Forex trader profile: Amy from QLD "Idle capital is not going to earn you profits"

In late November, almost 200 traders participated in a Rivkin-first forex demo trading competition. Each trader began with $20,000 in demo money and traded as much – or as little – as they liked in hope of either winning the AU$1,500 prize for the overall highest return on investment, or the AU$1,500 prize for implementing techniques aimed at achieving positive risk-adjusted returns (as judged by the Rivkin Investment Team). Traders received daily education, market updates and statistics and commentary on what the most popular and successful trades were for the day: contributing to an overall average profit of $4,708.82 per trader. (For more statistics, read to the bottom of this post.)

Because there are certain attitudes and disciplines that help traders succeed and maintain profitable strategies over long periods of time, when we saw a trader in our competition with these traits, we just had to interview her. Meet Amy C. from Queensland – one of our competition participants and Rivkin Global client – who has kindly offered a snapshot into how she trades foreign exchange. Amy classes herself as a swing trader, and trades on a daily basis because the shorter time frames suit her trading style, temperament and lifestyle. In summary, Amy also believes:

  • optimal use of capital is very important and key if you aim to maximise your return: learn to 'scale up' and 'scale in'.
  • having support from fellow traders and a team of professionals is essential to long-term success.
  • keeping things simple is also key to success: start small and build from there. Pick yourself up when things go wrong, learn from your mistakes and try again.
Q: Where did your passion for trading forex come from and what is the outcome (financial or otherwise) that you expect from trading?

Amy: My passion for trading stems from my inner drive to be the best I can at what ever I chose. To be able to master something and have well developed skills in an area and ultimately pass on this knowledge to others, is my ultimate goal. Coupled with this, of course, is my aim to be a profitable trader!

As I’ve always had a strong interest in the financial markets and working for myself, trading became a natural choice. Trading offers a unique business model whereby your outcome is solely dependent on your effort and what you make of it.

You are totally accountable to no-one else but yourself, the buck stops here so to speak, so you have to be the best you can. Each day is a new opportunity to be a better trader and it’s that continual learning process and challenge, that I find very rewarding.

Q: You refer to a challenge relating to the optimal use of capital in ‘scaling up’ your trading outcomes, can you talk about how frequently you trade and what resources you might require in order to ‘scale up’ your successful trading strategy?

Amy: Optimal use of capital is very important and key if you aim to maximise your return. As you trade and work on your trading strategies, it’s easy to forget to look at just how much of your account you are really putting to work on a daily basis. Idle capital is not going to earn you profits.

So when I talk about ‘scaling up’, I mean determining position size and how many positions your account can have open at any one time relative to your amount of capital and predetermined risk levels. This means, adding trades as trades close and being continually mindful of where your capital is at. This might also include ’scaling in’, adding to your position as the trade progresses. This is not to say you load your account up with as many trades as you can – it has to be manageable and within your risk parameters. Obviously, if there are no trades to make, then you stay out of the market.

It is built on the premise that you have a strategy that works and now needs to be taken to the next level by increasing your position size or adding further trades, thus optimally using your capital. It’s about stepping back and looking at the bigger picture in terms of your account and how it’s being used and not getting lost in particular trades.

In terms of frequency of trading, I trade on a daily basis and have found that shorter time frames suit my trading style, my temperament and lifestyle. You have to find what works for you. I would class myself as a swing trader, trading time frames from 30min to 4 hour charts. I also make use of different time frames for any one trade to cross check where a trade is headed. If I’m trading a 30 minute chart, I’ll always check the higher time frame chart (1 hour or higher) to confirm the direction of the trade and make sure I’m going the right way. Stepping back and taking a broader perspective is an important part of my trading strategy.

For me, the challenge is making sure I’m on top of things in terms of optimising my use of capital (or being scaled up) and managing this process. Trades aren’t going to jump off the screen at you, you have to go searching for them. This is where having access to resources such as Rivkin Global is invaluable where opportunities are identified for you. It prompts you to look at your use of capital and current trades and decide if you can add another trade or not. This way you are always reminded to make sure you’re always optimising your use of capital and if you are trading as a business, you need to be always looking for opportunities to do this.

Q: You say all of the things we love to hear from traders: you’re interested in consistency; you’re committed; you’re aware of the patience required; and it sounds like you enjoy being a part of a community of FX traders. What could Rivkin do to help you achieve your trading and personal development goals?

Amy: For a start, I think it’s great that Rivkin is focussed on assisting traders to achieve their goals and become better traders.

It’s not an easy task to trade the markets successfully and it’s something that others outside of this industry often don’t comprehend or understand. No man is an island, so having support from fellow traders and a team of professionals is essential.

If you are serious about trading as I am, you want to know that there is solid analysis and expertise behind recommendations being made; you want to be able to ask questions, study the analysis, be exposed to different markets, instruments and opportunities and develop skills and knowledge as a trader.

You also need a provider who wants their traders to be successful: The Rivkin Members' Home, model portfolios, and general support provided addresses all these areas, so as a trader, I’m happy with what the Rivkin team does already!

Q: If you could offer a few words of advice to an FX trader just starting out, what would they be?

Amy: Keep things simple. Learn the basics of technical analysis (price action, that is) and learn to really read the charts. Look for high probability trades and only trade when these opportunities present themselves.

Start small and build from there. Pick yourself up when things go wrong, learn from your mistakes and try again.

Remember, you’re not alone: log into the website, make yourself known, ask questions and learn all you can. Above all, enjoy what you do and reward yourself for your efforts!

Key Rivkin FX demo competition statistics (20/11/14 - 4/12/14)
  • Most profitable trade: short 15 contracts of XAUUSD (from US$1,188.31 to US$1,157.69 – a $53,160.18 profit)
  • Most popular instrument: AUDUSD (33% of trades)
  • Most profitable instrument by net P&L: XAUUSD
  • Most profitable instrument by average profit/loss: USDRUB (100% profitable closed trades!)
  • 52.47% of trades were long, 47.53% of trades were short
  • Short trades on average were 15.6 times more profitable than long trades
  • The mean average profit per trader was $4,708.82, representing a very healthy 23.5% return or a $24,708.82 average account size at the end of trade.

If you're interested in participating in the next Rivkin FX demo trading competition early next year, register your interest by emailing us here.

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