Alistair Crooks: Master Retail Trading in 2024 with These Pro Tips | WOR Podcast - EP.132

We have a 22-year trading veteran with us today, Ali Krooks. It was a sign on the dotted line, a 2.5 million-pound regional contract. I remember where I was when I got the phone call and it said, “Ali, we’re not going to go ahead with the deal.” I’m sitting there with about 30-35 grand worth of debt. I was living in a one-bedroom flat; my outgoings were low. I was covering my costs through the job, so I was just, well, I’ve got nothing else to do. Whether I succeed or fail, it’s on my own terms.

Remember standing there? Guy trading. The amount of traders I speak to will say, “Uh, my strategy doesn’t work.” I’m like, “Well, define what ‘doesn’t work’ means. Is it that you’ve had a four-trade losing run?” How often does that strategy have a four-trade losing run in the last two years? And no trader answers me. “Oh, six times.” I say to traders, lean on your data. It’s not the back testing or real trading data is the Holy Grail. Back testing or data gives you a perspective on what the market has done. [Music]

The number one podcast in the trading space, the fastest growing, and that’s thanks to every single one of [Music] you. Welcome everyone back to the Words of Wisdom podcast. We are back once again, and we are still the number one podcast in the trading space and the fastest growing, thanks to all of you and our incredible guests. Talking of which, today we have a 22-year trading veteran with us today, Ali CBS.

Really thanks for having me on.

It’s my pleasure.

It’s my pleasure. Thank you for being here. I know obviously we spoke a couple of months ago. We had Charlie on the podcast, and I think we’re going to do it back-to-back, so we have Charlie and then yourself.

Come out great.

Um, so it should be, you know, great synergy as always. But 22 years of experience, you know, it’s not every day that I get to have someone such as yourself in the podcast room. And you know what we’re trying to do for the audience is get them that wealth of experience, you know, that longevity, different market cycles, you know, versus just the traders who have been in the market—a lot of traders came in during COVID or just before.

Yes.

Um, and they’re great traders too, but you know, it’s really just tapping into that wealth of knowledge and just diversifying there. But what was it about trading that really got you interested at that time?

That’s a great question. Um, I’ll give you the long—I’ll give you the long story or the short story. I’ll try to give you maybe the middle. Um, for me, I left university in 1998, so 1998. Um, when Tony Blair was in power. I mean, that’s—I was three years old. There you go. So um, trading was never something I had—it was never on the radar. It was never something I wanted to do. But what happened at uni is I had a sudden realization that I didn’t want a job. The plan was to go into sports marketing. I did my placement at Nike, thinking this is what I want to do, this is this is, you know, the path was mapped out, and I suddenly realized this—this isn’t for me. And to cut that bit of the story short, I essentially went into business with a friend. I used to hire out Land Rovers and Range Rovers, um, and it was great fun. So basically, I was just delivering—delivering cars and doing sales, and it was great. And I left there and set up a business with another friend in the health and fitness space, and thinking, you know, we’ve had one successful business, the next one’s going to do really well, and it didn’t. And whilst I was in that space, it was all very much about entrepreneurship, earning money, you know, I was just hungry, as you know, early 20s, just wanted—just wanted money. And I was part of an investment club that—back then they used to be this network called the Investment Club Network, and essentially there was one in each town in, you know, the Southeast, and you’d meet up with 20 of you, and you’d sit there for three hours, and eventually you might come to the decision of which stock you were going to invest your 50 quid that everybody had put in each month. And again, that was just something I was thinking, well, I can, you know, I want—I want another successful business. I want to diversify into stocks, and I was thinking about real estate. It was just—I wanted to do it all. And what was interesting at the time was there was a guy there who was a truck driver, but he spent a load of his time—his spare time—trading. And I used to sit in these two-hour meetings just bored because people were just, you know, arguing over whether we were going to pick Microsoft or we were going to pick whatever stock, Qualcomm or whatever it was back then. And I started looking and sitting next to him, so he’d have his laptop there, thinking he was, you know, showing he was paying attention, but actually he was just looking at charts. And it got me a little bit interested. And back then you didn’t really have the sort of CFD retail space in the same way. It was very much options, so you, as a UK-based trader, could open up an options Express account in the states, and you would essentially do similar to what you would do here. You take a chart; you’d look for—you look for the chart; you look for the—the—the market that’s got the biggest upside or potential upside. But rather than say, you know, placing a CFD trade or, you know, buying a lot or two lots for a position, you’d be physically buying options, so it was leverage trading. So it allowed you to tap into the US market without having to have $35,000 to day trade. So that’s what got me into it. The problem was is when you’re looking at options, there’s so many different variables. It’s not just if the market—it goes up; you’ve got to pick the right strike price; you’ve got to—you’ve got time value; there’s so many things that you have to do. And very quickly in that scenario, I lost five grand in three—three months, just under. Now, again, looking back, it’s not a lot of money, but at the time it was because I didn’t have a lot of money at that point. So for me, that was my first entry into trading. And if you went back at that point and you asked me, you know, should I—you know, say a mate came up and said, “Oh, how’s the trading going?” I’d be like, “It’s not good; don’t do it.” So I became the kind of person that would, you know, jump onto social media now and say, “Don’t do it; it’s risky; the market’s risky.” I was that person because I’d had that experience of this is dangerous. Now, what I didn’t realize at the time is it wasn’t that that particular model of trading was risky. Yes, there’s risk involved, but I was the risky one because I didn’t understand how to manage risk through options. So I became that person with that bias. So for me, that was it. I was like, “Not doing this again.” Stepped away from it. And then about two years later, the second business—we’d—we’d had a provisional contract with David Lloyd, and we were ready; it was—it was—we were literally—it was a sign on the dotted line, a 2.5 million-pound regional contract. And at the time, TechnoGym came in, who sort of swooped in under us and offered David Lloyd a deal they couldn’t resist. And I remember where I was when I got the phone call. It was outside Bermondsey Tube Station, and I got the phone call from Whitbread.

Live there, did you?

Yeah.

Oh, yeah. So literally outside that station, and the Ops director of Whitbread phoned up, and he said, “Ali, you know, we appreciate all you’ve done, um, but we’re not going to go ahead with the deal.” And at the time, I was like, “Right, we’re going to go again; we’ll go and find another—we know—find another gym chain; we’ll push on.” And my business partner was like, “No, enough is enough.” So at that point, I’m sitting there with about 30-35 grand worth of debt. He’s remortgaged his house; he’s out. I’m sitting there going, “I want something that is not beholden to anybody else.” So for me, it wasn’t—I love trading; I love the—the independence of where I’m fascinated by charts. It was just—I don’t want a business that involves staff or business because I felt at that moment—I felt let down. Now, looking back, it was actually the wise decision because we were going into an arena that we probably would have struggled in as two individuals. Now, this is—this is before, you know, the big startup phase where, you know, tech could—tech could give you that advantage as the individual person.

Yeah.

So I looked at it, and I just—I remember standing there going, “Trading—trading is—I—I—I can—I can—whether I succeed or fail, it’s on my own—it’s on my own terms.” So weirdly, I—I got back into it because I wanted something that was—that was for me. So at the time, I was living in High Wickham, and I was working—literally working a factory job. There’s a—there was a factory called Molins in Princes Risborough, and I used to go in at 6:00 in the morning and just pack—literally pack up stuff. That was just a packer. But the great thing about it is I’d finish about 1:30, and then I’d come home and would give me the chance to trade the US session through till 9:00. So for me, I was living in a one-bedroom flat; my outgoings were low; I was covering my costs through the job, so I was just—well, I’ve got nothing else to do. I want something that isn’t, you know, 16 staff and, you know, X number of—I want something—it’s just my own. And at the time, I set myself this stupid goal—looking back, it was really stupid—like, if I can just pay my rent and bills, which is about 650 quid a month, then I’ve succeeded, because then I can say, “Look, this thing—trading—pays—pays the way.” But looking back, it was a stupid thing to do. It’s a little bit like what some people might do these days—you know, with a profit—say, you know, “I need to—I need to get my 10% in one month,” yeah, and then I’ve—and then I’ve, you know, I’ve passed—I’ve passed the challenge. Because what would happen is my psychology would get messed up when I was hitting sort of 450-pound profit, and then I’d mess my risk up, and I’d essentially just—just kind of fail for this arbitrary goal that didn’t actually mean anything. And it wasn’t until I started getting some coaching and mentoring—’cause back then you couldn’t jump—you couldn’t just jump on and see 20 different offerings on YouTube. Most of the coaching and mentoring happened in the states. There—there was only a couple of companies in the UK. And I went and did a course in Vegas and then got in with the—the mentor that was there and essentially just paying monthly to be in this little group. And this was back when it was dial-up internet, and it was like voice over IP, so you would sit there, and it was actually really good. He would ask everybody what—what are they looking at? What are you looking at today? And you had to describe it to everybody else without the ability of showing your chart because all it was was just a voice—a voice thing. And it actually got you very good because you were having to—to describe to a group of people what particular position you were looking at and why you were looking at it. So that—I did that for probably about six months, and we can talk about this in more detail, but my biggest issue back then was I was a very driven type-A personality, as in it was all about the money; wanted to win; didn’t want to lose; um, and essentially there was a side of my personality that I was avoiding. So when it came to filling out my spreadsheets, when it came to submitting my data at the end of the month, I was always late or always had an excuse. So for me, it was very much like, “I’ve got to be in the market; you’ve got to be in it to win it,” which is true—you’ve got to—you can’t—you can’t make money sitting on the sidelines. But I wasn’t really understanding the subtleties of where I was going wrong. So there was 20% of things that I was not doing or 20% of things I was doing incorrectly that was having an 80% impact on my result. So even with three months of mentoring, I was still sitting around this sort of break-even—you know, make some money, give it back; make some money, give it back. And when my mentor eventually got me to start submitting my results, we noticed something really interesting. So what would happen is I’d come—I’d come home from the job, and essentially I’d be trading—trading around the US open. And what we noticed is if I had more than two trades that were losers in the morning, I would average 4.8 trades that day. Now, some days they were justified because there were more trades that day, so we—we weren’t running a, you know, a trade limit—once you’ve had two losses, stop trading. It was trade every setup that comes along. But we noticed a pattern. And what we—what we were able to see was that if I had two losers, I would overtrade, and I wouldn’t take what we call howlers—with, you know, no—no setup, no—no criteria. But I would just be skipping little bits because what I’d want is I’d want to get to the end of the day and either be in profit or break even. So it’s a classic case of recency bias and a subtle case of um, what I call, you know, sort of overtrading.

So I’m thinking about the day rather than thinking about the week, the month, the quarter.

Yeah. But it was only because we were able to see it—a pattern in the data—that we were able to identify it. So for me, that’s a real big thing that when I work with traders or even with my own trading is I—I—I say to traders, lean on your data. So make—make sure you’re recording it. And then two—it’s not that back testing or—um, real trading data is the Holy Grail. You know, some people will argue, what’s the point in back testing because market conditions change in the future? But back testing or data gives you a perspective on what the market has done. The amount of traders I speak to will say, “Uh, the strategy—the strategy doesn’t work.” I’m like, “Well, define what ‘doesn’t work’ means. Is it that you’ve had a four-trade losing run?” How often does that strategy have a four-trade losing run in the last two years? No trader answers me. “Oh, six times.” Most traders look at me blank because they haven’t got any data to give them perspective. So I suppose that was my journey. I was left side of the personality quadrant, type A, and I was disowning the more analytical side of the personality quadrant. And once I started owning that—that’s when the consistency came. It wasn’t overnight. I didn’t suddenly have—you know, a lot of traders—a lot of people ask me, you know, what was that one moment? It wasn’t one moment, but that was probably the most significant out of all the—the moments that add up to make you—make you a trader over that time. I say data is king.

You—yeah. But I loved what you said there, and it’s so interesting because a lot of the time we kind of forget, especially like the traders I mentioned when we first started, like the ones who’ve been in maybe just the last 10 years, they’re just used to today; they’re just used to having your charts being able to speak globally, um, you know, knowing many opportunities that can present where you don’t need to have staff and manage a company. It’s just you and self-reliant, um, well, in comparison to back then, there were very limited choices; probably trading was one of the only choices I would imagine that could really do that. Um, but then, as you mentioned, in terms of what I was getting at is that a lot of the time we would think of the past and go, you know, you know, “It must have been hard being a trader then,” you know, um, in comparison to now, we got charts; we got Zoom; we got all these things. But the reality is that from speaking to so many traders from, you know, the 70s, 80s, 90s, the 2000s, who went through those eras, they actually—I think a lot of those things that we clean look at in a negative light will say that that probably held them back—it was actually the same thing that actually allowed them to propel because, yeah, I think ease creates complacency, um, versus having to describe a chart where no one can see it, but describe it in a way where they can understand would no doubt build your skill set in terms of how to dissect the market, um, versus if the chart was just there, you’d probably be a bit more complacent—just be like, “Yeah, here’s a candlestick and a level that I looked at, and that’s it”—versus breaking it down at a more deeper level. And I always find it fascinating speaking to traders such as yourself who come from a different era that we can learn from still, you know—is that something that maybe you practice out?

Yeah, I think that’s—I think that’s a really, really important point. Um, I think the first thing I would say is at the time we didn’t know any different, so there was no—there was no, you know, we knew internet speeds would get better, and we knew things would get better. I mean, I used to use—I don’t use it anymore, but I used to use eSignal charting software, which was $300 a month. So I was $300 in a hole as a retail trader before I’d even—before I’d even placed one trade. So when I have, you know, people—I’m like the old—I’m like the, you know, the miserable granddad when the new traders go, “Oh, oh, I’ve just been slipped one point on a chart,” or, “Oh, 12.95 for TradingView.” I’m like, “You don’t know how good you’ve—you’ve got it.” But in the same breath, what we had an advantage was we weren’t bombarded with the same level of information. So I’m sitting there with two, you know, two courses that I’ve done, one that I had to travel to Las Vegas to, but that was good because you were completely focused; you’d invested money to be there, so—and then you weren’t sitting there going, “Well, I’ll just jump online and see what that—that course is like compared to that one.” So there was an element of focus that you were—you were afforded because you—there wasn’t the amount of information. So I think one of the challenges traders have—retail traders in the space now—is just the overwhelming amount of information, and it’s very easy for people out there to say something that sounds right and is right but necessarily hasn’t got the depth behind it. And I’m not saying that’s wrong, but for—if I was coming into the retail space now, knowing what I know, I’d be—I mean, I find it overwhelming going on YouTube now. I’m like, “Wow, look at all of this information; where would you start?” So you know, you had—you had books, and YouTube was in its infancy, so you—you were afforded that luxury. Um, I think things like having your charting software, you know, not—you—you weren’t able to link your broker, so your broker’s over here with—there’s an arbitrage of three points, five points, and suddenly your broker kicks the spread up; it’s not showing on your chart, um, or, you know, we used to just have—you’d have partial fills when I started out, so you—you’d be in it—like, partial fill, and then you’d be sitting there for three minutes wondering, as a day trader, wondering if you’re going to get filled. And there was no ringing the broker up saying, “Oh, you’ve—you’ve—you’ve slipped me three points,” because that’s just how it was. So I think at the time it made you—it did make you resilient, and it made you just go, “Well, that’s just—that’s just part and—part of day trading.” On the other side of it, there were times, especially around a bit later—2006 through to probably 2009—where the trading—the S&P trading, Euro trading, cable—you know, as a day trader, there were a lot of, you know, really nice intraday runs that—although I’m not trading that way now—I don’t see quite the same runs. So we had it probably better that way, you know—you look at Euro for the last—the last year; I mean, it’s just—you know, it’s just squeezing and squeezing and squeezing. So you didn’t—you didn’t tend to have that in the same way. I remember if—if my broker invited me out to London or I was meeting a mate in London, I’d almost be a bit twitchy because I’m like, “I could be missing a 250-point run today if I choose to go into London,” whereas I wouldn’t have that same feeling now as a day trader because the markets don’t have quite the same level of fluidity—at least—at least the markets I was looking at back then. I don’t want to speak for all—all traders, but you—yeah, you have—it’s—it’s—it’s—I think the trade—I think the traders now could benefit, but I also think there’s—it works—it works both ways. It does definitely—there’s always pros and cons. And that kind of led me—as we were talking there—in terms of like that level of focus, you know, not having all this information that can really distract you, um, another element I was just thinking of, and I’ve not asked anyone else before to be fair, but you know how everything’s digital now—almost like all of our—in terms of money—barely anyone really carries much cash anymore; we don’t really transact in much cash anymore, while when you first started, it was pretty much a very cash-heavy society, you know—

Yeah.

Um, and therefore would you say that you respected money more, you know, or at least, you know, like when we’re trading, you know, nowadays, we just numbers on the screen; everything’s numbers now—the numbers on social media, numbers on a screen—uh, all of our transactions on a card as well, you know, even our bank accounts, we’re pretty much just looking on our screen as well. Um, was there any difference in terms of your mindset towards money, you know, as a trader rather than what most people do now? If they lose a $1,000 account, they say that was all—that’s all they had—account, they lose it, and it’s just kind of like—kind of brush it off; it was just like numbers on the screen. Obviously, it’s still a bit of pain, there’s a bit of a—annoyance, no doubt, but like they kind of brush it off and then do it again, you know, the next month, versus was there any difference back then where it was a lot cash-heavy, you know, maybe more—of a respect if you will for the amounts that you’re trading?

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Let's get back to the episode. In terms of—I mean, you could argue from my own perspective—to, to, to lose five grand in two and a half to three weeks is pretty disrespectful, you know. If, if my dad at the time had known, you know, he would have—he wouldn't have slept at night because he was from that—even the generation before. Yeah, so I would say yes. But I think one of the things that happens these days is the societal structure is a little bit different. So, you know, more people were—at—more people at sort of 25 years old, when I was in that sort 25 to 30-year-old bracket, wouldn't have been living at home. So they would have—there was a higher percentage of people living—not living at home. So you could argue that there's bills to pay, so there's a respect to the money in the trading account because they can't take another thousand the next month because maybe it's easier if somebody's living at home with their, you know, at 25 living with their mom and dad. I'm not saying that's wrong, but they may just have a little bit—it might be easier to access more money or just not have quite the same responsibility. I always say I was very lucky because even back then I was single with no, you know, with no kids, no responsibility. I wouldn't have—if I'd been—would I have gone down the trading route if I'd been married, married with two kids? Probably not. I think it was—I was—I was fortunate that the planets aligned. But yes, in a way, um, I'm not against—I'm not in any way against prop firms. I think it's—I think it's like anything in the industry that comes along; there's negatives and positives. I—the only thing I think sometimes is the mindset of, well, if I fail, I can go again. If I fail, I can go again. Yeah, is not wrong because you can play that statistically. You could say, right, I'm going to allocate maybe four goes at prop firm X because I know statistically, based on what I've been trading, I'll—I'll get through on—I'm likely to get through on one of those. But by default, you're saying, well, if—if—if it goes to game over, I can go again. Whereas when I—if I hit game over, finding another would have been a lot harder. Yeah, um, so I wonder if that—that—that has influenced people a little bit. But—but then that gives them the opportunity potentially, if they can, you know, get through the system, to have more money to trade. So yeah, maybe—maybe I think is the answer. It's—it's difficult to tell. And I think every generation almost thinks the next generation is more flippant with money, and you know, so it's—it's—it's a tri—it's the classic thing in that cycle.

Uh, just going back to one thing you said though, in terms of a mistake—making your goal, you know, to cover the bills and the rent—why—why was that a mistake? Um, I think because when I looked back—because when I—when funny enough it wasn't in that—in that, you know, in that period that I thought it, but once I started looking at my trades, I could see this pattern. Said it was the initial pattern of overtrading when—when I went through losers that day. And the other pattern was, as I got closer to this goal, that was all I thought about. And it was that subconscious thing of thinking, well, my goal is more important than what the market is going to offer me today. So I'm focused on the fact there's six days to go or six trading days to go, and if I—if I do XYZ, I will hit my goal. What if the market just hasn't got—is not offering me the next two—the next 2% that I need in that time to get there, but it's going to offer it me—was going to offer it to me 3 days after the end of the month. So it was making this arbitrary line in the sand of: if I make 650 quid that month, I am a successful trader. But if I made the 650 quid a week later, what—does that make me unsuccessful? So it was—it—I mean, it got me to where I am, and I think it was—it was more my type—a personality, which is: I—I want to do this, then I am a success. And I think over time I've learned to—to realize—I had—I had a scenario two years ago where I was flat for three months, and then 23% came in in six weeks. But all that was was a few of the positions just didn't roll in earlier; they all just rolled in. But if I was measuring myself based on the quarter, and I say this to the guys I work with, if I was measuring myself from—from, you know, uh, when was it? It was Jan through to end of March—well, how do I deem that success? The fact is the trades just came in a little bit later. And I see that a lot with swing traders is they—they—they deem themselves almost a failure if they didn't make money that month or that quarter. I think I see it even more with—with um day traders—sorry, swing traders; they sort of measure it—arbitrary months and quarters and years. Day traders—weeks and months. And I think sometimes if they could take a step back—there's nothing wrong with having goals and benchmarks, but deeming your trading a success or a failure should be more about the process of what you've done on those trades rather than whether or not the markets chose to be kind. I always say the market laughs—the market smiles and laughs at you. What you can do is smile and laugh back. You know, there's not a lot else you can do if it's not—if it's not gonna—if it's not gonna hand you—hand you some winners that week, that month; there's nothing you can really do about it.

It's fascinating what you say though, in terms of, um, you know, that was only two years ago you say, because a lot of people I think have a misconception when it comes to trading is they assume that once you have a profitable edge, you know, then every month you're pretty basically going to be making money every month. Yes. Um, and yet when I've spoken to traders who have that wealth of experience and have been through different market cycles, etc.—versus the traders who maybe have just gone through one cycle currently or maybe two if they're lucky—um, you know, they don't have that sort of knowledge or that awareness that, okay, you can have a losing month or flat month or even quarter or even year potentially. Um, you know, what's it like to go through that? You know, even with all your experience, what was it like to go through that quarter? Uh, was there any worry? Was there any sort of thinking of: have I lost my edge here? Or—there's always—any trader that says there's not—it's a little bit like the—the book—The Disciplined Trader—Mark Douglas; it talks about being, you know, the goal is to be completely emotionless. And I—and I—I think that's a—a worthy goal, but it's an unrealistic goal. I—I still want to be affected by the market 1% or 2% because it's like the actor—they—they say if an actor walks on stage and they're no longer nervous, then it's time to retire. And you want a little bit—you want a little bit of emotion there. So for me to sit here and say it didn't affect me, I would be lying. But it's—if you imagine like a volume knob, it's at 0.5, whereas the first time you go through it, it's at 8.5 or 9. And this is where trading psychology is always an interesting one because there's tons of books on it, you know. I spend a lot of time with the guys I work with on psychology, but I say you can only really learn it on the job. And—and drawdowns—there's two things that happen. Traders think, like you said, once they are successful, they've got their edge, or they've been consistent for a year—that's it—now it's—every year is going to be the same. And I ask questions when I—when I talk to groups of traders. I say, um, what do you think statistically happens to your win-loss ratio when you've been in the game 10 years? Do you think it stays the same, goes up, or goes down? And 95% of an audience I ask that question to say it goes up, and the statistics show the opposite is actually what happens. As you build resilience, your ability to deal with losers increases, so you'll risk—you actually then start tolerating losses more, and it's actually your risk-to-reward that goes up. So traders that have been in longer tend to have better overall risk-to-reward ratios and actually lower win-loss ratios. So did it affect me? Yes, it—it always affects me. Um, and you have the thoughts, and this is one of the things I really try and get across to other traders is: I don't sit there—because I've been in the game 20 years and not have the thoughts—I just have the thoughts as whispers, and I don't act on them. So—and I think that's really important for young traders to see because a lot of the time they go: that guy's this—he—he will—they—they have a misconception. And the art—the art of it is to—the art of trading is not to not have those thoughts; it's not to act on them.

What do you think that is in terms of, like, you know, people like yourself and—and other people who've been—come from that era or that have that experience—they share that—I've not met someone yet who's been like in the market 20 years plus—or even 10 years plus for that matter—uh, who have been profitable and showcase that and have that track record who have said—sat there and said, you know, I don't have losing months or big losing trades or, you know, have moments where I'm just completely emotionless and like a robot. They always do share, um, that, you know, those thoughts are always there, and there—those struggles do happen, and those flat periods happen, and so on. Why do you think it is that—that the audience—the—the general community can hear all that, but yet still not take it on board? I think it's—um, when I was—when I was starting out—it's because you were being so sold the laptop—it was the laptop lifestyle. So you can do this from anywhere in the world. And I think it wasn't—anyone said you will make 5% a month consistently each month, but I think we—you went into that mindset because you think, well, your job pays you every month, so this will pay me every month. And I literally had a conversation with somebody on Monday, and I said to him: you do realize that even as a day trader you might have a whole quarter where you don't make money? He's like, really? And he was—he was—he was lost for words. He's like, yeah, but I'm going to be trading every—I said, yet, but it could still happen. It's—and—and I think there's just this—it's almost a—and it's not even—it's not an intelligence thing—um, I just think it's the way—the way people think. We think—we think too short-term, and we're conditioned to think short-term. Jump on Amazon—I want this book—it's on your Kindle—I want this—this thing—it's—it's—we're so conditioned that we can have what we want quickly that it's—so the norm that we—it's not that we don't logically see it, like you said—so well, there is—you can say that to a trader, but—and they'll nod their head, but then they won't—their actions won't match what you've told them. And I think it's—I think it's conditioning. It's a little bit like the—the people who say that, you know, in—I'm going to retire at—at 65, and we're going to travel the world, but they've spent their entire life going nowhere. Most of the people when they retire at 65 go nowhere, even if they've got the resources to do it, because they've been conditioned. And I think it's the same thing. I think it's—you have to unwind conditioning, and a lot of the time what happens for traders is they either give up or they get overwhelmed and give up. So whatever the—whatever the reason they lose money, they get overwhelmed before they've had a chance to unwind the conditioning. Or the other thing I see, and this isn't helped by the trader education industry, is they look for a technical solution to what is a psychological problem. And that doesn't mean that if they got a better strategy or, you know, got on top of their data or managed their risk, it wouldn't help their mindset, but very often the next strategy isn't going to be the solution to high LEL, recency bias, or—um—confirmation bias or hindsight bias. That's—that's almost a separate thread that needs to be worked on alongside everything else. Um, so you've got a huge amount of traders that are just strategy hopping because they think it's going to be the next solution. And that's not helped when somebody on YouTube is saying: buy my strategy—it's got a 90% win—win-loss ratio. Well, it has between May and June, but then the rest of the year it takes it down to 50. And I think—yeah. So I think having other traders that you can be around as well—so with what you do—having other traders—the more you hear that message, the more chance it's got of going in—it's that—it's like—it's like our friend in sales; he says, well, you need seven touch points before somebody buys something. You probably need to hear that message seven or 70 times before it starts to actually come out in your actions. I think—yeah. I've always given an analogy of like—it's a bridge—like the advice and then experience, and then once you—like, for example, outside of trading, there used to be people who give me advice on things in life generally—like, try and avoid that risk because, you know, it's—it's no good—it's not—it's not good for you—it's not going to help you progress—it's going to distract you—whatever it may be—like, yes, you—I'm going to listen to you, but then you end up doing it, right? And then you learn: oh, right, this is why that guy said—um, you know—this is a waste of time. I've experienced it now, and then that's sort of the bridge between—to allow you to cross that bridge and sort of have that understanding. I've always kind of given that same analogy when it came to trading advice—like you can hear it, and you can nod your head, like you say, but then—and I guess part of that can be that, you know, different conditioning—you breaking away those chains and sort of making a new path for yourself is essentially having the experience alongside that advice—you know, you hear the advice—you say, yeah, that's sound advice—it sounds good—you know, makes sense—it's logical—and it's coming from someone who has experience, right? But then I've not experienced it yet. So once I experience it—it's—that's like every new trader pretty much reads Trading in the Zone and Disciplined Trader, but it means nothing to them—it's the words sound good, and it makes sense—logical—um, and you know, this person has experience, but then the reality is that they don't truly understand the depth of the words just yet because they've not experienced it themselves. Once they then go and—go on until—and be emotional—and then come back and read that book, then they—oh, then they can connect the dots a bit more. You know, I—I think I think that's really, really interesting because what I—I talk about four phases, and a lot of time when people read those books, they're in phase one, which is interpretation. So they're interpreting it, and they're—like you said—they're understanding it logically. And then when they go into phase two—implementation—that's without the experience. So it's easy to forget what you read or, you know, because you're then consumed by the fact that you've had four losers, or you've—you've failed the prop firm challenge, and that becomes the thing that's in front of your mind. It's when they then—and—and a lot of people—it's step two—when they're interpreting—they'll strategy hop—they'll—they'll—they'll give up—they'll go away—they'll—it will go down their list of priorities, or they'll look at real estate or drop shipping, and they'll—they'll get distracted. If they can get into realization phase where it becomes: oh, okay, that thing I read actually meant that with my trading—that idea of trying to be emotionless—I realized my—that when it—and for different—it's different for different traders. So if you're more type—more left-side personality, it's going to be—usually it's going to be an overtrading tendency. So if you have a losing run, you're more likely to respond with overtrading. If you're more analytical—you're more on the—the right side of the quadrant—it's probably going to be: five losers—what's wrong?—and then you're back—you're—you're back burying your head in your data or trying to find a way to change the strategy. So it's again—that realization isn't the same for every trader. And I think if you can then link the two, and then you move into the last phase, which is personalization, and that doesn't just mean trading a strategy that's purely what you've come up with, but it's a combination of the strategy—you feel like you own it. And I always say to traders: it's—it's—ally—what do you mean when I feel like I own it? I like—it's—I can't describe it; you'll just know when you feel like you own it—it's because you—you'll—you'll have a higher level of acceptance of the losing runs. And that can be—be—you—you own that strategy because you've had—you've traded it for three years—you've changed it—you've been through three drawdowns, sake of argument, one a year. So you—you—you're—you're more battle-hardened, and you realize and you accept that that's just part of it. Um, you know, and a new trader's got to fight the—you know, the—of tsunami of what they're seeing from, you know, people online saying: it's this—it's 80—you're going to have an 80% win-loss ratio. I saw an ad yesterday said: 100% of the people I work with pass the challenge. I'm like, really? Is that—can you really say that 100%? Because 100% of the traders I work with don't become successful. I'm happy to say that. Um, and I think that's what's missing. So it's not only a—a—like you said—an—a way that they've got to bridge that gap, but they're also fighting—yeah—information being thrown at them that is saying the opposite essentially—it's trying to—feeding into their desires—feeding into what they want to hear—they want to be the reality—and then that makes it this battle—you—an additional battle to just the market, you know.

Um, kind of leading off the back of that what you just said there, I literally just released a podcast yesterday, um, and someone made a comment, you know, try and ask someone, um, in regards to: how do you handle—uh, psychologically and just generally, you know, what do you do next when you take a loss that was according to your edge? So you've done everything right—taken a loss—like what is your mindset like, you know, when that happens? S—and was that ever an issue? Uh, but when that does happen, what is your mindset like, and what are the next steps that you follow? Great question. Let's take a break for a minute there, guys, cuz I want to tell you about the best trading tool on the market: TradeZella. The reason why TradeZella is the number one trading tool that every trader needs is because you can do backtesting, automated journaling, trade replay, in-depth analytics, and so much more. And the greatest part about TradeZella is that it's all automated. All you have to do is connect your MT4 and MT5; it will pull all your data onto the dashboard. You can add playbooks, you can just add notes, you can add images from your trades, and you can get the insights that is necessary for you to progress as a trader. Now TradeZella is for absolutely everyone, whether you're a crypto trader, whether you're a Forex trader, whether you trade prop firms—it is for absolutely everyone. And that is why thousands of traders have signed up using my link here through the podcast. Make sure you use the code RIZ10 for 10% off your monthly subscription or RIZ20 for 20% off your yearly subscription. Link is in the description below. And let's get back to the episode. The—the caveat to that is—this is an interesting one—because a lot of traders go—and just to—to take a step—step back first—there—a lot of traders don't have a strategy with an edge. And actually, in a way—well, their brain goes: if I get a strategy with an edge, all problems will be solved, because at the moment I don't have an edge, so that's the problem. The edge is the solution. And actually what happens is they can often end up—and the stats show this—that they actually start doing worse initially when they've got an edge because they've created this false belief that when they have an edge, they won't—they won't make mistakes, or they won't screw up, or they won't—they won't bail. But actually the problem is—is again—they're in this short-term mindset, and they're thinking: well, now I've got an edge, it should all just work. Well, the edge is—even if the edge was 60/40 win-loss, 2 to 1, which is, you know, fairly—fairly I think good considering what a lot of traders will have—that's still—in the next 100 trades, you're going to have 40 losers. And it's not win-loss, win-loss, win-loss—couple of winners—that doesn't—you know, you could have six, seven, eight losers in a row in that. And the problem is is the trader then won't—hasn't got the excuse of saying, well, it's because I haven't got a system. They're then—and then they—then they—then they become external, so they blame—they blame the system, and then they strategy hop. MH. So to then lead it on to me—I—my—it was for me—it was data. I think it was the—I—I was like, okay, I need to be able to lean on my data. So at the moment I'm feeling anxious—I've had four losing trades on the bounce—I've checked through them—everything was right—okay. So then I—I didn't have that issue of going: well, hang on a minute—is the strategy wrong? Because I could reference back across the data. So I can go—flipping—NE—that strategy had four—four straight losers in eight months and still managed to deliver 25, 30%. Oh, okay. Suddenly, it's not that—that's guaranteed to happen again, but I've got that frame of reference where I can just: okay, this is—this is normal. And I think that's the problem is when people aren't sure—they're like: is this normal? Even—is it right for the strategy? Is—is this okay? They're in a short-term mindset. And the other thing I say is: practice expanding your time and space horizon. So if you're thinking about the trade, by defa—you're thinking too short—think about the last 10—just go up a level—think about the result of the last 10. If you're thinking about the result for that week, just assume that—that's too—you're thinking too short—think about the result for the month. If you're thinking about the result for the month, think the quarter. If you think about the quarter, think the year. So practice pushing your—of time and space horizon out wider. And that isn't to say that you shouldn't look at what's happening now because if you don't look at what's happening now, you might miss something. But invariably we're just—by default—thinking to—with—with short-term—we're short-term creatures—we think—you think that.

Is there a correlation between our emotional state and the time horizon? Because it's always been a diagram. I don't know who's done it; I think originally it might come from Dr. D. Martini, maybe. Uh, but there was some—a mentor I had who was more psychology-based, and uh, it wasn't—he was a trading mentor at one point, then he went into just doing, um, sort of coaching for people who want to become coaches. Um, this was a long time ago, but he had a diagram basically that was two points: positive, negative, negative. And the majority of the masses live between positive and negative at the lower end of this scale, constantly going between it, right? That's how they live their life—either feeling super negative then going to super positive. Um, and then essentially, the higher up in the scale you get to, it meets at the point, and the higher up you're less emotional; um, you're starting to be more balanced as an individual. But the second layer to it was time horizon. They would put time fields on it, so it would be like thinking day-to-day, thinking month-to-month, thinking year-to-year. And as you went up the scale, the emotional uh standpoint would become more balanced, become closer together.

Um, and as a trader, I see it. I see a correlation in terms of that because when you start thinking bigger picture—so as you say, let's say if you're on a month and you start to think quarter instead, or quarter to year—the more higher you go in that sort of playing field, if you will, or those levels, the less emotional you're going to be on the day-to-day. Because now, when you're thinking a year perspective, you take a trade; you know, let's say you lose for a week or two, but yet you're thinking on about the year as a whole, that week or two isn't really going to affect you emotionally as much. Still be some effect, but in comparison to when you're thinking of just the day or the week, because then you think, "I've just lost, lost this week," you're not thinking about anything else versus, "Okay, that week was a losing week, but you know, over the year I've already got 16 winning weeks, I've got four losing weeks." And that's where I guess the data reflects that too, because once you have the data of that and you're thinking on that bigger picture, those two correlated will help you to bring those emotions down more.

Is that something you would say absolutely? And and just to back up, I I'm I'm sure it was Dr. John D. Martini because he talks about the the guy on the street, the [ __ ] is thinking minute-to-minute; the the the vendor seller is thinking day-to-day; the corporate executive is thinking month-to-month. And and I remember hearing that and thinking, "Wow, that is that is just so applicable to trading." Um, I think it's completely—the data is—I data shouldn't be a crutch, but you should lean on it. And there is def L the the correlation. And I always use the analogy is if imagine you're looking at horizon, and the horizons is your the start of your trading career and the end of your trading career, so you're sat there looking out to the horizon, and each trade is like a a minute dot on the way, you know, it's one trade in your next 10,000. And in a way, you've got to be able to pull that trade right in front of you, and that trade in that moment is the most important trade because you got to do everything right. But as soon as you've placed it, you got to stick it back on horizon and leave it there because it's just one element of the next next 10,000. And I remember hearing that phrase years and years ago: "Your next trade is just one in the next trade is one in the next 10,000," which sounded like a cute phrase, but um, it's in those moments where you those those things you you need to pull on those things. So yeah, absolutely, data and that time horizon has a huge huge impact.

Yeah, when you mentioned uh in terms of like quarter being flat and then that trader being shocked by that, you know how that is something again that a lot of people I find do the exact same thing where they just don't think in that level, even though we kind of know trading isn't guaranteed and we can't guarantee the result that we're going to have. People really don't take it on board, especially in the beginning stages and the sort of intermediate stage. Um, but what can you talk on in terms of like when you went through that, how do you have to structure, say, your finances or diversification of investments or businesses so that you're not relying purely on trading income to cover your expenses? Very, very good point. So the audience get some context, I I've only ever traded purely for income for about 18 months. And what I mean by that is that that was the only income coming into the household at that time. And then I met someone—she was a sales director—so suddenly the income has has gone up. So the combined income of my trading and her job meant there was more money coming in. And what I remember in that scenario is—and I say this to everyone—is you have to have buffer money. So the challenge a lot of traders will have will go, "I've had I've done three months, 10%, two grand a month—that's just safe sake of argument—they've done, you know, right, that's my bills and rent covered, I'm off to the races." I'm like, "No, you need six, regardless of whether you're day trade or a minimum of six months' money, nothing to do your trading account, sat to cover your expenses." Otherwise, the risk is you will make bad decisions because you're making decisions to cover to cover cost. So that's the first thing is you you you never want to be trading—I say you never want to—I can't say for every trader, but I never wanted to be trading to make the the rent at the end of the month. And if I didn't, then I'm in trouble because it, you know, it's not—if you're in a job, there's so many constraints what you can and can't do, but sat in front of your screens, I mean, you you're you're fraction of a centimeter away from all sorts. And I know that feeling, and I know other traders in that situation. I've I've worked with traders that have said, "Can I go?" I've like, "No, another six months," or you know, now we have prop firms, it's like, "Maybe explore that route," um, rather than, "Oh, I you know, I've had three months of success." And as a trader, almost like a statistician, if somebody comes to me and say, "I've been consistent for six months, I'm going to go full-time," my brain goes, "You've had six months consistently, you probably doe you probably du a losing period." It's actually probably the worst time, but the average person goes, "Look, look at the proof." I'm like, "Look at the stats, you actually probably due two quiet months now." And that's what you don't want. The minute you or if you do choose to go, there's capital there to cover so you're not making poor decisions. Because it's not just losing trades; I think for a lot of traders, it's boredom if nothing's happen in the market. So I mean, at the time of filming this, we've obviously had this we had this drop, you know, this sell-off across the board with the the carry trade in Japan going, and I was saying to my guys, "Look, just just hang on here, this looks a bit more like risk of people just stepping back rather than a mass selloff." Now, at the moment, markets have recovered a little bit, but there'll be a ton of traders out there that have just seen the news, think they're going to miss the opportunity, and have just have just shorted the market, and they're going in all sorts of trouble now. And that that that type of behavior, even with the trader who's been consistent for six months, is more more likely to occur if they're quiet and they and their mind is saying, "I need to make money by the end of the month." So I think how that's how I dealt with it was money in the bank during that time where it was my only income; my expenses at that time were very low. And then going forward, I've had other things that I've done; I I've essentially coached traders for probably 12 years out of the the last 22 that I've been in the game. And that's and part of that has had two things: it takes the pressure off my trading, and it allows me to compound. So you know, when when the wife wants to go on a 20 grand holiday, um, it isn't, you know, "I need to make oh, that's going to that's going to really impact things over here," because it's not the only income. Yeah, and I think traders can in these days, the newer retail traders can essentially look at prop firm in the way same way is that's a different stream to your own account. And I'm not going to sit here and tell people how they should shouldn't shouldn't run their their affairs, but people have asked me that I work with, and they'll I'll say, "Well, you know, those payouts they're not guaranteed, then they can come at any time, so see those as, you know, a way of building your own your own trading funds." So you've got you've got you've almost got two two things going on. So I think that's a a really important one is not not actively necessarily have six businesses on the go because then you lose focus on your trading, but if you can have other things go on, I don't think it's a you know, it's a it's a bad thing. And what helps me think long term is my my big trading part is my pension. Yeah, and I'm looking I'm still looking five years down the line as to when that reaches a certain point. Sorry, not five years, seven years, so 55, so I'm looking seven years down the line. So by default, and then what will happen, I I won't stop trading at 55 because I love it. So so I'm setting the game up to win because my my time and space horizon is is so much bigger than the guy with less experience, and so it's just that could just push it out. I think it comes back to that as well, even with the savings; it's like if you're thinking just this month's bills only, the emotional standpoint versus you start thinking a quarter's worth of bills, okay, let's save that six months. And I think a large part of all of it, if you look at the data, you look at the time horizon, you look at the savings, comes down to as you said, like neglecting that 20%, but then that impacts the 80%, you know, yeah. So like when people neglect that smaller elements of work, but then those smaller elements are so important to the success and the overall journey that in the end, by neglecting that work that that—and normally it's the mundane stuff—it's the mundane and sort of boring and difficult things where it's not really exciting at all; there's no way to make really journaling exciting, right? Versus the markets are exciting, so, "Hey, let's just focus there." Um, and I think because of that, that sort of focus on "I don't want to do the boring stuff," you know, "it's just a bit of work, it's tedious, uh, takes a couple hours of my day," um, and because of that though, that as you said, that stuff then ends up impacting the thing that you're really focused on, and then it's like a catch-22; it's like a it's just a constant cycle that traders find themselves in.

Let's just take it back quickly though, in terms of like the beginning of your journey; uh, we talked about you know focusing on the data; that is where you started to find that consistency and start to see those changes. Where did you go from there? Like, were you always just trading your own money and sort of just starting to scale? Or so yeah, it was it it was at that point I was I stuck I stuck the the boring job out. So you could argue, you know, did the did the boring job because I've looked at it and went, "Well, I can do that standing on my on my head, and I've got this other thing now." So I did that to just accumulate because I looked at it and went at that point 10% a month feels feels nervy; 5% a month feels better. That's just that, and again you could argue that's it's not really very um very you know very scientific, but that was the emotional side; it's like if I only need to make 5% in a year's time per month to cover my outgoings, that feels better than making 10. So logically it said to me, "Look, let me look at the numbers, what's the I would say what's the capacity of the strategy on paper?" You probably need whatever's on paper for those last three years, half it; it's like, you know, "half the profits, double the time." Okay, well, 10% is doable, but I'm you know I'm going to have more months where I don't do 10%, whereas 5%, 4%, that little area there, yeah, that feels comfortable. Okay, that's within the capacity of the strategy on paper. So the better thing for me to do is carry on and just build more capital. So back then, if I can get to 25 grand in an account, suddenly 3 to 5% at the time—because again my outgoings were were relatively low—that that feels comfortable. So although it's all data, how you feel every day as a trader has a big impact. So for me, it was Accu it was accumulating capital till the point where I could go, "Okay, I can put six months so aside from that I can put six months away, and and 3 to 5% a month means I'm not going backwards." And that's when I then then made the jump and I and did that as I said for about 18 months. Yeah, then obviously I met somebody, so the income into the house became became more, and then I got involved in teaching. So that again was only something I did on weekends, so two weekends a month I would go and teach a group of traders in London, so it didn't really impact my trading; there was two Fridays that I I wasn't trading, which was fine. So then I've got the other income, but at that point I was like, "That just needs to go in the pop," mhm, "that just needs to." So the higher this pot can get, the easier the easier my life is. And I always say to traders, "You you want to be the dumbest trader on it; you want to set everything up that you're essentially the dumbest trader on Earth, and you want to make things as easy for you because trading in itself is the hardest game in town." Yeah, so if you can create everything—your environment, that being the people around you, that being where you trade, everything—make that as easy to operate in the financial environment. And for some people, they can't, you know, and the other challenge is a lot of people come into trading because they're backs against the wall. So so you know, that's not necessarily a reason to not get involved, but it is—if you stay in that zone of scarcity, it's it's it's it's going to be difficult. Definitely, it's just because like the way I describe it is if you need money, you're always going to be desperate and emotional in the markets, yeah, versus if you—everyone wants to make money, but let's say if you just don't need to—like it's not absolutely necessary that you have to make this money from the markets—you're going to be in a much more stable position to trade from. Yeah, um, and as you say, like it's easier said than done, um, but it's something that's so important because so many traders are like completely, you know, from zero or even in debt already, and they're trying to come to the markets. And I've always just from my own journey, like I remember I had a little bit of debt—nothing crazy, a couple thousand pounds on credit cards or something—coming into the market that increased because of coming into the market, you know, trying to bring those emotions and like, "I'm going to make this and cover these debts and make this lifestyle wherever it may be," uh, got into more debt—nothing crazy, like 5, 6,000—okay, but lost a lot of money in the markets trying to write off that debt and just, you know, live that life. Lost about 20 to no, 30 to 35k, sorry, uh, but staggered, you know, like 5k here. Then it got to a point where it was literally like 2,300 pound at a time because I was just literally just had a cash-in-and job, um, barely had much money to put in, but I just kept putting it in, thinking like, "What was I going to do with 1 pound? You know, I could learn, right? You can learn with 1 pound; you can develop an edge with 1 pound," to a certain degree, but you're never going to take 1 pound and turn it into something, you know, that's going to change your life. No. Um, don't get me wrong, I'm sure there's someone out there who's done it once, you know, yeah, but that one instance can't be the you know the example that people look up to. I think I think there—and I say to trade—I think there's nothing wrong with adding into your account, and especially at the early days, if you're sitting at if you're starting with two grand, 1 pound a month into your account is significant. Now, for me, putting 100 pound in is it's pointless; it would have to be a much higher amount. But I think that and also by doing that, if that's hard-earned money, what we go Lo back to what we were saying earlier, you may have a bit more respect subconsciously for what's in your account because each month you're putting in putting in what is what is left over. So I don't think that's a it's it's a bad thing. But the the challenge with that is if you're doing everything wrong, then you're just that money's just that money's just being being thrown away. So again, a lot of the things you the things that you may say or I may say to a trader, it's subject to terms and conditions, like, "Do yeah, put a put your 1 pound that you've got left at the end of your month into your account to to to ramp up the compounding over time, assuming you're doing everything right. If you're breaking all your rules, don't put that 1 pound in because you're just throwing money throwing money down the drain."

Yeah, in terms of uh you started with options and obviously now you trade—which markets are you trading? You trading Forex? Forex, uh, major indices and oil. I would say that's it, yeah. And what was your—have you always been day trading or was—started out as day trading, uh, 13 years. So most of what I did was very um was very momentum-based, so five or six markets, usually US markets in the afternoon, so cable, euro, dollar, Yen, Swissy. And all I was looking for was momentum signals. So most of what I learned from my mentor was moving average-based, so that's where I where my focus is. I'm not saying they're they're better than anything else; it's just what what I focused on. So I would literally sit there and filter those markets and look for multiple time frame momentum and then just trade trade pullbacks; that was it. It was literally that simple, and probably easier back then in 2007 in terms of you know the number of runs you would get. Um, but that was it for 13 years, very very simple. The only other thing I would do is I would fade at the end of the day, so I'd look if the rocket had a good run, yeah, came into previous daily high, I would literally look for a divergence, and then I'd fade; I'd do an overnight fade. Again, don't know how reliable that would be now because it's not something I trade anymore. And that was it; that was what I would do day in day out, week in week out, and and I and I really I really enjoyed it. But back in—it's probably about nine years ago—I started adding in swing trading. I had people come to me saying, "I want to learn from you, but I haven't got the time to sit in front of my screens all day." So it became more of what the students I was working with wanted, but also for me, I just found myself not wanting to be sat in front of my screens for so long. Um, and now the thought of sitting in front of my screens all day as a day trader, I'm not not something I really want to do. Yeah, um, I just like I like the swing trading experience; I like holding trades for for longer; I I'm happy to be in trades overnight, big positions, um, and I'm and I'm happy to go through periods, and I can financially go through periods where I don't make any money for a quarter because the trades will come. And looking back at the data, most of what most of the most of my results come in in about three months of the year. I would say probably 70% of what I make—it's not the same three months every year, but it's around, you know, there's there's three, four months where—they say that though, they say like, you know, a smaller portion of time is going to make up the book of your P&L. Yeah, it's just handling those other months where it's not as um adventurous or as exciting, and it might be like some break-even, slightly negative, small positives versus those three months where it's it's obviously a lot larger. And I think going back to a similar thing what we were talking about earlier is that most traders will have those three or six months, for example, and then make some sort of drastic decision from that euphoria, you know, that euphoria and that greed and that "I've cracked the market now," yeah, and then end up going back to square one and then changing that strategy that did work, but it's just time for it to have a a slowdown in in that period. Because I've noticed that in in my journey is that it seems to be a very common theme, and and I think you've alluded to it as well in terms of you have a winning period pretty much straight after, there's going to be either a slowdown where you break even or a lot of the time a losing period. Yeah, um, and I think one thing I've always observed and I've said this in many podcasts is I think a lot of traders out there are always looking for for the strategy that always wins. Yes, but not only to that point, but to a point where they will always be able to predict every uptick and downt of the market. Yeah, I remember there was one particular trader I've used as an example a few times where he was making good returns per month every for three months, right? He put in the work, uh, stayed in the market, journaled the trade, so on and so forth, profitable for three months, but yet still changed his strategy, 'cause I assume he was just—and he did it twice; I saw him go from one this strategy to the second one to a third one, even though the second one was profitable too, went to a third one anyway. And I I think simply because he assumes that there's going to be one thing he will learn that will allow him to go buy, sell, buy, sell, yeah, and just read the market like a book essentially. And I personally, that doesn't exist; doesn't exist. I don't I I again, speaking from my own perspective, I don't think it exists. I think it's that, and I also think it's just human nature, um, it's like if if if your dream car is a 911, a 911 Carrera 4, and you have that for six months, it becomes the norm, and you'll be looking at something else. It's the same same with any kind of purchase. I remember when um me and my wife, we got the house we're not in anymore, but when at the time it was like, "This is our dream house," within three months we're back on Rightmove. So I think there's an innate nature in humans that this this this—once you get consistent at something, it becomes the norm, you're looking for more. And sometimes I'll I'll I'll highlight that with a trader, and I'm like, "Your your downfall at the moment is that you are is that you're you're almost too hungry." So they they're either looking for the mystical edge, the mystical perfect trading system, or they just by default get used to 5% a month or regular, and they're like, "I want more." And what

They forget is that what other industry will give you that 5%? If you perform no better for the next five years, that five—how much more will that 5% in cash in your back pocket be in five years' time? You know, if you're in sales and you hit your target next quarter, your targets are going up. If you're in operations and you meet your cost-spending objectives, the next quarter they're making you—there's very few industries where you actually can have, in essence, a static, unimproved performance over a five-year period and be paid more at the end of it. And that's something that's always sat with me, and I try and remember that.

Because I had the same thing last year. I had my biggest cash-winning trade that I'd ever had, and despite all of the experience and what I say to others, I can remember I was like, okay, I've done 71 grand, and I'm level-headed about it; I feel good. But I noticed something: I had a five-grand winner a week later, and I was like, I could even feel myself being a little bit—and I was like, so, even like I said earlier, even though I know it and I've got the experience, I can still—I was like, huh, even though I knew logically that that big winner is not coming next week because it was a culmination of trades at that time that statistically only happen once every 18 months to two years, and it's—I know logically it's not happening—but even I was like, huh, I want the—I want the bigger money. Yeah, so it happens to everybody. Again, everybody I think is affected on some level; it's whether or not you can put that to bed and carry on objectively.

But I really like what you said about the mystical strategy, that that doesn't exist, because I think that's something they're all hunting for—is what they call the holy grail, right? Ex-holy grail strategy. And I think social media hasn't helped with that, because a lot of people, as you mentioned, like people promoting an 80% win rate, "100% of my students are doing this and that," um, and you know, "this is how the banks or institutions trade," like all these narratives. And I get it in terms of, as a business, you know, creating marketing techniques; I get it, business 101, okay, cool. But then there's also, I believe, especially in trading, there is a responsibility to make sure that, regardless of your marketing or your business, you do it in a way that still gives a realistic expectation, because you're just setting up your trader then to fail, right? Because then they will join you under this assumption of the 80% win rate or the 100% of getting funded, whatever it may be, and then when it doesn't happen, what happens to their emotional standpoint when they're not seeing that progress? You know what happens to their emotional standpoint? They normally end up either quitting or going to the next one, repeating the same mistakes, and then ends up being—so eventually, by the time they maybe come across a good mentor, that mentor then has to undo all this work, and that's, I think, an issue that a lot of traders or—doesn't get highlighted a lot—is that the amount of work that has to be undone to then become profitable.

I'm sure, obviously from your experience, have you noticed that there's a lot of traders who come to you with so much baggage? Yeah, that in reality, like even if you—everything you're doing is right, and even they're trying to do the right steps, but they have all this what I call like trading trauma, um, that just holds them back, and therefore you have to undo all that and sort of really work through all of that before they can even start to then progress on their journey. Absolutely, yeah. Um, there's two elements to it. So just to caveat, my best-performing trader that I've worked with had never had any experience before she came to me. Now, that could just be by chance, but it's interesting that, on a numbers basis, she—because she—that first year she was just a sponge. Now, she still went through the same hurdles that everybody else went through, but she was focused on that hurdle. Her challenge was that she did—she actually did a huge amount of testing, 'cause she heard me, you know, preach about testing and data, and she did that, but she just kept breaking her rules. And she knew logically she shouldn't, but she didn't have her—only other baggage. And remember, she said just one day, she said, "I just got sick of my own [ __ ]." I got—it wasn't anything she said; it wasn't anything you said, Ally; it wasn't anything you did; you kept, you know, putting the message there, or like you said, creating that bridge. She just said, "I just got tired of it." But the problem is, is a trader in a similar boat that's got all of this, like you said, trauma or baggage, they don't—some of them don't know which way is up, and it can also manifest technically. So I—I will often with a new—with a trader with experience, I'll give them really simple technical analysis diagrams, so just take this chart, follow this process, and find the key levels of support and resistance, and then they'll be like, "Yeah, but I don't—support and resistance; I—I use supply and demand." I'm like, "You're missing the point of the exercise. The exercise isn't that you have to use this; I just want to see how easily you can look at a chart and identify and do one thing simply," because a lot of the time what's happening is they've just got so many things going in their mind that they can't focus on one. It's not that the way that I'm doing it is right, but they—they've got like trauma, baggage, information overload. Yeah, and it's not—it's not absolute, but yeah, a lot of the time I'm working on—undoing what—what needs—yeah, undoing years in some cases.

And the shame about it, and I know speaking to other educators, it's going to be a shame, is by the time they get to you, they're either low on cash or low on motivation. And sometimes people will send an email into—to me, and it'll—Sarah will send it through, and it would say, "I'm your last—I'm your last hope," and I'm like, "Well, that's not great either," because you're—then—then that becomes a huge gamble, PR, yeah, and it's not the pressure on me; it's the pressure they then put on themselves. So it's—it's one of those, and I think yeah, if a trader can really step back, and what you said earlier I think is really important, is look at that 20%. So I'll say to guys, "Look, let's say you got Trader A, and he's had four—four losing trades; fifth trade comes along, and because of those four losers, that—it's gone into fear mode; it doesn't take that fifth trade because he suddenly sees the support and resistance that means he can't get his 3-to-1 target, so he's not going to take it; so he's found something technical to excuse him from the trade. And then you got Trader B over here, same four losers, takes that trade. So Trader B in that moment gets the 3-to-1; they're down minus one. This trader doesn't take that trade, then goes into revenge mode, takes the next trade with 2% risk; suddenly they're now down 6-7R. This trade is almost at break-even; that was one decision that has created a 5 differential in that result over the short term. And—and it's those things compounded that mean that Trader A by the end of the year is minus—minus 10 and can't understand why, and that Trader B is—is up 10, up 20, and is—is in that place where they're building confidence rather than losing it."

I know it is so important, and you know, throughout your experience, we've talked about how the markets are slightly different in terms of when you were trading to begin with versus now, especially in the FX markets. I've noticed as well, especially—I only—I started trading 2016, and even then I was seeing a lot of fluidity. I remember my first trade was a Brexit trade; um, I remember it was uh, GU; I put a sell on; I just—I just had this really strong feeling, you know, that Brexit was going to get ped, and I just—I don't know, I assumed that that would be bad for the currency, um, and I remember I put sell on; I had a TP on. So if I didn't have a TP, it would have made me more—obviously, you can imagine. That was my first trade; I made like £500 on a £10,000 account; I was like, wow, this is easy! And I blew it of course within like two weeks or something, but it always stands out to me, which is, I guess a—I guess a good little pin in the journey. But what I was getting at is that even after that point, though, for a couple of years, you know, very simple strategy of just a Fibonacci retracement, price would move—nice swings, nice movements. But now I've noticed—to be fair, I was trading like GJ—a bit more fluid markets at the time, bit more volatility—um, but uh, I've noticed the same thing with like EU, as we said; it's just squeezed; it's quite a big price range, but it's squeezed in between it, um, which I find a bit difficult personally, you know, when we're in these sort of uh ranges. I—I prefer the sort of volatility and the movement. Yes, I think most traders with experience do, because they can handle the volatility; they're used to it, and what they don't want is just price going nowhere. Yeah, yeah, because I hate—especially as I—I transitioned to swing—I was scalping at one point; transition to swing trading, and I think to begin with the transition was a little bit difficult because you're so used to, you know, closing your trade so soon, so then now you're going to the complete opposite end of the spectrum where you're having to hold the trades—you—regardless of whether it's hit, say, a particular point, because your actual target is much further away, and if you scale out too soon, you're—your R is actually maybe negative or—or close to one-to-one, yeah, uh, because you scaled out that much versus you need to hold it. And um, I made that exact mistake when I started swing trading because I was fiddling around with trades, building a position, then scaling out, and I got to the end of it; went, "I would have been better just buying and selling," and it was just 'cause I wanted something to do because I had this extra—I'm sorry to jump in, but it's—I was going to say, not uncommon—it's not—is that your transition through those years and the changes in the markets and the different market cycles—like, how have you had to adapt, if any, or how have you had to adapt your strategy? Was it any big changes? Was it just minuscule changes? Was it change in risk management, etc.?

Yeah, I think for me the biggest—the biggest change is that I've looked to trade counter-trend because the—well, it's funny, I actually looked to start—I started counter-trend trading back in 2019, so I was like, okay, I've got a basically momentum-based swing trade; I'm going to start counter-trading using divergence, just key levels, nothing—nothing over complex, and then scaling into that position. So I use a—I use a five-high and a five-low moving average, so essentially like a tight Bollinger band, just allows me to scale in. So yeah, for me around 2019, what we had was—for me that was when things—we had a—had a bit of time in 2020, but it just—the sweet spot was to about 2019, and I've been swing trading since 2013, 2012. So what I noticed was that the trend started to decrease. So for me at that time, I just started adding in counter-trend trades. Well, what I didn't really think about at the time as we transitioned into sort of tighter markets is to get counter-trend trades, you need the market to trend. So I got—I was trading with momentum; price was coming into the key levels; I was counter-trending those, trading those positions; it was all going great because price was moving a lot and getting to key levels. And then as we got further and further down the line, what I noticed was that we just—there wasn't as many markets trending; we're seeing that at the moment, you know, right now, apart from the impairs, everything's just tight; everything's just stuck. So I'm sitting there going, "Okay, well, I've got to look at the market maybe on a 4-hour or 1-hour," because I've just got to look at it from a fractal's point of view; I've got to scale down so that I can still capitalize from a trend. So it's still the same strategies, but I've just essentially just moved them down the time frames, but not—I didn't wake up and go, "Right, I know what I need to do; I need to trade on a lower time frame." It's just over time those little evolutions—would you say that—have you noticed any patterns with this, you know, that this sort of tight ranges that we're seeing across—

I think for me what I've noticed, and again I always say to traders, even though I've been in the game this long, I could still have a bias because we, as traders, we can all see something and then bias it. For me, it's—it's the theme we're in at the moment. So I think why it's quite tough at the moment is we're in this inflation, interest-rate theme, and that—that theme won't stay the same forever. So what I think we're seeing is a very, very US-centric market, and you know, I'm noticing on the short-term price jumps, pulls back and doesn't really get going, whereas before you'd get a jump, pull back, and then it would go. Yeah, so I think I've learned just to accept it; it's like I haven't suddenly reduced massively my targets or made any—the only real significant change is trading slightly lower time frames, and I've just—just got more accepting of the fact that this is—this is the period we're in. And then somebody will say, "Well, how long is it going to last?" I—I don't know; I don't know when suddenly the markets will, you know, loosen up because they feel—feel better about where the Fed is going. You know, it might be this September. If the Fed, you know, lower rates and there's a clear path and liquidity picks up and everything—everything starts moving a bit more, it might be after the election. So I think with everything being very US-focused, and the other thing I think people forget is you go back 10 years, the European economy in terms of size versus the US economy was quite—quite close in GDP, but America is just shot ahead of Europe. So the news that comes out of America is so impacting of all the other—you know, plus we're in a global economy anyway, and we have been for a while, but I noticed that everything is centered around what the US does, and—and really, like you can look at the Dax, and sometimes it's the US news that moves the Dax more than the—than the news out—out of Europe. So I think the correlation there is due to the fact that the US economy is so much bigger. So yeah, we're quite US-centric, and I think the theme is this inflation, interest-rate scenario, and once—you know, two years we'll be talking about something else; there'll be another theme that is driving it, and maybe that isn't causing the same—same tightness. And we've got, you know, all this potential conflict that's going on, which is, you know, doesn't help with oil; you know, you only got to look back at oil um and see how much—again, that's squeezed. And I think look at things like ATR; just—you don't necessarily have to change what you do as a trader, but sometimes the trader will get stressed because they don't know why things are the way they are, and nobody absolutely knows the reason why things have tightened up. But if you go—"Oh, look at ATR; it's dropped"—okay, well, maybe I'm going to spend the weekend just looking at my strategy on a lower time frame. Like I—like that's all I did; I didn't—I didn't have the—it wasn't my experience that went, "Ah, this is—this is what it is; I'm going to do this." I was just like, "Well, let me go and have a play around." Okay, yeah, actually, maybe if I took this down to a 4-hour entry rather than a daily, it's not necessarily going to be as good as what I was doing before, but it's going to help—mean, you know, I'm—I'm—I'm closer to where I want to be. And it's a lot of—it's experimentation, I think. I think traders think that they need to have all the answers, or somebody that's been in the game 20 years has got all the answers; no, they've just got more experience; they've got a—a higher level of resilience. And the number one thing I talk to most traders about is work on improving your resilience; have the expectation that there is going to be a quiet six months, and it's not—it's not about being negative, but you know, every SAS mission—you know, if you watch those SAS programs where the—you know, the celebs go on it and everything else, they always worst-case scenario—you know, they're like, "Think about the worst-case scenario," because if you avoid that, you—when the worst-case scenario comes, or that worst-case scenario for a trader with an itchy—itchy right hand is six months of not much happening, and it's that six months where they become a trader—can they stick to their rules, hold their nerve, and not ruin in what they did well when the market was easy? 'Cause a higher percentage of traders can do well when things are ticking along nicely; a lower percentage do well when things are—things are more difficult. So I think—and also just—just to end that, don't try and change too much; it doesn't have to be, as my mentor said, "Doesn't have to be a U-turn in the Queen Mary," you know, you don't have to do this massive shift; just—just have a look at a few things and be willing to—willing to have an experiment, and if it doesn't work out, go and look at something else.

It's interesting you say that, though, because I remember distinctly, like I mentioned Brexit, like as you said, there's always a theme that seems to be like what the market is looking at, and at that time it was Brexit, then like, you know, Brexit was like a three- or four-year period uh to finally get it pasted, but there was like common themes consistently where Brexit would be a highlight for the UK, for sure. There was when obviously Donald Trump came in and his focus with the—the trade tensions and trade wars that he was having, then obviously the conflict he had with Iran, for example, um, and then obviously we had the inflation, we had Covid, of course, um, then we had the—the inflationary things right now, the interest rates right now, the conflicts that we're seeing right now. And as you say, there's always going to be something. I've always said—it's a bit of a different one to be fair, but you know, when things are in the news, for example, there's always like a theme in the news constantly, globally; there's always going to be something. Like right now, I think it's monkeypox; I think it is our new potential virus that is going to be interesting to see how that plays out. But most things in the news—like we just had these riots in the UK one to two weeks ago—yes, that's what I've always noticed, like one to two weeks, it'll be in the news—all the—all the emotion, wherever the narrative may be, then it's something else. I don't know if it's maybe human attention; like we just can't—we don't care after that point, but it just moves on to whatever the next thing is. And as you're saying in the markets, it's definitely something that we see more so on the fundamental side, which leads to my next question, though, is—is fundamental something that you focus on at all, um, to an extent?

So initially, when I'm talking about themes, the first—the first thing I do with fundamentals is my own expectations, so it helps me rationalize what is going on. And as I said earlier, you—somebody could be listening to saying, "Well, you can't prove that the reason the markets are—that euro is tight, like Euro US dollar is tight like it is is because of the inflationary and—um, interest-rate decision or whatever," you can't prove that. I'm like, "It's not about proving it; it's about me having an—an acceptance and an expectation of what's going on." So if I've—let's say I've got a 5R target on a trade, and I can see that the market is stuttery, and we've got a whole series of news coming out, and that news comes out a little bit positive, a little bit negative, then I'm expecting that 5-to-1 target, if it gets hit, to take longer. No, it might not, because I—the market might just choose to go there, but if I've got an expectation that is a—a better time horizon—somebody's like, "Oh, if we get that news announcement, that means—and it goes that way, price is going to hit its target"—I'm already in the driving seat compared to that trader. So for me, there—that's probably it. So yeah, I—I will—I'm—I'm a little bit contrarian, so a lot of the time I will actually weirdly feel better about a position I'm in if I'm reading a series of analysts' reports and they're saying the opposite. And again, I can't prove that; I'm not tracking that, but I think I will—I will take the data of my strategy over the last five years, even though market conditions change over that period; I'll lean on that a little bit more than—"Well, I think Paul's gonna say this; oh, he has said that, therefore I'm gonna do that." Yeah, I think that's where I go. So I don't ignore it, but I don't put—I don't put too much emphasis on it; it's more—I think it's more for me in the strategy. I think the thing that I—I will look at a little bit is—I don't—I mean, it's more—it's more technical, but I like retail sentiment. So again, I go down this avenue—a lot of—"80% of traders fail"—if you're having a reactionary thought and you want to press the button on the market, that's what the 80% want to do. So I'm constantly saying to people, "If you feel that you—you—you're thinking like the massive traders who are losing money," so it's natural to think that way, but what you don't want to do is act that way. So again, with—with sentiment, if I'm looking at a position and I see sentiment coming in—my retail sentiment as a contrarian indicator going—so I say I'm long, and more and more retailers going short, I don't think, "Right, I'll double up on that trade, or I'll hold it for longer"; just makes me go, "Okay, that's more weight in my direction on this trade." Now, I also caveat that with not thinking now that re—now that retail sentiment is short and I'm long, my trade is going to hit target. So it's again—it's a balance, um, and I get this a lot from traders: "Say, well, why are you trading—why—why you—why—why have you got euroyen and dollaryen on your watch list? Because if you're going to go long on both of those, you're essentially—you're—you're trading—you know, you're only trading really one of—you're only really trading the yen." I'm like, "Well, firstly, both might not set up, and two, the data backs up that in that moment I'm okay to take both of those; it's just if they lose and the next time that happens, I've got to take them again." So I will put probably less on fundamentals, more on technicals, but I've got the data to—on—if that makes sense. Makes sense. And it's interesting you mentioned that contrarian viewpoint, because that—that person I mentioned before we started, in terms that podcast I did with New Market Wizards, Jason Shapiro, that's his whole thing; his whole strategy is just being the opposite of—when everyone's long, he will be looking at shorts, and when everyone's short, he will be looking at longs, um, and it's fascinating because obviously, as you say, like 80% of traders lose, so it's a good strategy to have. Yeah, and—and—and one of the things I've always—even now is I'll journal how—

How I feel about the overall position? So if I'm long US dollar Yen, I will. And and I see loads of people saying, you know, that it's dollar's going to do this and we're going to be down. You know, the classic one was Euro going to parity; everyone was talking about Euro going to parity. And I will, I will almost look at it like a scales and go, "How much on a scale of 1 to 10 am I going against what's out there?" And invariably, it doesn't actually impact the result. And often it's the fact that I'm actually in, I'm in a better position because the old saying, "Fundamentals are always right," the problem is you don't know when. MH. So as even as a swing trader, fundamentals play more of a role, but it's still for me more technical based because I'm still timing entries and exits as opposed to a hedge fund manager who's got to weigh up a whole load of different things than than I have.

And it's funny because I've got a couple of friends who are hedge fund managers from uni, and we'll meet up and the discussion sort of—we'll talk about fundamentals, the news—but very quickly the discussion dissipates because the way they operate versus how I operate is so different. Yeah, that actually the, the things, the data points and the things that I'm relying on are completely different to to them. So there's only so many things that we can talk about that are, yeah, yeah. It's fascinating. People don't understand that there is a huge difference between like a hedge fund manager versus uh, not a retail trader, but even just someone who's an institutional trader, for example, or a professional money manager, for example, just because their role is so different and what they're meant to be doing in the markets isn't just to trade. It's to obviously, has a hedge, you know, and just reduce risk and they're looking at such a various different markets versus usually what an institutional trader, they'll normally have like more of a focus point. Yeah, and they've got to have, they've got to have a much larger percentage of their, their pot in the market. You know, I'm sitting, I'm, as we say, your, your, your job as a trader is to, you know, you, how often are you more than 95% in the market? You know, most of your trading accounts should be cash and stay that way, which is very different than what a hedge fund manager is doing.

In terms of risk though, actually, um, you know, what, what is your rules to risk? Are you someone who's fixed risk, dynamic risk? Um, again, it depends. So I've got, I've got, I've got two pots. I've got two swing trading pots. One is dynamic um, because it's a specific strategy. It's much more mechanical in its nature. So again, by dynamic, what I'll do is it, I will, I will use, if I'm on a really good profit run, I've got a framework that I can run in, so I can go from a 1% risk to 1.2 to 1.5. So it's still relatively small, but I've got an, I've got an uplift relative to how much profit I'm making. And the same thing the other way on my other account, it's fixed risk, which is purely 1% per trade, um, but there are two strategies in there with different targets. So it's fixed risk, but one's a three R, and then the other one is a trailing stop. So that will depend, yeah. So and that's, and and I'm not saying that's right, but it it feels and works right for me; the numbers back it up. So some, I've, I've had the question where, "Why don't you trade dynamic risk over here?" And I probably could make more money, but I'm happy doing it the way I am over here. But with that one strategy in that one account, I'm good with the dynamic risk. So it's a little bit different.

Would you say that a lot of the decisions that you make in trading is really backed by the data, the data showing you these are the right decisions to make? Yeah, I think one of the things that a lot of traders underestimate is trade frequency. You know, if I'm probably going to be in three trades at any one time, maybe on a busy month I play six trades in one month. You know, again it's not, it's the average. You don't, again, don't look at the average because different months it's different. You know, it's like buses; they'll, you know, one month I might have six, next month I have none. But I think a lot of traders underestimate, and they're, you know, they're sitting there and they're banging five or six trades in a day at 1% risk; it's going to take its toll. I'm not saying you can't do it, but by default, I think reducing that to 0.5 is a good thing to do, just because of the number of trades that you are physically, physically placing as a day trader versus a swing trader. So I do think, yeah, risk is something that is, is huge, is hugely important. It's the number one, you know, and I always say to people, people I say, "What's the number one rule in trading?" And they say, you know, "Protect your capital." I'm like, "No, protect your confidence." If you're not protecting your capital, you shouldn't be trading; you shouldn't actually be—the number one rule it should just be a given. Yeah, but if you protect your capital, you protect your confidence, at least then. And I always say, "Look, set yourself up to be the dumbest trader on Earth." You know, if you're risking 0.5, you're going to, at some point, at least have a winning trade, even if, you know, in the next 20 trades, the chances are you'll have a winner. So your worst-case scenario in that, if you're doing everything wrong, is only a 10% drawdown. So again, that's, again, and this is where the current state of affairs where people are focusing on making the 10%, like I did, but in a different way. I want to make the 10, that the 10%, the 650 quid in that month, I want to pass challenge, I want to get to this point. It's, it's variably about the profit. So if you can switch the mindset, it's not that you ignore the profit, but you think risk first, you're already putting yourself ahead of tons of traders out there in terms of uh, like the current state of the retail space.

Most people are focused on, from what I can tell, on acquiring capital from prop firms, right? And it makes sense; nothing wrong with prop firms, but I think over the years it's been such a focus that people, even people using them, you know, I think we mentioned earlier like taking payouts and making a personal account, even people using them aren't really doing that; they just, you know, if they are getting funded, they're just getting their payouts and then just continuing with the funded route, which is nothing wrong with that either. But I think as we've talked about though, having that time horizon, it's smart to build a personal, using the prop firms, uh, I think that's really what they're there for, in my opinion. I think that's what they really should be there for is to, if you have no capital, you can use this avenue, if you have an edge to build your capital, absolutely, to then actually take that capital into a personal account and then still have diversification; you can still trade both then, um, but at least then you have a bit more peace of mind because you don't know—we've in this industry, you know, we've seen brokers go away, we've seen all sorts happen. So it's not even just to say that everything's safe over here; you know, this is the industry we're in; there's a lot of volatility involved, even the brokers are taking risk and so on. So there, anything can happen any time. And so I think it's our job really to understand that and then position ourselves in the best way possible to, you know, alleviate risk. Um, but there are other options available like invest capital, managing other people's capital, copy trading and so on, but I think a lot of people aren't sort of aware of it or understand a bit more details to it.

Is there anything that you can share with us? Yeah, I, I think just hitting on the, the, the funded account scenario, I'm, I'm not against it, but I think you've got to, you've got to, again, play it like the 20%, so you, it's, I think it's a different mindset getting qualified than it is staying, staying in the game. And I think if you can see it almost as two separate tasks, you're then ahead of half the people out there that are doing it. I always say if you could, if you can sit, once you're qualified and have the patience of a saint or the patience of 1% of traders out there and you can get to a million pounds of hypothetical funding or whatever it is, then that 10% payout is worth so much more than the first. But I think, I think the thing that kills people—yes, there's obviously a percentage of people that don't make it past qualification, it's phase one—because they want, they want the first payout. Yeah, they, you know, I spoke to a guy, "I paid my mortgage off, I worked shifts. He said, 'If I can get to payout one, that will cover my expenses for an entire year.'" And I'm like, "It's over already," because you're thinking about, you're thinking about that. So I think in the prop firm space, if people can think longer term, just like we talked about for any trader, they've got more chance. Um, yeah, there are other avenues. So I have a, I have a regulated manage fund. I'm not regulated myself, so I don't have the qualification, but I come under an asset manager that does. So the way that worked is they actually contacted, me, um, I've been doing it four years; they probably contacted me about eight years ago. And for me I was like, "I don't, at that point I was like, 'Don't think I want to manage other people's money.'" Yeah, um, it wasn't for me. And then they, they kept hounding me, sent them a track record, and then I said, "Yeah, all right." So it's, I think it was June of 2019 that started. So very simply, all that I have is I have an account of my own, and anyone that wants to invest into that, they simply have an account that gets connected to mine. So it's a little bit like copy trading, but it's, you know, it's authorized under a regulated entity. So essentially, that's the initial way that a lot of people can get in. Obviously, you need a good track record. Now the thing with the track record isn't just how much money you can make; it's all about, it's all about um, drawdown MH. So the what they actually looked at, because I sent it in and I was like thinking, okay, they were like, "Ali, there's a couple of months here where, you know, you've had a few, a few, a few bigger drops." And I'm like, "Well, that's the way that I trade." They said, "Would you trade that way if you were trading people's money, were trading under our umbrella?" I said, "No, actually what I would do is I would very simply initially, and probably stick at half the risk," because I understood at that time that if I'm trading somebody else's money, it's a very different, it's a very different ball game. And also the other thing is if you're doing something like that, then Joe Public puts his money in, or the institution puts their money in, and you, they could be putting their money in slap bang at the point where you're going into a drawdown, so you have to account for that. And for me it's all about, again, it's all about managing risk. So I don't do anything that different on my fund than I do on my own account, except I heavily reduce the risk on the trades, um, and it's been a really, really good experience for me. Um, I thought it would be easier than it was, but interestingly, even though I have a rule, "no friends and family," um, and and honestly a lot of the people listening to this, I'm looking for 10 to 20 max percent a year, so I'm not looking to hit what I'm looking in my swing account; I'm aiming for 50% a year in my swing. So I'm looking for a much smaller return, but the challenge is with that is what I found myself doing is because I have to report my figures each month, I started becoming a little bit month-centric when it first started. Yeah, and I was like, "Had two and a half percent down this month, oh great, I've had an 8% winning month," and actually I would have never done that back in, or I don't do it now, wouldn't have done it back in 2019 when I started out with my own account. I don't even blink; I don't even really measure the month. But having to report just meant my SP and was, I was focusing on the month, and I was like, "Oh, okay," and then I just found myself getting a little bit more tense about trades that were getting close to target, so I was even, I was wanting it a little bit more because I'm conscious that it's not for me; I'm wanting it for my, I'm wanting it for my clients. And especially if I knew that somebody's only put their money in two months ago and they've had a 1% losing month and a half a percent losing month, I'm wanting that winning, that winning profitability for them. So it actually helped me almost re-and what new traders go through because it just knocked my emotional intensity up by, you know, one, one, one point, you know, one volume notch up from one to two. So it was a really good experience for me, and I'm really glad I'm doing it, and there is a long-term plan to it. So yeah, any trader listening to this could potentially get involved in that as long as they've got a consistent track record and it's not yoyoing up and down, because I mean there might be, there might be copy trading firms out there that are okay with that, but the firm use, it's, it's, it's drawdown first, profit second.

Yeah, and would you say that going through that process, it's, I know there are options and depending on how you want to structure it and then also I guess the, the firm that you'll use, it will be management fee and performance fee. Yeah, so with mine, I, I just chose to go straight, straight performance fee, because again I'm not, and again this is another thing that is space and time highest and oriented, I'm not looking to make money from it over the short term; it was more a challenge for me. And I want to get five years under my belt, and then I will go more institutional with it, and then I can also go to other firms with that track record that could set me up more with institutional money. So I see it as a stepping stone. However, yes, if somebody, somebody comes in, it's performance VI orientated, so what happens is there's simply a high water mark, so every time I breach that high water, I get above it, then returns wise that gets split, and there's a fee, I think it's 25% that we then split, and the asset manager gets a bit and I get a bit; that's how it works. And if somebody's introducing money into the fund, then they, the asset manager takes their bit, and we, we have a separate agreement on how the, how the split of that 25% goes. So it's good, but it's again for me it's more about a long-term play. Yes, when you get a payout, it's lovely, but I'm not trading for payouts; I'm not doing anything other than placing the trades that I would, and I just see the payout as, as bonus money, yeah, because then that way there's no, there's no, there's no decision bias.

But even that being the case though, is it just so that people, traders out there aware, cuz again I knew it existed, but not really spoken to many people; it's not something that's really highlighted over the retail space. Like literally, I'd say the retail space is really heavily taken over by prop firms and evaluation firms, which again is not a bad thing, but I think it's good for people to know the different options. So even if it's like bonus money, you're thinking more long term, is that money—would you say that is something that you know is substantial, you know, it's still good money and you could live—not live, but trade full-time from? Yeah, I mean, you just have to do the math; it's all relative to asset under management. Yeah, so you know, my goal is, my goal is eight figures under management; we're nowhere near that yet, you know, so we're in the lower, we're in the lower sevens, but over—and I'm honestly not pushing it; I'm not going out to try and find money, and the asset manager isn't really doing that. So if I wanted to do that, I could. Now part of my five-year plan is to, is to push that because I want to move that up, and once we get to that level, it might be that I need to move it to a different, a different um, asset manager, because that's, that's getting into, you know, bigger numbers. But for me it's about taking it slow. But if somebody, if somebody had that track record and knew that they could get access to essentially, you know, let's say 2 million under management, well, you know, they hit, they hit 20% that year, do the, do the maths, because they can, they can set the parameters as long as the asset manager is getting enough from the performance fee; if they want to set a management fee, they can, so they can set it up, and and then it becomes more about them finding the money. Yeah, and then they just have to understand that I think the key thing within that is, is you're going to get people coming in at very different stages of the process, so you, that's something I thought about when you mentioned it was like, "Actually, that's so interesting, because, you know, if someone did come in on a losing month, they might feel a certain kind of way," and that's why it's so important to limit those drawdowns and how big they are. Um, I mean, I force people to watch a 20-minute video that explains the strategy, explains my process, and and I can see whether or not they've watched it because I, it's not that it's not that, that, that necessarily is going to make the difference, because again somebody who doesn't understand trading but sees the results can nod their head and go, "I want in." But I even say in that video, "I want you to imagine that I have the statistical losing run at the point you put your money in, and if you're happy to deal with that, then and look at this as a minimum of a three-year scenario," because the, the challenge I've got is when—is in my mind I want that person to understand that that because it's FX trading and it's, it's CFD trading, I don't want them to think that it's quick, easy money. I'm treating this the same way that a long-term fund manager would be treating them; I'm just using a different vehicle to get there. And I, I'm very, very aware that I don't want people to say, you know, "This guy's an FX trader, and he's traded currencies and indices, and he trades CFDs," they think, "Oh, I can whack my money in for three months and, you know, it's going to be a, it's going to be a, it's going to be a win." So it's just a different vehicle to stay long term. So it is, it is available, but it comes down to, it comes down to track record, and I think um, whether or not different asset managers would want a shorter track record, but you know, this one wanted five years. So for some traders it's, it might not be the thing for them now, but it could certainly be something they aspire to.

Exactly, yeah, because again I think like a lot of people aren't focused on track records, and I think it's so important. Would you say in terms of track records though, is there an element of the capital you trade as well, like in terms of size? Yeah, I mean, I, I've taken it out now. I initially put 150 of my own money in, so I put 150k because I didn't want to be that guy that was, you know, trading two grand of his money but had a million of other people's. But I wanted the traders that were coming in to know that, you know, "He's, he's got his own skin in the game on this particular account, not just in his own, own trading." Um, so I think yes, it is. And and one of the things that I talk about with my traders is there's that phase when you get to personalization, phase four, it's not just about what you trade and how you trade it; it's the size you trade. So it's a different ball game. Some traders do better with big size. I've worked with a couple of guys that I said to them, "You actually are trading too small relative to your income, because you're just flippant about the fact you've lost 100 quid today because you're earning 500 quid a day as a consultant; you're like, 'What's, what's the—I can just lose this.'" And actually when they up their account to 25k, they became better traders because the loss, the loss was more severe. Yeah, so that's one angle. So I like trading with bigger money, it's, but but I've grown into that; it's not that I know if I'd started with the money I trade now in the first six months, I probably would have crumbled. So I've built my way up slowly. So I like, I like, but I but I've got used to trading with big money, but I'm also fully aware, and I think this is another thing with experience, is I can't sit here and say how I will do if I've got 10, 15 million under management; that's where I'm going, but I'll only know how I'll do once I'm actually there. Yeah, so I try and it's that, it's that healthy respect. So again, I think what a trader doesn't want to do is go, "Okay, I've traded with a two grand account; I've made 20% a year for five years; here's my track record. Yeah, oh, off we go then; here you've got 2 million under management from, you know, friends, family, and people and businesses and people you know." It's too big a leap. And and although the asset management company didn't say anything, they could obviously see that the amounts that I was trading relative to then what could be in the fund were proportional to some extent; it's not like I was trading a 10 grand account and then suddenly I'm trading with half a million quid of other people's money. So again, I think those factors do come into play. I think it's very important you highlight that.

It's actually interesting; something happened here in, in basically Nottingham, but the UK, but this home, the home city I'm from is this fund that was around; I don't think it was regulated or anything, but um, they were offering, they, they were approaching their friends and family, right? And I think apparently it was one trader; I don't know them personally; I just, as you can imagine, small city where it gets around, where it gets around. Yeah, but essentially, long story short, they uh, they had a fund uh, it was like a trader who'd been trading for a while, apparently done very well, um, you know, was just a one guy by himself, um, and had traded like, let's say multiple six figures himself, you know, all good, then started to build this fund. I think it scaled to like a million quite quickly; it was still all good; 2 million quite quickly; still all good, from what I hear, um, they were offering something, I think maybe the returns were a bit too high, maybe like 2%, 3% a month, like they, you could get that monthly, uh, which isn't necessarily too crazy, um, but what happened was I believe there was one year where they had such an uplift in, in income coming in, so that it went from like 2, 3 million to 10 to 15, something like that. And I think the numbers, from what I've observed anyway, it seems like the numbers were just way too much for the trader in such a fast uh, succession that it just led to one mistake taking place, and then that mistake being, yeah, spiral, and then ended up blowing the whole thing, uh, and it was a majority being friends and family and and friends and family of friends and family and something like that, um, very dark place for that, that trader and the people involved in that uh, by the looks of things. But it really, me observing it, just having my experience and knowledge, obviously the people, friends and family in the, in the city were...

All very much shocked, not knowing, like, did this person run away with my money, and so on? Yeah, uh, because they don't know trading, you know. And I found it fascinating though, because the amount of people who suddenly had six figures out of nowhere to put into this thing, whether they were borrowing it or mortgaging their houses or had it somehow, but putting it into this thing because I think they just assumed it was easy money, you know, like 2-3% a month, every month. And I think at one point it was doing that, but I think it just got to a point where the numbers just got too big too quick. Yeah, and uh, you know, I feel—and this is kind of leads me into the question for you—in terms of scaling, how important is scaling at a—I don't know what the right word would be—but scaling at a good pace rather than at a very quick pace? Because I see a lot in the funding realm, yeah, the amount of people who have never been funded yet their goal is, “I need to get a million funded by the end of this year; that’s my yearly goal this year,” but they’ve never traded even 10,000 of personal money or even an evaluation for money. Um, you know, so how important is scaling at a good rate?

It’s it’s it’s hugely important. It’s it’s an—it’s the element of risk; it’s an element of risk management in its own right. And I’ve I’ve had traders where I’ve said, “Look, okay, you’ve done really well; you’ve made 30% in six months on a five-grand account,” and then they want to put 50 in, and I’m like, “What? You don’t understand is just—just think about the loss.” So when you lose—when you lose 1% on five grand—50 quid—it’s gone. Could you go on a night out with your mates, have a few beers, get home thinking there was 50 quid in your back pocket and it’s not there? How would you feel? They go, “They’ll be a bit pissed off, you know. I can’t account for 50 quid, but it’s not the end of the world.” Okay, what if the same thing was happening? You went on that same night out and you came home knowing you had 500 quid in your back pocket and it’s now gone. How would you feel? You’d be—you’d be pissed; it would ruin your weekend; you’d want—you’d be—you’d be in a mess. Okay, well, that’s what you’re just about to do, trade by trade, on your own account, because you think you—you—you think you’re being logical, and you think you’re going to—you’re going to work; everything’s going to work the same way. And even if the person nods their head and goes, “Oh, no, I realize it’s going to be more stressful,” but try and—try and break it down, and then I’ll just say, “Right, let’s run the—let’s run the inevitable four-trade losing run that that strategy has; that’s two grand, two grand. That could all happen statistically in one week, even though it’s swing trading; they just—the trades just all fall.” How would you then feel? Would you be—because it’s—can you place the fifth trade when you’re two grand down, whereas before you were 200 quid down? It’s a very, very different game. So I think people don’t understand increments, and they don’t understand compounding, not necessarily from the point of view of where your account is and where it can be, but how will you deal with it? So I always say, “What you’ve got two things you can play with: the amount of money you put in the account and the amount of money you can risk per trade.” So let’s say you’ve got five and you’ve turned it into eight, great. Why not just—why not just—no more than double that. So let’s say we’re going to add in another eight, okay, and maybe for the first month just trade at half the risk, just to get used to it, just get used to seeing the figure in your account. And then, okay, and then move up, so just every—do everything in stages. Whatever you want to do, like we said about the time and space horizon, if you’re focusing on a week, it’s not long enough; if you’re focusing on adding in, you know, 300% extra capital, it’s at least half too much. Always, always, always downsize; always do that. And again, it’s just being respectful, and it’s—it’s the difficult thing to do, and I think that comes back to, “Can you step away and go, ‘I know I want—this is what I want to do, but is it the right thing to do?’” And the challenge for a lot of traders, they haven’t got anyone to feed back—haven’t got anyone to feed that back off of. And I’ve had traders that I’ve said that too, and they’ve taken my advice on board; other traders that haven’t, and I’m like, “Yeah, you—you,” and then three weeks down the line they’re like, “P—this is hard work. MH—the logic’s out the window suddenly.” You know, those—those three losers. I’m working with a guy at the moment, and he—he said to me, “I’m going to—I’m going to up my account; I’ve traded well with 10; I’m going to go in with two accounts at 50, so two separate accounts of 50, and I’m going to up my risk from 1% to 2%.” And I—I can’t tell you what to do, but don’t do it. Yeah, he didn’t do it, but it was just—it’s amazing how much a short period of success can create a—a delusion in how you will behave. And I always think everything’s an experiment, so treat it like an experiment, like see how you behave, and that also just by doing that creates a detachment anyway. Okay, so I’m going to up my eight—I’m going to up my eight-grand account to 16 MH, and I’m going to see how I do. If I do well with that, I’m going to up it to 25 and see how I do. So by treating it like an experiment, doing it in stages, that by default takes the emotion out anyway.

What sort of—um—it’s a bit of a different question I would say, but like what sort of—um—traders do you tend to work with in terms of like age and—Oh, it’s—it’s so varied. I mean, like I said, Kry, my best trader, she—she’d never seen a chart before in her life. Um, she—so the—she worked a business, I think was printing packaging; she did—um, you know, sort of late—came to me in her late 50s. And I have other people, you know, 18 or even younger; you know, they can’t actually open an account, but they just want to learn to trade. So it’s very, very varied. And the one thing I’ve learned is it’s—it’s easy to underestimate something. You can look at something—I remember working with a lady called Christina, and she—she wouldn’t mind me saying this—she was a graphic designer, very creative, airy-fairy, head in the clouds—um, just not somebody that would look—you’d ever think—and initially it was a car crash, but she had so much determination that she got there, and nothing—nothing out—out of this world, you know, few percent a month, just some simple swing trading; still doing it now. But even I was like—I remember saying to—to Sarah, and my wife, “No, I don’t think she’s—I don’t think she’ll make it,” and I was like—and then she did. I was like, “I’ll never write anybody off as long as they’re taking feedback.” I think that’s the key thing. Yes, she didn’t start out with the ideal—ideal, you know, skill set, but she had determination, and she took feedback. So yeah, it’s—it’s very varied, but I am getting more and more people—not necessarily of a certain type—but wanting the, you know, move—wanting that prop firm, and that’s just because that’s what they’re seeing. And I think that’s okay. And what I’m—what I’m doing with a lot of the people I work with is saying, “Look, balance out; learn to trade with your own money, even if it’s 200 quid, just—or a demo account, just start without this arbitrary goal, and then move towards the prop firm.” And I have more success with people that do that than the people who come to me going, “I want to pass this challenge; can you help me? MH,” Well, yes, I can, but the mere fact that that’s your only goal says there’s things that need to be worked on. So if you can take a step back, that will—that will help. But yeah, yeah, it’s interesting; it’s definitely—it’s definitely a younger—a younger crowd than it was 10 years ago when I was—when I was doing it.

Yeah, one thing you mentioned just before that was in terms of a trader not knowing other traders, not—not—not being able to get that feedback or comparison or—or, you know, just advice or that familiar—someone else understanding what they’re going through. Um, but what was it like for you? You know, did you get to—to meet many traders early on in your journey?

Yeah, I mean, I was very fortunate. So I had that—I had that guy from the states that was—that was mentoring me, and I’m a couple of people that the event that I went to in Vegas, I became friends with. It was more—it was—we weren’t close friends, and then—and then were they like—us guys? Yes, the US guys. But it’s—it’s like traders want to talk to other traders. I mean, it’s like my guys are like, “Ali, Ali, when are you going to organize a social?” Because they actually don’t always want to be doing something—being taught something or—or learning; they just want to hang out. So I think I was very fortunate that uh, a good buddy of mine, Charlie—you—you got on the show—we became friends, and I think our friendship grew for two reasons: one, we’re very similar in our outlook on life, but we both trade. So, you know, our wives would sit—How did you meet? Um, we met through a mutual friend who was also a trader. So he—he wasn’t as passionate about it; it was something he sort of did, and he’s like, “Oh, Ali, you’ve got to meet Charlie.” And because Charlie and I were deep in it, you know, you know, our wives will be like flipping out, “You’ve been talking shop for two hours,” because you—you just want to, you know, you know, you—you don’t have that—that—that—that network, and you know, most of my uni mates don’t get it; you know, they’re in completely different industries and arenas. So I think it is—it is difficult, and I think, you know, good networks out there that are solid and allow—PE—I think allow people to—to connect like that are really—it’s really important. I think you, as the trader out there listening to this, you just got to be careful what—what that network is—is doing, as in you might—you know, are they trying to sell you—they trying to sell you something? You know, Charlie and I—and very interestingly, we’ll never talk about strategy. He’s like, “What are you trading? What are you trading?” Because we’re both comfortable in what we trade, you know, even if I’m on a drawdown and he’s doing well or vice versa; he’s not like, “Well, tell me what you’re doing.” So I think it’s important that you can have a—to have a social network where you discuss all types of things within trading, but you’re not necessarily trying to take something from that person and vice versa, because it can then—that’s probably going to be a detriment to what you do because, you know, they have their own style; they have their own way of doing things. So, you know, yes, go and learn a process from somebody, but from a network point of view, I think it’s just nice to be able to have a beer with someone and talk—talk trading. Yeah, because it’s like people don’t understand when you’re handling drawdown, when you’re taking these losses, like you can try and explain it, but they just don’t really understand like what’s going on. Um, versus fellow traders going to understand a lot better in terms of the—the psychology behind that, like the emotional rollercoaster behind it all. So therefore you can have that conversation, and that’s all it has to be. Like you said, it’s not about comparing or, you know, trying to say, “What can I take from this person?” and vice versa; it’s more so, as you say, just being able to have someone who understands that is, I think, an incredible thing. And I think the—I’ve always said that a huge element of—of what can help a lot of retail traders today is that if they get around other traders, just in like a networking or a summit or like a convention or whatever it may be, not even to learn, right, just literally so that you realize every trader almost goes through the exact same thing.

Such a good point. It presents itself in different ways, you know, but for the most part everyone goes through the exact same thing. And I think a lot of people just trading at home alone, not knowing any other traders—it’s hard to recognize that. It’s—it’s easy to think it’s just me. Why am I the bad one? Why am I—why he gets it—he gets it online; you know, he’s got this; he’s got that. Why have I not got any of this stuff? What’s wrong with me? Maybe I’m not cut out for this. Versus you go to these conventions or these meetups or whatever it may be, it could be the most casual thing in the world; you just sat at a dinner table with five other traders, and you recog—and you’re just talking about your journeys and stuff, and you realize, “Oh, every single person here overtraded, blew an account, made this silly mistake, didn’t journal,” but then, you know, and you learn from the fact—from their experience as well, and the joint experience at the table, not because of necessarily the Holy Grail of something, but more so just like, “Ah, you know, he struggled with what I’m struggling with right now, and what he did was this; let me try that, or that makes sense, or let me ask him more about it.” Again, mainly I think it’s just understanding that everyone goes through the same thing. I think that’s so important. And I always say, um, when you meet other traders, you realize that they thought they were the only one as well. So when you think you’re the only one, everybody else thought they were the only one, and it’s a comfort in that, and I think that’s hugely important; hugely important.

Just to finish up with you, Ali, I would love to ask you, in terms of like you’ve worked with a lot of traders over the years, is there any key theme that you recognize between the ones who don’t make progress and the ones that do?

Great question. Is—is there one—that’s the—that’s the struggle—to come up with one thing, like key themes. Yeah, I would say it’s space and time horizon would be the number one. Is if you can—the traders that—that act like—like I said—that—that they—they put everything into that trade in terms of focus, energy, discipline, skill, but they can put that trade on the shelf or on the horizon and think over a bigger picture, and knowingly or unknowingly for that trader is focusing on not just skills but attributes, so resilience, realizing that they need to work on their resilience, so accepting that going through three drawdowns in the first 18 months is actually good for them rather than they failed, whereas a lot of traders are focusing on skills: “If I can get more technically competent, if I can understand the correlation between interest rates and why the euro is doing this”—not saying that isn’t important—but actually what’s going to keep you in the game is, “Can I build better resilience? Can I be more relaxed on a day-to-day basis? Can I expand my time horizon?” So I think—think attributes, work on those rather than just skills. The traders that do that, I think are in it for the long term and do better.

Can I ask you one actually a side question I just thought of it right now, but—um, yeah, you—one—you’ve had a long career as a trader and continue to do so, uh, but you look like someone who’s extremely healthy as well. Yeah, um, how important has that been, and do—do you have like a particular routine?

It’s very—that’s—that’s very kind of you to say that. Um, for me, I’ve—I’ve always been into sports. So I mean, actually, ironically, at school I wanted to be a PE teacher, but I looked at the car my PE teacher drove, and I kind of wanted to do better than that. So I’ve always—I’ve always liked sport; I’ve always—I’ve always ironically—I didn’t join the dots at the time—but I’ve always enjoyed coaching. So this is why I can imagine you and Charlie getting on, because we’re both into—we’re both into sport. Um, for me, I think it’s hugely important, um, and I think it changes as you get older. So one of the things that I’ve actually noticed—uh, I cut it out last September—is I cut caffeine out. Okay, now, when I was younger, I could—I probably had—weirdly, as you get older your energy levels drop, so what I found myself—I could be four cups of coffee in. Now, I wasn’t day trading, so I wasn’t needing to be focused, but I found that was a huge one. Um, for me, I’m—again, it’s the 80-20 rule. So if some—if one of my mates says, “You want to go out for a beer?” I’m not going to say no, but I’m going to make sure it’s within a range, so I’m not doing that too much. And for me, it’s—it’s high-protein, low-carb diet. So I try and eat a lot of meat, try and eat a lot of fruit, a lot of veg, and just make that 80% of what I do, because—um—I—I know my weaknesses. So if I’m tired and lethargic, I—I overexaggerate and I generalize, so everything’s wrong. If I’ve had two hours’ sleep, you know, and the whole world—every—I’m negative, and everything’s wrong. Well, if I’m, you know, how that could still play out in my trading, you know, and I—and I—and I tend to, if I’m tired, I overthink. So for me, I know that if I’m—if I’m on good form, I’m rested, you know, I’ve invested quite a bit of money in—in sleep; we’ve got a decent bed; we make sure the room is, you know, blacked out at night; you know, I don’t—when I was drinking coffee, I wasn’t drinking it past midday because it was having an effect on my sleep. So for me, sleep and energy are huge; hydration is important as well. So I’ll take, you know, a non-sugar electrolyte because I find that keeps my focus up. Um, I’ll actually—I’ve worked out that I do better if I eat more later on rather than eating too much.

Interesting. Yeah. And if I—if I have carbs for breakfast, it’s over—carbs and breakfast at lunch. So for—for me, if I’m going to have any carbs, I’ll have it at night. Okay, so there are a few things that I’ve done. Yeah, and I—and I’ve pushed myself; I’ve done stupid things like—strongman competitions where I knew I was going to finish last, but I just wanted to do it. So I think pushing yourself with little things—Charlie and I went to—Eusee a couple of months ago and just did a—a load of crazy hikes. So I try and do little things that will push—you know, will—when I—if I find myself going, “Oh, that feels a bit icky,” I’m going to do it, because I know that going forward—and noticed this—that as I’ve got older my—my urge to be a spectator is a bit higher, okay? So I’ve wanted—you know, as you get older, you know, men’s testosterone levels drop, and so I’m conscious of trying to keep myself thin, lean, and fit because I’m more likely to want to participate, because it’s not just about trading; it’s about enjoying your life; otherwise, what’s the point sitting in front of your screens? But also, I know that I want to push myself over the next 5 to 10 years, and as you get older, pushing yourself becomes harder if you’re not in good—if you’re not in good shape. And I think it’s—I think it’s a—it’s a big role, but it isn’t the defining factor. So a trader out there that’s struggling with their mindset and hasn’t got a strategy and going to solve it by being fit, but it’s not going to do them any harm.

Exactly. I was going to say, do you think there’s a correlation between being disciplined generally, you know, in your—because really discipline is, as I think Mike Tyson said, it is like doing the things that you hate as if you love them, right? But more so, I’d say it’s just embracing hardship and getting used to adversity, yeah, uh, to a point where it’s not as adverse anymore; it’s not as much of a hardship anymore because you’ve just embraced it and you know, sort of fought through it. Doesn’t mean like, for example, running, right? Your first times you go for—I’ve just started running recently.

Great. Um, I’m doing a marathon at the end of next month. Okay. I started running. Which one are you doing? I’m just going to have to do it. I was going to do—there’s Robin Hood Half Marathon here; I thought it was a full as well, but it’s not; it’s just a half. Long story short, I’ve been out of—I was in amazing shape 10 years ago, uh, and then I just let myself go, you know, just let myself go. Then I constantly was just on, off, on, off, and I eventually—I always knew I just kind of need this thing, but I eventually I just kind of sat there one night, it was like 1:00 a.m., and I was like, “I need a goal to attack; I just need to attack something.” I’ve always loved raising money for charity, and I’ve done it before where I’d run like 5K and stuff like this, so I was like, “I’ll do two in one,” so I raise money again and I’ll do a half marathon. That’s why I said because—and the Half Marathon was in two months. Okay, well, that’s okay; it’s not advisable, but half marathon, two months—I’m 120 kilos; I was like, “It’s going to be hard, but we’ll push ourselves; we’ll raise some good money for charity.” It gives something to attack. What ended up happening was another fellow trader, you know, helped me to try and push—when I first announced it, literally on the day I announced it, he was like, “If you raise £10,000 in the next 24 hours, do a full marathon, and I’ll do it with you.” Right? I was like—I didn’t realize what a full marathon really was at the time; I was just like, “Yeah, let’s do it.” We raised 10,000 in 24 hours, and then—um—I ended up—I was like, “Okay, I’ll do a full marathon; no problem,” and then I started training; I did my first 10K; I was in New York; um, I did 10K in—in Central Park on Saturday; I was like, “Okay,” and then that’s like one-tenth of a marathon; I was like, “It’s perspective.” I’ve—I’ve done nine—I did it in my 20s; I did—and I remember I was—I was training; I did the Great North Run, and I finished a Great North Run, and I went, “[ __ ] I’ve got to do this again,” and I was like, “I’m six weeks out,” but what you realize is your—your body works relative to perspective; it’s a bit like a trade, you know, if you’re—if you’re—if you’re—if you’re aiming for a two to one, and then you change—you—you know, you test a strategy like, “Right, I’m going to run my trades for longer,” initially you’re like, “How am I going to run this trade to—I don’t know—5 to one or—or whatever,” because you’ve got so conditioned to that, but actually you will respond quite quickly. Yeah, so the key thing with a marathon is just think, okay, if I can steadily—it’s like trading—if I can steadily increment and get—get better, you don’t necessarily have—I never—never had run 26 miles before I did it. Yeah, because—be—but I’d got to the point where I got my head into the game that 26 is the goal, not a half, and it’s a lot of it is perspective and taking your time. But good on you. Good on you. We’re going to try—we’re going to try it; should be interesting. But Ali, it’s been absolutely incredible episode; I know.

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