore the responsibility of trading. Um, and again, I, I'm not just saying this as a trader who doesn't understand the retails. I really do. I, I've kind of,

I spent five years at the trading academy, kind of running the trading academy, nurturing people along, and some high net worth individuals there as well. We're not talking about people coming in with small accounts. But to be honest, I cared more about the people with the small accounts that wanted to make it work.

Um, because that, that's what they had, and that's what, but it was getting them to understand.

Um, but it's accountability.

People have to take accountability. Like you said, people will look, oh, it's because of this. Oh, the banks are pushing my. They're not. They really are not. Um, the market's going to go where the market's going to go. Then no one's, even if you've got a million pound in your retail banking account, no one's chasing your stop loss. There's a lot bigger going on out there that, that, that it will feel like that in a moment, but genuinely, that isn't the case. That would, that true. I,

Can almost say that that isn't the case. It's just, you, people looking to attribute excuse for what's gone wrong, when they should be focusing on, okay, what happened there? What can I do to stop that happening again? That, that really is the key thing.

Because you've been in a unique spot where you've trained and been a trading floor boss, and therefore you know, helped people and their individual problems in that environment, but also on a retail level, you've also guided and, and mentored people. Have you noticed any insights worth sharing between differences in behaviors or tendencies, or what's holding people back specifically in the retail realm?

Pretty much what I just spoke about, really. It's, it's just the, everyone, there's an element of sales for retail and trading that I'm not particularly comfortable with, the kind of millionaire lifestyle, you could do this in, in X amount of time, you could be doing this.

Trading is a job. It's, it's, you, you have to serve an apprenticeship. Whether you're doing that in a bank, or whether you're doing it yourself at home, in your bedroom, or, however you're sitting around the pool, however you choose to do it, it doesn't matter. It, it's an apprenticeship. You earn, you, you should earn the right to go from a SIM or a demo,

Right.

To a small trading account. You should set yourself, when I get this, this amount of money to that level, then I des, then I deserve the right to fund myself, by this bigger amount. The problem the retail traders face is this speed to get to the top. That's the biggest challenge. This speed to get to the lifestyle.

Um, and the, probably one of the biggest things is this, if I tweak this in my strategy, it will stop me losing all this money. Well, first of all, concentrate on stop losing the money.

Concentrate on getting the right structure in.

Um, people tend to just, the, the, um, the amount of people who just blow accounts and then wait a few months and then come back with another account. You should never blow an account, because if you do things on a percentage basis, an account can't blow.

Um, but it's, it's that focus. That's the biggest challenge. The biggest challenge to a retail trader is the fact that they've got nobody as a boss.

You can have a mentor, and I'm very honest with the guys when I, when I speak to them at Trade Day. I'm, I'm a mentor. I'm not going to, I'm not going to. Sometimes you get people go, tell me what you do. What I do works for me, and I literally will tell them what I do, but whether they can make what I do work,

Sure.

They probably can't. It, it's, they'll probably struggle. And, but the, the problem is, in a month's time, when the market's changed its shape, a lot of the time, people buy these, someone tells them how to use signals, or, or whatever they pay for it, and then they walk away, and they think they've cracked it. They have a good month, and they think that's going to be it forever. It's not, because ultimately, any signal or, or strategy is going to change. The edge is the work that you do,

To, to maintain the profitability.

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I like the thing you said earlier of the worst thing that can happen is, you do something that is wrong behavior and it leads to a positive outcome, because then you not only chase that high, it subconsciously changes the way you approach the market, because you're like, that worked last time, let me keep trying it out, not knowing that that was the one time it intended that it would play out, and the rest rest lead to losers. Uh, because you're also in a position with Trade Day where you have, I guess, insights on, on the nature of prop firm traders, specifically. Is there anything that you notice that is like, if traders just stop doing this, the percentile of success would increase? Aside from this accountability towards, uh, towards a boss or something. Is there certain things you notice of like, if people stopped scalping, or if people stopped, uh, you know, trading five trades in a single day, overtrading, is there something that stands out like prop traders are struggling because of this?

Well, from what I've seen at Trade Day, uh, and I don't see within the mechanics of the company, just in the mentors, uh, sorry, the mentor meetings I do with them, um, it's, there's a mentality of, if things start to go a little bit wrong, just go, "Screw it," and just take a load of trades. I, I'll blow this account up. It's the way, because it cost them only a couple hundred.

Couple hundred, we start again. Yeah.

But never, like I said to you before, the biggest achievement I had was working back.

From nearly that, that, that's what makes you grow as a trader.

Never go, "Screw it." But the problem is, 200 bucks. 200 bucks. We, we can walk around with more than that in our pockets and it be okay.

Um, but that is, for me, that's a discipline. That is never going to, because that's the mentality of, oh, we'll just go all in, Boston, we'll do it again.

Someone said it to me just the other day, one of a pre, a previous shoot. He was like, traders are born in the extremes, like you learn how to become a trader when you go through a losing period or a winning period, and how you react, and how you, what you learn about yourself, uh, associated to risk, which is, which is a big, uh, predominant philosophy of yours. Obviously, tied to that is adhering to the risk, where you can have a predetermined plan, but if you follow it, that's another thing, which obviously would only connect towards psychology. Um, in an individual environment, I guess, is just greed and fear, which would be the predominant two. Would you say those are the same thing in a, in a trading floor, in a professional sense? Are you incentivized on the upside? If you have a profitable quarter, are you paid just your base salary, or do you get a, a performance on top?

No, no, you, you get a bonus. Yeah.

Okay. So, so greed and fear would be, you're fearing to lose your job, but you're, you're chasing that bonus. It would be the same?

Completely. Yeah. So, everything works out in a way. The, the bonuses were, uh, in terms of your relative to your base salary. Uh, you perform, you're going to get paid. Um, but, and, and if you didn't, you, you move to someone who could.

So, if we can, uh, condense it down in both arenas, that if greed and fear are the primary drivers of psychology,

What, what are ways we can navigate these emotions that are so amplified, whether it's in, I'm about to lose my job, or I've got rent to pay. These emotions are are heightened for everyone in the markets, which will amplify it. How do you navigate these emotions?

It comes back to risk and control. It can, it, it, it can't be anywhere else. That's, that's where it.

Let's an example of like, I've got a risk plan. I know I'm supposed to do 1% risk per trade. In a losing period, after five losses in a row, I'll cut back to half a percent. So, you can, someone can have these parameters in place.

But then for the life of you, you just can't get out. Like, you can't stop yourself behaving in a certain way when you are in that tilt moment.

So, knowing is one thing, but doing is the other part. Is there certain tricks, routines, habits, accountability, any anything that is?

Just being prepared to walk away. One of, and I mean, you, you've done a lot of these things. The hardest, and I'm sure you probably get this said on every single version. Um, the hardest thing about trading is not trading, is knowing you are not in a good place at the moment. Even now, to this day, last week, I had two losing trades. I was trading from home. Two losing trades in a row. I have to walk my dogs for an hour. I, and I will literally walk out of the house.

It's interesting because on two accounts, you've discussed how you, uh, express, um, not taking position because I like to say in the market, there's three positions: buy, sell, and sit on your hands. Yeah.

Um, but you either book a meeting or a lunch so you don't have to be there for NFP, or you, you get out, you get out of the room to walk your dogs.

It sounds like it's hiding. It's not hiding. It's, it's taking the, doing what past behavior has told me that this is what I should do in this moment. Because if I take a third trade within an hour of two losing trades, what do you think I'm going to do? I'm, I'm going to put on basically what the last trade was, or I'm going to synthetically create it by trading something else, which practically means the same as what that does.

I'm going to do it. I know I'm going to do it. So I have to kind of try and remove, even if it's just that hour or so of removing myself from the situation, I calm down, and I, and I think to, I've gone through a process of, I, I will get angry. I, I will.

It's interesting because a lot of guys focus on, you know, the meditating and the journaling and the XYZ, which is all fantastic, but someone said it, and it stuck with me. It's like, it's better to have a bad mindset and the correct behavior. For example, I'm furious, but I walk away. This is better than having the greatest of mindsets and all these stoicism techniques, but then doing the wrong behavior. So, in, in principle, is if you want to express patience, which is, uh, not taking a trade and sitting on your hands, you can either eliminate yourself from the environment so you can't take a trade, or you sit in front of the screen and, uh, use all your willpower to not then take the trade, which, if you think about it like that, is kind of foolish. It's a lot easier to walk away.

Yeah, completely. Um, because you would, your your mindset won't, and I, I don't meditate or anything like that. I, I know I should, and I'm not against it.

Also, maybe not your performance didn't need it.

My, my wife does, and I, I, she often tells me, and I probably should, but for me, she, she will have, she's into mindfulness, and she'll say, "Meditate." Like I walk the dogs. That's what a version of.

For me, that is me going out, clearing, clearing my head, taking time. Um, but yeah, you, you have to, to have these things. And on the calls with the, with the, the, the men, the mentor course for Trade Day, it's a, it's about people don't realize that they think, oh, well, you're, you're a professional trader, you, you, you must be above that. I'm not above it. I'm mad.

But, um, but it's just about creating these controls to keep yourself out of it.

Um, because it will, if you didn't care about it, you shouldn't be doing it. Um, but it's, it's about care.

For, for, I mean, most traders in this generation are just all about prop firms because of the opportunity that it is and a tool that it is. It can help people with not a lot scale to a lot.

Um, obviously, the success percentile is, is not favorable. But if I, if I explore the mechanics of it, it's also bringing out a lot of problems that most traders traditionally wouldn't have had to experience. For example, the reset button of like, oh, it's, it's whatever, I can just buy another one. Uh, also this idea, I've got to chase a target to pass the evaluation, maybe setting a tone of unrealistic, uh, gain potential, and obviously they want to do it in an afternoon. Yeah.

Uh, what's certain bad habits that you see that are only brought out because of the proper domain that's, that a profit trader should be aware of?

Well, obviously the biggest one is the reset button.

That, that simply shouldn't exist. Um, and then the, the other thing I would say is, don't get too hung up on the rules of the company. People seem to get, "Oh, well, if I could have done this, then I would have made money." You have, when I was at a bank, you, you sat on this, and even to the currency pair, it'd be like, "No, you trade, you're, you're trading euro dollar. If you want to do Aussie, that's, that's what we pay him for."

And you just have to make a go of it here. Again, it's this excuse mentality. It's like, if I could have, get that out of your head. The rules are the rules. Stick to the rules and, and work within it. Not, yes, we'll all have a little gripe about it, but, but that's not the reason you're not making it. Yes.

Uh, you have to find the reason why you're not making it, because it isn't necessarily that you've got scope to do what you, obviously, you don't know the rules of all these pot firms off the top of my head or anything like that. I'm sure there are probably some really crazy ones out there, but then if there, if there are, you shouldn't have signed up to them in the first place. It's true. Yeah.

But the, the rules are the rules. Stop blaming the rules and, and focus on what you can influence, because you can't, you're, you're, as an, as an individual or a retail firm, you're not going to change their rules. You have to focus on either,

On, on working, working out a way to work within those rules. Mhm.

It's interesting because through this conversation, something that's shining through is this retail trader or traders, they're very quick to scapegoat, where either it must be my psychology, or it must be the rules of the profit. It must be that they have more information in the banks, and it's always looking outwards as opposed to inwards. To wrap up the episode, I want to explore on that of introspection and, and looking towards in. What are certain things that people can do to, as, as an actionable step, that they can maybe start from today? Uh, certain behaviors that is going to help them look more towards inel themselves as opposed to blaming outside.

Um, well, the first things first, creating, uh, risk parameters of your own. If you're, if you're working within a retail firm, create your own rules within those rules, follow those rules. One thing that I really from, and I, I can't say this for definite because I don't speak to everyone in the retail space. People who are all learning to trade late, completely skip on the fundamental side.

Um, be prepared to push yourself to start learning, and it's going to take years. Um, but it's, it's, you're never going to get there unless you start. So, there's so much out there on the internet. Just go listen to people talk about the market, specific to the ones you're in. It may not influence what you're doing today. Don't let it influence what you're doing today, but you start to build that understanding and appreciate that in two, three years' time, you're this, and this will help you in the long run. It cannot help you today.

But it's, it seems to me to be something people are missing out on. It's like, well, if I, if I, the chart's going to give me all the answers, and the chart is the key to my future.

Um, the chart can only tell you so much, and sometimes things will happen in the chart, and you'll be going, "Why did that happen?" Well, there's a very good reason. You've just completely ignored it.

Um, but start that process. Um, it's a, it's a slow burner, and it's a long-term thing, but certainly my interactions with people in the retail space, it's the, it's the piece of the jigsaw that everyone misses out on.

It's super interesting, and I think when I reflect on, you know, where traders spend their time, you know, back testing and going through technicals is, it's the fun stuff. You know, you're exploring, and you're, it's like a puzzle, and you're figuring it out, and it's, you can al, you can interact with it. Whereas fundamentals feels like, um, going back to school. I got to learn. I got to go textbooks. I got to, you know, watch a course or something like this, and that's the unsexy stuff, and, and you just avoid it.

Uh, on that though, is now with AI, there's a lot of, um, wrappers, they, I think they're called, where technology built off the back of LLMs, where, cuz my brother's using university, and I wish I had at university, where you can input all of your, uh, class lectures, and off, and it'll spit out a podcast for you. So the AI will make a podcast of two guys discussing whatever's in the lectures. Or it can now make flashcards for you, so you can test yourself, or you can learn in whatever way you want. So you can make something that is seemingly boring into an interactive way, where it's like, hey, ChatGPT, or whatever, um, ask me these three, ask me three questions that will help me, you know, learn better about this, and when you spit out a wrong answer, it gives you feedback, you have a dialogue with it, and you pick it up.

Um, and I think this is an advantage of this, this era.

Definitely, definitely. Um, just expose yourself, uh, to, to the, to the greater market, uh, and building that understanding. Ultimately, trading isn't this glamour thing. It's a job. And just like any discipline, whether whatever it, whether you're becoming a surgeon, or football, or anything, anyone who gets there works really hard to get there.

Um, when they're off form, they work even harder. Um, obviously surgeons can't really be off form, but ultimately, any career in,

And, and yet people will come to trading and just go,

"Oh, well, it's been two months now. Why am I not there?" Because you've not put the work in. You've got to, and you have to accept. Yeah. You have to accept you've got to keep yourself current all the time, and that comes from analyzing, but not hyper-analyzing what you're doing. Looking at improvements for, looking to replicate. Everyone wants to replicate the, the positives, and focus on what have I done right? How can I do more of that? And of course, you need to do that. But like I said, going back to looking at losing trades, trying to extract some value from money that's already lost, and seeing what you could do differently to eradicate those losing trades. That, that for me is a key focus. And of course, risk management.

There you go, Duncan. This was a lot of fun. Thank you for joining me and, and us today. This was a fabulous episode.

No problem.

Thank you very much.

Cheers. Brilliant.