From developing the app, to being kicked out of the Apple store, to being a first time entrepreneur - Lucien Tavano Interview - Founder and CEO of OhMyGeorge
We recently had the pleasure of sitting down with Lucien Tavano, self proclaimed "hipster" and Founder of OhMyGeorge. Lucien is a bright young mind in the tech industry, holding dual masters degrees in Engineering from ESTACA and Strategy and Management of International Business from ESSEC Business School. The combination of his science education and business acumen has led to him developing one of the soon to be hottest apps in the Forex industry. Below are some excerpts from our conversation.
DrinkForex - What is OhMyGeorge?
Lucien - Oh My George is an addictive iOS and Android forex trading app that lets beginners experience currency trading easily thanks to a minimalist user interface and a gamified learning system.
DrinkForex - What gave you the idea to create the app?
Lucien - When I got into trading I kept jumping from one service provider to another in the search of a platform that would provide me a pleasant user experience as a beginner. I couldn’t care less about being able to choose from hundreds of financial assets, set parameters I had no idea what they were for, or get my trades executed at the speed of light. I wanted to learn how to drive, and I had no other choice but to directly practice with a formula one car. Since I couldn’t find one, I started to build the one I wished existed: a platform simple enough so I could experience the markets with just a couple of taps, safe enough so I could trade for real but with some safeguards, and smart enough so that, as my knowledge increased, the platform would always meet my needs. Oh – and fun enough too, because the legacy platforms all had that super serious and pretentious feel (and even scary/scammy feel for some).
DrinkForex - Who is your target demographic and audience?
Lucien - Our target demographic is financial market beginners, and more precisely, among them, the Gen-Ys as marketers call them. This generation differs in many ways from the baby boomers, a subject that has long been extensively covered . We specifically focus on how they learn, which is through trial and error (i.e. experimentation) rather than by reading books. This is therefore central to our product design: at first you may not exactly know what you’re doing with Oh My George, but it’s so easy to open your first trade and feel the pulse of the market for the first time that you stick to it and you learn --in the app and by documenting yourself outside of the app-- because you are hooked. Our goal is to get Gen-Ys interested in financial markets, we don’t have the pretension to teach everything (if that’s possible at all). It’s okay if after a while our users move on to more powerful platforms, it means we have achieved our mission, they are not our target users anymore.
DrinkForex - Why focus on Generation Y or Millennials?
Lucien - Simply because [ for finchtech ] it’s the generation that is driving the consumer demand now.
DrinkForex - How has the app evolved over time? I remember initially seeing you had a binary options broker listed when someone clicked “open a live account”, then awhile back you switched it to FXCM. Was this decision a result of the evolution of the app?
Lucien - The initial concept involved a full gamification of the learning curve. The feedback of our early users taught us that the spread for instance was a concept that was not easily apprehended, so what we did was to take it out entirely and reintroduce it later, once the basics had been assimilated (which assets am I trading, what market is this, what are the opening times, what does it mean when the chart goes up and down, etc.). This led us to build a gamification system where users earn experience points in order to level up (unlocking new financial instruments) and gear up (adding new features to their trading platform). We are still far from achieving our vision, so we have many more levels to add, including the highly anticipated real-trading option. Pointing our users to other trading platforms is therefore an intermediary step for us before we can technically allow them to connect a real-money brokerage account to their Oh My George app. We have tried many different partners, and the ones that have the favors of our user base are the ones that offer the best user experience (unsurprisingly), regardless of the instruments they allow to trade.
DrinkForex - One of the main taglines on your home page is “No Math”. Can you explain what this means and why this sets Oh My George apart from other trading apps?
DrinkForex - Can you run me through an example of these calculations ? Let’s say I have a $1,000 account and I want to risk $50 on a trade.
Lucien - When you select $50 in the app, the system opens a trade worth 50 micro lots (50,000 units), so each pip is worth $5, and a stop loss is set at -10 pips (i.e. $50). To think in terms of dollars “risked” rather than dollars “invested” makes more sense from a user perspective, because for users the risk is the actual “investment”, the size of the trade (i.e. the amount which was technically invested) isn’t really relevant in their context. In a real-money trading situation, a leverage of 200 means that $250 from your balance would be required to guarantee your position, so, with that system, you can’t have too many positions open at the same time. For the moment users cannot change the trade size’s default setting (trade size = 1 micro lot per risked dollar, but of course this is a feature they will be able to unlock later in the game). We tried to make it a function of the spread, so that under any market condition the initial loss due to the spread was always the same. But the feedback was that our users couldn’t understand why sometimes their investment was evolving very fast, and sometimes far slower. It was easier to understand that depending on market conditions it is more or less “expensive” to open a trade. So in the end we hard coded that parameter. I have to confess that we do change it from time to time, and we analyse the impact on the activity of our users in order to see what the best compromise is.
DrinkForex - During a recent discussion you mentioned that your app had been removed from the Apple store, can you explain what exactly occurred?
Lucien - Yes, that was tough time for our company. A while back, Apple notoriously chased down all binary options apps, and any app that was promoting or in any way helping the binary option industry expand. It’s was a unilateral move from Apple that was not motivated by any regulatory requirement. The problem (for us) was, Apple’s employees are not financial experts, and in addition to taking down the apps that were related to binary options, they also took Oh My George down overnight without any warning. We had to argue for many weeks to convince Apple to republish us (we only emulate Forex instruments and promote Apple-approved apps), and we even had to remove all third-party app promotions to please them. According to Apple’s guidelines, it is not allowed to promote third-party apps within an app (a rule that obviously they only enforce selectively). After a month we got republished, but our download rate is only one-fifth of what it used to be and what took us so much work to reach.
DrinkForex - What do you mean by enforcing selectively? Can you share some examples with the rule included and what you did incorrectly?
Lucien - We are diving into App Store publishing very deep here :)
The guidelines that Apple opposed us was the 3.2.2(i): “creating an interface for displaying third party apps, extensions, or plug-ins similar to the App Store or as a general-interest collection” (formerly infamously known as the guideline 2.25, with a wording that was a bit less ambiguous: “Apps that display Apps other than your own for purchase or promotion in a manner similar to or confusing with the App Store will be rejected”).
This rule seems to only be enforced selectively, because they are tons of Appstore-approved apps that promote third-party apps. In our case, this third-party app promotion had been present in our app for more than a year, so we are not sure why it is causing an issue now. We argued that in no way we were mimicking the App Store, but this did not unlock the situation.
Apple’s crackdown on third-party app promotion is not new (2012!) and unfortunately we could not obtain further explanation regarding the interpretation of that guideline in our case (it is the subject of extensive discussions on many forums & blogs).
Some app makers do not activate third party app promotions in their app until after their app or update has been approved. Some remove third-party app promotion when they get caught and reintroduce it later with a new update…
Long story short, we removed the promotion of the third-party app altogether (our only revenue source) and moved it to our website. Even though users are invited to visit our website at some point during the game, this obviously drives much less conversion in the end for us, and therefore much less revenue.
This does not change too much our long-term product strategy though, because this business model was a temporary solution, supposed to be removed with the arrival of in-app real-money trading.
DrinkForex - When Apple took down your app what was going through your mind? Were you like of f**k I just spent years of my life and a lot of money developing this app and they just killed my business?
Lucien - No, not really. First because that was just one more problem on top of many others (it sounds bad, but what it means is that we are used to dealing with issues that seem business-frightening at first, it’s almost business as usual, so we don’t freak out anymore), second because our financials are good and our fixed cost extremely low, so we know we have time to adjust our strategy, even pivot it if need be. We initially had a very aggressive growth-at-all-cost startup approach, but in time (read: after many roadblocks and failures) we realized that it wouldn’t work in our case, so we are taking the slower (but no less rewarding) bootstrapping route now (growing at a pace allowing to always be profitable), and it has already proven to make much more sense. Also, we knew about Apple’s change of policy regarding specific financial instruments (binary options), so we were aware that there was a good chance Apple should get confused and take us down by mistake while chasing down non-complying apps (unfortunately, there was not much we could do to prevent that mistake to happen…). It doesn’t mean we weren’t upset though, it felt really unfair.
DrinkForex - It seems that your success is somewhat dependent on Apple and Android. Are there things that you can do to help isolate yourself from the impact that they have on your success?
Lucien - Yes, we are a mobile-only trading platform, because our target users are mobile-first consumers. So we rely and depend 100% on Apple’s Appstore and Google’s Playstore for distribution (there are other stores for Android, but the traffic is much less than on the official Playstore). Our strategy has been from day one to use a development framework that allows us to publish on both app stores simultaneously, so the risk is at least split between the two. Our marketing strategy had been so far mainly focused on ASO (App Store Optimization), with new users discovering us as they search the stores. In the months to come we will focus on getting other sources of traffic in order to be less dependent on the app stores’ search engine algorithms, but the only way to totally stop being dependent on Apple and Google (if at all possible) is to offer a responsive web-app to our users (a mobile-friendly web-based version of our app). Unfortunately, it is not yet possible to provide the same level of user experience with a web-app, so for now we are sticking to the mobile-only approach, adjusting our product’s features as the stores’ guidelines evolve.
DrinkForex - Do you ever plan on launching a desktop or web application?
Lucien - Yes, and it wouldn’t be too much of a challenge since our app is built with web technologies. But our UI works well on mobile, the screen’s is not too busy, unlike most trading apps, so for now our users do not push for a web version (which wouldn’t bring significant added value), there are much more pressing matters :)
DrinkForex - Changing subjects a little bit, is this your first venture into being an entrepreneur, if not, what have you created before?
Lucien - Yes, I’m a newbie (so don’t take what I say too seriously), 2.5 years in. It’s been painful most of the time, fun sometimes, but it never felt like a bad decision.
DrinkForex - What was the hardest thing you learned from developing the app and getting into the store?
Lucien - Development time estimates was and is the thing that has always been hardest for us. And as a consequence, in our early days planning our runway right has been equally hard.
DrinkForex - What are 5 suggestions for people developing an app and wanted to get it into stores?
1. Draw and get feedback, then prototype and get feedback, and only then start the development itself. Also, it’s obvious, if you’re not a developer, get feedback early on on your wireframes and prototypes from developers too (not just from your potential users), otherwise you will have big surprises when you want to start the development process.
2. People who download your app will give it only one single try, and you’ll have about 5 seconds of their time to make an impression, think about it. 1, 2, 3, 4, 5. Bye!
3. Most consumers aren’t able to distinguish a native app from a hybrid one, so don’t hesitate too much: unless your app has very specific needs that hybrids can’t meet, go for hybrid.
4. As you design and build your app think about your acquisition strategy. It will have an impact. It should have. And don’t think that the hardest part is to actually build the app. It’s to market it. Period.
5. Finally, if your app is also at the heart of the revenue streams of your business, make sure you have enough cash to survive two or three storms in a row.
DrinkForex - Ok, on to the fun question. If you could have a drink with anybody (alive or dead) who would it be and what would be the topic of conversation?
Lucien - It’s gonna be cliché but it’d be with Elon Musk, to talk about his master plan for the human race! I would also like invite Vitalik Buterin to join, because a conversion between Elon and I would probably be very cool, but a conversation between Elon and Vitalik would be mind-blowing.
Make sure to checkout OhMyGeorge by clicking HERE!
In this episode of DrinkForex we sat down with Jason Jenkins and Alec Ziupsnys of JRM Risk Management. The topic of conversation was ICO's and the regulation behind them. If you are not familiar with Cyrpto Currencies or ICOs then this is a great video for you! So, grab a drink, sit back, and listen to the experts simplify them for you!
Get in contact with Jason and Alec
Free JRM Live Chat Room: http://www.jenkinsrm.com/chat-room/
In this episode of Drink Forex we interview Stelios Kontogoulas. Stelios has an interesting background as he began his career as an IT professional before being selected to work at a Major Bank as a Market Maker. After gaining significant experience Stelios made yet another transition from Bank Trader to Independent Prop Trader. Grab a drink, sit back, and listen about the trials and tribulations Stelios experienced during this transition.
Get in touch with Stelios
Forex Analytix: https://www.forexanalytix.com
We recently had the pleasure of sitting down with Blake Morrow, or more commonly known as @pipczar on Twitter. Blake has been a trader and analyst for over 20 years, and brings a wealth of knowledge to this interview. So grab a drink, sit back, and watch as we discuss the UK Snap Election, holding positions through news events, Forex Analytix, and how to become an Analyst.
Forex Analytix 9am EST Daily Webinar: http://bit.ly/2roewnO
Follow Blake on Twitter: https://twitter.com/PipCzar
Visit Forex Analytix: https://www.forexanalytix.com/
In this episode of DrinkForex we have a drink with Dimitrios Charalampidis. Dimitrios is the owner and founder of Snail-Trading, a proprietary and analysis trading firm. Dimitrios has dedicated his studies to Elliott Wave Theory and educates our host on how to apply it to your own trading. Grab a drink, sit back, and learn how to apply Elliott Wave Theory to your trading.
HOW TO JOIN SNAIL-TRADING SLACK ROOM
HOW TO FOLLOW DIMITRIOS
In the most recent episode of Drink Forex George Papazov of TradePro Academy joins the show. George is a passionate coach, educator and most importantly successful practitioner and eternal student of the markets. He founded TradePro Academy in 2012 to assist new traders navigate the emotional roller coaster that is trading. Grab a drink and join us as we discuss why managing your risk and emotions when trading is vital to your success as a trader.
Thanks to a partnership with Choose Forex, our interviews will be translated into different languages.
THINGS DISCUSSED IN THE VIDEO
Free 14 day trial of TradePro: http://tradeproacademy.com/freetrial
How to begin trading Oil by George Papazov: http://www.drinkforex.com/drinkforex-blog/how-to-start-trading-oil-the-complete-guide
Trade The News Vs. Ransquawk: http://bit.ly/2mGMvF7
HOW TO FOLLOW GEORGE
Twitter Page: @TRADEPROAcademy
Facebook Page: https://www.facebook.com/TradeProAcademy/
A little over a month ago we published an article entitled, The Fibonacci Magic. The article was an excerpt from a ebook authored by Roy Cuzin, the self proclaimed Chart Wizard. After receiving a postive response from the article we decided to grab a drink with and interview Roy to learn more about him and really get to know who he is as a trader. Below is the first part of a two part interview with Roy.
Drink Forex - First, thank you for agreeing to do an interview. A few months back you allowed us to post an excerpt from your Ebook, “The Fibonacci Magic.” Thank you for allowing us to publish that article on our site. You and several of our other contributors have been excellent in providing our readers great educational material in order to improve their trading performance.
We wanted to do this interview to allow our readers to get to know you and your history. We believe it is important for them to understand who you are in order to take what you write more seriously, because you are not just some fly by night person. You have a tremendous amount of experience in this industry. So thank you again for agreeing to do this interview.
To start off, Can you explain a little bit about your background and how you got your start in this industry?
Roy Cuzin - Back in 2004 as I was about to graduate with my B.A in Economics, I began an amazing life time journey for becoming a professional trader. It all started with a small $2000 account that I have decided to open after reading a few books on the subject of technical analysis. In the meantime, I went to work as a Forex dealer in a small company so I got the chance to sit in front of the charts most of the day. However, that did not help me much with the trading as I have managed to blow up the account within a few months. Nevertheless, that just made me more focused on “cracking” that code of trading. It took me a few more years till I began to master my domain.
Drink Forex - Last year you made a transition from working for an investment firm to doing your own thing. Can you explain to us what you are doing now and what led to that decision?
Roy Cuzin - For many years, I have been head analyst and head of trading desk in a few companies around the world. Throughout the years, I have accumulated a lot of experience with markets analysis and trading to the point where I felt ready to go on my own. At that point I also had already a large group of followers, which only helped me to make that decision. I wanted to give my followers and traders a unique and highly beneficial experience by sharing with them my trading activities and expertise, in order to help them become professional and profitable traders. So today I’m running a Forex trading website that gives traders all the tools that they need to become a pro. A full trading support package which includes daily signals, forecasts, webinars, videos, training courses, advanced charts, and pretty much all the necessary elements that I was missing in my early years as a novice trader.
Drink Forex - How did you come up with the name, “The Chart Wizard”?
Roy Cuzin - Over the course of the past 10 years I was able to develop an extra-ordinary method of analysis that I named as the “Fibonacci Matix”. A few years later, I developed that formula further into a full trading system that I use very successfully for my own trading activities. The method is very unique and almost revolutionary. It is based on the Fibonacci sequence, which means that it is applicable to all markets and all types of assets. Constantly observing the way price reacts to the Fibonacci-Matix™ system in place is nothing short of a magic. Once you master the Fibonacci-Matix™, you really begin to feel like a wizard.
Drink Forex - Based on your name we take it you focus on technical indicators in order to make trading decisions. Which indicators do you focus on and why do you focus on those? How many did you try before deciding on those indicators?
Roy Cuzin - The focus is definitely on technical analysis, but from a very specific angle. I do not use any indicators what so ever. Just a blank Japanese candle stick chart with a 200 daily M.A. Upon that I apply the Fibonacci-Mtrix™ set up to find trading opportunities. In my early years as a trader I have tried every kind of indicator under the sun. Back at 2008 I specialized as a master analyst (Certified Financial Technician) by IFTA (International Federation of Technical Analysis), so I got to be familiar with all of the technical indicators, methods and techniques. After testing all of these tools over the years, I came up with the final conclusion on how to analyze and trade the markets. I had to become an expert on technical analysis to realize that most of it was mambo jumbo. However, I also realized that the Fibonacci discipline was totally exceptional, as these principles govern the laws of the universe.
Drink Forex - What time frames do you look at? What is your average trade hold time?
Roy Cuzin - I am a swing trader by nature. As oppose to day-traders I focus on the longer time-frames of the Daily, Weekly, and Monthly charts. I take medium term trades that can last up to a few weeks and sometimes even months. In terms of time-frame and trading style, swing trading is placed right in the middle between investing and day-trading approaches.
Drink Forex - New traders often make mistakes, which is expected. Like anything in this world there is a learning curve to becoming a successful trader. But, what is the single biggest mistake you think new traders make?
Roy Cuzin - The most critical mistake would have to be leveraging. Taking high risk leveraged trades right from the get go is a sure recipe for destruction. In fact, even today, 12 years down the line, I am still very cautious when it comes to leveraging my trades.
Drink Forex - Leverage has been a hot topic recently with Cysec and the FCA both coming out stating they are considering capping leverage at 50:1, which would be in line with the NFA regulation. Do you think limiting leverage is a good thing or do you believe traders should be allow to trade on 400:1+ leverage?
Roy Cuzin - I think limiting leverage is a great thing, and that takes us back to the previous question. Since in my view leveraging is the biggest mistake traders do, without the proper understanding of its nature, limiting leverage right of the bat could actually prevent a lot of self-inflicting harm doing, mostly by new participants. I also think that 50:1 is still a huge leverage to use. They should limit it much further and all the way to 10:1, and even that is still pretty high.
Drink Forex - How much leverage do you generally trade with?
Roy Cuzin - I generally trade with no leverage at all. Once I secure my running positions by moving my Stop Loss to break even, I allow myself to put on some leverage. In any case, I never go above 2:1.
Drink Forex - As we all know leverage can be a double edge sword as it can compound your losses. Not that it has anything to do with leverage, but one question we always like to ask in interviews is what was your worst trade and what did you learn from it?
Roy Cuzin - To be honest, my worst trade was actually not about leverage, but rather about the lack of protection (i.e. Stop-Loss). Back in the days I tried trading without any stop loss orders, and it did go well for a while. But then one day came an exceptional move (as it always does) against one of my unprotected trades, which completely wiped out months and months of steady profits. From that point on, I have never left my positions un-guarded.
Drink Forex - We just have a few more questions we would like to ask you before we let you get going. We have discussed a lot of new traders and some of the pitfalls that they might run into. With this in mind, what is one piece of advice you can provide to new traders just starting out?
Roy Cuzin - In a nutshell, stay away from the intra-day charts, as they are very noisy and extremely deceiving. Their sole purpose is to fool traders into reckless overdrive and over-trading.
Drink Forex - If you could have a drink with anyone in the world who would it be and why?
Roy Cuzin - That would be Donald J Trump. That man has always been a fascinating type of character, but to top that all with the presidency of the most powerful country in the world. To me, that’s just legendary.
That concludes part one of our interview. Stay Tuned for part two!
How To Get into Contact with Roy
Website - www.TheChartWizard.com
Twitter - https://Twitter.com/Roy_Cuzin
Facebook - https://Facebook.com/TheChartWizard
YouTube - www.YouTube.com/c/RoyCuzin
Blogger - http://roycuzin.blogspot.ca
Google+ - www.google.com/+RoyCuzin
E-mail - RoyCuzin@TheChartWizard.com
Kiana has an amazing story, from growing up in Iran to getting an advanced degree in Engineering from a prestigious Japanese University. In addition to speaking 3 languages she has run several successful businesses, including Invest Diva.
While in university Kiana needed to convert Japanese Yen into US Dollars. Over the course of a several weeks she had saved herself a tremendous amount of money by converting her funds. This led her to exploring the Forex industry on a greater scale. With being in Japan she was introduced to the Ichimoku Kinko Hyo technical indicator and quickly became an expert on the indicator. Grab a drink and listen along as we get to know Kiana and how to trade using the Ichimoku Indicator.
Don't forget to purchase Kiana's new book: https://education.investdiva.com/ichimoku-waiting-list
Where to find Kiana Danial
From Accountant to unemployed to professional trader. After seeing an ad online this out of work accountant decided to take a major risk. He walked into a bank and took out a £3000 loan and within days he blew his account. Join us as he explains his comeback story and what it took to become a disciplined successful trader.
Where to find Samuel Morton
The response to Mr. Cho’s interview has been amazing. We have received a lot of messages and follow up questions. Most people were amazed at the $65,000 loss he incurred on his first trade. People wanted to know more of the details surrounding that trade and his mindset during and after. As a result we reached back out to Mr. Cho, who was gracious enough to extend us additional time and answer those questions.
If you have not read the first interview with Mr. Cho you can do so by clicking HERE.
Drink Forex - Thank you for giving us more time and answering some of the questions people have had since we initially posted your interview. The response has been amazing.
B.I Cho - You are welcome. Tell me, what questions did people have?
Drink Forex - Can you explain the lead up to putting on the wheat trade?
B.I Cho - Well, back then we really didn’t have any charts or quotes. We would have to call the broker to place orders and get quotes. The one thing we did have at my firm was a Chart Book from Moody’s. Each month Moody’s would send us a book that contained old charts. The book used to cost $1000 a month! We could then draw our indicators manually on those charts and figure out the trades we were going to take. But, on the wheat trade I didn’t use those charts or anything. My mindset was that I just wanted to make money. No game plan, no analysis.
So, I called my broker and said buy 5 Wheat. The position didn’t initially go against me all that much. The first couple of days it just floated around where I was up a little, then it went minus for a couple of days. Then for three days straight it locked limit down. I was unable to get out of the position and just had to wait until it stopped going limit. By the time it was done I had lost $65,000 USD.
Drink Forex - What were you feeling during that time?
B.I Cho - I was so fucking scared. I was feeling like oh shit oh shit. It is one of those things where it doesn’t feel real. It is like you can’t believe you have just lost so much money. Similar feeling to when you are playing large in Seven Eleven and the snake eyes are watching you. I was only 21 years old at the time and $65,000 was a lot of money to me.
Drink Forex - How did you recover from such a large loser so early on in your career?
B.I Cho - It was not easy. It took me 5 years to get back to being comfortable trading. For the next several years I just tried to be + or – 0. I didn’t really try to make money during that time, just tried to get more comfortable with the markets. It was a difficult time.
Drink Forex - Another question we received was what time frames do you look at?
B.I Cho - I have tested a lot of variations on time frames. I have found that doing my analysis on 4 hour and 1 day charts works best for my trading style. I do all of my analysis on those time frames and then use a 1,3 or 9 minute chart to find my exact entry and exit. Using the smaller time frames allows me to get the best possible price.
Drink Forex - What is the average length of your trades?
B.I Cho - It is tough to give you an average. Sometimes it is 1 week, sometimes it is 9 months. I was in a wheat trade about 5 years ago for over 9 months. But most of my swing trades, which is 60-70% of my trading lasts about 1-2 weeks though.
Drink Forex - Jumping back to risk management and mind set, do you ever let a winning trade turn into a losing trade?
B.I Cho - Mostly I put my stop loss at break even in my mind once my trade is in the positive. I don’t ever place stop losses on the platform though. But, if I am wrong I have no issue cutting a position and going the other way. It just all depends on support and resistance. I know when I am wrong. I am a firm believer that every day is a new day in trading. Just because I am a swing and position trader doesn’t mean I don’t look at the markets daily. Every morning I look at the charts for 60-90 minutes during my morning shit and over coffee and a cigarette. Then I decide what type of positions I am going to do and if I need to change anything with my current positions.
When I open positions against the market trend I typically will start with Options to limit the downside risk. When the market starts going in my direction I then start working Futures too. In case the market is going against me I let my options run out and open mostly futures in the other direction. I don’t like to take a loss on trades...so most trading decisions can turn into a win trade too by working with this strategy. Currently, I believed Oil would have a reversal. So, I bought 5 puts when it was trading around 50.80. I knew it could have went higher, but I had a feeling it would turn around.
Drink Forex - What Futures markets do you trade?
B.I Cho - I mostly trade CME and CBOT products for Futures. And trade FX and CFDs during the Asian hours. FX and CFDs are new to me though. I only started 5 years ago because the Futures market changed. It was becoming very difficult. I wasn’t a fan of FX and CFDs for a long time, but I had to adjust.
Drink Forex - We have talked a lot about a bad trade you have done, do you remember any good trades?
B.I Cho - Well… I remember one good trade, but it was more lucky than good. I was a Futures broker at the time. We had a female customer who didn’t really know anything about the market, she deposited $200,000 with us. Her parents had just passed away and she received a large inheritance. It was 1994 or 95, I can’t remember the exact year. But, there was a coffee crisis going on in South America. There were mushrooms or worms growing on the coffee plants and most of the beans were destroyed. As a result coffee prices were running straight up. So this client deposited on a Friday and typically we were instructed to not put positions on during Friday’s session, and certainly not to hold positions over the weekend. Well my boss told me to buy 20 Coffee contracts, but make sure I closed them before the weekend. So, I bought 20 Coffee contacts pretty early in the day. I got busy and on Fridays we would head out for a beer and dinner around 3pm.
We headed out and were drinking and having a good time. Early evening after some cups of beer I realized I did not close the position. I jumped in a cab and rushed back to the office. But, by the time I got there the market had closed. It closed at 8:15pm my time. In the Softs and Grains markets, prices can move very quickly. The whole weekend I was shaking and scared because it was my fault that I didn’t close the position. I thought I was going to get fired. Come Monday, the markets opened and went against me. Now I really couldn’t tell my boss because we were in a losing trade, so I waited. Late during Monday’s session the market started to rally, it continued into Tuesday and Wednesday and the rest of the week. Finally, I went and told my boss about the Coffee trade and how I kept the position on during the weekend. But, the good news was the client now had $1.1 million in her trading account. My boss was so happy and I received a huge bonus on that trade. By the end of the week though the client closed her account. She didn’t know about the mistake, but she realized she was lucky and that the market could have easily went that far against her, and she would have lost everything.
Drink Forex - Yeah, I would say that turned out well for her though.
B.I Cho - We were all lucky, but it was a very memorable experience.