Well mate, I have a soft spot for you so I’ll share with you my experience because I was in your position not too long ago. Hope it’ll inspire you and others in one way or another.
I was first exposed to the markets when I was a really young kid, probably seven years old. I saw this HK drama about how two individuals tried to outwit one another in the stock market, with the loser pushing his sons off a building before committing suicide himself. That left a deep impression in my head, firstly because of the over the edge excitement and secondly because of the severity of what can happen if someone loses.
I didn’t want to become a trader then, but it was always in the back of my head. After finishing high school, I completed a diploma in Business IT. It was something that my dad wanted me to do, but I have no liking or passion for it whatsoever. I wanted to study Banking and Finance, but my dad managed to convince me otherwise, claiming that it would be easier for me to find a job with a Business IT diploma (security first). It was during this period that the notion of becoming a trader started to kindle within me. I also determined in myself that my future job would be one that I have a passion for and not for security sake. I rather do something I really like because with passion and desire, I believe I will have a higher chance to excel and succeed.
I had to do two years of national service (army) after my diploma. My bunk mate coincidentally is an avid equities investor on his own book, and quite a successful one, or so he claims. He is a fundamental investor like Warrant Buffet. So I took the chance to ask him heaps of questions about equity trading, questions like how do I start, why price moves, how do I differentiate a good stock from a bad one etc. Yea, plenty of noobie questions. Surprisingly, he was willing to answer all of them! He taught me things like P/E ratio, fundamental news, the state of economy etc. I could tell that he really loves what he is doing.
One month after meeting him, I decided to have a go at trading. I decided to start with warrants (something like options) as it gives me the leverage I need with my small capital. I choose a property developing firm and gave my friend $4000 to go long for me. Rising property prices and building projects were the reasons why I went long. $4000 was heaps for a 20 year old guy like me then. So everyday, I would be checking the price of that particular warrant on the news paper even though the price printed was from one day before. This went on for another 1 ½ months.
One fine day, the underlying company called for a trading halt! At that time, I didn’t know what a trading halt was, and I got worried because the warrant stopped trading. My friend had to calm me down and explain what it was to me. The next day, positive news broke about the company. I can’t remember what it was, but I was really glad it was positive news and I that was vested. So I waited in anticipation for the halt to be lifted. The stock price soared after the halt was lifted and my warrant doubled in price. Having not seen so much money in my life I asked my friend to close the position for me. $4000 out, $8000 in. Woo hoo! I was on cloud nine! I thought I was the best trader ever, and that I was borne for this! How wrong I was. I think the worst thing that can ever happen to any new trader is making a huge profit on his/her first trade.
The stock climbed higher and higher, and I started to dream about the profits I could have made if I hadn’t close out the position. If my memory serves me right, the warrant ended up quadrupling! I decided that I want to do this for life, so I opened a trading account with a local broker, and they gave me $30000 credit to trade with. Wow, that’s heaps of money. Imagine making just 5% every day, I would be a millionaire in no time. Ah, the folly of a greedy new trader. I was on my own and I had no help as my friend and I parted ways as we were posted to different units.
To cut the long story short, I was close to broke after 1 ½ years of trading equities. I lost about $35000 in that short period due to reckless trading. I had no discipline, no strategy, just pure greed. My Dad had to bail me out a couple of times. But I was stubborn. I continued in my erroneous way till I was completely broke. I was devastated to say the least, and I felt like a complete failure. I thought I’m probably not cut out for trading. I should just take the safe route and lead a safe life.
Well, if there is one thing I think a new trader should experience is the feeling of going bust. I basically paid a $35000 to learn what not to do. Some may call it a waste of precious money, but I think this lesson was priceless. No one can take away what I’ve felt, learnt and gone through over the 1 ½ years. It took me a few months to recover psychologically and I promised my parents that I will not trade again out of my means.
Off I went to university to take a Bach of Business Management. Like I said, the thought of becoming a trader left me after my trading debacle that was why I chose to study business. I went through the motion of completing my degree. I wasn’t really looking forward to graduate because I didn’t know what kind of job I would like to do. I had one elective to spare in my last semester. Normally most students would take the easy way out by taking a level one course which is simple and easy to score to beef up their GPA, but something in me pushed me to take a level three finance course called Derivatives and Risk Management. All my friends thought I was crazy, as it was a hard course to do without any financial background. I took the plunge anyway.
Guess what? This was the only course in my degree that I thoroughly enjoyed and the only course that I scored a distinction in. Even though I did not have a finance background, I still was ahead of the class, even teaching some of my peers to understand what was taught. I didn’t miss a single lecture! We leant about options and different strategies, how to price them etc. Slowly but surely, I was back in touch with my trading passion yet again. It is time I stop doing what is safe and pursue what I really love, trading.
My parents were kind enough to sponsor me again to get a Master of Commerce (Applied Finance). I wanted to go into the Masters course with some knowledge of the banking industry. By God’s grace, I managed to secure a summer internship in a German investment bank. It was a good experience even though it wasn’t really related to trading. We just took care of the traders to ensure they’ve not gone rouge. I also managed to speak to a few directors and the managing director of the bank. He even agreed to be my referee!
I started my Master course after that internship. During my first semester, I sent out over 100 resumes to different prop firms and hedge funds hoping to secure an internship during my winter break. Out of the 100, less than 20 replied. Out of the 20, only one thought my resume was interesting. I mean I can totally understand why I only got one favourable reply. My GPA was not high, just average and I have little to no professional trading experience. I only just started a finance course and the market is now saturated will retrenched IB traders.
Anyway, they wanted me to come in to have a chat with the directors. I was stoked!!! This was a newly founded prop firm by two top traders, and they were currently recruiting for the first batch of trainee traders. An intern wasn’t what they were looking for, and till this day, I don’t know why they wanted me to come in to have a chat with them. I remember walking past the trading floor and I looked past the glass panel and my heart skipped a beat! In fact, many beats! Lol. I was so thrilled to be even this close to traders, with their multiple monitors and all the buzzing going on. Absolute bliss.
During the interview I could tell somehow they didn’t want to take me because I would be of no use to them and they started telling me how tough trading is, and that they would offer me only $500 to help out with admin stuff. They said that I probably wouldn’t learn much. Why would they pay me to learn how to trade and then leave? The director told me if I don’t have the passion for this, I won’t survive. I told him, that I wasn’t looking for a salary. Even though I was broke, all I wanted to do was to learn from them and to break into this industry. They laughed and said that I was crazy. I smiled and looked at the director and said, “Isn’t this what passion is all about?” He nodded and stood up. He shook my hand and told me that he was impressed by me and it takes a hell lot to impress him. He then welcomed me into the company. I was rejoicing in my heart, but I had to act calm!
So it was there that I began my trading career. What they got me to do was a thorough research on all existing futures in every exchange around the world. This allowed me to understand what is out there in the market. I also researched in great detail a couple of Asian indexes. I had a chance to trade DAX futures on the simulator even though it wasn’t live and I did pretty well. I was able to use one of the director’s desks as he left on a month long vacation. It was so unreal. Right in front of me was 8 giant screens! Wow! It’s like a life long dream coming to past right in front of me. But I know this is only the beginning. I still have a long way to go before I can convincingly say that I’ve fulfilled my dream.
One of the director’s brother came to oversee the company when they were gone. And he was interested in how I was trading. He was really encouraging after looking at my trades saying things like “I think you might be a natural trader”. I stayed for as long as the winter break allowed me (1 month) and I went back to continue my second semester. Before the directors left on their holidays, they told me that I could come back during the summer holidays as I would be able to learn much more then as they would have the company fully up and running with live TT simulators. I gladly told them, I’ll definitely be back!
Summer came and I was back with the same firm. They moved to a bigger office and there were more traders now, most of whom were trainees. I got the best seat in the house! I was placed beside the Bloomberg terminal! I had full control over it unless the trainees needed to use it. If not, I could use it all day long! My charting and news were all through the Bloomberg terminal. I got set up for live simulation and I happily ‘fired’ away! Everyday the directors would meet the traders to go through their end of day evaluations. I learnt a lot just by sitting in and listening to them. Most of the time, I was treated as invisible. I could totally understand as I wasn’t a paid employee. Their focus would be to evaluate the paid traders so that they can become profitable soon. It felt really discouraging at times to be overlooked and I felt as if I wasn’t wanted there. But I pressed on knowing that my future is in God’s hand. I just have to do my best, and I believe God will do the rest. I can’t let my insecurities overwhelm me.
I came to work everyday, for 3 months without pay. It was such a joy! I looked forward to coming to work! I wished weekends wouldn’t come so that I could get more experience trading. After one month on the sim, and with the recommendation of the director’s brother, I was allowed to go live! Dream come true! So I thought. I was taken off live trading just after 2 weeks because I wasn’t doing well live. Honestly live paper trading can only prepare you so much. It’s a whole new ball game once you go live with real money. I was really discouraged as I showed so much promise in the live simulator. However the traders there and the directors were really encouraging. It’s a rite of passage every one goes through when they start. The directors wanted me to go through the proper training like the other trainees before putting me live again. I started exploring other index and currency futures, trying to develop an edge.
On my second last day there, the director and the risk manager sat me down for a chat. So we talked about my experience over the past 3 months. They even apologised that I wasn’t given much attention. I told them it wasn’t a problem and that the onus was on me to learn as much as I could. It was a pleasant conversation and it ended with them praising me and offering me a job whenever I wanted one. Woo hoo! Dream is slowly coming true! They were even willing to let me start months before the next batch of trainees come in as I have paid my dues and have done enough screen time. Not only that, I will be able to go live straight away!
Now I’m back for my last semester of studies. Over the past 2 weeks I’ve been sending out my resumes again, to see if I can secure an overseas trading job. This time there were more favourable replies. I’m currently sitting on 6 favourable replies. Lets see how things work out.
Well, this is my story (so far). I'm 25 this year. I am NOT a successful trader yet, and I’m not teaching you how to trade. I have learnt heaps but there is still MUCH MUCH more to learn, much to experience. It’s never too late to try or try again. The only thing that can stop you from pursuing your dreams is yourself. This is my dream…I want to be a really successful trader earning heaps so that I can build churches and schools in third would countries to give people a chance in life. Can I fulfil it? I’m sure gonna give it many shots!
I can suggest this. Go speak to directors directly. Go to their door. Show them you want it. If they have any business mind, i'm pretty sure they'll take you without pay.
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