If you check our DARWIN leaderboard, DARWIN $THA will certainly catch your eye: not only is it the DARWIN with most investors’ capital, it is also the first DARWIN to achieve a quote higher than 400. Not bad!
So, tell us a little about yourself. How did you get started and how long have you been trading for?
I’m 26 years old and I started trading in 2012 before I entered university. I just graduated as MSc in Economics and Business Law, so essentially, I have been trading for a living in parallel with my studies. From the start, I had sort of a knack for trading events as I figured that’s when the market moves. I quite quickly grasped the underlying logic, that if expectations for certain event are not met, there will be volatility and possibly trading opportunities. The same underlying idea is still behind Thales.
It wasn’t until 2015 when I started focusing on events in a structured way. That was essentially when the track record for Thales was established. I had already researched events and had been turning a decent profit, yet I realized I had been risking way too much, and therefore could improve a lot if I had pre-made plans based on research. I thought this would especially mitigate psychological factors that plagued my trading.
Thales isn’t operated by one person though. My partner Gianluca established finbou.com in 2014 and we have been working together since the start of 2016. He has a lot of experience in FX and IT and gives me some valuable insights in both risk management and trading in general. It was also his idea to participate in Darwinex. Since 2016 our Swiss entity holds a license to trade client money and in January 2017 I became an employee to the company and Thales was finally launched to investors.
I trade mainly the G10 currencies. It depends on which currencies are most influenced by monetary policy expectations and events in general. I want to isolate those currencies that are most responsive to events. For instance, if the policy is on autopilot (Japan), the monetary policy events or data releases typically aren’t too interesting. That is not to say JPY itself is not tradeable – it’s one of the best currencies to trade US data releases against or any other currency when the market sentiment is short-term risk-averse or risk-on since it’s quite volatile.
Regarding timeframes, I focus purely on 1 min and 5 min during the event. Typically, the event gets priced within seconds to an hour, therefore 1 min and 5 min timeframes give you the most information about market perception of the event.
I think the focus on events, creating extremely detailed plans and still being able to execute the plans to the point, is something other market participants aren’t doing. I remember exactly what most of the G10 central banks did during the past 3 years; what the price action and communication was. Now, this might sound very boring to some, but I find it fascinating.
One of the key elements of my trading is that I take the market as a given. I don’t pretend that I know what happens with the event. The only thing I know is that if something specific happens, I have a view, how the market should react, which I base on my research, knowledge over how market works and experience. If the market does not react like I assume, i.e. price the event correctly, there’s a trade.
Oh, where to begin… I wouldn’t speak of weaknesses but rather of things to improve – and there are many. That is one of the fascinating parts in trading, you are constantly trying to improve – not only your trading but your psychology as well and some lessons are directly applicable in real life. It is indeed like an evolutionary process (no pun intended). If you fail to improve, you will likely get wiped by changing market conditions.
Regarding my current trading, I am specifically working on what kind of signals I should skip. Lately, I have been trading events, where I perceived there was a signal, but the market just ignored it. It would be best if I could determine such instances beforehand.
I try to isolate the moments, where I think I have a high chance of being right according to my research. If I am not profitable after a certain pre-determined period of time or the price does not behave as expected, I accept that I am wrong and I am out.
If you think about it, all the other market participants get the same data and are likely to interpret it within – let’s say 5-10 minutes (in reality it can take even longer, especially with ambiguous releases). They are also extremely smart people; therefore, you’d assume the market to correct the inefficiency quite quickly. Correspondingly, if there actually is an inefficiency and still you aren’t profitable after a certain period of time it’s a sign you are wrong.
Essentially the most important lesson from trading is that you must be brutally honest to yourself and admit your weaknesses so that you can improve.
I used to have a few major issues related to psychology, which are still there but I have figured out a way how to deal with them. For instance, by nature, I am an extremely anxious person which of course does not trade well with the markets (I wouldn’t be too great of a value investor). In addition, even though I like to think myself as an extremely disciplined person, I also struggled with overleveraging trades, due to greed.
However, being aware and honestly admitting that I need to find a way to deal with them, allowed me to improve and build a strategy that works for me. Thales is purely based on trading pre-made plans – therefore being anxious or greedy does not matter – as long as I am able to execute the strategy as planned.
There’s a good quote from the movie Wall Street 1987; “Everybody’s got good luck, everybody’s got bad luck. You have to be there for turns. Don’t whine when it hurts, don’t run when you lose. It’s just like in the first grade, nobody likes a cry baby.” The movie is rather cheesy especially if reflected by today’s standards (the one regarding greed being good was probably taken too literarily before 2009). However, this one well catches the essence of trading (or any business in fact). Those that stick around through tough periods e.g. drawdowns, have the integrity to admit their mistakes and most importantly keep doing their thing and improve are likely to last.