[0:00]You are one decision away from blowing up your account. Financial market trading is the most dangerous activity the human can do. It's like a ticking bomb if you don't know what you're doing. Because you are responsible for your own decision. When you're driving, you make a mistake, there is a chance that the other driver pull back because nobody wants to get an accident. But trading nobody stops you. Your broker doesn't call you, hey, don't make that trade. You are on your own. Amazingly, my trading started 12, 13 years ago hasn't changed much. I learned opening range breakout, and I just continue trading that. Right at the market open. You can find the direction in the first 5-10 minutes and then you breakout upside or downside. What do you do to specifically find the range and then when it triggers, how do you get in? Is it Fibonacci, is it candlesticks? So let me share an example of today. Every trade that you take, you have to be able to put a name on it. Each trader should have a couple of trade books. I have two trend trading, momentum trading, and two counter trading strategies. But they have a name. Opening range breakouts, 9-20, fallen angel, rising devil. These are the name that only I understand. Every trade that you take, you should be able to put a name on it. If you took a trade and you don't know what is the name of that trade or strategy, then you probably shouldn't be in that. It's very common you see people that are trading for five years, and every year it's a new markets, new strategy, new approach. And that saying of 10,000 hours to master something, maybe they spent 10,000 hours, but they spent a thousand in different places, so they didn't master anything. How do you know when to keep pushing and keep giving something time versus this is not going to work out, you should change. We have research papers that shows that...
[1:35]Ladies and gents, welcome back to another episode. Andrew, thank you for being here. You are just about to get on a 16-hour flight back home, so we caught you in the nick of time. But what I want to explore with you many things, but the first thing that stood out to me is, if I was to design a character, the perfect trader, I'd think give him a PhD, uh, climb Mount Everest, be a top best-selling author, and you've done all of these uh accolades. But what surprised me, you still fell victim to human behavior, which is a large loss, $2 million. So despite everything seeing uh perfect on paper, you walk through a tough period. If we can explore what happened at that time, and and despite market experience, what emotions got the better of you to have this huge loss? I had two big uh losses in my trading career. One of them was in 2022, was $2 million, which was uh another one I had this April 2025 Liberation Day, that was also $2 million. But the first one was really worse because that was a big portion of my asset. And I fell into the trap of averaging down on a losing position that they say is the scene in trading that you should never add to your losing position, something that I constantly tell people, teach people, but I did it because I just didn't want to accept a small loss. And that was the peak of my trading career after pandemic, I made so much money. It was great volatility, and I was feeling I'm invincible. Like, I, I figured out, figure this thing out, nothing can beat me. This overconfidence, market always, you know, slap you in the face. Same thing happened in 2025, very similar. I just didn't want to accept that this volatility that comes with policy change would be that impactful. Eventually I accepted the loss, but funny, it was right at the bottom I accepted the loss. Same in 2022, was right capulation was at the bottom. So, interesting perspective I want to give is, I spoke to a quant trader a few months ago, his name is Rishi. And he, he kind of shared an opposing perspective, so I want to hear your view on this. He mentioned that if you get into a trade, and I'm you're buying, and then price goes lower towards your stop loss. Now, price is cheaper. And the reason you got into the trade hasn't changed, whether it's fundamental or technical, whatever bias you had, then if price is on a discount, shouldn't we add more? Is the thought he gave me, um, which is essentially what you were doing. So, why did this turn into a catastrophe when it was on a discount and right after you were liquidated, it went in your direction anyway? For my case was because I was using leverage product. Leverage changes every equation. I was using a product that was 30% uh three times leverage. So if things drop 30%, which can easily, your product goes 90%. And if that thing goes back up 30%, your product goes back 90% but from the beginning. So from $10 goes to $1, but when the Spy goes back to 30%, from $1 this one goes to $1.90. So leverage destroys you. Uh, to some product like, for example, if I trade currency, you know, or indexes and I'm looking at the longer time zone, maybe that works. But when you're dealing with leverage, you got to be very careful, or if you are dealing with something that has extreme volatility, you got to be really careful because the bounces might be take way longer than you want to be stuck in that position. Whenever I've had such a similar feeling and spoken to traders who've had that pivotal loss in their career, usually in my case as well, it was a I went on tilt. And I, I, when I look back, it's like it's like a flash, it's a blur. I don't really remember. But it was one, one day or one afternoon where I just ended up taking 15 trades, and I'm like, what have I done? But yours seems like it was across the space of weeks or months, where you had time and, and the ability to figure it out. You still have to stomach a big loss. What was that four-month period like?
[5:39]I was uh degrading every single day because I trade live in chat room and YouTube. And people saying later some of my friends told me that we could see you degrading every single day. Like, you waking up and you see the numbers is getting bigger and bigger and bigger. And then when you accepted that loss, it was just a relief. They could, they could say that to me. Uh, for me, it started as a day trade. I'm mostly day trader. And I just didn't want to accept $10,000 loss. The next day, it was $40,000, $50,000, next week. I just didn't want it. which just the numbers got bigger and bigger and bigger. Um, and I was high of the all-time high. You know, you sometimes you get this recent bias that you think market has to go up every single day. And no, it's not and sometimes six months can go down. And that's exactly what happened. I remember when I've been in those positions and then the market blesses you, it comes back to break even. And you were wishing, all I want is back to break even. When you get back to break even like, but it could go up now, and you keep it this way. Yeah. So one thing that you asked me off camera just now was how do I define the difference between gambling and trading? So I'm going to put that question back to you. How would you define the difference and your behavior in these times, would you say you're still acting like a trader or was did you end up being a gambler in that situation? I mean, my answer is exactly what you said before the camera. I think the gamblers don't have any positive expectancy. They're dealing in a completely random environment and they cannot have a system or edge that they over time they make money. Traders also they're dealing in the random environment that they have no control over, but they try to build a system that they can have this positive expectancy. Like, for example, you mentioned Casino and this roulette uh there is uh, you know, black and red and then you can do bet 50/50. But in reality, there are two um also green slots and those are casino edge. So you can win but over long term, Casino is always the statistically win. That's the edge that they have. So traders have to build that system and that system is different from person to person, from instrument that they're trading, from day traders to swing traders, from crypto traders to stock traders, future traders to currency. it's completely depends on people as well. With that being said, a definition of just a trader is, you have this positive expectancy, and the only way to get it is, you keep placing trades that are part of the plan because at the end of the year that's edge will appear just like for the casino. Where they might have a gambler come in, bet their life savings and the gambler wins. So casino has a huge loss that day, but at the end of the year they're still up. So, when I compare it to this analogy of a casino, then I think, okay, we just got to think long term. But then as you mentioned now, recency bias. That becomes challenging now, because you know if I got to keep placing trades and I back test it and I've got an edge here, but it just takes six months for it to really pick up the pace. But then you have four losses in a row, you feel the recent losses more than your, your North Star, which is your edge. How do you navigate such emotions over the decade plus you've been in the market? I think simulation is the most important part. If you trade in a simulation for three months, then you believe in your system. So if I press live trade four times in a loss, then it's really dreadful. I might not be able to continue. But if you do that three months or six months in simulation, and you know that it's going to come back, that system is tested, you know, forward test it, not only back test, but you actually forward test your own execution as well, then it's much better. That's why after simulation we always recommend, I'm sure everybody recommends, go small size before you go, you know, all of your full position to build that trust in yourself and in the system that you have practice. What is the most common psychological issue you've seen in traders that you've, you've been around? You mentioned the uh tilt. I think that's one the thing that people don't accept the loss and try to make it back and try to make it personal rather than think statistically. Uh, I think that's the most common. Another thing that uh I recently had a conversation with Dr. Brett Steenbarger, which is a very famous psychologist author. He said a lot of people blend their system over psychology. And when I looked at them, he said that a lot of people are struggling and then they say my psychology is not right. But when you look at their system, their system is not right. So you have to make sure that you have the good system before start blaming yourself. Do you think it's harder to fix a system or do you think it's harder to fix the mind psychology? I think fixing mind is harder. Like everybody knows that what a good diet is. Everybody knows that they should exercise, but not everybody does that, because that discipline is, you know, difficult.
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