This year marks a new and important chapter. After navigating the rough waters of Forex for almost a decade, I decided it was time to make the switch to full-time trading and making it my only source of income through Forex and Stock investing. This global situation has re-enforced an opinion of mine which I had 8-9 years ago when I first started trading:
What happens if things goes wrong. Can I survive on my own?
I always had this thought in my head that I needed a backup plan in case I lose my job and am no longer physically able to “get” to my workplace. The first problem was solved by enrolling and going back to school. The second problem was solved by learning how to trade, both the automated and manual route. I guess you can sum it up to this old saying:
Give a man a fish and you feed him for a day; teach a man to fish and you feed him for a lifetime.
Fortunately for me, I like to see myself as self-taught, meaning no one ever sat down with me and said “look this is how you do it.” There is this kind of good feeling knowing that I don’t owe anything to anyone. It’s hard to describe freedom.
Approx. reading time: 15 minutes.
- The Micros Challenge: GX100
- Daily FX analysis
- Weekly FX analysis
- Weekly stock watchlist
In order to accomplish all these things and not get lost in your work, a strict daily routine will be applied to cover all these aspects in an orderly and efficient way.
The Micros Challenge: GX100
I love challenges which pushes you to work harder than you expected. I believe you can accomplish almost anything in life if you actually spend time and dedicate yourself to it. It’s a certain mindset where “No, it can’t be done” actually translates to “Hmm, let me find a workaround”.
Now, I won’t make this a motivational article but I like to think that “if you can see it in your mind, you can hold it in your hand”.
The Micros Challenge: GX100 is a personal challenge of mine where I attempt to turn 100$ to 10,000$. Everyone raves about that 10X return but can you deliver 100X return? It’s bold, unusual, probably unrealistic. In other words, perfect challenge for this year.
Albert Einstein allegedly said compound interest was the most powerful force in the universe. Whether he really said it or not, this has become my financial motto.
The graph below shows that if you are able to turn 100$ to 106.50$(6.5%) every week, then with the power of compounding and using same ratios, you can turn that same 100$ to +1M within 3 years. (50 trading weeks/year x 3 years = 150)
Ideally, you need to break it down to more realistic smaller goals. I’m a very big fan of Excel, it’s probably the best tool ever created for computers after the internet and emails. It not only saves you time doing rubbish calculations on-the-fly but you can literally build endless systems/decision process into an error-free output, based on your requirements.
Example, building a card counting system and money management calculator in Excel to play Blackjack and Baccarat on various online casinos.
In the example below, I built an example using fictive numbers and returns to demonstrate an easy way to track your progress based on your own goals. We start the account with 100$ on January and we input fictive returns up to August.
I broke down the system to a weekly reference. Every week, we must reach at least 6.50% gain from previous week. Our goal is to take 2 trades a week, ~30 pips each. The hardest part of this model is going from 100$ to 200$ as you cannot use any multiplier leverage. We have to go up to 120(E12) pips to make that 6.5%. As soon as you reach 200$, then you only need max 80-100(E19) pips a week to reach same 6.5%. That’s ~15% easier right off the bat.
Note: this is not a recommended strategy long term, you will need to properly adjust your lot size and risk factor as your account grows. This is a static low-level model with the only purpose of demonstrating the power of compounding. Life is dynamic, so are the global markets. It does not take into account random variables, such as pandemic events which can create global sell-offs and thus amazing opportunities to be on the right side and get that extra boost once in a while.
You will see at line 35, our End of Week Balance(872$) is just a bit above the End of Week Target(861.20$), hence the differential(% Diff.) of 1% between the two.
The graph above shows your actual account balance progress versus the target balance expected(6.50%) for the same date. It is an easy tool to visualize your account growth.
The graph above shows whether you are meeting your weekly target, 0% being right on track. With our fictive numbers, we simulated a good first period of trading, followed by a few months of recovery, then we calmed down for a while, managed to stay above water and finished just above our expected target value.
Regarding the money management behind, it’s pretty simple. It’s actually taken straight out of Earl Nightingale 30min session. You withdraw 10% of every dollar made, so for every 100$ I make, I need to withdraw 10$ and so on as the account grows.
Note: the graphs above do not take the withdrawals into account.
I have been thinking of publishing these for a very long time, just didn’t have enough time on hands to properly do it in a structured and consistent way as of this year. These watchlists will be necessary to achieve The Micros: GX100 challenge, as they will be our reference for ideas/trades generation.
We start the week on Sunday night by preparing the week for potential setups we want to look for and enter. During weekdays, we will take some time in the evening to prepare for the next day.
Lastly, I have decided to make a Weekly Stock Watchlist which I plan on releasing every Wednesdays. I have 4 different strategies which I have perfected over the last year during pandemic and am now ready to fully deploy it. Suggested minimum requirements: $4000 USD.
With 4 different strategies, the idea is to allocate 1000$ per strategy and alternate every week. First week, you allocate 1000$ for strategy 1 and keep it for a full month. Second week, you allocate another 1000$ for strategy 2 and keep it for a full month and so on.
On the Fifth week, you close all your positions from First week(Strategy 1) and you re-allocate for another 1000$. On the Sixth week, you close all your positions from Second week(Strategy 2) and you re-allocate for another 1000$ and so on.
This allows you to have a diversified portfolio and constantly shuffle your tickers. This is also a hybrid approach from value investing and swing trading.
Making this switch means I have to be at my optimal game. If there is one thing I learned from trading, engineering school and working in various high-performance industries is the importance of having a process in place.
If you can’t measure it, you can’t improve it.
If you don’t know Peter Drucker, you should. He’s known as the man who invented modern business management. He wrote 39 books on the subject and is widely regarded as the greatest management thinker of all time.
And Peter Drucker is credited with two of the most important quotes in business management.
Management is doing things right, leadership is doing the right things.
From my experience, the best tool for productivity is having a schedule and respecting it. When I used to do logistics in the aerospace industry, I always booked a meeting in Outlook with myself for 2-3 hours everyday so I could focus on doing my things without being interrupted.
Tip: never share your Outlook schedule.
Otherwise you don’t get anything done since it takes you 2 hours to go through your emails and you have another 2 hours of meetings plus lunch and breaks. That’s a whole lot of time spent on doing useless stuff.
Originally, the Pareto Principle referred to the observation that 80% of Italy’s wealth belonged to only 20% of the population.
More generally, the Pareto Principle is the observation (not law) that most things in life are not distributed evenly. It can mean all of the following things:
- 20% of the input creates 80% of the result
- 20% of the workers produce 80% of the result
- 20% of the customers create 80% of the revenue
- 20% of the bugs cause 80% of the crashes
- 20% of the features cause 80% of the usage
- And on and on…
Funny story, when I share this with coworkers, they are always surprised of hearing it. Somehow they feel like I am cheating the system by not making myself available because I choose to prioritize my work, yet am always one of the very few who delivers projects and reports as scheduled or in your inbox by 8:00AM Monday morning.
Bottom line, find a method which works for you as long as you can deliver a good quality product, not a last minute late night rush.
So how do you structure your day? We all know we need on average between 6-8 hours of sleep per night and an average of 8-9 hours of work per day, but is there something else that could guide you?
I found this. Quite interesting since it covers various personalities. You can see a strong concentration of people going to bed at 10pm and almost everyone is in bed by 12am. Wake-up hours varies from 6-8am. What I find the most interesting is that these are social behaviors which have been tried and tested throughout centuries of history, since they all lived in different eras.
The figure above picked my curiosity. I decided to make a full table in Excel to place them in chronological order with the most relevant information for each individuals.
I personally like to see the portrait of individuals, specially when we can cover ranges from year 1608 to present. It captures a special moment in an era but it also captures the present state of mind of the individual at that time on the day it was taken. Another reason why I wanted to put them in chronological order is to see how fashion and hairstyle have changed throughout the different eras.
For example, we notice from year 1600 to 1800, people did emphasize on having long hair and displaying their “silkiness” while the period of 1800’s to 1900’s seems to be more focused on the suit. Let’s not open another chapter on sociology, just pointing out a few observations.
Also, Pablo Picasso’s full name is actually Pablo Diego José Francisco de Paula Juan Nepomuceno María de los Remedios Cipriano de la Santísima Trinidad Ruiz y Picasso.
Getting back to the original topic, another interesting daily routine is the one of former President Barack Obama, who used to be the most powerful man on Earth. Don’t forget he used to run a superpower country and the global economy, not to mention being followed by the best physicians “money can buy”.
I’m a night owl. My usual day is: I work out in the morning; I get to the office around 9, 8:30 a.m. to 9 a.m.; work till about 6:30 p.m.; have dinner with the family, hang out with the kids and put them to bed about 8:30 p.m. And then I’ll probably read briefing papers or do paperwork or write stuff until about 11:30 p.m., and then I usually have about a half hour to read before I go to bed, about midnight, 12:30 a.m.—sometimes a little later.Q&A: Obama on Dick Cheney, War and Star Trek | Newsweek
I’d wake up after five or six hours and try to squeeze in a workout at whatever facility we could find (the old treadmill in the back of a tanning salon was memorable).A Promised Land | Barack Obama
This leads me to believe that going to bed at 12am and waking up at 7am offers an optimal in-between sleeping schedule. It’s been tested and proven so many times throughout history. I also don’t sleep much in general so this is actually a no-brainer.
MS Outlook is by far one of the best agenda tool I have ever experienced. Used by Fortune500 companies and with endless tutorials online, look no further.
Here, I mapped out a ~30 hours work week with a typical work day from 7am to 9pm.
See figure below.
By using this schedule, you get to work 5-6 hours a day and it accommodates North American traders who watch the US(8am-5pm EST), EU(3am-12pm EST) and Asia(7pm-4am EST) trading sessions with the last “Creative work/Preparing next day” block.
Note: trading the Asia session is optional, some only trade US/EU session in the morning. By opting-out of Asia session, you cut down 6 hours of work. Bringing your total work week to roughly 24 hours.
You will notice I start trading 30 minutes “late” at 8:30AM instead of 8:00AM and 7:30PM instead of 7:00PM, this is to avoid getting caught in news trading and potential fake breakouts/traps by the smart money, as shown below. I also do not trade on Friday afternoons. In fact, I try to close all my trades by 1:00PM on Friday’s.
You are also able to divide trading time from idea generation time which is very important to distinguish. You have to prepare your next day of trading instead of trading on-the-fly and get caught in bad moves.
You could describe it as an adaptation of the “4-Hour Work Week” by Tim Ferris. Truth be told, I don’t think anyone can make it by working only 4 hours a week, unless they are already at a level where they can outsource 80% of the work. The book was written in 2009, many of the stuff presented are outdated and are no longer viable options. I remember back then when it came out, it was around 30$ at Chapters and I would go read it for 15-30min at a time.
Well there you go guys, hope this motivates you as we are starting a fresh year.
As always, any thoughts or suggestions, leave a comment below.