Success Hacker

I’ve been asked this question over and over again. Whenever people hear me say I’m a trader the normal response is “but trading is risky!”

Maybe it is maybe it isn’t, it depends. What is risk anyway?

Warren Buffet, the world’s greatest investor, said that risk comes from not knowing what you are doing. Maybe he has a point. Flying a plane entails some risk. Pilots do hours and hours of training before they get to man the aircraft and years before they get to be called captain. Do you think veteran captain pilots still see flying as risky? They don’t but I still do because I have no clue how to things work inside their tiny cockpit. This is exactly the same for traders. People outside trading see trading as a risky business and indeed it is especially if they do not know how the market moves or how traders use low risk ideas to profit from market volatility.

What is trading anyway and why does it seem so risky?

Basically, trading is an exchange of goods or services. Traders are speculators. To profit from trading one has to exchange one’s goods (stock, contract, currency etc.) for someone else’s speculating that the latter would have a higher value in the future. The risk comes from the speculation of the value because a trader can be right and make money or can be very wrong and lose.

In my experience it takes a lot of studying and analyzing whether it’d be technical or fundamental before I get into any trade at all. Unlike skydiving for example, you don’t need a lot of “guts” to trade but you certainly need a lot of discipline and the right mindset. Taking big risks doesn’t always guarantee big profits also. You can apply low risk trades and still win big. This is certainly what I do for myself and for my clients. We apply only 1% risk per trade and limit our exposure with only a certain number of trades at a time. This doesn’t mean we only gain 1% at a time in fact risking 1% of our equity in a single trade can yield a 3%-10% or more profit in the long run.

So is it possible to win big while limiting your risk?

Yes it is!

Now, I can’t explain all the details of how to look for low risk ideas for trading in just one blog post. But at least now you have an idea how trading can be not as risky as you think. Here is a tip – look for good position sizing strategies and money management rules for trading in the web there are hundreds of articles that can help you. You can also feel free to contact me and ask stuff about trading and I will gladly respond with the best of my ability.

Remember trading is speculating. The risk is real but unlike a casino the odds can be in your favor. We are dealing with uncertainty and the only thing that we can control is our risk not the market, not other people and sometimes not even our own emotions. This is the cornerstone of great trading.

We all have felt grave hardship at some of point in our lives whether in our job, our home, through sports or business. There is always that point that you just want to give up because every inch of you is ready to quit and everybody around you supports it.

Seth Godin, in one of his books, calls it The Dip. I call it The Wall. You see, in whatever goal we set to achieve there will always be the wall. The wall is the point where everything does not seem to go your way and the hardship is too great that you might just as well quit. It is in this moment where you, your ideas and your will to succeed will be tested.

I have hit the wall many times in my life.

One of the best parts of being an athlete is that I get to build my mental toughness that is applicable to all aspects in my life. In every race, much like in every goal I set in life, there is this thing called the wall. If you have ever done a marathon (a 42 kilometer run) there is this wall that you go through. Around 33k into the race your body will scream for rest. Every part of you will hurt. Your mind says you can but your body says you cannot. Every step just feels painfully exhausting and every part of you wants to stop.

You have now hit the wall.

Everyone in the marathon hits the wall at some point. And guess what? After that few moments of pain and suffering; after that moment where you were ready to give up but you didn’t, something amazing happens. The wall slowly and mysteriously disappears! On that same race on that same day in that same moment after you had the guts to go on, you have conquered the wall (this is around kilometer 37 or 38). And before you knew it you have crossed the finish line!

In life there are always walls, dips, and mountains that stand between us and our dreams. It will test us. It will bring us to our knees. It will knock us down and do everything in its power to keep us where we are. In every endeavor there will be challenges and it never gets easy. I am not saying this to frighten you rather it’s because I believe you can conquer the walls in your life. Its’ possible!

In every race our greatest enemy is ourselves.

There is an old African proverb that says “if there is no enemy within, the enemy outside can do us no harm.”

Be brave, be strong, and push yourself. If we do not go beyond what we have already mastered we can never grow. Yes there will be pain, difficulties, trials and some defeat but remember that this is a test to see if you are truly worth your dreams.

“Pain is temporary. It may last a minute, or an hour, or a day, or a year, but eventually it will subside and something else will take its place. If I quit, however, it lasts forever.”

Nestled in the majestic island of Panglao, Bohol Bellevue Resort set the stage once again for one of the country’s best and most beautiful triathlons – DEFY 123. The unique race features a 1km open water swim, a 110k draft-legal bike leg and a 12km run on the seaside finishing on the beach.

My journey started in our host hotel, Bellevue Resort, where the race took place. Preparing for the race for only over a month I wasn’t sure how I would fair especially on the bike (especially when its a training race and the coach forbids you to draft). But I took on the challenge as any competitive triathlete would. This would be my first tri race for the year.

We did a water start in the pristine crystal-clear waters in front of the beach.

The water was so clear that you can see the sand and the corals below. That plus when the water level is less that 6 ft., all fear of swimming in the ocean vanish. We did one loop ending in a short skip and jump up to the shore and running 200 meters towards T1.

Time to gear up and get ready for the bike!

The bike leg was tricky with a not-so-flat rolling course that if you push too much will punish you at the end.

We crisscrossed Panglao and into Tagbilran City passing by different churches and sites. The people in Bohol were super supportive cheering us along everywhere we went. Its amazing that the roads were really well paved, smooth and closed to all vehicles even in downtown Tagbilaran. I’m guessing everybody was out full support for the event. There were so many marshals on motorcycles that lead different groups on the bike.

It felt like I was in a cycling tour (tour de Bohol?) because there was always a marshal leading in front of me honking his horn.

Pacing was key to finishing the 110k bike and starting fresh for the run.

On to the run!

The 12km run course was none like I’ve tried.

Starting from T2 going towards the beach running on the seaside on sand, rock and pavement. Since I saved my legs on the bike I ran at a faster pace finishing 3rd best run-split in my age group. It was an awesome finish indeed with the crowds cheering me on the last 2 kilometers at the beach and finally finishing on the sands in front of Bellevue!

What makes a successful race? 

A good strategy, a strong will, and heart!

I finished 4th in my age-group despite racing in “training” mode but what matters most is the experience of swimming, biking and running to the finish line of a great event! Kudos to Guy Concepcion and the rest of the organizers for a well-organized Defy 123 2014!

CHEERS!

Forex traders are born every day. The industry is booming with countless aspiring men and women whose goal is to beat the market and make a ton of dough. I was no different back then when I started in 2010.

Who wouldn’t want to make a pile of money with a push of a button or while sleeping at night?

It is true that one can certainly do these and more with trading the currency markets but let me warn you that most people rush too soon with their first trades and eventually go bust. Too little professional information is out there and many of us are too narrow headed to even get the best advice before we execute our trades and we eventually give up trading the markets all together because “it does not work”.  This type of behavior isn’t only seen in trading but in most if not all industries. Think about the weight loss industry for a second. Most people who want to get fit go to the gym and try on dieting and after 3 months they quit and say “this isn’t working for me”. Trading, like losing weight, is a process. It takes time and mental endurance to trust that it will work out some time in the future. It’s not easy especially at the start and the path to trading success is full of ups and downs, but once you have achieved a certain level of toughness and experience you’ll find trading gets easier to digest.

I started  currency trading back in late 2009 just after college as a means to look for extra income for myself while working for my dad in another business.

Like many of you I have seen and done it all. I got wiped out once. I bought so called robots and trading signals that didn’t work much. My first three months of trading I lost 70% of my account! I was a member of all the trading forums searching for the Holy Grail or the perfect system that would make me rich beyond my wildest dreams but to my dismay there were none. You can say that during my first year it was literally an initiation that did sufficient damage to my pocket.

What inspired me to go on was Jack Schwager’s remarkable book of interviews with the world’s top traders called Market Wizards. Out of all the “wizards” in the book there were none who did not experience losing. Some even got wiped out more than once in their early years of trading. What was truly amazing is that all these pro traders did not give up. They stuck to their plan and objectives no matter what other people said and eventually they became a success (If you haven’t read the book I highly recommend it for any serious trader). I believe a successful trading career takes time just like any other field or industry. No one gets to be an overnight superstar in this business.

You don’t get rich overnight.

If you are looking for a get-rich-quick guide then close this post and look for something else. Only 5 years into this business I have learned a LOT. The last three years I manage a small fund from friends and family that gained 50%, 40% and 100% in that order. I am not saying that I am good. No. I even consider this a fluke! I do not consider myself a guru. The reason why I am writing this and sharing this to you is because my goal is to help as many traders as possible through my experiences. The methods that I learned are priceless and sharing this information is my way of giving back. But like you, I am also a student of the market and always will be. I never stop reading and learning new things. Constant research is a must. I have read and applied so many methods and books from trading, to psychology, history, and even spiritual guidance to align my vibration to the markets. I practically eat books for breakfast. This has become my passion and obsession. You see I believe that markets are inefficient and because of that there is opportunity to trade and cash in especially when you make the right trade.

What then is the secret? How do I beat the market?

The answer is: there is no secret! There is no holy grail. There is no robot that will make you lots and lots of money while you sip piña colada under palm trees. It doesn’t work that way. Success doesn’t work that way! I’m sorry but that’s the truth. The billionaire Wall Street guys still put in the time to trade the markets. That’s their job and it will also be yours too.

I learned after my freshman year as a trader that there are two keys to succeeding in this business – First, the right psychology. Second, proper Risk Management. With these two, you can trade any type of system and still make money! I was lucky I had a teacher early on that showed me the ropes but of all the lessons he taught me it was these two keys that really mattered because without them no matter how good an entry or prediction you make you will still lose money in the long run.

I am amazed of the people whom I share this risk management system to be so ignorant and negative about it. They complain that it is too simple and couldn’t be used because there isn’t anything fancy about it. Let me say this, the best trader’s in the world rely on robust and simple systems.

The simpler and more robust a system is, the better it works across the markets.

Most people over complicate themselves with a thousand and one indicators and charts plus a truck load of fundamentals and news. This is insanity at its best. No one can grasp every aspect of the market and I mean no one. Don’t take it from me. Michael Covel in his bestselling book, Trend Following, showed that even the great traders only used simple systems. If it’s good for the pros then it’s good for you and me.

Don’t let your emotions get the better of you.

Successful trading is 50% psychology, 40% risk management and only 10% actual technical trading. Everyone has access to the latest news, the best indicators but the real edge (and enemy) is your own mind. That thing between your ears is a goldmine that only you can tap into if you only knew how. I am just a guide pointing you to the right direction when it comes to the markets. Invest in yourself, invest in your mind.

Cheers!

Flashback to elementary…

Its quiz time and you failed. Worse, Mrs. Terror just sentenced you to detention and 10 tasks for punishment along with a not-so-good reprimand episode with your parents. Failure equals punishment, your parents said.

Moving on to high school…

Its exam time and you learned your lesson during elementary and prepared and studied hard. But despite your efforts you flunked a subject and will have to repeat another year. Failure equals punishment, the teacher said.

College comes…

…and you did everything by the book. You were active in school organizations, joined university politics, participated well in class and even topped your peers.  Alas! You have done everything to avoid any kind of mistake because you cannot afford to fail! You did well not to fail and you will be rewarded with a bright future, everybody said.

   WHAT A JOKE!

Do you know why A students work for C students?

Here’s a story. A group of researchers wanted to find out if above average intelligence was needed to be a successful investor/trader. The experiment consisted 40 people from different backgrounds and different levels of IQ. The game was real-time and with actual money to be invested then the people who went bankrupt got eliminated from the game. What researchers found out shocked them. The last 5 remaining people in the game neither were the smartest nor the most experienced! The ones with all the degrees and high IQ lost.

Conclusion…

It takes only average intelligence to succeed at anything (well, maybe not rocket science) but it also takes a lot of trial and error. Success is three steps forward and one step back. Everyone who is anyone will tell you that it takes one to embrace failures, admit mistakes, pick yourself up and do it again.

In our society where mistakes are frowned upon and must be avoided, we teach our kids to be safe, to risk nothing, to stop experimenting on what works and to be average. The real winners in life know that failure is necessary for success!

 But failure equals weakness! I don’t want to look weak! 

The greatest basketball player of all time, Michael Jordan, said this: “I’ve missed more than 9000 shots in my career. I’ve lost almost 300 games. 26 times, I’ve been trusted to take the game winning shot and missed. I’ve failed over and over and over again in my life. And that is why I succeed.” 

Arnold Schwarzenegger had this to say about failure: “Anything I’ve ever attempted, I was always willing to fail. So you can’t always win, but don’t be afraid of making decisions. You can’t be paralyzed by fear of failure or you will never push yourself. You keep pushing because you believe in yourself and in your vision and you know that it is the right thing to do, and success will come. So don’t be afraid to fail.”

Think about it. Who is a success now that never failed in the past?

Success is to know that you also risk failing and failure is another stone to step on the path to success. In any case, people become stronger after a recent setback.  Weren’t you braver on your second attempt or smarter after your first business venture failed or wiser after your first breakup?

Failure is a natural. Everyone goes through it. Embrace it. Admit it. Learn from it. He, who never failed, never attempted to do something great. You don’t learn to walk by following rules. You learn by doing, and by falling over.

“When life knocks you down, try to land on your back. Because if you can look up, you can get up. Let your reason get you back up.”  – Les Brown