How to Trade Like The Big Banks | Smart Money JP Morgan Trader Kathy Lien

Summary

In 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

• 📈 Successful trader KYLY shares insights on trading strategies and time frames, emphasizing the importance of multi-time frame analysis.
• 🕒 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.
• 🌐 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.
• 📊 KYLY recommends retail traders to use a combination of technical and fundamental analysis for successful trading, as institutional traders also focus on both.
• 📈 Bank traders often trade on momentum and mean reversion strategies, which retail traders can replicate by following market sentiment and looking for price corrections.
• 🎯 Risk management is crucial in trading; KYLY suggests a two or three-tiered exit strategy to bank profits and protect investments.
• 📚 KYLY's book 'Day Trading and Swing Trading the Currency Market' is a valuable resource for those interested in learning about fundamental analysis.
• 🤔 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.
• 🌐 Institutional traders may use technical indicators for observation but base their strategies on arbitrage opportunities, market misalignments, and global macro factors.
• 💡 KYLY advises retail traders to focus on trend-following strategies and establish clear trading targets for better discipline and psychological management.
• 📖 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

00:00

📈 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.

05:03

🌐 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.

10:06

🛠️ 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.

15:08

💡 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.

20:09

🚀 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.

25:10

📚 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.

Keywords

💡Mean Reversion

Mean reversion is a trading strategy based on the concept that prices and returns eventually return to their average or mean. In the context of the video, it is one of the methods used by banks and professional funds, which suggests that after a significant price move, the market will correct itself and return to a more normal condition. For instance, if a currency pair has moved too far from its average, traders may expect a reversal back towards the mean.

💡Multi-time Frame Analysis

Multi-time frame analysis refers to the practice of analyzing financial markets across various time frames to gain a more comprehensive understanding of market conditions. In the video, KY emphasizes the importance of not solely focusing on one time frame but checking higher time frames like the 4-hour and daily charts to ensure that trades align with the overall market trend and avoid entering positions against strong support or resistance levels.

💡Risk Reward Ratio

The risk reward ratio is a fundamental concept in trading that refers to the potential return of a trade compared to the potential risk. It is typically expressed as a ratio, such as 2:1 or 3:1, where the first number represents the potential profit and the second number represents the potential loss. A higher ratio indicates a more favorable trade.

💡Global Macro Trading

Global macro trading is a strategy that involves taking positions based on the analysis of economic factors that influence the overall market or a broad segment of the market. This includes factors such as economic indicators, political events, and central bank policies.

💡Fundamental Analysis

Fundamental analysis is a method used to evaluate the intrinsic value of a security or currency by examining related economic, financial, and other qualitative and quantitative factors. It forms the basis for informed investment decisions.

💡Position Holding

Position holding refers to the duration for which a trader keeps an open trade. It can range from very short periods, such as in scalping, to long-term investments.

💡Market Manipulation

Market manipulation refers to the act of artificially inflating or deflating the price of a security or otherwise influencing the behavior of the market for personal gain. It is generally considered illegal and unethical.

💡Proprietary Trading

Proprietary trading, or prop trading, is when a trader or firm trades financial instruments such as stocks, bonds, commodities, or currencies with the firm's own money, rather than with client funds.

💡Technical Analysis

Technical analysis is the study of historical market data, primarily price and volume, to forecast future market trends. It relies on the premise that all relevant information is already reflected in the price, and it uses charts and statistical tools to identify patterns and trends.

💡Risk Management

Risk management in trading involves the process of identifying, analyzing, and accepting or mitigating the risk of loss in financial markets. It includes strategies like setting stop losses, using position sizing, and diversifying investments.

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