YTE speaks to trader Kat Sayers and shares with you the trajectory of her trading career.
How did you get into trading?
I first learnt about investing from my father. I was quite young at the time. After my first year out of high school I spent a year working and saving. I later invested my savings in some shares. I made a good profit and was able to use it to support my education at university.
In 2010, after completing my undergraduate degree, I had the good fortune to work with Carlo at Traders Circle. He introduced me to the options market. However, at the time I decided to continue my education on another path and did not apply what I had learnt. I did nothing during that time, which taught me a lesson that is often repeated; ‘when you do nothing, nothing happens’. Two years ago I returned and went through the Traders Circle program again as a refresher. 12 months ago I started trading options for the first time. There have been some tough lessons along the way, but I love it.
What do you trade: for example, shares, indexes or currencies, and why?
I only trade options and invest in shares for longer term portfolio development. As a younger person starting out I think it is important to develop a strong portfolio over time. However, trading options is a different ball game altogether. First of all, I like options due to the familiarity I have with the options market and the strategies I have learned in trading it. Secondly, there is a versatility in trading options that does not exist when investing in shares. It is also more fast paced and often more challenging, which is something I find enjoyable and stimulating.
Trading the options market is a part of my long term money management and wealth accrual plan. What I love about it is the flexibility it gives me. I travel pretty frequently and trading the market is something you can do from any part of the world that has an Internet connection. Furthermore, I am young and still developing my career, so this gives me the chance to develop a second line of revenue while I study or switch between jobs. I also think it is a great option for women, as it gives you more choice and flexibility around what you want to do when it comes to having a family. This is something you can do from home, so if I decide to have children I can do so and still generate an income from home. I find it really empowering to know that a 9 to 5 routine does not have to be the sole source of my income.
Do you think the everyday person on the street has a chance? Can they become successful traders?
I guess I would consider myself an ‘everyday person off the street’, so to speak, so my answer to that would have to be yes. I grew up on a dairy farm in Gippsland and have self-funded my education. Therefore, learning about investing and trading has come through the development of my own interest and networking.
Over the years I have witnessed that trading is something that requires certain factors if you are going to be consistently successful over the longer term. I think that you have to approach it with a ‘ready’ mindset, have a willingness to learn, employ discipline, communicate with your educators and exercise resilience. The fact is, not every trade is going to go in your favour. Like many people, I learnt this truth the hard way. In my experience, that the sooner I employ these factors, the better I trade. Moreover, it also leads to a higher rate of personal success.
How have you been able to learn and educate yourself about the markets?
I have been very fortunate in terms of my exposure to learning about trading the options market. I first learnt these trading rules in 2010. Consequently, I was exposed to the same strategies that were slightly modified for the current market when I returned to trading in 2014. Since then I have continued to gain exposure to trading strategies through volunteering at the Traders Circle training events. I get to reconsolidate principles and practice, gain exposure to new material and communicate with other people passionate about trading the options market.
I spent some time as a competitive athlete over the years, so for me a good support network is one of the key elements to ongoing success. Therefore, these events are an invaluable part of my growth and development as a trader. I also spend a little time each day looking over the market and reading through relevant material to help expand my market knowledge. Finally, I take full advantage of the service that Traders Circle offers by calling up and having a chat with the advisors, asking questions and learning from their experience as well.
What were some of the mistakes you made when you started out?
As the song says…. ‘I’ve done all the dumb things…’, but then I have always been one to insist on learning things the hard way. However, I discourage others from following my path in that respect. I would suggest, just stick to the rules, particularly early on.
Like many people starting out, I made simple mistakes that ended up costing me significantly more than they should have. I simply call these my ‘learning investments’. Most of them resulted from either breaking the trading rules outright, overlooking important factors or poor money management.
For instance, early on I was not very clear about the significance of support and resistance lines and had a few trades go against me because of this. However, the damage was really done because I didn’t exit the trades as early as I should have. I let the losses run rather than cutting them off early (within 10 to 20%). This experience taught me the importance of speaking to an advisor during negative times. Having a second or even third or fourth pair of eyes on a trade can help remove the emotion experienced when in a losing trade. It can help you make rational decisions that fall within your own money management plan. Lesson learnt: Communication is critical.
My second critical mistake was breaking my own trade management plan by having too much (greater than 20% of my trading bank) invested in a single trade. Unfortunately, the trade went against me. Although I exited at an appropriate time, the loss had still taken a decent chunk out of my trading bank. Lesson learnt: Protect your capital.
What are some of your golden rules?
If in doubt stay/get out. Sometimes if you are too enthusiastic or impatient, you may end up talking yourself into doing a trade that you’re not a 100% sure about. In the past, these trades have gone against me. Therefore, I have learnt that sometimes the best trades are the ones you don’t do. If I am still not sure, I will cross check with the trading desk. Often they have some information I may have missed or overlooked, which helps me gain clarity on whether I should be getting into or out of a trade.
Also, take responsibility for your trading. Throughout the years I have witnessed in others and also myself, the temptation to hold others responsible for your trade. It’s often easier to place blame on someone else, but people who do this rarely become successful traders. Even when it comes to recommended trades, I believe you have to take full responsibility for your actions. No one gets it right 100% of the time, but if you take responsibility for your own trades, you’re more likely to make consistent good decisions that you agree with. Ultimately, this leads to the development of long term success.
What’s the number one thing traders can do to improve their performance?
I think it’s key to communicate with your educators and advisors. Effective communication can help you overcome any insecurities you might have in placing a trade, knowing when to exit or any other aspects of trading or money management you may wish to grow and develop.
However, this alone will not be sufficient. ‘Practice makes perfect’- so practice through placing live trades. Even paper trading is an invaluable aspect of your growth and development as a trader. Some of my best trading lessons have come through experimenting on paper with riskier trades. They rarely pay off, and therefore I learnt that sticking to your rules is the best strategy for developing excellence rather than going for the ‘get rich quick’ trades.
Finally, what is core to a trader’s success?
Trading successfully over the long term is not a matter of tossing a coin and hoping for the best. You have to have a disciplined approach that is based on market understanding and a set of rules to guide you while making consistent successful decisions. This can only be developed with practice and time.
The other thing is, focus on the actions and not the outcome. Financial success is secured by focusing on how to trade well and developing your money management skills. So don’t worry if you’re not achieving your goals in a week, a month or a year. Keep the focus on your development and getting the direction right. A quote I read recently that I think really applies is: ‘you never see a small child fall over and say “you know what….?! This walking thing is not for me!!”’.
This defines my approach to trading. If you keep working on it, soon enough standing becomes walking, walking becomes running and off you go. So, it’s as much about the process as it is about the outcome. The falls along the way are just the little bumps that help you stand up again. They also get less frequent over time. So enjoy it and most importantly have fun.