In this episode of Truth About FX, a special guest joins Walter and talks about how she transitioned from being a corporate into exploring the wide and complex world of trading. Caroline Hui shares how her background in banking and private companies gave her a different perspective in trading. Is trading really a gamble or is it just another college homework?
They also dig into hedge funds, private funds, and brokerage. You will also find here the golden rule for retail trading and how to tell which one is a legitimate broker and which one is not…
Download (Duration: 45:02 / 51.5 MB)
In This Episode:
00:50 – wide range
02:50 – locked in
06:08 – other players
09:16 – go unlimited
12:20 – big correction
15:06 – waiting
19:00 – competition
21:40 – being watched
25:01 – a bridge
27:37 – market makers
30:09 – new blood
32:20 – no saint
37:26 – too conservative
40:28 – sleep and trade
41:09 – fit the size
43:58 – understanding yourself
Spend time for meditation and examine your thinking process [Click To Tweet].
Find your strategy and combine it with your character [Click To Tweet].
Understand what your goals are [Click To Tweet].
Announcer: Sometimes, forex trading can be a wild and wooly place to be but, forex trading doesn’t have to be the bad lands for your partner. Instead, hunker down and bend your ear. You will be burning the breeze in no time here at the Truth About FX Podcast.
Walter: Welcome! It’s Walter here and today we have a really special guest. It’s Caroline Hui. Caroline has an interesting story — don’t you, Caroline? — about how you’ve been doubling in different areas of the trading world. Welcome!
Caroline: Thank you. Thank you, Walter, for having me.
Walter: I would love to hear a little bit about your story, your background, in how you’ve got into trading and how you’ve been in different areas of the trading world because you have actually a wide range of experiences, don’t you?
Caroline: I am not sure whether it is wide or it just happens through this way like a natural puff. Basically, I am a Professional Accountant and about 4 years ago, I have decided to come back into the full time accounting world as opposed to part-time consultant.
My kids were older and I thought in order to be able to train them to be independent, I need not to be at home. That is why I took Accounting Manager, Roe, with a software company which has become very successful here in Canada.
I think they just recently won the top award for being the Best Cultural Fit Company in the whole Canada. Anyway, having said that, I joined them while they were having the growth spurt.
All their reference coming in as USD and we need to convert that into 3 different currencies: EURO, GBP and also CAD, just because we have an operations in Ireland. We also have a lot of the vendors in UK.
With that role, basically, I do a lot of treasury functions and then I told myself “My gosh, I’m damn in millions.” And, every time I have to convert, I have to think about exchange rate. I do not want to operate in the dark.
Although they told me that “You can do whatever you want, Caroline” just to make sure that we have a system like being consistent. When I was taking on that road, the CAD was really low.
Actually, sorry let me backtrack. USD was very low, CAD was high. It was three and a half years ago. We really could not do much so we basically locked in for contract they call the “Option Contract”.
You sell a CAD and you buy a GBP, you are locked into a particular rate. That was very secured. As we know that a year later on, or three years before, the USD is starting to come back up and we get off the contact so I have to stop thinking “How am I going to get better?”
That is the reason why I joined a local meetup group and then I’ve met different people. I also took some private calls which allows me to know what is the forex world, how do they wash the tide, and stuff like that.
From that, I still could not understand a lot. Basically, I got a lot more confused and confused. So, because it is different when you are a retail trader and also when you are an institutional buyer, you do not look at the chart the same way.
You are more long term for institutional investor, you look at one year. What is the USD? How is the USD going to perform in a year’s time? I do a lot of forward contract and we looked in it half a year. Every month, we look a year out.
As a retail trader, usually, you are more of a short term. I couldn’t combine those two concepts together as well as I wanted to but even though I couldn’t really use my learning through my mentor at that time for my job, but I did notice that I personally am very attracted to the forex world.
I really actually wanted to pursue this as my full time career just like a lot of people. More importantly, I think it is just as my character. I am very number-oriented, I am very technical and so because of that, I actively pursued night time studying on my own.
I come across your website and I just basically develop my own skills on the site and sometimes, I trade often the whole night but I do not do those things anymore. It’s just during the initial stage. That is how I got into forex.
Walter: You’ve seen it from the banking side, as well, you’ve said?
Caroline: Yeah. More often than not, I would have to discuss with the banking representative, their treasury, or their analyst, or ask them for their opinion. What do they think and how do they see the USD.
They use few of the indicators to help them like the MACD, Bollinger Band. I think it is very common that 50 Days Moving Average to 100, those are the common ones that they see and they will write their opinion every day and I receive that. And, sometimes, I’d pick up the phone and call them and discuss with them.
They also notice all the selling and buying orders from the banking side and they will be telling me: “We have a lot of the selling order at this level.” And so, that is how they based their analysis on, sometimes, because it depends on who the other players are. Do they want to buy or sell? At what level?
Walter: When you say that the banks have a lot of orders at a certain level, can you see that on the chart now with your experience? Is that something that you — because you hear this a lot where people talk about these certain levels where you can “see them on the chart.” Is that something that you would say that you can do now, that you can actually see on the chart where these particular levels might be?
Caroline: I’ve never really thought about that but I think the levels that they see is a strong level. We probably… If you go for a naked chart, you will probably see a rough…Because they are so, they’ve really pinpoint into a particular. Like, they will say 1.3150 but the sum maybe 1.3052, 3150 like a 100 pips difference.
They always mention those level but, when I look at the chart, I think those are the daily support and resistance level.
Caroline: Yeah. It is in line but I’d really did not go to detail on it.
Walter: Right. When they say “Look, Caroline, we’ve got a lot of orders at 1.31” and then you look at the chart, that might be a support and resistance zone that you’ve noticed or something like that. Is that it?
Caroline: Yeah. Sometimes, it is minus support and resistance. I think for institutional buyer and seller, it is different than in retail in the sense that they buy and sell for a reason. They have commitments to fulfill and they need certain amount of money regardless of how the rate is doing.
All they need is to convert because they signed a contract or they engage themselves in some sort of a forex contract. That is why you see those levels. Sometimes, it’s a strong daily level or, sometimes, it’s the intraday level but the intraday would not be one-hour.
Walter: Right, got it. When they send you the reports and say, “We think this is what is going to happen with the CAD” or what have you… Have you found that information to be reliable?
Caroline: Yes and no. They are not 100% right but, in general, I would say 80%.
Walter: I guess another way of saying this is when you get these reports or you pick up the phone and you talk to the banks, what is the most important thing to you? Is it relying to information on the reports that the banks sends you or is it just looking at the charts?
How do you make your decisions because you’ve got to move a lot of money around just like the other big companies do. What do you base your decisions on?
Caroline: I may base my decisions on my way of understanding the chart, number one. Number two is also based on when do I need the money and how much do I want to lock myself in because we cannot go unlimited.
We can only go certain amount each time on any basis. You can only lock yourself say 60 million and you can play around with it. “This month I can do 5, next month I can do 20 but I can never go exceeding that.”
Every month, I come up with a contract then I can do more. Like, on any basis there is always a running total, if you know what I mean
Walter: Yeah, I know what you mean. Is there someone who oversee that? Someone that you report to or someone who says “Make sure that you are in line with this?”
Caroline: No. We have a CFO and I run by him but, basically, I have my logic and then, usually, I would have to say whatever I say with the analysis and that is how it gets done. But, I am really, really, really careful.
I look at the chart and I cannot sell with the bank and I know that interest rates is important. The interest rate decisions affects the currency, dramatically. With those information, I helped locking certain amount of money in what month as an institutional investor. I wouldn’t call it an investor, it’s just institutional participant.
Walter: Yeah, exactly. That is right, that is interesting. You’ve got this background, you’ve got your toe in the banking world and… What other aspects of the currency market have you seen?
I know you’ve sort of seen it in a business point of view because you’ve got this business working for the investor. You are in charge, basically, of moving the money around in different currencies. You also have good working relationship with the banks so you can talk to them and get information from them but what are the other areas that you’ve also been in?
Caroline: No, that is basically it. From the forex standpoint, my treasury experiences allows me to notice that forex is a fascinating place when you are diligent, when you do your homework but, it is definitely not a gambling place.
Not a gambling place, meaning you do not randomly — I know a lot of the times you have weapons like the flip-the-coin, buy and sell, and do 33’s and see where that goes…
Caroline: … But, in real life, when you have that much amount under your belt, you really have to think whatever it is. You have to come up with a reason, whether it is a buy and sell. Sometimes, I am not correct.
I remember I was worried that the CAD/USD is — I cannot remember going up or down. I worry about the USD is going down because we always get USD and then it was a big correction.
I think 1.21 going to 1.25 and coming back, I was really, really worried that I cannot afford not to lock any money. So even an institutional participant, I let my fear to take a hold of me so I actually locked in quite a bit at a lower level.
Of course, we all know chart — the CAD/USD — it’s just kept going up after that. Once, it hit — I don’t know — 1.25. That was it, I do not have it in front of me. It is just going by my memory.
Walter: So you lived and you learned, I guess.
Caroline: Yeah. And, they are not my money but I still have responsibility. Anyway, when you do million, it is quite a lot of money.
Walter: Yeah, absolutely. Makes a huge difference.
Caroline: I know. That is like my annual salary, maybe.
Walter: Yeah. They just do it all and mistiming by just a little bit.
Caroline: I was suggesting to my CFO that, “Why don’t you, based upon my salary, to have a bonus system. If I help you to make this much as opposed to not planning, I will have to set up some sort of a measuring skill.” And he said, “No. If we are not giving you that incentive then, you’ll be like full time doing this.”
Caroline: Anyway, that is just a side joke.
Walter: It makes sense though because you are saving them money. I mean, you are saving the company lots of money if you do it right.
Caroline: If you do it right, yeah. That is exactly right.
Walter: So, you have certain set of eyes in doing these trades but, obviously, they understand that what you are doing is quite important because you can save them millions if you do it the right way.
So, really, you are relying mostly on the charts and you get a little bit of information from the banks and that is basically how you based your decisions. How many decisions you make a month?
Caroline: Actually, it is not how many. We have a certain amount that is explained earlier. We have a running total. If I see good opportunity everyday I watch the chart, if I see a good time to go in to lock in some USD for a contract then I would do it. It is not how many, it is just a constant role.
Caroline: Everyday, I look at it.
Walter: Right. So, you are just sort of waiting, really.
Caroline: Yeah. And also for EUR/GBP, we have to move around and sometimes we do not do as much. Those are really minor but, mainly CAD/USD, because our operation head office is here in Canada and because, obviously, the payroll.
Walter: Of course. Some banks I know — I’ve heard stories actually — some banks, at the end of the year when they pay the bonuses and things like that, they’ll often take trades because they know that they are transferring the money for their own payroll that is going to affect the market.
They’ll often take trades around that time, too. The trading does close as well because they know that, basically, they are going to move the markets with these large transactions for the company. That is interesting.
Caroline: Yeah, and also, the month end value is important. The month end, I did not really understand it before why do we have month end flow when we are doing the trading. I am learning as an institutional participant and also as a retailer.
Why do they… Almost at the end of the day, you’ll see some movement going on and why is it so important all on a month end. It is because we have to. Especially USD, a lot of the companies mark their month end value to the USD.
The USD value is important for the financial reporting purposes, as well. Now, on the back end’s side, I have seen one trader wipe out the whole account even though you can be winning the whole month. If you are not careful on the last day, the whole account will blow significantly.
Caroline: So, you can incorporate that in your trading rules that you do not trade the last day or something like that.
Walter: So, it is the last trading day of the month you are talking about, obviously. The last trading day of the month where they mark their account at the bulks.
Walter: You were talking earlier offline before we were recording this about the other experience you had with the hedge funds. Can you talk a little about that? Because, I find that fascinating.
Caroline: About my desire wanting to join the hedge fund, is that right? Is that the one?
Walter: Yeah, you were talking about that. That was interesting.
Caroline: What happened was I really want to join the forex world. I bet as a retail investor or retail trader or with the group and I thought that, “Okay, this is just my mindset.” I thought that individually, it is just me.
I am learning the trading from your forum, from the books that I’ve read. It’s all great but sometimes, I feel that if I can talk it out loud with a group, I feel that I will be more successful or consistent.
I like to be in a group and with that mindset, I thought maybe I can join a hedge fund and basically trade together in a group environment. So, I pursue at that avenue and there is a local person here that said that he has connections with placing traders with a hedge fund and he earns commissions if he was successfully being placed.
I said, “Okay, so why don’t you try placing me?” And, I didn’t know that you actually have to go through a competition. What happened with that one, I only picked one because that one, the timing and the location was good.
There’s some hedge fund… They are located in Seattle and I live in Vancouver and I’ll be the one to go there for one week and then come back on the weekend.
Walter: You have to physically go to a location for this period of time?
Caroline: Yes. Those hedge fund companies require the traders to be in the location, correct. This particular one is a local one in downtown Vancouver and so we have to enter into a three weeks competition.
You have to trade your own account, live with your own money and take it as they see you trade over time. They have software to analyze you on a daily basis. At the end of each week… I believe there were 30 people going for 3 positions and every week they would tell a group or 7 or 8 people that “Thank you for your time, you no longer make it”.
I was really nervous at the end of week number 1. I didn’t really do too crazy like my risk column was so low but, obviously, my reward is also not very high and basically about break even at the first week.
Apparently, a lot of people fail. I was still in the group after the end of week number 1. Actually, I went all the way to week number 3, the final week. I believe, in between, there’s enough NFP trading day and I did trade on that day.
I trade CAD/USD because that is the pair that I know the best. I’ve got a phone call from this intermediate person and he said that, “Why did you choose the NFP? They do not like you when you do that and they are about to kick you out, if you do that again,” or whatever.
I said, “Wow, I won’t do it again because there’s only three weeks.” Anyway, I finished but I didn’t make it. I think maybe the top 8 but definitely not the top three. Throughout that exercise, I feel that if someone is watching you, your mindset is different.
You’ll do get nervous because it is not just you and you, yourself. You are being watched in a screen by other people even though they do not know you. They do not see your face, but you feel that you are naked. You know what I mean?
Walter: Yeah. In psychology, we call it the Hawthorne Effect which is, basically, what you are saying. Exactly. As soon as you are being observed, you changed your behavior. In fact, they know that is the same thing with the sub-atomic particles.
When they watch the sub-atomic particles, it is the same thing. They change. It is fascinating that it sort of extends throughout different things.
Caroline: Yeah, and my body is tensed. I am always tensed. I’m placing trades with extreme carefulness. I just feel so tensed I wasn’t sure whether I want to do hedge fund anymore.
Anyways, during that period, it is just the time that I met a Switzerland guy. His name is Victor and I constantly tried to outreach to send my trading results to different people. He is one of them that I send to and he gave me some hints on, “Oh, I think your results will be better if you have a different broker or the commision rates are different or the spread is different.” A little bit of comments here and there.
I would keep him on my radar, every 6 months we would talk, and I would continuously send my trading results to him. Last year, he came to Vancouver for business trip and we met in person.
I think he was here for about 3 weeks and we met quite a few number of times and discussed about different things. Now, I am working with him.
Walter: Talk a little bit about that because that is a fascinating transition to go from applying for the hedge fund and just missing the cut to, now, you are working with this broker. So, tell us a little about that.
Caroline: Basically, I always ask Victor because he has many connections and I say, “Do you know anyone here in Vancouver?” Or even at that time I said, “I do not really care if it is in Seattle. I would go to if you can set up the connections.” Then he said, “Yeah, I would give you in my connection”.
During the trip that he was here, we talked about education, we talked about the forex that we do. We talked about many different things and we shared quite similar value that a lot of brokers out there, they are not really clean broker. They are market maker.
He has some over ten years brokerage experiences so he was able to explain to me about that and then, he also have a vision at that time that he wanted to start his own brokerage firm but nothing was set in stone. He went back to Switzerland and we maintained contact.
Then later on he said, “Caroline, I have decided to have my own brokerage and I really want you to come and work for me. You can be a representative in the North America and also in Asia” — because I speak Cantonese and also Mandarin.
He said that, “You will be a good person to be a bridge between Europe and Asia.” And I said, “Oh, wow! That is wonderful.” The door just opened, I did not really look too hard.
I mean, I guess I was looking hard otherwise, I won’t be sending all my trades out but it is not like I am going for a competition. I am tensed, I am being nervous, I feel this and I feel that but it was just all natural.
That is how I decided to quit my full time job and not because — well, partly because of the burn out like you are constantly doing full time role. When you say full time, it is not defined. There are few times that there’s just so many things to do that you actually work a lot, burn your midnight oil, or something.
I do not want my mind to be so busy and so I decided to come out and work part time for the brokerage firm and also have few clients on my own and keep my accounting clients. I feel much more relaxed and when I feel much more relaxed, I can trade better and I can think better, and I am a bit more creative.
Walter: Right. So, what is the expectation that you offer for the brokerage? What are they looking to get from you?
Caroline: Basically, I handle all the back-end, there’s not that many people. The head office is actually in London and there’s a cell’s office in Dover, and also in Switzerland, and Vancouver.
We talk almost in the back end issue or with new clients. We talk about compliancing. It is more of administration stuff and also getting to know the clients better because we have our own product. We have managed account clients.
Caroline: We also have our own product. We have managed account client that would choose certain products and we communicate with those clients if they have questions about strategy or this and that. It is more on that.
Walter: That make sense. There is a lot of misunderstandings and concerns about brokers. Can you tell us more about this broker that you worked for? Because, you’ve mentioned market makers.
Some people are confused and they do not really know if they should trust their broker if it is a market maker, or an ECN, or STP, or whatever. What do you know about that?
Caroline: The basic rule of thumb is you look at the brokers and see how much leverage they give to you. That is your best guidance. If they give you 1 to 500, you know they are market maker.
There is no way you are able to have your trades all in the market order when the other party will give you 1 to 500 because they are the ones who takes your trade and they expect you to lose.
That is why a lot of the brokerage, when they have the license in Cyprus, they give you high leverage. By the way, it is changing. I am not sure whether you’ve heard of it. In Cyprus, the Securities Commissions, they have now gone down. You can only do 1 to 50.
Caroline: I think on the KYC form, you’ll know from your client’s form that they say, “I have experience, I can do this.” And then, you can get exceptions but, by default, you can only do 1 to 50. I believe that is the new rule.
Anyway, our license is licensed by FCA, the UK license broker — the Financial Conduct Authority. They are, by far, one of the most legit one. Our brokerage offers 1 to 100 interest rate standard.
Having said that because Cyprus has changed even for them so FCA most likely would issue a memorandum and also will probably change their requirement to a lower leverage requirement.
A lot of the brokerage would probably go out of business just because the way the business model work is they take your trade and all these people, they just blow up. Ninety five percent of people, they blow up their account and they take all your money.
If you do not allow the high leverage and people cannot gamble as much, I guess that will really shrink the whole industry.
Walter: Yeah, absolutely.
Caroline: If that makes sense.
Walter: Yeah, absolutely. It makes perfect sense. I mean, the brokers that offers the lower leverage have always been the brokers that have the longest lasting clients because of just like what you said. The high leverage they are always looking for new blood. They are always looking for new clients because they’ve just burn out so fast and they blow up.
Caroline: Yeah. So, that is your rule number one for the people, retail traders out there. I actually do not know any of these as a retail trader. You do not know, you just want your strategy to be successful and that’s it. I did not care about the spread and the commissions back then in the first year — the first part of my journey, anyway.
Walter: What are the other things that you would look, Just as an advice to the listeners? You were looking for a broker, what would you suggest they do?
Caroline: You look for the broker. If it is a UK broker, FCA is fantastic. They have to have a certain amount of money put into a segregated account in order to keep their license. Also, your account is being protected and there is insurance coverage.
You feel assurance that they are not going to run away with your money. Also, look at the leverage and the spread, obviously. You can compare that. I think there is a website that can compare. You can use the major pairs and see whether your broker is giving you a good spread.
Usually, for the most liquid one, the spread is low and also the commission’s. You look at the better commission because, at the end of the day, they are all factors that will affect your performances.
When you look at your PNL, like you charge me a lower commission below one spread, my net result is still lower. You have to put them all. You just export all these data then you can compare.
Walter: Yeah. And, you’ve done that, obviously. When you trade your own personal account, how do you do this? Do you do it in the same way that you do for your job or you’ve just sort of sitting on the sideline? A lot of time, you’ve just wait for that perfect opportunity to jump on the daily charts or four-hour charts. How do you approach your trading?
Caroline: I have switched back and forth so many times but, I mean, I am no saint, definitely. The fact that I worked for the brokerage firm does not make me a fantastic trader. I just noticed a lot of the trader’s behavior, good or bad.
Even good traders, they have bad days because I see all the back-end trades. Even though they are good traders, they have the back-end days. You need to have a proper risk profile. Without that, you’ll basically give up everything that you have made so hard.
Walter: What do you mean by that? Explain what you mean, the proper risk profile.
Caroline: Say for example, our brokerage is 1 to 100 and if you have small amount, big amount, does not matter. Let’s say just regular 10,000 account. You have been consistently applying your risk — 2% or 3% or whatever percentage you are comfortable with — and then you slowly, slowly bring yourself up to double your account, say 20.
I’ve seen it and then you feel so confident. I mean, I don’t know that person. I am just saying you feel confident. You, obviously, must feel confident because you doubled your account, started to tick the complete leverage.
Instead of sticking to your 2%, 3%, 4% rule but that one trade that you did could really wipe you because you took a bigger leverage than normal. It just so happened that it turn against you. You are probably frozen, you don’t know what to do because that trade is not going to close until really, really low. It wiped you back to not zero but, your 100% gain could be wiped out to zero and you are back to 10,000. You know what I mean?
Walter: Yeah, absolutely.
Caroline: Sometimes, it is even more. I have not seen a trader that I know — because we have many different clients and I only look at certain groups — that have gone keep on going. Keep on going without a major setback, if you understand what I am trying to say.
Walter: If they have a major setback, what do they do then?
Caroline: They actually stop for a while and come back slow again.
Walter: Yeah. Because they have a plan, basically.
Caroline: But as an educator, like you yourself, you probably want to teach them that “You do not want to have a major setback if you always have a 2% drawdown”. It is very hard to wipe out a 100% of your gain because it would take so many trades to wipe it out if you have always 2% rule.
Walter: Yeah, that is right.
Caroline: Because in that major setback, you might not be able to recover. Not everyone can recover and they may close the shop and goodbye because it is something that not everybody can handle it well.
Walter: Obviously, a lot of people, they overestimate the amount of drawdown that they can withstand. They think “Oh no, I’ll be fine if I have a 30% drawdown.” And then, when they hit 20% drawdown, they are completely… Like they are in shambles because they are unable to handle it and it is too difficult for them.
It is one of those things so when you, at the broker’s managed accounts, what do some of the managed accounts look like? What sort of drawdown or things like that? Do you see that you have access to that data?
Caroline: Yeah. With different traders, currency, we have 4 and so the swing is quite high. It is not like what you and I come to with like 2%, no. The swing could be 15%, 20% at least for the product that we have but on the offside is from January to now, one trader would make over a 100% but the swing is not 2%.
The drawdown is not like 10%. It is 15 to 20% but the data is there that the trader can generate over 100% from January until now. The other trader, one of the trader — I think 60% and then the other one I think — less than that. But, we are retail trader, if we do not talk about managed accounts, just as a retail trader if you can make 3 to 5% per month, I consider it as very very good.
I mean, even 1-2% per month is very good. In the initial 3 years, I was really only a break even trader like, I may going to lose but I always stay break even and that is good too.
Walter: That is really good. It is better than I did.
Caroline: Because, you do not have to go through the psychological ride and I am very a conservative type of person. I have to calculate all my risk, sometimes too conservative so I cannot do 15 minutes type of trade or one-minute. I cannot even think that fast.
I am more like you. I like daily chart. Four-hour chart and one-hour is already very noisy for me but when I first started, I go with one-hour. That is why I continuously lose and I didn’t really understand and then finally I decided to, “Maybe I should go for the higher timeframe.” I’ve never even heard of an 8-hour chart before.
Walter: You are just finding and settling in. It is really good that you were break even in the beginning because most traders are horrible losers. I am looking forward to hearing at the event, some of the things that you’ve found to be useful in terms of helping you get past that break even stage.
Today, what kind of trading routine do you hold? What do you do everyday? Is it that you check the charts first thing when you wake up or you check in your charts when you go to work or when you go home? How do you do with your trading now?
Caroline: I trade a lot of the CAD/USD and I also look at few pairs. I do not look at 20 pairs. I only look at maybe 6. In the morning at around 6 o’clock, I would basically have the charts open and see whether there is a trade going.
I also look at daily charts in the afternoon at about 2 o’clock. My morning is quite busy because I work with the UK group and I get up at 4 am every morning. I will be talking and having meeting with them, sometimes in Asia as well. We have clients there, we have sales representative there and then we have to collaborate.
Between 4 to 8, I am quite busy working on the administrative side of things. Usually, between 6 and 7, I do my setup and I would have one hour to do the setup and looking at the chart.
Definitely in the afternoon at 2 o’clock here in Vancouver, I’ll look at the chart and see whether there is any trade for the day. I do not take many trades.
Walter: That is basically the close because that is 5 pm in New York. So, you are looking at the close, right?
Caroline: Yes, very slow trader. It suits my character. The only one thing I think what trading does for me, personally, and maybe for a lot of people too is once you know about who you are, you are so much better, not only in trading but in everything, in every aspects of your life.
You’ll know what you can do, you’ll know what you cannot do, and you’ll have knowledge that… Like, I have knowledge that I cannot have not sleep. I used to give up on my sleep and trade non-stop and that was a big mistake.
I thought I could trade my sleep to taking naps and I couldn’t. I would not do that or I know my energy level is low on certain period of the day. I would definitely do not look at the chart.
I just know what my limitations are and also know what type of person I am. When you know yourself and the type of personality you are, you would not even go close to something that you will not succeed because you would not like those.
It is not perfect mindset that “I would never succeed in this.” It’s just that it does not suit you. It is as a tailored suit, you have to fit the size.
Walter: Yeah. For you, are there any indicators on your chart when you are looking at the chart? What do you use?
Caroline: Actually, no. I basically have lines. I just draw lines and it’s the part of the resistance.
Walter: That is great, Caroline. Knowing what you know about brokers and knowing what you know about the banks and everything and, here is somebody who is coming to trading. Let’s say I’ve been trading only for the last 6 months and I say, “Caroline, what do I need to do? How can I make this work?”
As someone like yourself who has so much experience in different areas; you applied for the hedge fund, you used to move money around for a company — lot’s of money around for the company– you are working for the broker, you had relationships with the banks, you saw how they saw things. What do you say to the new trader who is just trying to make it work? What is the advice?
Caroline: I think learning about trading, it is good to have good strategy and all the knowledge but, ultimately, you have to know yourself first. You have to spend a significant time to understand your thinking process, your mindset, your fear level, your confidence level.
Once you understand yourself, you will be automatically be attracted to certain trading style and not going for browsing website. There are certain website you can look at but you do not like what they say or you keep on turning from website to website to keep on survey.
Trading is the same. You go from system A, B, C, D and I’ve done that. I have done so many different indicators. I will go on Forex Factory that tons of different people are telling you about thousand polls and strategies, even tried those but in the end, you are just trying to go out instead of going inside. You are trying to copy, you are trying to get information that are essential for others but they might not be for you.
I would tell all the new traders to before you go anything further, you can keep on studying, going through your program and your personal trading course and everything. But, the most important part is if you have a personal mentor, not in trading but after helping you to figure it out yourself, that would be fantastic.
If not then, you spend sometime every week. You set aside 2 or 3 hours to go through your thinking process or meditation. Just something that you know you need to give permission to yourself to understand yourself, shall I say, because we always try to please others once we know what other people’s needs are.
It is hardly that we want to know what we want, what we need. I do not think it is selfish and it is actually a good thing to understand what your needs are before you can serve others.
Once you do that then you will find that equally brim between your trading strategy and your character and once you can just combine them together, you will be successful, I guarantee you.
Walter: That is a great advice. That is really good advice. Knowing yourself, taking the time to understand what you want and then you can set your path from there, that is really a good advice, Caroline, and I really appreciate it. I am looking forward to seeing you at the event. Thank you so much.
Caroline: Thank you.
Walter: See you soon. Bye.
Caroline: Okay, bye.