How to Trade Like The Big Banks | Smart Money JP Morgan Trader Kathy Lien
Summary
TLDRIn this insightful interview, successful trader KY Ly, formerly of JP Morgan, shares her trading strategies and experiences. She emphasizes the importance of multi-time frame analysis and not obsessing over risk-reward ratios, advocating for a balanced approach between technical and fundamental analysis. KY discusses her daily routine, the key differences between retail and institutional traders, and her upcoming book on prop trading secrets. She also offers advice on risk management and handling the psychological aspects of trading.
Takeaways
- π Successful trader KYLY shares insights on trading strategies and time frames, emphasizing the importance of multi-time frame analysis.
- π KYLY's trading signals are based on the 1-hour time frame, but she checks higher time frames like the 4-hour and daily charts for confirmation.
- π As a former JP Morgan Chase trader, KYLY's daily routine involves trading twice a day, focusing on the New York open and the Asia open sessions.
- π KYLY recommends retail traders to use a combination of technical and fundamental analysis for successful trading, as institutional traders also focus on both.
- π Bank traders often trade on momentum and mean reversion strategies, which retail traders can replicate by following market sentiment and looking for price corrections.
- π― Risk management is crucial in trading; KYLY suggests a two or three-tiered exit strategy to bank profits and protect investments.
- π KYLY's book 'Day Trading and Swing Trading the Currency Market' is a valuable resource for those interested in learning about fundamental analysis.
- π€ The major difference between retail and institutional traders is the time horizon and level of accountability; institutional traders have a more conservative approach due to their longer holding periods and need for justification.
- π Institutional traders may use technical indicators for observation but base their strategies on arbitrage opportunities, market misalignments, and global macro factors.
- π‘ KYLY advises retail traders to focus on trend-following strategies and establish clear trading targets for better discipline and psychological management.
- π KYLY's upcoming book 'Prop Trading Secrets' will feature interviews with successful proprietary traders, offering insights into their strategies and the modern landscape of prop trading.
Q & A
What is the primary time frame KY uses for her trading signals and why?
-KY primarily uses the 1-hour time frame for her trading signals because it reflects her personality and trading style. She is not a scalper or an aggressive day trader, and she usually holds positions for a day or two, maximum.
How does KY approach multi-time frame analysis and what higher time frames does she check?
-KY is a strong believer in multi-time frame analysis. Although her strategy triggers on the 1-hour time frame, she always checks higher time frames like the 4-hour chart and the daily chart to ensure she is not buying into resistance or selling into support.
What is KY's daily routine as a trader?
-KY's daily routine involves getting up by 6:00 a.m., doing research, analyzing data from overnight markets, and looking at the news flow. She then identifies trading setups and decides whether to buy or sell a currency pair. She trades twice a day, during the New York open and the Asia open.
How does KY define the Asia open and when does she typically trade during this session?
-KY defines the Asia open as 8 p.m. New York time. She usually trades during this session and sometimes carries her positions overnight, often finding her profit targets hit or half her position reaching a profit target by the next morning.
What key strategies or techniques do big banks employ in Forex trading that retail traders can also utilize?
-Two popular ways that bank traders trade are trading the flow, where they ride the momentum of large transactions, and trading mean reversion, which involves betting on prices returning to average levels after significant moves.
What is KY's recommendation for retail traders regarding technical versus fundamental analysis?
-KY recommends using a combination of both technical and fundamental analysis for successful trading. Fundamentals help determine the direction of trades, while technicals help with entry and exit points.
How does KY approach risk management in Forex trading?
-KY suggests using a two or three-tiered exit strategy, where she might sell half of her position after it has moved a certain amount, trail her stop to break even, and then let the rest of the position ride for potentially larger moves.
What is the major difference between retail traders and institutional traders, according to KY?
-The major difference is that institutional traders tend to hold positions for longer periods and have to justify their trades to higher-ups, making them more conservative and less impulsive than retail traders.
What technical indicators do institutional traders specifically use, and how do they base their strategies?
-Institutional traders often use technical indicators for observation purposes rather than as the basis for their strategies. They typically base their strategies on arbitrage opportunities, market misalignments, or actual data.
How does KY handle the psychological aspects of trading?
-KY handles the psychological aspects of trading by setting a weekly trading target, which helps her focus and manage her emotions. Once her goal is met, she becomes more conservative to protect her profits.
What advice does KY have for retail traders on how to improve their trading strategies?
-KY advises retail traders to focus on trend-following strategies, establish trading targets, and find the right time frame that suits their lifestyle and personality. She also suggests not obsessing over risk-reward ratios and instead focusing on higher accuracy trades.
What are some of the common mistakes retail traders make, according to KY?
-Some common mistakes include not fully understanding trading strategies, revenge trading after losses, being too greedy with profits, and not knowing how to protect profits with a defensive mindset.
Outlines
π Introduction and Trading Strategies
This paragraph introduces the guest, KY, a successful trader featured on Wall Street Warriors and a former JP Morgan Chase trader. The discussion begins with KY's trading time frames, focusing on the 1-hour time frame but emphasizing the importance of multi-time frame analysis. KY shares her personal trading style, which involves holding positions for short periods, typically overnight to a day or two. She also talks about her daily routine, which includes trading twice a day during the New York open and the Asia open, and her approach to analyzing market movements and news flow.
π Key Strategies and Techniques
KY elaborates on the key strategies and techniques used by big banks in Forex trading that retail traders can also utilize. She mentions that bank traders often trade the flow, taking advantage of incoming flow from customers and smart money. Retail traders can adopt a similar philosophy by trading with momentum and market sentiment. KY also discusses mean reversion, a strategy where traders anticipate a return to average conditions after significant market moves. Additionally, she talks about the importance of combining both fundamental and technical analysis for successful trading and recommends resources for learning about fundamental analysis.
π οΈ Risk Management and Differences Between Retail and Institutional Traders
In this section, KY discusses her approach to risk management, advocating for a two or three-tiered exit strategy. This involves taking profit on half the position when the move is in favor and trailing the stop on the other half. She contrasts retail and institutional traders, noting that institutional traders tend to hold positions longer due to their need to justify trades to higher management. KY also touches on the differences in focus between retail and institutional traders, with the latter often focusing on arbitrage opportunities or global macro trading rather than technical indicators.
π‘ Fundamental Analysis and Global Macro Trading
KY emphasizes the significant role of fundamental analysis in her trading strategy, helping to filter out good signals from poor ones. She discusses how institutional traders may use technical indicators for observation but base their strategies on arbitrage opportunities or global macro factors. KY also shares her experience with global macro trading and recommends following intelligent institutional-level analysts on social media platforms for retail traders looking to learn more about fundamental analysis and global macro trading.
π Overcoming Trading Challenges and Career Reflections
KY shares the biggest challenge she faced in her trading career, which was finding a consistent and trustworthy trading strategy. She talks about the importance of understanding when not to trade and building confidence through a deep understanding of one's strategy. KY also reflects on her time at JP Morgan, highlighting the influence of inter-market analysis on her trading approach. She shares her current activities, including writing a book on prop trading and her plans to focus on expanding her business in Asia.
π Learning from Successful Traders and Social Media Presence
KY discusses her upcoming book, which features interviews with successful proprietary traders, sharing insights into their strategies and commonalities. She also talks about her previous book, 'Millionaire Traders', and encourages traders to learn from diverse trading strategies. KY shares her social media handles and warns against scams, emphasizing that she will never ask for money on any platform. She invites traders to follow her on legitimate channels and offers her assistance in verifying the authenticity of accounts claiming to be hers.
Mindmap
Keywords
π‘Mean Reversion
π‘Multi-time Frame Analysis
π‘Risk Reward Ratio
π‘Global Macro Trading
π‘Fundamental Analysis
π‘Position Holding
π‘Market Manipulation
π‘Proprietary Trading
π‘Technical Analysis
π‘Risk Management
Highlights
KY ly, a successful trader and former JP Morgan Chase trader, shares her insights on trading strategies and time frames.
She emphasizes the importance of multi-time frame analysis, not just focusing on one time frame.
KY's trading signals are keyed off of the 1-hour time frame, but she always checks higher time frames for confirmation.
Her daily routine involves trading twice a day, at the New York open and the Asia open, with a focus on research and analysis.
KY discusses how retail traders can replicate bank traders' strategies by trading with momentum and looking for mean reversion.
Technical analysis and fundamental analysis should be combined for the best trading results, according to KY.
She shares her approach to risk management, which includes a two or three-tiered exit strategy for trades.
KY highlights the differences between retail and institutional traders, noting that retail traders are more impulsive and aggressive.
Institutional traders focus on arbitrage opportunities and global macro trading, rather than technical indicators.
KY recommends following smart institutional level analysts on social media platforms for learning about global macro trading.
Fundamental analysis plays a crucial role in KY's trading strategy, helping her filter out good signals from poor ones.
She advises traders to establish a weekly trading target to improve their psychology and focus.
KY shares her experiences and lessons learned from her time at JP Morgan, emphasizing the importance of inter market analysis.
The biggest challenge she faced in her trading career was finding a consistent, trustworthy trading strategy.
KY's upcoming book, 'Prop Trading Secrets', will feature interviews with successful proprietary traders.
She warns traders to be aware of scams and fake accounts on social media and other platforms.
Transcripts
a lot of banks and professional funds
will trade what we call mean reversion
and this is maybe type of a little bit
controversial I would not obsess over
risk reward ratio hey what's up guys so
today we have KY ly and she is a very
successful Trader you might have seen
her on Wall Street Warriors and she's a
former JP Morgan yes Chase Trader and
she has a lot to share us today so the
first question I have for KY is since
you have traded with the big Banks Forex
and many other asset classes so what are
the time frames that you trade and what
do you use them for you know that's a
very good question um Karen I get this
question a lot which is you know what is
my favorite time frame and I would have
to say you know my trading um signals
and the trades I pick are keyed off of
the 1-hour time frame but just because
my strategy Triggers on a 1our time
frame doesn't mean that I look at the 1H
hour time frame alone I'm a strong
believer of multi
time frame analysis so even though I may
have um the trigger on a 1-h hour time
frame I will always always check the
higher time frames the 4our chart the
daily chart to make sure I'm not buying
into resistance or selling into support
I think those are very basic tenants
that everyone needs to follow you can't
just focus on one time frame and you
know along those lines I think that the
1our time frame is reflective of my
personality I'm not a scalper I'm not an
aggressive day trader I'm also you I
don't hold positions for weeks sometimes
I hold positions for overnight for a day
usually that's about it sometimes for
two days and but that's the maximum I'll
hold my positions for a lot of my
followers would like to know as a former
bank Trader what is your daily routine
like right now well I no longer trade
for a bank um so basically the schedule
that I have um is very different I trade
twice a day I trade the New York open
and I trade the open so at at the New
York open I'm usually up um by you know
6:00 a.m. and I'm doing my research I'm
looking at the opportunities I'm looking
at the analysis and data that happened
overnight I'm looking at what the
movements in the uh overseas markets are
and then um after looking at the news
flow and the data I will look at um my
trading setups and um I'll look at
whether you know I have a setup to buy a
currency pair or sell a currency pair
and then usually I'll take this tra and
I'll hold it into the New York Market
open now but usually almost always I
close my trade in the New York session
trade by the London close the other um
time that I trade um is at the Asia open
so for me at the Asia open is defined
differently for everyone some people
Define as 5:00 P p.m. New York time some
people Define as 78 for me I Define it
as 8 um New York time usually before
that um I'm just kind of seeing if
there's any big moves in the markets or
data that's coming up but typically with
the Asia session trades I've already
watched the markets throughout the New
York session so nothing new is really
happening between the New York session
close which is 4:05 p.m. New York time
and the Asia open so I'm just seeing the
calendars to see if there's any um thing
that's going to affect my trade on the
calendar and I love trading the Asia
session I think we talked about this
before I love to trade the Asia session
because those are usually my biggest
movers and those are usually my most
generous trades so for the Asia session
trades I'll lay them on at um 8:00 p.m.
New York time and often times I will
carry them over um overnight and you
know more often than not when I wake up
in the morning the profit targets are
hit or half my position has hit a profit
Target I'm trailing my stop on the other
half of the position so those two um are
kind of my clearest time frames where I
have my setups to trade okay so this is
what a lot of retail Traders would like
to know okay what are some of the key
strategies or techniques that big Banks
employ in Forex Trading that individual
retail Traders can also utilize it's
kind of funny you asked me this question
because I actually had you know a while
back um did a whole presentation on this
in Singapore maybe someday I'll do it
again there are many techniques that
bank Traders trade that um R Traders can
replicate obviously not in the same way
but the idea is the same the two most
popular ways that bank Traders trade is
number one um they will trade the flow
meaning that um often times you know I
used to make markets um in currencies at
JP Morgan Chase and we would get um
incoming flow from the customers the um
mutual funds uh the cor corporates who
are you know taking transactions and
offsetting it and often times what will
happen is that the bank Traders if they
hear that a big company is selling let's
say 20 million euro dollar they'll ride
the flow you know especially if it's
what we call um smart money where it's
not necessarily a corporate but maybe a
fund who may actually know what they're
doing um they may we will ride the flow
meaning that we will sell in conjunction
with that now that that is not something
that retail Traders can replicate but
what you can do as a retail Trader is
take that same type of philosophy which
is that the best traits are the ones
that are on the side of momentum you
want to take the trades where the the
momentum and the sentiment of the market
the overall Market is on your side so
for example if um I'm waking up at the
New York open and I've seen that euro
dollar has fallen significantly for
whatever reason during the European
session a similar flow trade would be to
sell the euro dollar assuming there's
going to be continuation when New York
Traders come onto the desk the other way
that you can replicate Bank strategies
is that a lot of banks and professional
funds will trade what we call mean
reversion very fancy way of saying just
getting back to the average right so
when you have a huge move is an
assumption that you know the move won't
last it will correct and that the
overbought oversold this will ease and
return back to normal conditions
particularly if you're trading on a very
short-term basis so you can take that
similar type of idea and um you can look
at the standard deviations you know I
love to look at Binger bands and when
prices get to the third standard
deviation that means that you're three
standard deviations away from average
which is very abnormal so if it starts
to reverse and you always want to wait
for it to start to reverse first there's
a good chance that that reversal could
be more significant getting back to the
um usually called the middle line the 20
period moving average so that's another
way that you can replicate the same type
of philosophy that bank Traders do a lot
retail Traders like to debate that
technical analysis is better than other
forms of analysis whereas the
institutional traders that I came across
that I talk to they all focus a lot on
fundamental analysis so which approach
do you recommend to retail Traders
technical or fundamental analysis and
why I think that you cannot just trade
on one or the other you absolutely have
to use a combination of both if you want
to be a successful Trader because if you
think about it even if you can't really
understand fundamental analysis and um
only the charts make sense to you
minimally you have to know what's on the
calendar you have to know you know what
why the market wants to buy US dollars
or sell US Dollars and whether the
Federal Reserve is going to look to
lower interest rates um or raise
interest rates you have to minimally
know the very basic that you can find
you know on the the front page websites
of cnbc.com or bloomberg.com at the same
time though just because you have a
theory of where something should go
doesn't mean that's just going to go
that way at the exact same point in time
that you decide to put on a trade so
it's very important to combine your
fundamentals with your technicals um in
order to select the best trades I like
to use fundamentals to determine a
direction and technicals to determine
the entry and exits retti Traders they
tend to ignore fundamentals right I
think they try really hard I think that
um I get a lot of questions from retail
Traders wanting to learn fundamentals
but it's not easy if you put a little
time to it and if you want to take
trading serious seriously it's not that
hard as well and it does take a little
work if you want to make money even
though a lot of them automatically go to
technical analysis the sheer amount of
Interest I have in fundamentals shows
that people are trying and they're
recognizing the importance of it by the
way K's book is really good when it
comes to learning fundamental analysis
thank you
the one with the white color it's called
day trading and swing trading the
currency Market it's the one I'm
actually the most proud of but it's also
one of the oldest ones I think we should
ask her to write one more book for us so
how do you approach risk management in
Forex Trading especially in relation to
the methods used by Major financial
institutions now through all my years of
trading the smartest way to manage risk
is um to recognize that the immediate
moves that you get in the market um may
not be as generous as you may want and
sometimes the movements aren't enough to
hit your ideal targets so I think the
best way to trade especially when it
comes to trading Forex is to use a two
or three tiered exit meaning that you
enter your entire position you maybe
sell half of your position when it's
moved by the amount risk Trail your stop
to break even and then let the rest of
it ride and potentially participate in
the bigger move so you want to be able
to bank the greens you want to be able
to collect profits along the way before
actually wait for those larger moves CU
sometimes it'll happen sometimes it
won't but you want to be able to still
Bank profits along the way um as you get
towards those trades Kathy you've been
in the trading education industry for
many years now you've been trading for
banks too what do you feel is the major
difference between retail Traders and
institutional Traders well I think the
major difference between retail Traders
and institutional Traders is that um
with institutional Traders um usually
they end up holding the positions for a
lot um longer than retail Traders
because they need to justify the reason
why they're taking their um trades to
the risk management desk to their
managers no you know a whole ladder of
higher ups and they need to have sound
reasonings for the entries and exits
whereas retail Traders are much more
impulse driven and the only one they
have to answer to Is themselves and so
they tend to be much more impulsive and
get in and out of Trades more quickly
than institutional investors or Traders
more aggressive right yes definitely I
think retail Traders are far more
aggressive more impatient and more
impatient because institutions you know
before they take every trade they have
to have a a good reason for it and they
have to have a good reason that they be
able explain every process and every
part of the process to many layers of
management which that accountability I
think you know makes them more
conservative do they tend to focus more
on fundamentals or technical analis um
usually it's uh two things usually it's
either um some type of you know arbitr
opportunity and this they're hyper
they're focused primarily on the
Arbitrage opportunities or they're
focused on global macro I mean they're
not going to be trading off of moving
average crossovers they're going to be
trading on usually deviations of the
markets that reminds me of one question
a lot of retail players always ask this
is what indicators do the institutions
use technical indicators specifically
every institution is different and I
think that a lot of times the technical
indicators that they use are only
technical indicators that they use just
for observation purposes um it's not
what they base their strategies off of
so most of the time they will base their
strategies off of arbitr opportunities
how misalignment in markets how
different things are happening or you
know actual data the technical analysis
is just if they're doing nothing they're
sitting there they'll just maybe monitor
the trades using some technical analysis
but I don't think that it's ever going
to be the reason why they take the trade
maybe they may use an excuse as a reason
to get out of a trade but their
justification for getting in trade needs
to be much bigger and more welldeveloped
than just indicators K you mentioned
about global mcro trading which I've
done a whole seminar on this recently to
it's related to fundamental analysis in
a way so a lot of retail Traders want to
learn fundamental analysis Global macro
trading which is what J Source use and a
lot of hedge funds use so what do you
recommend them to do to learn all these
uh sort of more technical stuff you know
there's a lot of very smart people on
Twitter you know now X or ex formally
Twitter um there's a lot of very smart
Bank analysts on there the name slips me
I think it's VJ Patel effects he's very
very smart lots of you know correlation
charts my point is if you want to learn
more first of all you have to start
reading some of the major fundamental
Publications but then also follow some
of the you know more intelligent um
institutional level um analysts that are
on on X like kobeski letter is also very
popular you know maybe I can share with
you a list um there's that's a really
good way to learn because I think that
you know they are pointing you at two
things that are interesting to them that
they are looking at on a global macro
level um I remember you said that you
guys should just follow whoever I follow
on yes but my follow list has now gotten
much longer includes random things
irrelevant stuff okay but I think you
know maybe I'll do like a filtered I
have to figure out what it's possible or
not like a filtered list that I can put
just um the financial influencers on
there yeah okay so this is a great one
okay what role does fundamental analysis
play in your Forest trading strategy and
how does it compare to the approaches
taken by institutional Traders well
fundamental analysis plays a huge role
in my my selection of Trades because you
know you have a lot of with any
technical setup you have a lot of
signals and you you'll have a lot of
false signals and fundamentals help me
filter out the good versus um poor
signals the fundamentals are determined
by you know what's happening in each
economy what central Bankers are doing
and you know a lot of the big stories
now with um
institutionalsales what yields are doing
how you know the economic indicators are
doing but they will not be parlaying or
they may not be parlaying that with a
with a technical strategy and previously
we talked about how they will most
likely be looking at deviations in the
markets or relative value plays and they
are looking at much longer term um
positioning or shorter term Arbitrage
opportunities which is different from
what I do so how do you handle the
psychological aspects of trading such as
dealing with trading emotions and
maintaining discipline especially when
emulating the strategies of
institutional Traders well training
psychology is always the hardest part
for um many Traders the thing that made
the most biggest difference for me is
when I established a weekly trading
Target for myself by establishing a
weekly trading Target it's kind of like
goal setting right just goal setting in
life in general once you set a goal you
kind of focus on the goal and focus on
achieving it a lot of times with Traders
um their only goal is to make money and
they don't know how much they don't know
you know when it'll happen or how
quickly it'll happen they just want to
make money period but you know when you
have a very fixed goal in a certain
period of time like a weekly goal then
you know what ends up happening is the
beginning of the week I will be more
aggressive towards working towards my
goal and once my goal is hit I'll be
much more conservative and you know in
terms of protecting my profits and then
adding to it gradually you know when I
started doing that that's been a really
transformational aspect to my trading
and my own psychology because I've been
able to focus on not only the trading
setup but also you know really banking
Pips on a week toe basis so KY if you
can start your trading career all over
again what would you do differently well
if I could start all over again I would
definitely follow a couple of things
number one I would definitely start
almost immediately looking at Trend
following strategies the trend is your
friend and it's really really true while
you know many people are tempted to pick
tops and bottoms you'll quickly realize
that much more generous trades much more
relaxed trades um and easier trades
happen with the trend so it's much
better to look for opportunities to um
join the trend than try to fade it a lot
of traders that come in trying to fade
it and I I'll be honest you know I tried
to do that in the beginning too one of
my favorite strategies for a long time
which I still like is my Bullinger band
turn strategy but you know following the
trend and looking for um momentum based
trades will make your life a lot easier
and then I would establish a trading
Target very quickly because having a
Target gives you a goal and gives you
something to focus on and I would also
you know start figuring out what is the
right time frame um for you to trade
because it should really be based upon
the type of person you are whether
you're um are someone who's more focused
on looking at the markets you every
couple of minutes then you know maybe
you should be more of a day trader if
you have a very demanding job and you
can't follow the market Market very
closely then you know you want to make
sure that you want to focus on being a a
swing Trader and the other thing is I
would not and this is maybe kind type of
a little bit controversial I would not
obsess over the um risk reward ratio
yeah I have worked with so many Traders
on an Institutional and an individual
retail level and even though um everyone
is taught 2 to1 3 to1 risk reward I will
tell you that the most successful
Traders are the ones that have one to
one risk reward on their first level and
then they Trail their stop on their
second level because you know there's a
huge psychological drag if you hit loser
loser loser loser before you hit that
one winner and if you focus on high
accuracy trades and you lower that
initial risk reward ratio it's going to
give create a much more positive
experience for you and much more
positive experience for your overall p&l
and I think that's much healthier for
you as well as everyone who you know may
be involved because you won't be taking
it home for example so um I think you
know those are things I would you know
wish I had known right away like go
focus more on higher time frames or
lower time frames because a lot of
retail Traders they love the small time
frames because it gives them a lot of
Trad so what do you think about that I
have never really traded 5 minutes or 15
minutes for me I've almost always
focused on 1 hour and up I cannot say
that the lower time frames um are
ineffective because there are plenty of
people who trade on the L lower time
frames but I think it's really about you
know figure out what works um for you
and your own personality um because I
realized that you know I like to watch
the market but not that much what the
important lessons that you have learned
from your time at JP Morgan that have
shaped your perspective on trading I
would have to say that my entire
perspective on trading is based upon my
time at JP Morgan because when I joined
JP Morgan although I was on the market
making desk initially when uh they
merged with Chase I joined the cross
markets prop trading desk and what that
meant is that I learned how um other
markets influence the Forex market and I
also learned how to look at other
markets um as a guide to be able to
determine what's going to happen in the
Forex markets and even to this day it um
is the way I trade it's the way I you
know teach people to look at you know
bond yields and stocks and all stuff
like that because it came from what I
learned in the very beginning so I think
you know it's been significantly
influential in the way I trade these
days inter market analysis yeah yeah
specifically which is super important a
lot they don't focus enough on that so
right we have couple of questions from
our subscribers on this channel so what
are the biggest challenges you have had
in your trading career and what did you
struggled with the most and then how do
you overcome them the greatest challenge
was really trying to figure out a
trading strategy that worked
consistently that I could trust it took
me a long time you know if you've ever
um attended my presentations or followed
my careers you may have learned a number
of different strategies from me but I've
been trading my current strategy for at
least eight or nine years now and you
know I become very very comfortable with
it I trust it I understand when it works
when it doesn't work I understand
exactly when to trade it when not to
trade it took me a long time to figure
that out and it took me a long time to
understand I think it's it's very very
important for you to understand that
knowing when not to trade is just as
important as knowing when to trade and
um that's a part of understanding your
strategy and it took a lot of time for
me to truly figure out why certain
sessions were so good for me and certain
s periods of time was not when I
overcame that I think that built a lot
of confidence because I think a lot of
Traders aot lot of the problem they have
is that if they hit a a losing streak
they um start to worry and they wonder
you know how can they get the confidence
to get back in and keep Trading
and I think that confidence is built in
truly understanding your strategy inside
and out and understanding how it
performs on a long-term basis so that
even if you have a losing week you can
step back and see the longer term
performance and realize that this this
happens there will always be a losing
day a losing week a losing session a
losing month but as long as it's still
you know within what it should be doing
and that it's happening for a reason you
can keep trading and trusting your um
strategy you've done it for a very long
time what are the major fundamental
drivers economic indicators that you pay
attention to the most the number one
most important economic data or numbers
that you should pay attention to are the
ism and PMI numbers now they may not be
the most Market moving but the reason
why they're so important is first off
they are usually the first pieces of
economic data to be released releas for
that particular month so if it's March
you know they'll be coming out with the
March numbers those numbers will come
out first and they can be used as
leading indicators for many other
numbers like non-farm payrolls
employment reports retail sales reports
inflation reports so even though not
many people follow them I think that
they are um the most important um
economic indicators to follow even
though they may not also be the most
Market moving so a lot of the
institutional Traders hedge funds they
like they they often use boomberg
and personally for you which trading
platform do you normally use so I also
um had a Bloomberg terminal for a very
very long time but then I realized I
really don't need it anymore because a
lot of the information flow is just as
quick on um a lot of the um relatively
inexpensive platforms like um new squawk
or financial juice and it's also very
very quick on X as well I think that you
know with technology with time
everything has become a much more Level
Playing Field field and you can get a
lot of the information that I would
normally pay you know thousands of
dollars a month for completely free and
I think minimally you should be watching
Financial juice and new squawk um
because I think you know they're very
fast they're very good with you know
giving you the information that you need
to know quickly so what do you normally
do on those days when there are no
trades if you follow KY on Twitter you
probably know she goes on vacations
aot on those days when there's no trats
yes I do go on vacation a lot um the
thing is that what's the definition of
no trades right I trade pretty much
every single day um the Asia session um
and the New York session with the
exception of um ahead of major event
risk like the fomc rate decision or
nonfarm payrolls and the inflation
reports I won't trade those days but the
rest of the time when there's no data
that could still provide plenty of
opportunity because sometimes when you
do have um event it's actually more
complicated because um you have a lot of
hesitation in the markets before you
actually get some clear Direction so you
might actually have some a lot of false
signals so sometimes when there's
nothing going on those are the best
opportunities because you have the
market really digesting what happened
before um in order to really you know
decide where it wants to go I like I
said understand my setup inside now and
there I don't trade specific um events I
don't trade specific times the day it
usually works pretty well but I'll have
to you know say that if my trade is
showing that's not working out and the
Market's very Consolidated um and that
truly is nothing going on even though I
may have a trade on I won't hesitate to
close it early either so K you've been
teaching for many years now what the
most common mistakes that retail Traders
make there are so many common mistakes
um I can't even isolate yeah there's so
many different mistakes I think a lot of
retail Traders they won't truly
understand what and when when they're
trading so what they'll do is they'll
just learn a setup from somebody and
they'll just think that it's going to
work you know all the time or they'll
buy EA from someone thinking that it's
going to work all the time they don't
take the time to really understand the
trading strategy and understand that
nothing can work 100% of the time and
another mistake is that I often see is
um Revenge trading you know they have a
losing trade they get back in and they
try to double their size in order to win
it all back and you know that can also
be very very problematic and another
mistake that I see is that they tend to
be too greedy with their profits so if
you imagine you're you're a day trader
right you say that okay I want to have a
um 20 or 30 probably a 30 point stop on
my trade and I've been taught to achieve
a 2 to1 risk reward minimum so they're
trying to go for 60 Pips in you know the
three or four hours they're sitting
there to trade it and they might not get
there and so and too often I would have
to say the most common mistake is that
they let the trade move in their favor
by a good amount and then they just
watch it completely reverse and then
move into losses and I think not
understanding how to protect your
profits and have a defensive mindset is
also one of those very common mistakes
that Traders make what's your opinion
about Market manipulation I think the
Forex Market is huge I think that market
manipulation um is very uh hard given
how much um movement and flow and
participation that's happening um in in
the market itself now you know sometimes
you know you may have some Brokers doing
things here or there but in general
though the market is very very big and
it's hard to manipulate you know the the
entire Market particularly in liquid
currencies like euro dollar dollar Yen
just now I didn't ask it if I'm just
going to ask Kathy when are you writing
your next book for us I actually have a
book coming out in November oh yes
what's your about it's called um prop
trading Secret
um how successful Traders are living off
the markets and in this book I interview
12 or 13 successful prop Traders now
this is prop traders in the um entire
definition of prop trading there's a
modern way of prop trading that you know
a lot of Traders are getting into but
the traders that I've interviewed in
this book um are you know some of them
have traded for decades some of them are
trading champions of trading
competitions some of them um are
proprietary Traders who've turned into
money managers and of course some of
them trade the modern way of prop
trading and in this book you know I talk
about their stories the commonalities in
what they do I reveal you know little
slivers of their trading strategy that
they'll share with me I give takeaways
on you know some of the things I learned
um from them and so I think you know um
it's going to be very fun book and I'm
hoping it'll come out in November
because that's when you know the
deadline is July um which is very very
soon and if I meet my deadline is should
come out in November you know I find
this very this very interesting because
you'll learn a lot about other people's
trading strategies too and there's some
traders that are fundamental Traders too
that I think is very neat you actually
got a book that's called millionaire
Traders yes and that is a good book too
maybe you can check it out too you guys
can check it out too so what's next for
you like what's coming up for you aside
from the speaking engagements the books
how's life like as a full-time Trader
enjoying life well I mean life is not
just a full-time Trader I'm you know
also a mom to two young boys um so life
is very very full I'm very excited about
um kind of um returning to Asia and this
is my first time sitting here with Karen
this my first time in Singapore since
the pandemic and I plan to come out here
more often I'm Consulting you know with
um companies on helping to expand their
business throughout parts of Asia
there's a lot coming I'm definitely much
more interested in sharing the prop
trading opportunity with this part of
the world in Asia I think that you know
there's a lot of opportunity and
interest that's going to be built out
here by some of the local companies and
international companies and someone's
been in industry for a very long time
told me that there hasn't been as much
demand for a specific trading product
since the beginning of retail FX and
that's you know prop trading and it's
exploding in the US and that's why I'm
so excited to share that in this part of
the world as well if you guys want to
follow KY you can follow her YouTube
channel social media so what are your
social medias K certainly I mean you can
follow me um at Cathy Leen FX onx I am
tweeting all the time um and you can
also follow me on YouTube um at youtube/
BK forx you know if you want you know
you can follow me on Instagram I am the
only one with the verified check mark in
my face there are a lot of scammers
please don't fall for it my handle is
Forex macro Queen and of course our
website BK traders.com yeah be aware of
the fake accounts there are lotors
especially over the platforms I've
didn't tell you about like Telegram and
WeChat and WhatsApp I am definitely not
on those platforms and not going to be
um asking you to send me money on any of
those platforms on any platform period
but just I'm just not on Telegram and
WhatsApp and WeChat um and all those
other places very often the scam are
Tell G and what's yeah and and I will
never message you on Discord either
basically I will never direct message
you as much as I love you so um you can
always check with me too Kathy at BK
traders.com and say is this person legit
and I'll tell you chances are that they
are not and they're just trying to scam
you okay great we are done
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