Dear Financial Voice Reader,

I write to you from Hong Kong. I was asked a great question recently: “What are you greatest success and failures in trading forex?”
My success should be broken down into educational and trading. You see trading, like all activities worth doing in life, requires life-long learning.
Educational
When I decided I no longer wanted to commute and be a barrister (lawyer) but far more enjoyed the markets, I knew my passion alone would not be enough. I knew I would have to find a way of learning from the best traders in the world. So I approached the Financial Times and the world’s ten leading traders from London, New York and Chicago. The traders I approached agreed to meet me, and the Financial Times agreed to publish all I learnt. The traders included the world’s largest forex trader - Bill Lipschutz, Global Head of Forex at Salomon Brothers whose Chairman was Warren Buffet. (For those interested that book is called ‘The Mind of a Trader’)
Another educational triumph for me was when I converted the best lessons from my 18 books into videos. Books became something people did not learn from. And the best way to continue learning is to teach. So by creating such free videos for people, it was a learning triumph for me. These videos added the personality of my talks which I was able to give worldwide.
Trading
The biggest success in trading, is not a single trade as you might expect. Trading success is finding a process and system which allows consistency of profits over a prolonged period of time. To me that was the key to success. That takes time. But, it is well worth it. That to me has been my greatest achievement. What does such a system and process entail?
Working out that the best traders in the world use certain simple rules was a huge triumph. These can be summarised as ‘stop losses’ – they always know when getting into a trade, when they will get out. They make sure such risk of loss is limited by ensuring that the loss will be small by making sure you place very little money in a trade. You also ensure when you are profitable, you reinvest those profits into a winning position. Most losing traders instead take their profits too quickly and run and miss out on bigger gains.
Failures?
There have indeed been failures. All the systems that did not work, all the processes. But just like Edison looking to invent the lightbulb, I found 100 ways of not to make a light bulb!
Also, when the credit crunch happened, we failed to foresee it. It meant that we did not raise as much money into the hedge fund as we might otherwise have done. Such cycles happen.
Alpesh Patel
To attend my webinars: www.alpeshpatel.com