In this episode of Truth About FX, Walter is joined by a fellow trader and a good friend, Hugh Kimura. They share their thoughts on living the trading lifestyle and keeping good win rates. Is it really possible? Hugh also points an interesting note on his blog, Trading Heroes, and how this helped him gain confidence and bridge connection with other successful traders.
Hugh also spices the talk by dosing this episode with some of the “weirdest” things he got across with on his blog…
Download (Duration: 31:03 / 35.5 MB)
In This Episode:
00:43 – awesome stuff
01:43 – steady paycheck
03:19 – old crap situation
05:37 – work remotely
08:57 – revenue streams
11:38 – bridge that gap
14:39 – controversial
16:05 – about podcast
18:44 – off track
20:51 – ball boy
24:30 – where to start?
26:07 – selling time
27:41 – in the shadows
30:14 – multiple streams
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 back to the Truth About FX and today is a very special one because we’ve got Hugh on the line. How are you going, Hugh?
Hugh: Pretty good, Walter. How about you?
Walter: Yeah, great. As most of you know, Hugh is a forex trader. He’s been trading for sometime. He’s also been offering some awesome stuff on the internet. I know a lot of you is obviously following Hugh’s Trading Heroes and all the interviews and really cool blog posts that he puts up.
I’ve learned a lot of stuff from reading your stuff that I’ve never knew. I know you offer a lot for forex traders so this is going to be interesting, Hugh, because I want to interview you about how to live the 80% of the trading lifestyle while keeping a steady paycheck and learning to trade. I am really interested to hear more about this.
Frist of all, what do you mean by that? What is the 80% of the trading lifestyle while keeping a steady paycheck and learning to trade? What does that mean?
Hugh: Something I came across on that blog is that a lot of people think it’s an all or nothing thing. Either you are trading for a living or you are working a job and they want to jump to trading for a living right away but they really want certain things out of trading that I find you can get out through personal experience.
I find that you can get with the regular job so that you can keep that steady paycheck and, at the same time still, learning how to trade and still do the things you wanted to do as a trader such as quit your job and have location independence. Give back and support a charity or philanthropy. Hang out with other hedge fund traders or get industry experience. You can afford to travel the world.
A lot of people think you need to be rich and be a trader to travel a lot but that is not the case. The final thing that the people want, the fifth thing is financial independence. That is the only thing that what I am going to tell you about cannot provide so that’s the 20% that you won’t get obviously but you can get the other four things.
Walter: That’s awesome. I understand this is obviously what people want. They want the freedom that trading enables. They want the money and they want to be a lot of the time, it goes with the freedom to do things. They want to like travel or fly kites or whatever their hobby is. They want to do that ceramics or whatever it is that’s their thing. Why do traders miss out on these? Where do they miss the boat here?
Hugh: Yeah. For sure, I think it goes back to thinking, “Okay, I need to quit my job in order to get a lot of these things” and that is sometimes the case. As we know, if you quit your job, that leads to a lot of things like overtrading and just blowing up your accounts because you are trying to trade more than what is prudent.
I think that if they can maybe switch their mentality in some of these areas especially around work, that they can get some of these benefits without having to put themselves in an old crap situation.
Walter: I’ve read something the other day in one of your blog post that you said you’ve never blown an account. That‘s so awesome. I found that, really, like that’s a badge of honor that you’ve never blown an account. That’s awesome.
Hugh: Thanks. But, it’s also an issue for me. I’ve been too cautious at times, I think, and a lot of times what it seems like is that people who have blown up accounts have that aggressiveness, I don’t know. Maybe you’ve seen that before, maybe I’ve been too conservative that’s why I have gotten the results that I am looking for. I don’t know.
Walter: Maybe. But, I think you’re better off than traders who, personally I think, people blow their accounts because they are looking at the positives of trading and they forget the negatives. They are not looking hard enough at their risk and so, you’re the opposite of that as I see it. You know what I mean?
You’re really a risk averse which is really what you need as a trader. It’s all about managing risk. It’s such an awesome attribute to come into the game with, to me I think, anyway. I think you are rare. Most traders would be more likely to go the other way and take too much risk, like you say.
I’ve met very few traders who haven’t blown up their accounts. Usually, that’s because they haven’t open an account yet.
Hugh: Yeah. That’s another thing, right?
Walter: You know what I mean? Usually, those are the traders that haven’t blown up an account saying, “Well, I haven’t traded live yet.” And I’m like, “Okay, that is why you haven’t blown up an account yet.”
Hugh: That’s true.
Walter: The leverage is crazy. It attracts forex trader to forex. It’s the leverage because they can see the pie in the sky. Tell me more about what mistakes traders make here because what you’re basically showing us is there’s basically another way. What are some of the other things that traders are doing here, kind of mistakes?
Obviously, one is blowing up your account, taking on too much risk but what other things do they do? They’re trying to quit their job too early which is a big one, right?
Walter: So, they do not have money saved up so they’re under their gun. What else?
Hugh: Just going to that, quitting your job too early. Thing for a bit, they hate their job. They’re in the position where they wish they could get out but really what they need to do is shift their mentality.
There are jobs out there that allow you to work remotely and these aren’t like $10 an hour job or whatever. These are serious income jobs and, I personally, my last four jobs had been all location independent.
I’ve worked from places like Helsinki, Hawaii, Toronto and if you google something like buffered transparent salaries, the company buffer puts all their employees salary online so you can see it and these guys make pretty good money. You’re talking 70, 80, 90,000 a year they and they’ve worked from anywhere in the world.
I think that is one thing that people could get their mind on that and then they could see that there’s another way to get a paycheck and still learn how to trade. So, that’s one of the things.
If you check out sites like buffer or something, like “weworkremotely.com”, you can see some of these jobs and what’s available. I’ll talk about more of these stuff and resources at the conference but those are two ideas that you should take a look at right now.
Walter: That’s fascinating. I imagined that being able to have a job where you don’t have to necessarily to punch in at an office, that’ll make it easier to watch the charts too. Like, if you’re trading the 4-hour chart or something like that, that would make it easier.
Hugh: Yeah, for sure. When you’re in an office, other people are going to see and they’ll say, “What are you doing? Why aren’t you working?” and stuff like that. So, for sure, it’s a benefit.
Walter: Yeah. I remember, I knew a trader who was an accountant and he said he trades the 4-hour chart and he would go to the toilet every time the 4-hour bar close and he’d check on his phone. That is how he managed his trade when he was at work, pretty funny. He lived in the UK so all day long it was an active market. It wasn’t like he was in California where it was slow. He was in the middle of the European Session so, it was pretty funny.
Hugh: They’d tell they’ve got stomach problem or something, right?
Walter: They did. They said, “Do you have problems with your bladder or something? You are always go to the toilet?” They asked him. It’s pretty funny. Alright, so that’s cool. That’s great to have resources to know what’s in there, what’s available. What else can you do in terms of being independent from an office?
We know that there are jobs out there but are there any other things that you can do? Any other tips for people who want because that’s like what you say, the big one for traders, isn’t it? Trading is to be free, to go away.
Hugh: Again, I think people think that trading is an all or nothing thing. I don’t know where I’ve read it but they said like the successful entrepreneurs have 7 sources of income or something. I know you have several, I have severals and I think you have to look at it also.
Trading isn’t always going to be profitable so there’s going to be some ups and downs. If you look at other stuff that you’re interested in and maybe make some money from, it can smooth out your income every month.
Some stuff that I do are like the website “tradingheroes.com”. I make some money from that. One program that I’m part of, I’ve made money every single month for the past… I don’t know how many years just because I referred some people over to them. It’s not a lot of money but it can help you pay for a few bills or whatever. That’s definitely an option, right?
Walter: Yeah. I guess at the conference, you’ll talk a lot about the revenue streams for that because one thing that I’ve noticed is if you do have other things going on — I talked to a trader the other day just 3 days ago. He was telling me that his broker went belly up and he was freaking out that his broker went belly up.
However, he also had two other. He owned 50% of a company and he owned a 100% of another company and he had bought these companies as he was building up his trading portfolio. He was like look, it really sucks because it’s a lot of money that was in his trading account and he doesn’t know if he’s ever going to get it but — he might. Might be a year or two down the road or something but he was also really glad that he had diversified because that’s the big risk.
I mean, to me with retail forex trading, that’s the big risk. It’s not having all of your money with one broker and just watching that broker go belly up so, that’s interesting. What are some other things that you do in terms of diversification?
So, you have your website which brings money in. I suppose it add revenue for referrals or affiliate referrals and things like that.
Hugh: Yeah, mostly. And then, I sell a few MT4 plugins and had a couple of courses, stuff like that.
Walter: Yeah, right. Interesting. Do you sell… I think you have a book, compilation of interviews and things like that, don’t you?
Hugh: Yeah. I think you’re one of the people in there. I put it on Amazon. It doesn’t sell a lot but it’s just to get my name on there.
Walter: Got it. I think I somehow stumbled on it the other day. I was like, I was thinking “I didn’t know I was in Hugh’s book.” And then I thought back, I think you did email me and asked me if you could put the interview into the book or something and I said, yeah. It was so long ago and I didn’t even remember it.
It was weird. It was like the weirdest thing when I was going through trading books on Amazon and I saw your book and I’m like, “Oh, cool.” Then I looked and I’m like, “What, I’m in it?” Pretty funny.
Then, I was trying to figure out, “Yeah, I think he did. I do remember an email.” That gets your name out there so that drives traffic to the website then, doesn’t it? Having the book out there.
Hugh: Yeah. Buying businesses can be a complex process and seemed a little daunting but you’ll also start small like, I’ll go to the occasional estate sale and if they have some good stuff there and I see a good deal, I’ll buy it and sell in on crisis or ebay. I’d made as much as 30x return on very low risk.
You can start small on stuff like that also and it’ll help you find your trading account, pay your bills, bridge that gap between full time trading and your job.
Walter: That is an awesome tip. I’ve got a garage full of surf boards that I haven’t surfed in years, I should unload them but it’s hard. Like it’s your kids, you didn’t want let go.
Hugh: Yeah, exactly.
Walter: Let me ask you this, Hugh, because this brings up an idea just based on what you’ve said. Have you ever done this? Sometimes trading is an interesting niche because traders really love their books and the books are quite expensive.
One thing that you might do just occurred to me, is you might find all trading books and let’s say you’re in an estate sale or whatever or used bookstore or something like that and you are run into an old trading book that is out of print. You could check on your phone when it’s going for an Amazon and there’s arbitrage right there, isn’t there? Like you’ve find a book….
Hugh: Yeah, for sure.
Walter: You’d find a $400 book or something like that. They don’t know what’s their worth and you buy it for 20 bucks, that is the same thing and it’s because it’s your specialty, you might be on the lookout for that. I’ve never even thought of that until you’ve just said.
Hugh: Totally. And, if you browse ebay even once a week or whatever, look at different types of books and you’ve had it in the back of your mind like, “Okay, this book is probably worth 100 bucks” or whatever. Then, when you see it, you can take the advantage of opportunity. It’s like trading. You are just looking for an opportunity.
Walter: Absolutely, buy low. I remember reading something just this week where a trader had put out his trading system in a book and then later on he tried to buy all the books off the market.
Walter: Yeah, I cannot remember who it was. I’ve read that article in the last 7 days, cannot remember who it was but it was like in the late 80’s or early 90’s. Some guy had written this book with his trading system and everyone was like, “Wow! This is awesome.” And then, he tried to buy them all up or something.
It might have been for futures, I think it was like a futures trading system. It was an interesting thing. Scenarios like that, I can see them unfolding. If you could find an old Gann Book or something like that that could probably worth quite a bit. That’s fascinating.
Hugh: Somebody I talked to had a somebody original like Ichimoku Cloud document so you can only imagine how much those are worth.
Walter: Absolutely, yeah. That’s amazing. That’s really cool. That is something I hadn’t thought. So, where else do we find opportunities like these? You’re selling things, you have a website. I know several traders who are really good traders and they’re just interacting with people.
So, you’ve put a blog up and one thing I was wondering about because I’ve read this where people were saying if you’re controversial, that would get more attention. So, is that something that you think about like you don’t come across as a particularly controversial guy but you do say somethings?
I’ve read one of your blog post was: “Why am I not on MT4 anymore”, “I moved to another charting platform” or something like that kind of like against the grain. Is that something that you consciously think of like, “Am I doing things differently and should I highlight that in order to show people?” You think independently and that is the way to show people when you contrast the norm against what your point of view is.
Hugh: Yeah, for sure. People either love you or hate you but the people who’ll love you will stick with you longer. If you just put out generic post like “5 Ways Not To Lose All Your Money” or something like that, then you’re just like everybody else. For sure, I’ll pick my spots but putting more controversial stuff can get you some attention.
Walter: That’s interesting. You’re setting up multiple streams of income and some of these can be quite easy to set up. Like, we’ve talked about like selling stuff or having a website or something like that. What else have we got here?
Hugh: That’s pretty much it. I mean, I want to keep my focus on these few things and I’ve been looking at some like cripple currency but not from my income standpoint. I just try to focus on the few things and then work on my trading, obviously.
Walter: What about podcasts? For me, podcasts are quite expensive. To have the people, the team that puts them together, edits them, everything and all that for the website of it. I know some people have sponsors for their podcast and things like that. Have you ever worked with that? Have you ever done that before?
Hugh: No. I’ve been approached, obviously. You probably have also but I think you need about at least 50,000 downloads a month in order for them to be interested. I know few people who have like a couple hundred thousand and they have some sponsors. I don’t think it’s terribly lucrative. I think it’s more like generated to pass people to your website or service or whatever it is.
Walter: Yeah, right. I was also just talking about trading.
Walter: That’s cool, that makes a lot of sense. They want to get more bank for their bucks so they’re not going to approach you. I got it. It seems like these brokers spent a lot of money because they’ve got me tagged as a trader on the internet. Everywhere I go, I see broker ads and all the google ads.
They must spend so much money on trying to bring blood in to open up an account and stuff. So, I’m always wondering like why aren’t they going for the podcast? They are looking for the big, fat podcast. That makes sense.
Talk a little bit more about other traders. You’ve met other traders and you’ve probably been exposed to a lot of wide range of ideas. I know I have from working with other traders so what is that added to your — I mean, it could be confusing too, I guess is the other side of it.
The fact that you have access to so many different traders by interviewing them and talking to them in different aspects, does that muddle the waters for you? Or does it just like, “Oh! That’s interesting that he trades that way or she trades that way”? Do you find it that it can get you a little bit off center?
Hugh: That’s a good question. It did actually throw me off in the beginning because I started a podcast way back in 2012 or something like that and hearing all these people, most of the people or all the people I interviewed are really cool so you can get to hang-out with them and start talking and you can see how their strategy might be really good. So, I start exploring that and then I interviewed the next person and then it got me off-track a little bit, to be honest. But, nowadays, I am a lot more resistant to that and figured out what kind of trading systems worked for me and I ignored the rest. That’s what happened.
Walter: I could see that happening. So, when you’ve worked at a hedge fund — because you worked at a hedge fund down in Southern California, right?
Walter: What was that like? First of all, how did you land on that one?
Hugh: That was really interesting. The job itself sucked because I was just doing Excell but just being in that environment was really cool. What happened was that I was straight up at college, I had quit my first job as an IT consultant and I want to get into trading, maybe possibly trade for a hedge fund or something like that.
So, I just applied for a bunch of hedge fund jobs just as at a trading desk, a clerk, or whatever and it just so happened that this guy who was hiring for this hedge fund was from Hawaii also. He wanted to give another Hawaii guy a shot so he put me in an interview and I did pretty well, I guess, so I got hired.
It just get to show that you just have to put yourself out there and there are options even if you do not have a background. I majored in Biology so totally doesn’t apply but I got the shot at it and it was cool.
Walter: What was the work that you’re doing there? What was the main focus of your work?
Hugh: Mostly was like processing trades, checking trades, balancing the PNL’s at the end of the day, working with the traders. We would help the bond auction and stuff like that, getting silly over the phone, shouting at their bid or whatever and we’re just pretty fine. Stuff like that, very admin type stuff.
Walter: Got it. That is how you’ve worked your way up, I guess.
Walter: You hear about all these guys in the NFL. These guys in the NFL, the football league in the US, they’re started out like a ball boy and end up being the General Manager of the team or whatever. It’s amazing how many of these guys, that they’re like scouts or whatever, right?
They’re scouting college players, people from Europe — and they don’t know what I’m talking about. These guys will go around searching for talent. So, these guy are living out of their car, they’re making like 20 grand a year. They’re in total poverty and they’ve lived with other scouts and then some of them worked their way up to these multi million dollar a year jobs, very few of them, but that is how a lot of these guys worked their way up. It’s amazing.
You hear the same stories in trading where traders are doing the same thing. They were sweeping up the tickets in the pit or something like that. You know what I mean?
Walter: Then, that kind of thing. It’s fascinating. People don’t know there’s a lot of jobs at the hedge fund that’s outside of trading. Like you’re saying, you could do those things that you were doing. You could be a risk manager, you can work with clients, you could be on the client’s side where you are taking care of the clients.
There’s a research analyst who don’t trade but provide research to the trading teams. All kinds of different ways that you can get to a hedge fund. You do not have to be a trader, they don’t have to seek you out as simply a trader.
Hugh: Yeah, for sure. Like you’re talking about, my buddy Rafael, he wanted to learn how to trade. He blew all his money out trading penny stocks so he wanted to get like a real education. He went to a brokerage. He said, “I worked for free”.
He got coffee for six months or something, not paid at all. Then, they’ve finally figured out, “Oh, let’s give this guy a job.”So, he got a job and then he became a trader. They’ve taught him how to trade. It is possible, for sure.
Walter: That’s awesome. That’s a great story. So, at the event, Hugh, you’re going to show us how you’ve built — because you’ve built quite of a following through social media and stuff like that. You’re going to share some of that stuff.
Some of the traders I know, they’re good traders. They’ll post a blog up and maybe it’s to give back and show people what they’re doing. Maybe it’s to get more attention so that maybe they can get some client accounts or whatever, their motivations vary. Maybe it’s all of the above but a lot of times they didn’t even know how.
Like the first time I did it, I put up a website and I was like, I didn’t know. I was just posting my account, my trades and I was sitting there waiting for people to show up and say, “Hey! Teach me how to trade.” I didn’t know what I was doing.
You seemed pretty savvy along those lines because you’ve done jobs where you’ve done that sort of thing. Is that something that you’re going to share at the event too?
Hugh: Yeah, for sure. I can definitely share that and yeah, that’s my day job. I do marketing for a start up. So, all day, I am just looking at how to get more traffic, how to get more people to a website and how to get more people sign up. I’ll be happy to share that.
Walter: Right, cool. Okay, that’s awesome, man. I’ll be looking forward to that. That’ll be cool to share. If you’re starting out, knowing what you know now, Hugh, from what you’ve learned and everything you’ve done. If you were starting out as a trader today and you didn’t really know, you hadn’t really decided what kind of system you’re going to trade, you’re sort of meddling around some stuff but you know that you want to be a trader, you know you want to quit your job. What will be the advice that you would give them?
Would it be like go look for a job that you can work remote or would it be start some other things up on the side? Like, side businesses like you’ve done. What would you say to that trader? You’re a new trader, you’re not really consistently profitable but where do they start?
Hugh: That’s really a good question. I would say like you say, start with your job and figure out what kind of job can I get that is going to pay me enough money that will give me the lifestyle that I want but at the same time give me enough freedom to learn how to trad. Then, from there I would look at my expenses.
I think that’s a huge one that people don’t really look at too closely. Do you really need that car? Do you need that cable subscription or whatever? On things that you just can’t pinch pennies or whatever but I think there’s a lot of things have been scaled down on our personal lives that don’t makes us necessarily happy.
Once you scaled it down and figured out what’s important to you and you just pay for the good stuff and those other categories, I think life becomes a lot simpler and it’s a lot easier to focus also. That’ll be the second thing.
Then after that, instead of jumping into systems right away, figure out your own personality. What kind of trading do I prefer? Do I like longer term, shorter term? All the stuffs that you’ve mentioned on your website and then the community, I would look into that first.
Start getting into some of the strategies and then pick one or two things that you can do on the side like buying stuff at the estate sales or putting up a website or whatever appeals to you. Maybe you want to do a service business or something. That’s usually the fastest way to make some money. If you have a certain skill, you can be a consultant or whatever and take it from there.
Walter: That’s good because all of those don’t necessarily mean you’re selling time. I mean, consultant can be kind of selling time. You can sell time as much time as you want. Those are really good tips actually from my point of view. That’s really cool.
One more question I just have to ask, being that you’ve had the website up for a long time and you’ve got quite a following by a lot of people who are interested in what you have to offer, what’s the weirdest thing that someone has ever done?
Do they come at you and say that’s crazy, you told me about this system and it sucks? I don’t know like, what do they say? What’s the weirdest thing that’s ever happened to you from that point of view?
Hugh: Jeez, I’ve put it out of mind at this point but there’s been some pretty weird stuff. You get a lot of that flock rate like, “Oh, trading is a scam.” All that kind of stuff. I think I’ve been pretty good at ignoring that.
I think the weirdest stuff has been more like the traders that I’ve come into contact with. There’s been some traders where, I can’t mention names but they’re pretty high up there and I wouldn’t have never expected that they would contact me but they did. We chatted for a bit and I think it was just cool that you get tracked by so many traders even by these so high up traders.
Walter: Yeah, that’s really interesting. You know what’s amazing to me is the number of really good traders out there who are just in the shadows. They really never come out. It’s weird.
You get these people in forums and stuff like that and in my own forum and I’m sure, it’s almost like they’re just keeping a lookout on, just keeping tabs on what’s going on. You’ll never know that they’re there. They never say anything. They just log in just to have a look around then you find out later who it is.
It’s amazing to me that you learn a lot by working with traders, I guess. I’m sure you’ve learned like I have. You learned a lot from the people that you worked with. It’s amazing, it’s a great opportunity for education. Interview traders, talk to traders, work with traders. It’s really a great thing. That’s cool that they’ve reached out to you. That’s pretty cool.
Hugh: Yeah, for sure. Like you’ve mentioned, there is this one woman that I’ve met. I didn’t think much of her not because she was unimpressive or anything but I just thought she was just a regular housewife or something. She’s a friend of a friend. I’ve met her at Starbucks, done the talking, and it turns out she has a $5,000 trading account that she doubles every month or something and she just lives off with that stuff. It blew me away.
Walter: Yeah, that’s awesome. Have you interviewed her or anything like that?
Hugh: No. I tried to get an interview but she didn’t want to do it.
Walter: It’s tricky, isn’t it? Some people just don’t want to step out in the light at all. So, for all of you listeners, this is a good point, what Hugh just said. There are those people who do exist, they are out there and you’ll never hear them and that’s just the case. That’s just the truth.
A lot of people will say, “Oh, forex is a scam” and whatever. I’m sure there’s a lot of pitfalls but it can work, it does work. You just have to fine tune your own approach. It’s got to be your own approach. She’s found her own approach clearly and she doesn’t want to talk about it, that’s pretty cool. How old was she? Is she like in her 40’s or 50’s?
Hugh: 50’s I think. Her kids have moved out and everything so her cost of living is pretty low but at the same time, that’s still pretty impressive.
Walter: Yeah, exactly. You showed that to everyone. “Trade for me, trade my money”
Walter: That’s pretty cool. Alright, thanks so much, Hugh. Is there anything else you want to end with? This has been really awesome. I’m looking forward to hearing more tips on multiple streams of income and how to live the 80% trader’s lifestyle. I think it’s a really good topic and I am looking forward to seeing you at the event in London. Is there anything else you want to add or anything?
Hugh: Thanks for having me. Looking forward to being at the event and finally meeting you in person.
Walter: Yeah, I know. I am looking forward to meeting a lot of traders that I’ve only seen on the forum or Skype or whatever. It’ll be good. People are coming from all over so it’s going to be pretty fun. I’m excited. Thanks so much for sharing this, Hugh. Looking forward to seeing you in London.
Hugh: Yeah, you’re welcome. See you then.
Walter: Thanks. See you!