Over the past six years, forex trading has been a very important part of my life. It has enabled me to travel the world and live a very unique lifestyle. It has also changed my relationship with money and work. In this article I share how I got into it, some of the challenges I have faced, where I am now and how you can get started and learn how to trade.

 

My story

The first time I heard about Forex trading, it was from my flatmate back in Montreal. To say that I understood Forex right away would be lying; Regardless, being a Yes man I deposited 50$ into a trading account and gave it a try. I made about 2$ that evening, turning my 50$ into 52$ (sheer luck really). 2$ may be pocket change but on that day it felt like a whole lot more to me. Heck it felt like dark magic! That evening I went to Tim Horton’s with my flatmate and we spent the 2$ on coffee. To say that that coffee tasted good would be a major understatement.

Fast forward a few months; My trading account had grown thanks in part to me depositing more funds and in part thanks to my average monthly return of 15-20%. At the time, sky seemed the limit. Heck, there seemed to be no limit! I was making plans on how I would spend my first billion dollars and was even starting to consider buying a small country. My reasoning was that with a monthly growth of 15-20%, it would only take me a few years to reach the trillion dollar mark (Google “exponential growth”). I even remember joking with my friends that it would not be China that would overtake the US as the world’s biggest economy, it would be me. It goes without saying that I was incredibly naive. To my defense, I had no understanding of concepts such as liquidity, growth stress and the exponential effort curve.

I have now been trading for many years and my account has grown considerably. So much that it is become by far my main source of income. The journey from my first 2$ to now has not been smooth though, in fact it has been more challenging than I could have ever imagined. It is not that trading Forex is particularly hard from a technical point of view, it is that it is very hard from an emotional point of view. Most people fail because of the psychological impact of making/losing money very quickly in a seemingly no-limit environment, not because they do not “understand” the market. After a few major losses I finally “got it”, deposited a more sustainable amount and adjusted my goals and strategies. Since then things have been going well and while I will not be buying countries anytime soon, I make a good living trading Forex. I definitely see myself trading far into the future although I am now spending most of my time running more conventional businesses such as Freedom Surfer.

 

The challenges I have faced

Managing expectations has definitely been my biggest challenge. To put it bluntly, it is easy to get greedy when faced with an unlimited earning potential and getting greedy is the last thing you want to do when trading. It leads to overconfidence and catastrophic losses. Speaking of those, another major challenge I have faced has been how to deal with losses. Experienced traders always say that you should be emotionally disconnected from your trading but let me tell you, no one really is. Losing money is hard and can definitely affect your emotions and happiness. It takes a lot of practice to learn how to “let go”. Another challenge I have faced has been the lack of purpose. It is nice to trade and make money but there is no purpose to it (other than making money). To address this challenge I have created Freedom Surfer and other more “conventional” businesses. This has allowed me not only to make money but also create long-lasting value for myself and the wider world.

 

How to get started

Forex trading is not for everyone, it takes an incredible amount of self-control and restraint. In order for it to be sustainable, it also takes a decent amount of capital. If you think you have what it takes, the best way to get started is by opening a demo account and giving it a try. While demo accounts use fake money, they otherwise are identical to real accounts. Using one for a few months will give you a good “feel” for the market and more importantly, a good understanding of the level of risk involved with Forex trading. Once you feel comfortable trading on the demo account, open a live account and deposit a small amount in it. Join communities of traders (Freedom Surfer’s Insiders Club has lots of helpful members), analyse what successful traders do, read books and practice. Despite demo and live accounts behaving in the same way, the experience will be vastly different due to the psychological impact of trading with real money. It will likely take months of hard work before you feel comfortable enough to deposit more funds. Go slowly, do not rush. Patience pays when it comes to Forex trading. A few words of advice: never get too comfortable, never trade right after making a gain or a loss (wait until the next day), never go all-in on a trade, establish rules you are comfortable with and FOLLOW THEM, never trust indicators over your own gut feeling and most importantly, never get greedy.

  • Erwin
  • He makes valid points but his arguments do not take into consideration one factor that is very important for me: freedom. If I take OPM, I have to trade, I have to deliver results, I have to be responsive and transparent. In other words, I lose my freedom or at least some of it.

  • Mauro Stettler

    Interesting read. May I ask what account you use to trade on Forex? I have a bank account with PostFinance in Switzerland which allows me to access Forex, but their fees are way too high.

  • My main account is with OCBC in Singapore. Their iOCBC platform is great and their fee structure is reasonable.

  • Mauro Stettler

    Thanks, I wasn’t aware of OCBC. Their eligibility requirements list a Singaporean E-Pass, which AFAIK is not that easy to get. Did you find a way to get that account without E-Pass or did you create an offshore company in Singapore in order to be eligible?

  • I used a Belize IBC. There are no local restrictions for corporate accounts, only personal accounts. Please note that a personal visit to the bank is required to open the account.

  • Mauro Stettler

    Great insights, thanks! One more question: What’s your opinion about trading cryptocurrencies like BTC:ETH on exchanges like Coinbase? Doesn’t that make the bureaucracy way easier? (I wouldn’t keep all my currency on the exchange, because they tend to go bust quite often)

  • I do not have any experience with Bitcoin trading so it’s better if you take my answer with a grain of salt. I guess that it could simplify the process of getting started as you would not need a corporate bank account to fund the wallet and start trading (opening an offshore corporate account is not easy these days). From a tax and compliance perspective I do not see any difference.

  • brently

    I’d be interested to know what your thoughts are on trading spot forex versus forex futures contracts. It seems that with futures you pay a flat exchange fee whereas in spot forex you aren’t typically charged a commission but you pay a spread which can often cost more than the exchange fee.

  • The fees for futures trading can be lower but there are also some drawbacks. The leverage allowed is usually lower and the contract sizes are not as flexible for example. Not to mention having to trade with a CFTC-regulated broker. It can make sense for some but for most traders, spot forex is the way to go.

  • Ben

    Have you traded from China at all? Has the great firewall caused any issues?

  • Yes, I’ve traded from China. I trade using a VPS so the firewall hasn’t impacted me.

  • Ben

    Thanks- what’s the pros/cons of using a VPS versus a VPN service like ExpressVPN in China?

  • The VPS isn’t there to unblock the internet, it’s simply there to ensure that you always have a stable connection to your broker and that latency is never an issue. You should use one all the time, regardless of where you trade from. Also, using a VPN in China is not really a viable option, oftentimes you can’t connect or it’s too slow. The CMHK trick works well but not for trading due to latency issues.

  • Ben

    Thanks for the info. Can you recommend any VPS service or tool? Or do you have your own ‘home brew’ server?

  • I personally use DigitalOcean. They have servers in New York / London, their prices are competitive and the customer service is excellent.

  • Ben

    I’ll check them out, their prices are on par with amazon. Thanks again for the info.

  • Ben

    Are you running a fully automated strategy on the VPS or are you trading discretionarily?

  • I trade discretionarily. Most of my strategies are long-term, low risk.

  • Andrew Wilson

    If you’re looking to trade OPM, what kind of structure would you be looking at? I’ve got a base in the Bahamas and have thought about creating an IBC to do it through, but there are restrictions on trading that may make it such that I can’t hold the accounts here. Then it also raises the question of which account to trade the FX as well. Would be really interested in your thoughts

  • Most people setup hedge funds in the BVI and Cayman to trade OPM. If its a small fund (private fund), compliance is fairly easy. Unless your clients are US citizens / residents, then you pretty much have to register in the US. As for opening an account for the fund, iOCBC is my recommendation. It is a Singapore-based bank and the minimum deposit requirement is only 30000 USD. The platform is fairly nice and offers access to most markets (including forex).

  • Ed

    Been looking for a forum to discuss selling options by digital nomads. No luck so far, so I’m posting here. Any experience with selling options? Seems like a good way to generate location independent income like Fx.

  • Hi Ed, I haven’t had any luck finding a forum for nomad traders either. There’s probably too few of us out there. I have not sold options nor do I plan to in the short term. Have you?

  • Dave Blanco

    Can you trade FX using your OCBC Business Foreign account balance? Or do you have to fund S$30k for the OCBC Business Foreign account and US$30k for the iOCBCfxpro account separately?

  • The 30k requirement for the bank account is a relationship balance requirement. As long as you have 30k+ plus in your trading account you’ll be fine.

  • Alex Strong

    When you trade through your VPS are you using remote desktop or recommend a program that works well for this?

  • Alex Strong