Interview with Aaron Thompson

Welcome to the first trader interview in a long row here on our website.

Our goal with these interviews is to give new and experienced traders an idea of the many different approaches traders can have to Trading, what kind of problems the traders experience and what they have learned along the way.

The first interview is with Aaron Thompson. Aaron is not what we would normally define as a day trader since his positions are more like swing Trading. But he is very active on social medias and many know him as a solid trader with a good performance. Here is the interview Aaron gave us.

 

10 Daytrader questions:

1. When did you day trade/swing trade for the first time? And how did you get started?

I started in 2012, I was generally always looking at ways to compound money, and my journey had finally led me to the markets.

2. How long time did it take for you to have your first profitable month?

I had a profitable month within a year, but I don’t think that means much, a month is too short of a time frame to judge whether you’ve progressed enough at that point. Even though I had a profitable month, my knowledge base was still at a level to where it was likely more luck than skill

3. What was your biggest mistake in the beginning?

Wanting to be right 100% of the time, and taking losses personally. I equated losses as the market telling me that my theory wasn’t correct, and I of course had to prove I was correct. This led to bad habits like widening stop losses, averaging down, and position sizing too large.

4. Which markets are your favorit markets to trade?

The Forex market is still my favorite, due to having the most experience there.

5. How many trades do you take per week?

It depends on how many opportunities are presented to me, I’d say 1-3, with 1 being much more likely than 3. Maybe 1.5 on average

6. In your opinion what is the most important skill for a day trader?

I’d say for day trading the most important things to know are 1) Your risk of draw down, and risk of ruin 2) How to size positions correctly, 3) Knowing that in the short term prices are extrapolative 4) Knowing how to plan for the unexpected (gap downs on your trade on unexpected news)

7. How do you cope with a string of losers or with one really bad day?

Of course it isn’t enjoyable, but I just try to remind myself that I can lose 5+ trades in a row, and make the money back from those plus some if I win 1 trade. I also remind myself myself of the Pareto principle for trading. Across all traders, of all styles research has shown that is common for 10% of trades to make 90% of the profits, so returns are distributed in a really fat-tailed manner. So I know that I will only break even on most of my trades, but I have to take those trades in order to get the 10% I need to make a profit.

8. What is your best advice for people wanting to learn day trading?

I always point people to babypips, but the other thing I’d say is that you should possibly give longer time horizons a second thought before committing to Day-Trading

9. How much start up capital would you recommend as a minimum?

This depends on your costs, and goals. What you need to make a living trading, and just to make part time income will be different. What someone living in New York City, and the Philippines will need to make for it to be worth it will be different. What someone with three children, and someone who has no responsibilities will need will be different. My general advice is to obsessively lower your cost if you want to depend on trading for a living, because returns aren’t guaranteed to come at regular intervals like they would at a job.

10. Where are you as a trader in 5 years?

I see myself more knowledgeable than I am today, and still trading which is good enough for me.

Hans Henrik Nielsen

Hans Henrik Nielsen is a very experienced day and swing trader, teacher and publisher, who in the last couple of years has produced 80-134% profit on his day trading.

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