To get a better understanding of what it is like to be a professional oil trader, we interviewed a 26 year old trader from Germany and tried to discover his secrets.
How did you get into the trading business?
During college I never really liked to study and was fascinated by the financial markets. If I wasn’t reading the financial times or analyzing graphs on my computer, I was probably watching movies like Wall Street and Boiler Room. I think I’ve seen both of them at least ten times and decided that I wanted to become a trader as well. I opened a stock trading account with $500 and lost it within a week. I immediately put in another $500 but lost it again in about four weeks. At that moment I realized that it wasn’t going to be as easy as in the movies. I opened a practice account and learned to trade with discipline in about two months. After those training months I decided I was ready to take another shot and deposited $1000 into my account. I have never had to make another deposit again.
How much time do you spend trading on average?
I’d probably have to say the full 24-hours a day. I get up in the morning and the first thing I do is to turn on the computer and watch the price action that happened during my sleep. I then get myself a cup of coffee and start reading the news feeds and market analyses. Even when I’m going out for diner or sports I’m always connected to the markets by my cell phone. Some people blame me for that, but hey, if your money is on the line, you’d better know what’s going on I always say. The Saturday is my day off, I make time for my family and friends and stay away from my trading as much as possible. At Sundays I start to prepare for the upcoming week again and the whole story repeats.
You told us you started to trade stocks during college. When did you decide to start trading oil?
The stock market was a lot of fun, however, I have always been more into the macro economic news and not so much into specific companies. That’s why I traded a lot of index futures at the time. I felt that I would be able to benefit more from my strengths in the forex and commodities markets so I decided to make the switch. It took me some time to get used to these different markets and finally got the best results in the oil trading market. From that time, which is about two years ago, I have never traded anything else. I like the high volatility and constant price action that you will not find in any other market.
What’s your secret to success?
Haha, I knew you were going to ask that question. I don’t know, I don’t think there’s much of a secret. I think it just requires a lot of dedication and good analytical skills. You have to find your edge in this market, otherwise you will be doing what most traders do, losing your money. I believe my edge is my ability to look through the loads of rubbish information that is out there, and to find the information that really cares. If you see how many terrible analyses and predictions are being published by so called experts, you understand why so many traders are loosing. I only read the news from sources I know I can trust, and Skype a lot with other traders of who I know are successful. This business is all about sharing.
How do you manage your risks?
I got a few simple trading rules in place for myself. I never risk more than 2% on one single trade. I also forbid myself to do any more trades for the day when I just made three mistakes in a row. Sometimes the market is just going crazy and my analyses are worth nothing. To prevent myself from trying to win back my losses, I just lock my trading account for the day and hope for better times the next day. My third rule is to never change the stop loss I put in place when entering the trade. It can be very tempting to move the stop loss at times when you think the market will get back to your entry point. However, if you let your emotions take the better of you, you are on the wrong track.
Thank you very much for your time. Do you like to say anything else to the beginning traders out there?
I just like to say good luck with your trading. If you are really determined to make it in this market I believe that you will. Don’t think this is an easy way of making money, because it’s not, it requires a lot of dedication. But once you managed to turn yourself into a winning trader, it is the best job in the world!