We’re back at it with another exciting feature from one of our exceptional members!
If you’ve been hanging around BabyPips.com’s forums for quite a while, there’s a good chance that you’ve come across this guy. This time, we’re talking about @BaconSandwich.
He has been part of the BabyPips community for years, and we’re grateful to have been part of his journey towards becoming the experienced trader he is today. It’s his easy going and fun-loving personality that makes him such a lively contributor to the community. But don’t be fooled! Although he likes to joke around, he means business when it comes to helping newbies with tips and tricks he has tested throughout his years of trading.
He openly shares his experiences and trades with the community on his thread GBP.USD & EUR.USD- Proof of Profits Verified.
Today, we shall get to know more about him as we delve deeper into his trading approach and the secret behind becoming a profitable trader.
Without further ado, we give you, @BaconSandwich!
1. Tell us something about yourself. What are your hobbies and interests, etc.?
To be honest I’m not the type of person who has hobbies in the sense of playing a sport, solving a Rubix Cube whilst blindfolded or trying to knit as many jumpers as possible in time for Christmas. I do however enjoy going out with friends to drink and eat, if that counts? In fact I’d say that I’ve become quite the wine connoisseur (as long as it’s white and cheap).
2. From the time you’ve spent with us on the forums, what is something that the members of the community should know about you by now?
I think that the members here should know that I’m the joking type of person. I have an easy personality and will enjoy getting to know people. But, on the flip side of the same coin I also understand this trading game and the ‘typical’ expectations and realities of retail speculation.
If you start to demand gains that are high month in month out then I’m going to ask for proof - it’s as simple as that really. In a nutshell I’m all up for fun and jokes, but when it comes down to making money from this then I’d like to see proof of magical claims - I’m sure others would agree, at least I’d hope so.
3. How were you introduced to Forex trading? How has it changed your life since?
Forex trading came about by mistake - although I always wanted to trade per se. I was actually looking at spread betting in horse racing online many years ago. That’s when Google threw FX spread betting into the search results.
Without boring you to bits and 11 years later and I now trade CFD accounts in FX and know a hell of a lot more than I did back then.
It’s not really changed my life, although at times I wish I wasn’t doing this. You don’t give anything back to society and it’s entirely driven by greed. It’s also very stressful at times - I’ve often thought about dropping FX trading and investing in tangible assets like land and property, but then again I don’t have the time to learn a new skill. Saying that, property and land always appreciates if you can hold it long enough… that’s what they said pre-2008 financial crash….
4. Could you tell us more about the trading strategy you’re currently implementing? How does it work for you?
So the trading approach I take is perhaps the one thing that really captures my entire journey from the day I was introduced into FX by an online search to the day that I decided to work part-time contracting because I could now afford it.
Adaptation and quantifying variables is key. When you develop a systematic trading plan you have to cover all the bases. This means you have to understand and test all the market cycles.
You then have to be able to quantify all the variables that determine such a market phase so that you know when to adapt to the varying segments of a longer term market cycle. For example, trading in today’s markets compared to August 2008 when we crashed would require two totally different approaches, it’s as simple as that.
I’ve now stopped developing my own trading approach - because I’ve put in the work early on. The market goes either up or down and it does it either recklessly or passively. The combinations within these four underlying variables will give you every market cycle possible. Direction and volatility - that’s all there is to it, sounds simple, right? Ha, think again!
5. Have you ever traded without using a stop loss? What was the result?
Where do I start on this one…those of you who know me here in BabyPips will know that I’m an advocate of a Stop Loss- just like I prefer to wear a seat belt on a night out driving.
Yes, I’ve always used a Stop Loss - but you need to understand that this is never a guaranteed exit plan. They can fail, and they can fail miserably such as in a market crash environment. At the end of the day they are a pending market order, nothing else.
Would some of my trades come back in to a profit if I had never placed a Stop Loss? Absolutely. And, this is the risk you have to weigh up. However I know what side of the fence I sit on. There’s people who trade and hold and hope for price to return into their desired profit zone, to me that’s not trading. That’s playing with fire, and you’re going to get burnt at some point. I’ll have the hose ready to tell you “I told you so”.
Some people say that trading with a Stop Loss is akin to a death by a thousand cuts - I’d rather have one thousand attempts to come back into the game than leave everything on the line in one foul trade.
I also think that trading FX is highly risky, it’s not like buying a FTSE 100 company or index based fund where over time you would expect a one way movement up - FX pairs are generally restricted in a range of an absolute high to an absolute low over many many years. Look at GBP.USD for example, it’s basically between 1.1500 and 2.2000 since 1994. You’re going to get whipped out of trades, it happens - so get ready to deal with it.
Have I ever not used a Stop Loss, yes - every time I lost my entire account account, but that’s because of my deep-rooted gambling mentality. You have to find what suits you, right?
6. What are 3 things people should keep in mind when they’re trying to develop their own system/ strategy?
Sample size is important. Collect data from all market cycles as I mentioned previously. Yes this takes time, but it will give you a complete picture. This requires years of data, not just a few months.
Understanding how to quantify variables. If you can’t quantify a variable then how will you know in real time what to avoid and what to take advantage of based on the above sample size.
Have a decent understanding on statistical analysis and how to use Excel. it really does make everything much much easier, especially when you have a huge amount of data; the more the better in my view.
And here’s a bonus point - don’t listen to anyone else when you’re developing your system. Also stop asking for help… you learn far more by NOT being told the answer to a question and finding it out yourself - think about it?
7. What are key success metrics that could help traders determine if the system they’re following suits their trading style and personality?
This is a tough one…
I’d start with your personality first as opposed to a trading system. In life there are non negotiables, this usually relates to the time you have available for FX speculation, what commitments you have and other external factors. You need to build a trading approach around this and not the other way around. Your life should come first or the pressure and stress is going to cost you.
I also wouldn’t follow a system, I think that’s a train crash waiting to happen. When ■■■■ hits the fan you’re not going to know what to do as you did not design the system that you are “following”.
It’s also important to know that when you meet other successful traders / speculators you will come to understand that you are all basically doing the same, just with slight variations. There’s nothing new to create here, it’s all been done before. The people who are making a living from this are all pretty much doing the same analysis, trust me! Imagine all the roots from a tree underground, there’s thousands of them, but they all lead back to the tree - that’s the same with successful traders.
The successful ones have a lot in common from both personal attributes and technical understandings.
8. If you were to recommend a trading system found on our forums, which one would you choose? Why?
Quite simply, none.
I’ve not yet found a online trading system that generates constant average returns. There would be no need for this to be online as the user would be too busy applying sun cream whilst sat in Bora Bora in the French Polynesia.
9. What do you love most about the BabyPips community?
BabyPips has gone through a lot of change in the past few years. I applaud that. It’s not easy to take the risk. However driving change is what is needed to stay ahead in any business.
BabyPips helped me a lot in the early days. I’m now trying to figure out how to give something back. The problem with this FX game is that one trading approach does not fit everyone.
The individual should always lead the trading plan, not the trading plan being fitted around the individual. This is the biggest challenge.
10. Non-forex related question! What are some small things that make your day better?
Cheap white wine.
11. If you could be in the movie of your choice, what movie would you choose and what character would you play?
I’d love to be Jonah Hill, not so much for Wolf of Wall Street but more so because of 21 Jump Street!