How To Trade — Alpesh Patel Hedge Fund CEO

How to trade is actually 27 separate questions. As a hedge fund manager I get frustrated by the amount of junk on the internet.

Why most people get trading wrong

I am going to give short answers below and far more depth on my webinar — link at the bottom. The answers are based on my Financial Times books, Bloomberg TV show and my experience as a hedge fund manager. My biog at the bottom.

Your Top 27 Trading Questions:

1. How many hours does it take to master how to trade? [not 10,000. Best I’ve seen is 30 hours. Most take 100 hours]
2. Which products should I trade based on the data? [Dax, Minor currencies, ‘smooth’ stocks]
3. Do full-time traders make more or less than part-time ones? [Depends]

We are not forecasting, because we do not have a time machine. We are trend following using sophisticated algos

1. Are men more profitable than women? [No]
2. Which products are the most and least profitable based on research data you have? [Most: minor v minor fx pairs. Least: Major v Major when US and UK markets open]
3. Can I make 1k, without losing 1k? How long does it take? [The nub of the problem we solve for you] [A statistical edge is needed, but a small one. Big ones don’t exist]
4. What times of the day are better to trade profitably? [post US close in FX]
5. Why should I avoid trading software companies like the plague? [They’d be running hedge funds if they worked]
6. What is the average holding period for a winning trade? [Shorter than a losing one]
7. What is the average holding period for a losing trade? [Longer than a winning one!]
8. We read everywhere about algos and AI — what is the real deal according to hedge fund managers? [Few use AI. They bandy the words. Neural networks have been around for decades anyway]

There is a world to choose from. We scan and focus on 3–5 open positions from the best opportunities

1. Can you show me what hedge funds do to pick trades which I can use? [Yes, actual slides shows from two of the world’s largest hedge funds I will show you]
2. How little money can I start with? [Zero]
3. Why does your research show those getting trading alerts did worse than those at the screen? [They overtraded and reduced quality of picks]
4. How do you limit screen time and maximise profitability? [Scan — place trade — set exits — go away]
5. How many winning trades is reasonable according to the world’s largest trader? [40%!]
6. Why do 70–80% lose money trading? [add to losers, wide stops, no statistical edge]
7. Will I get rich quick trading [no — unless you’re lucky — assume you’re not lucky]

We try to find trades which do not move in lockstep with each other

1. How long will it take to make a reasonable sum each month [we will go through a business plan]
2. What are the rules for finding a teacher/mentor/software? [Rule 1: Are they a regulated hedge fund? And 5 More Rules]
3. When you are on the BBC or Bloomberg TV, what strategies do you use about market moves, given your reputation is on the block? [filter multiple momentum indications]
4. Do professionals use ‘profit targets?’ [no, they add to winners]
5. What is a volatility based stop and why is it better than a regular stop loss? [because it is customised to market conditions]
6. How do brokers rip you off? How can you outsmart them? [spike prices to take out stops]
7. What Winning Traders Do and Losers Do Not [Based on research from my books]
8. Am I too young/too old to be trading? [no. I started at age 12 and teach people who are 90]
9. What key skills will help me? [Detachment, among others as explained by top hedge fund managers]

If you want to see these answered in a lot more detail on a webinar — www.alpeshpatel.com/covid or if you miss it then www.trading-champions.com

The best thing you can do even if you can’t make it, is get ready by joining my Channel on your phone/desktop using this link: https://t.me/pipspredator AND following me on LinkedIn to see my latest posts: https://www.linkedin.com/in/alpeshbpatel/

There are a lot of trading opportunities — the key is not to be diverted by noise and chasing the market

Alpesh Patel