Fear, greed, excitement, overconfidence and nervousness are all typical emotions experienced by traders at some point. Managing these feelings, the crux of trading psychology, can prove the difference between making money and going bust. Thinking like a trader involves harnessing emotion, reasoning quickly and exercising discipline.
DailyFX Strategist Margaret Yang thinks like a trader. Her days move from global media interviews to gold price analysis to tracking recent IPOs, such as China’s ride hailing company Didi, to raising her toddler.
The Singapore-based chartered financial analyst (CFA) never expected to go into financial trading. Yang studied chemical engineering at Nanyang Technical University in Singapore and mapped out a career in petroleum operations, until she landed an offer as an equities dealer, almost a decade ago. Today she’s a strategist at DailyFX with expertise in multiple asset classes, including bonds, forex, cryptocurrencies, commodities and treasuries as well as trading psychology.
Yang specializes in swing trading, and employs a medium-term trading strategy with a focus on macroeconomics, as well as fundamental and technical analysis, using tools like Fibonacci and Gartley patterns.
We spoke to Yang about how she went from chemical engineering to thinking like a trader.
Talk about your early years in trading
I originally graduated from Nanyang Technological University with a chemical engineering degree, but began my career as an equity dealer in 2011 – almost ten years ago. The first few years I was assisting clients in placing trades, corporate actions and account management. I learned their successes, their mistakes and after three years, I used all those experiences to build my trading strategy.
How did learning from mistakes shape your trading style?
I am a trend follower – I identify uptrends and downtrends to follow. I then use technical indicators to identify signs of a trend reversal. Top trade mistakes I’ve learned include emotional trading – that is, chasing up high in an overheated market or selling at the bottom when pessimism sentiment is dominating.
What came next in your trading journey?
I went into institutional trading, focusing on options, commodities, bonds and treasuries. This helped me greatly upgrade my trading skills. I was working on emerging and frontier markets. We had to be very sophisticated in how we placed trades without influencing market movements – we used a volume-weighted average order tactic to break up the trades.
I monitored positions and placed daily trades to buy and sell stocks for the fund manager. I remember placing millions of dollars overnight in US futures – I couldn’t sleep through the night. It was very exciting.
How did you progress to analysis after trading millions?
I gave birth to my daughter and changed my role from trader to market analyst. I kept a close…
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