Andrei Knight ?Trading Forex for a Living? interview
Andrei Knight is a highly sought after speaker and coach for professional traders and individual investors alike. His first book will be called ?Trading Forex for a Living: A Practical Guide to Achieving Financial Independence with the Foreign Currency Markets?. He is interviewed here for www.tradingdiary.co.uk.
1. How would you describe your job?
My primary focus is on earning the best returns I can for my investment clients, while carefully monitoring risk exposure, and increasingly I?ve devoted more and more time and energy to helping other traders succeed through the Knight Trading Academy and fxKnight.com.
2. What made you decide to write a book?
One of the most frequently-asked questions from visitors to our website is ?Can you recommend a good book for me to start out with?? I often catch myself recommending two or three titles, as I cannot think of one which is really ?complete?. So I set out to write the book I wish I had when I was starting out, one which arms traders with all the tools needed to succeed in the markets. The very same strategies I use to manage my clients? funds.
3. There are loads of forex trading books out there. What makes yours different?
So many books focus on theory and leave out specific strategies, while others present ?systems? which are mostly rules for entries and exits, with minimal mention of money management. I lay this business of forex bare, pointing out the pitfalls to avoid, and help readers create a solid plan for leaving their jobs and transitioning to trading full-time. ?Trading Forex for a Living? features not only more than 100 charts and trading examples, but also detailed coverage of the ?for a living? part, including topics such as psychology, setting up a home office, trading other people?s money as a business, and balancing work time with family.
4. Your book jacket says that 95% of traders lose. What percentage of people who read your book do you think can be winning traders?
I?ve trained hundreds of traders over the years, and can think of perhaps three or four former Pro members who gave up and went back to their old jobs. In almost every case they left us in favor of jumping into live trading after only a month or two of training and practice, thinking they knew everything. I think anyone can succeed at this if they put their mind to it, devote the time to learn, and the effort to practice.
5. What will your book teach the reader?
How to be a consistent, confident trader. Consistency is the cement which holds everything else we?ve discussed to this point together. It will also show them how to supplement their income with trading, make a full-living as a trader, or even start a business and trade for others.
6. What are the typical trading mistakes that you see people making?
Not sticking to their system and trading plan, and losing all faith in themselves and their analysis the moment the markets tick a bit against them. The cure for this is to do more long-term, scenario-based analysis, and to resist the temptation to jump into or out of trades mid-candle. People don?t realize it, but if you don?t wait for the candle to close it can still change back and forth ? so this is like having NO system at all!
7. How did you first get interested in trading?
My father traded the stock markets here and there, and he once told me that if I wished to understand anything which happened in the world I only needed to ?follow the dollar?. I am someone who loves keeping up on news and current events, and trading provides me with a way to act on my opinions of what I see happening around me. If the world is indeed a stage as Shakespeare once said, then following the financial markets is like having a front row seat. You know you?re on to something when you catch yourself a bit sad as things begin to wind down on a Friday afternoon, and actually looking forward to the following Monday.
8. What did you have to go through before you realized that you were good enough to be able to give other people advice on trading?
I was more or less pushed into it, and felt far from ready when I first started. People kept asking for help and advice, and so I shared what did and didn?t work for me. Hearing about other people?s success then served to encourage me, and as more and more people used the system and added their experience and feedback, its evolution naturally speeded up. What we have today is the result of more than six years of testing and tuning.
9. Are you still an active trader? Are you placing trades using your own money?
I invest in the fund that I manage, so whenever I make a trading decision with my clients? money my own is on the line as well. We also employ ?high watermark? accounting, so if we ever have a losing month, we don?t consider money earned to return back to break-even as a gain for calculating commission. We only get paid when we make money for our clients.
10. Do you think that that trading automation is making it harder for individual traders?
Only in the sense that it gives them false hope. I?ve seen a bank that I was working for invest $2B in a system to help them calculate and manage risk exposure in real-time; it did not place trades on its own. Banks haven?t fired their human traders. Yet people still believe that a $99 piece of software is going to be the answer to all their problems. Software can help automate some trading tasks, but let any robot run long enough unattended and it will eventually empty your account.
11. What Japanese martial arts were you studying? How did studying them help you in the financial markets?
Bujinkan Taijutsu. The main thing it taught me is patience. Let the opponent show you their intention. Miyamoto Mushasi, perhaps the greatest swordsman in Japanese history, once said, ?he who moves first often loses?. Another really useful skill is flexibility ? not being trapped in a single, rigid line of thinking but being open to clues from the environment around you and being able to adapt your strategy as required.
Trading Forex for a Living is being published by Harriman House and will be released during January 2011. For more about Andrei Knight you can visit his website at fxKnight.com.