Introduction from Chris
Welcome to another addition of Trader Interviews, this time I speak with Rolf from Tradeciety. I can’t quite remember when I came across Rolf, but I discovered him on Twitter and after reading a bit about him and Tradeciety, thought he would make a great addition to the series.
The one thing that caught my interest was that not only did Rolf quit his job and start trading for a living, but he trades and travels the world (which he documents), something that I aspire to and it’s good to know it’s possible.
Originally from Germany, Rolf now trades his way across the world, currently in Thailand after a long European adventure, Rolf answered these questions 37,000 feet in the air to provide us with some insight into his day to day life as a trader / ‘digital nomad’!
- Before we get into the questions, I thought it might be interesting if you mention where you are answering these from as you do travel a lot and have posted on Twitter/Instagram some awesome ‘work’ stations with great backdrops.
Hi there, I am currently answering the questions from 37,000 feet altitude because I am flying back to Thailand after I spent the summer in Europe.
- Where did it all begin? You’re fairly young still, so did you first discover the world of trading / finance at an early age?
I am 30 right now but I had my first stock portfolio when I was 13 or 14. My dad was always into stocks and I used to follow the ticker symbols very old-school on TV in the teletext. Every day when I came home from school I checked my stocks and although I didn’t understand much, I was fascinated how one could make money by buying parts of a well-known company. My stock portfolio, thus, only included companies I knew such as McDonalds, Nike and so on.
- Have you ever undertaken any studying and/or courses or did you do research yourself?
After my stock venture, I forgot about investing for a few years and it wasn’t until university that I started to dig back into it. Like so many, I joined a trading group and paid a lot of money. In retrospect I don’t see it as a waste of money, although it didn’t help me become a better trader. I still believe, though, that it’s essential for new traders to get the basics right – especially when it comes to risk and money management – and that’s what I learned there.
- You currently have a business partner Moritz who you run Tradeciety and Edgewonk (more on this later) with, how did you get to know Moritz and did you two discuss trading together in the early days and push each other on?
Yes, we connected via the Internet first. He reached out because he saw that I was trading and traveling in Asia. He has very similar interests and perspectives on life and is also German. We started out discussing trades and trading related topics from the beginning on and still today we communicate daily and talk about markets and trading.
- In your blurb on your website you mentioned that you lost money in trading for years before getting it right. Have you blown any accounts? If so what were your thoughts in terms of carrying on and getting past it?
Yes, I blew a few accounts in the beginning. I didn’t really know what I was doing back then and I misinterpreted my “progress” early on. After the third account blow up I said to myself that if I blow one more account, I will quit trading. I started to take things very seriously and completely changed my approach. At that time, I was still in University and was working in finance besides my studies. I realized that I didn’t want to get suck into this 9-5 routine and trading seemed to be a way to make my own way which motivated me. Long story short, the fear of having to go to a 9-5 drove me and I became obsessed about trading.
- You also mention that you quit your corporate job to trade full time and travel the world? What were you doing previously? And did you transfer any skills from your previous life to trading?
As I said, I worked in finance besides my university studies. I worked in the job for 3 years before I quit and sailed off. I am a pure finance and numbers guy and you can see that in my trading. I approach my trading from a pure reward:risk perspective and pay a lot of attention to statistics. I am also obsessed with record keeping which I probably adopted after my years in corporate finance.
- Traveling the world and trading is the image people tend to picture as their future when they first get into trading (that or a cocktail on the beach). Was this always the goal? And if you hadn’t discovered trading do you think you would have still found a way to travel the world and be your own boss?
I think this gets romanticized way too much. Trading and travelling is pretty hard work, even if no one will believe me now. My goal was always to do my own thing. I was always entrepreneurial and active and I started selling stuff online and created websites back when I was 15. I was fairly successful so I think even without trading, I would have made my way around the world.
I need my personal freedom and it’s a nightmare for me to be chained down to one place and be stuck in a regular routine. This is a huge driver for me and it motivates me to keep working on myself as a trader and in my other ventures.
- You are purely a reversal trader, is this all from a technical bias? Do you use or have ever looked into using fundamentals? I understand you use fundamentals as a way to stay clear of the markets if there are particularly volatile news events.
I am 100% technical and my way of trading is a mix between price action and indicator based trading. As you said, when it comes to fundamentals, all I do is stay away from it.
- How did you settle on being a reversal trader? Beginners are told to trade with the trend, is this something you tried out in the beginning?
I started as a trend trader because that’s what everyone tells you is the easiest way, right!? Well, it didn’t work for me and I sucked really bad. However, I noticed that I was always drawn towards finding reversal points.
- Where there any moments in the early days where you thought you couldn’t do this or had doubts as to why you were trading?
No, I would say that I didn’t really care that much during my first 3 account blow-ups. I had the wrong expectations from trading and approached it from the “get rich quick’ mindset. Once I started to become more serious, I was sure that I can figure this out. However, it wasn’t easy but I always believed in myself.
- Is it primarily Forex you trade? Do you think a strategy like yours could be applied to other instruments such as stocks and commodities?
80% of my trades are Forex related. I do trade indexes and commodities from time to time. I haven’t traded individual stocks yet – I just can’t deal with the gapping behaviour; it doesn’t suit my reversal trading.
- How do you control your risk? Do you think there is a set formula or do you think its variable depending on the person, market, trade set up etc.?
I am big on risk control and risk management – probably one thing I kept from my corporate finance ‘career’. I have daily and weekly loss limits and I am also very quick to exit trades when they move against me. I approach trading from the mindset to avoid losing first before I think about making profits. Once you can limit the losses and have a trading system that you can trust, winners will take care of themselves if you manage your downside.
- When you undertake backtesting of new strategies, do you do this on a manual or automatic basis?
I don’t like backtesting and I also avoid excessive demo trading. You can’t ‘validate’ a trading method on a simulator. If you think you can make money after good demo results, you are in for a rude awakening. All the difficulties in trading exist because of the money that is involved.
- In your opinion, do you think trading is a teachable skill or do you think someone has to the knack for it to become successful?
I think there are certain things that are teachable. For example, I believe that reading charts, interpreting the way price moves and also concepts of technical analysis can be taught. However, executing trades cannot be taught. On my site, I lay out pretty much my whole trading approach and I share my Sunday watchlist but you’ll never see me give signals. Copying other peoples’ signals won’t help you become a better trader. You have to make trading decisions yourself autonomously and then take responsibility for the outcome – it’s the only way to grow as a trader.
- Have you ever considered joining a prop firm or managing other people’s money? Have you ever been approached to do so?
I had a very short period where I managed an account for other people. However, I quit relatively fast because I noticed that it’s not what I want from life. Once you trade money from other people, everything changes: you have to make reports, your clients want to know what is going on and often you have to explain losses or missed opportunities. I had the feeling that I was losing my freedom and independence which I fought so hard for and then I stopped.
- I have found that you are quite open in your trading, i.e. revealing your strategy and on Snapchat sometimes showing live profits. I in fact like this transparency; it’s good for the trading community and retail traders learning. Was there a reason you decided to be so open with your trading, as I know some people can be quite defensive and secretive on their strategy and profits/losses.
I want to inspire. Too many people live lives they don’t enjoy and I don’t think it has to be that way. I live a pretty minimalist lifestyle; when I weighed my suitcase in the morning, it showed 21kg and those are all my worldly possessions. For me, trading isn’t about $$, cars, yachts, watches or anything like that. People who get into trading often have the wrong motivation and ideas what trading will do for them. I am not the best trader, many people make more money than me, but I want to show that trading can be much more if you have the right mindset.
- There are a number of ways to follow you and your trading journey, the website, Snapchat as previously mentioned and Twitter. But you and Moritz have set up a Slack thread; this is the first time I’ve seen such an app being used for the trading community which is free to be a part of. What motivated you to set up this ‘trading room’?
We always look for ways to communicate with our audience and we use Slack for our business communication as well and really like the platform. We have stopped accepting applications because we want to focus on providing the most value without having too many people. So far it’s great and we see that people make huge improvements there.
- You have Edgewonk 2.0 coming out soon. Can you tell us a bit more about this? And was this something that materialised out of your own trading needs?
Edgewonk is our passion project. I was always big into journaling and record keeping and I noticed that there wasn’t a real solution out there yet. I got together with Moritz and interestingly enough, he agreed on the spot and was also huge when it comes to journaling. We combined our two journals, made some adjustments, added features and then turned it into a user-friendly version – that’s how Edgewonk was born.
- How do you manage to split your time between trading, writing market analysis, managing the website, doing work on Edgewonk and of course travelling?
The truth is, I work A LOT. But I am also a swing trader, so I don’t spend a lot of time glued to the charts. I usually do my charting in the morning and then just come back to my charts every 4 hours on a new candle close or when a price alert goes off. The market analyses you see on my site I write for myself mainly and it’s a great way to keep me accountable when I know that so many people come back to my site to read then. In between all the trading stuff, I work on my other businesses.
Being a digital nomad and traveling trader doesn’t mean that I do sightseeing 8 hours a day. When I travel to a new city or country, I usually set aside 2-3 hours a day for tourist stuff and then work the rest of the day. But I stay much longer in one place during my travel which means I don’t have to rush.
- What’s your general routine for trading, especially if you’re travelling?
I answered it somewhat before but let me give you my schedule from an average traveling/trading/working day:
• Wake up 6 am
• Sports and exercise until 7 am
• Trading and emails until 9/10 am
• Tourist things until 1 pm
• Trading and more emails
• I usually finish work at around 9/10 pm but it can be much later at times as well
I usually take off 1-2 days per week and preferably during the week when everyone else is working. It just feels great to do what you want to do and when you want to do it.
- What do you like to do to relax and take your mind off the market?
Sports is what gets me down. I start every day with a run, a swim and a gym workout. I also love to take my scooter and drive in the nature – I live in Chiang Mai most of the time and you are in the mountains in less than 30 minutes.
- Think I saw somewhere that you tend to stay in AirBnB’s when you’re back in Germany? Have you truly gone nomad and don’t have a base when you’re not traveling?
When I am in Germany, I usually stay with family or friends. When I travel, I mostly rent with AirBnb to avoid the hotel feeling. And in Chiang Mai, I rent apartments where I can find them. So yes, you can say that I don’t have a real base.
- Seeing someone actually achieve this life seems to make it possible for others aspiring to do the same. Is there any advice you could share with us that would think helpful to someone think of trading for a living?
The most important thing I suggest to anyone is to audit your expectations and compare it to your approach. Ask yourself: you want to be a professional trader who makes a living with this but are your actions reflecting it or are you just dabbling around and hoping to find something that somehow works?
NO trading strategy will work from the start and you HAVE TO STOP changing methods. If you are really serious, quit system hopping today and commit to one method. You’ll lose money, I promise, but over time you will progress and see what is working and evolve.
- Finally where are your travels taking you to next?
I am just coming back from 3 months in Europe and I travelled a lot through Germany, Italy and Austria. I am looking forward to take things slower in Thailand now. I’m probably doing more short trips (2-3 weeks) to the Philippines, Hong Kong and Singapore in the near future. My next big trip will be an 8 week travel through New Zealand in 2017.
QUICK FIRE QUESTIONS:
Number of screens you use to trade
I only use 1 laptop. Traveling with multiple screens is horrible.
Most unusual place you’ve placed a trade
That was probably a ferry in Vietnam where I used my iPhone as hotspot. However, I just managed my trades and didn’t really trade actively there. I rented a bamboo hut back in Bali for 2 weeks and then traded from there, just a few feet from the ocean, that was pretty memorable.
Ideas are worthless, execution is everything.
If you want to live your dream, you have to wake up.
Favourite Financial Themed Movie
The Pursuit of Happiness – does that count? Just love the message.
One book that everyone must read (trading or non-trading related)
The Alchemist. It changed my life and made me want to travel the world.
One financial / trading themed book that everyone must read
Pit Bull: Lessons from Wall Street’s Champion Day Trader – Marty Schwartz
Favourite holiday destination
In Asia, I’d say Chiang Mai or a motorcycle trip through the Vietnam highlands. In Europe, Austria is my favourite place.
Chiang Mai, Thailand
How many countries have you visited since you’ve been a full time trader
16 so far
Favourite beverage to wind down with
Green tea or red wine, depending on the time of day
Christoper Johnston is a Littlefish FX course-user and long-time reader. You can keep up to date with his weekly blogs at http://enigmaforex.co.uk or contact him on Twitter at @enigma_fx. If you’re interested in seeing your Forex blogs and content published on LittlefishFX.com, read more here.