169: Jack Ma – Strategies Die, Skills Survive

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Hey everybody, welcome to Chat With Traders episode 169. I'm pleased to be able to share this episode with you. I feel as though it's a really solid interview or conversation with Jack Maher. Jack is someone who I would consider to be a very talented futures trader, and he lives here in Sydney. Jack has traded prop for about five years now, and this year he's taken on a great commitment to form something bigger than himself.

It's a firm of his own which actually leverages the resources and the infrastructure of another firm, being Genesis Trading. And right now, Jack is currently mentoring and financially backing four developing traders who he sees potential in. So this is a topic you'll definitely hear more about later in the episode. Jack's way of trading is what he describes as an infantry style. He trades the Australian ninety day bank bills.

Uh, by continually working structures around his expectations of where the yield strip is going to be without being too exposed to outright risk. He also trades Australian three year and ten year government bonds, but mostly during the contract expiry, or the period known as rolls. As always, we discuss many things, prop trading, strategy, developing skill, psychology and mindset, competition, and plenty more.

But the exciting part about all of this is if you would prefer to watch the conversation rather than just listening to the audio only like you currently are, you can find the video on the ChatwithTraders YouTube channel. And as this is the last episode of 2018, I would like to say to you, have a nice Christmas. Make sure to enjoy some time away from the screens. And of course, thank you for continuing to support Chatwith Traders throughout the year.

Now enjoy the episode with Jack. He's a good dude who I respect and I'm sure he'll be doing this for many years to come. I'm actually very interested to follow along with his progression and see where he takes things from here. Anyway, folks, on with the episode. Here we go. Please welcome Jack Ma. Yeah, it's coming through. Cool. Alright man, well let's just uh make do. Great. This is how we roll. Yeah. I don't think it's too obvious in the camera. Nah, it's g it's fine.

Anyway, man, let's just start the way we normally do and um talk a bit about how you actually got into trading. So where did things Like where did you start out? Uh it came down to um you know I was in banking for about six years prior to that in sort of the commercial banking. So I worked at ANZ, Westpac.

Um and I I've always had sort of a interest in the markets, right? I've moved from commercial banking through various different divisions until I got to where where I thought I wanted to be, which was the so-called equity division in uh West Patrick. U it was more of a product based role. Um there weren't any real trading or market based. So

I pretty much walked out of that job because I was unsatisfied. I sat down to myself and went, What do I actually want? I started listing the things I want, you know, and went from being remunerated properly or according to you know your contribution, freedom of time, freedom of location, um, and you know, no red tape. And kinda actually came down to either, you know, becoming a Um you know, celebrity.

or trading. So I guess I went with that. Um and then and I just started looking, you know, and back then the old Genesis Alium. Yeah, that they they had a um they were on seek, they had a job application and I went for it. Okay. Okay. And had you done any trading on the side, like while you're doing this Yeah, I have. Um I was doing C F D Um, just, you know, probably pop a couple of grand into the account, did did sort of everything, you know, from FX to gold to index.

Um blew up two accounts. I I pretty much was like, Yeah, I don't know how to trade. But, you know, um I was happy to actually get the opportunity at Allium because you know, I think Working at a professional firm, getting trained up.

alongside other people trying to make this living and they're all committed to it. And this is not some sort of spend a bit of time at home, you know, in the afternoon or at night, you know, after your daytime job. It it it gets you quite motivated. And, you know, that that actually helped me a lot. Yeah, okay. And so those two accounts that you blew up while you were just trading on the side, was that any like real money? Like obviously it was real money, but like was it

Just a couple grand? Yeah. Oh it was one was three, one was five. Okay. So it wasn't crazy, but I guess I I did take it seriously, um, even for the amount of money that I was trading in the sense that'cause for me it was if I blew this up it's it's really bad on my own sort of mentality as well. Of course.

Well that's what I wanted to ask you actually, is why you made the decision to go into prop trading. Like obviously you could have continued as a retail trader. Uh but you made a decision to actually look for a prop firm which was hiring at the time or taking on new traders. What advantages did you see of actually going down the prop trading route?

It actually is different to what I expect it to be. I initially thought, you know, I went back and looked at how I blew up my accounts. I thought, well, it's pretty clear I don't know what I'm doing. And I was here to learn knowledge and, you know, go, wow, you know, there are people who's made it in a career. They should be able to teach me. It turned out actually to be something different, but

also in a good way to help me. You know, coming to a prop firm, what what it does is it sets you up in the right mentality to be successful. You know, y you're now treating this as a full time job. You're committing your entire day into it. There are like minded people next to you. It's less about this the knowledge, which is important, but more about sort of how you approach it, which I think is probably more important to. to become a successful trader than some

crazy, you know, strategy or or system that you find somewhere. So when you started, uh did you go through a training program of any sorts? Yeah, I did. I would say it's very rudimentary, um, in in a sense that It's more about learning what we trade, right? So at Allium we traded interest rate futures. You know, very few, I think, retail traders. get to trade that, um, or even look at that market. Um so you gotta learn what

what the bills market look like, what the bonds market look like, how it even works. You know, very sort of basic knowledge based. Um and a sort of a a strategy that I would say is is very basic. Most of the learning, and this is the important part which I learned about coming to a problem is from yourself, you developing yourself. Without someone telling you that's the way to go, it feels wrong. Um, you know, like other things, you feel like you should consult.

you know, all the experts and and and, you know, get all the knowledge that you want. But it's more so actually training based. It's a training skill base. That's that's I guess the main thing I learned. go into a prof phone. And so when you started, did you start with like a group of other new traders as well? Yep. Yep. So the the program at Allen was they take in they have an intake

um, go to through a training program, which is also an assessment, right? So at the end people start falling off during the course or get fired. Um they take on, say, four to five at the end of that course. Okay. Now obviously just I guess going back a couple steps, when you applied for this job, or it's not really a job, is it? No. There's no salary. No. Which is something else I want to ask you about. Sure.

Obviously there's a lot of people who are going to apply for that sort of role. you got uh given the opportunity or how come they picked you out of everyone who kind of applied? Like did you have any skills or anything which you think uh appealed to those who were in charge of the hiring? I I my oh and this is this is probably a slight contribution. My my honest opinion about prop shops, right? Now there's there's two types, you know, there's there's types such as, you know

Um, Optiva, Tibra, those guys, right, where they pay a very high starting salary to grad. So they have a very I guess tough recruitment process. Uh, my opinion is it's actually not very hard to get into a prop shop, provided y you're the right kind of person. Now, that m means sort of, you know, you're competitive. You are

you know, driven, you you know, you you you're not scared of taking risks, right? Now that sounds like everyone should have it, but you know, people say they're competitive, but you know, it it's the actions that really count. And people can tell after interview, especially during that six week program.'Cause you're gonna fall over. You know, you you don't know what you're doing in this market, you're gonna get crushed and

how you react to that is is that shows the true character. So in that respect, I don't think it's very hard. And I think I had the right personality for this this sort of a role. You know, I wasn't scared of having no salary. I was, you know, I'm happy to take risks. Um and I'm I'm very competitive.

I guess. So how did you set yourself up to go into prop, like with regards to not having a salary? Obviously you'd been in banking for about six years or so where you were getting a salary each week or each month. And now you're going into prop trading where you literally eat what you kill. Yeah. Uh did you have uh generous savings to fall back on or something?

You know, I wasn't naive. I was like, Oh I'm not gonna make money in that first year. You know, you're learning how to do. If I do great, right, but you can't really plan for that. I I saved up, you know, a lot during my um six years of working.

I was actually gonna buy a house. I'm not sure which one's c which one's doing better. The the property or my c trading career if I bought it seven years ago. But um no, so you know, I had a lot of savings to s to put me through and and I was willing to, you know, go I can probably live four years without any pay. Okay. Um so and that allowed me to, you know, to actually move on move forward in this industry. Yeah. Now you said that you were at Alliom. Yep.

That was Mark Gardner's firm, right? Yes. Yeah. Okay. So Mark Gardiner is someone who has previously been on the podcast. Listers all know that, uh episode one hundred thirty two. What were some of the things you picked up from him? Was he I I presume he was probably one of the guys who was uh quite influential to you early on and uh

as particularly as a mentor as well. Is that was that the case? Yeah, that was the case. I was just gonna say so I mean, he he's obviously been involved in a firm and there was two parts of my trading career that was, you know, sort of related Well very working very closely with him. One was when we had a group of um traders together that

Sort of he formed this group for us. Um, and that really helped a lot. That's that's driven most of my sort of philosophy about how trading should be. It's a lonely job.

Right. If you you know, there's no salary, right? There's not really much of a teamwork. Everyone's trading their own books. So having somewhat of a team environment, even just for the sake of, you know, having someone to bounce ideas off and having that casual banter when, you know, you're bored or the market's dead or you're just not having a good day trading.

Um it's really important, you know. So that original group, that was really important for me. And then later on Mark became my mentor officially, um in a one-on-one um basis. And I think, you know, a lot of things the the most important thing I I think I learned from is just that an attitude you're gonna sort of bring to trading. You know, it's very easy to blame things. You can blame the market, you could blame

You know, the slow system, you know, internet speed, whatever. F you'll f people find something to blame. Um and and we we have one motto in the group that Mark brought up. It was called Be Better. And that that literally answers pretty much every question you have. You know, why did you lose money? Well, instead of trying to find something to blame.

Be better mean means okay, look at it, how could you have improved it? And if you keep having that mentality going to every trade that you screw up, that you know you're gonna be a much better trader. No doubt. Yeah. Obviously you've got to take responsibility. And that's like uh Mike Bellafure always says, uh you can be better uh you can be better tomorrow than you are today. Yeah.

So how did you go during that first year? You said before that you were willing to you know, you had enough savings that if a couple of years went by and you didn't make any money, you would be okay.

But how did you actually end up going during that let's say first year? Yeah, that's a very interesting story'cause there's two ways you can look at it. One way is in the first six months I'd say I did really well. Um, I pretty much didn't have I I was one of those guys who Started making money straight away. I figured out one specific strategy very early on and I just abused it. I mean, in a good way, right? And and I kept going. So so I clipped up very far.

um during the first six months relative to, you know, sort of what the typical rate people, you know, increase their trading size with. Um and, you know, at that time I thought I was I was doing really well. What I later learned is for people, especially in their first year, they need to focus more on becoming a better trader than making money. Um, because later on the market changed and what I used to do um stopped working and I had to learn the hard way, sort of how to how to make money again.

Um and that that's something that it's easy to forget about because, you know, people come into trading and all they think about is how to make money, you know, how how to generate that income. And it's not about that. This is a long this is a marathon. You know, you're here

If you don't have three to five years planned, I I would say to people, you know, don't don't worry about it. Yeah. So how come what you were trading stopped working? Like in your words you said it stopped working. How come? Oh, I I I I can be very specific. So

When I first started there was a lot of random orders in the bills market in Australia, right? And by random I mean people paying offers or selling into bids That are really stupid. Um, you know, these are these are probably not other prop traders. These are are most likely, you know, either investment banks or funds who who who has some sort of a daily VWAP target, right? They don't really care about individual fields. They have a system that just

Does you know, maybe it's a TWAP system, right? Just every 10 seconds or every minute drop some into whatever price. Now we trade intraday. Right. Um and for that I'll say intraday arbitrage or scalp. Right. So we we're only trying to make a tick or two per trade in the bond uh bills market. So Whereas they have a bigger view of the whole day, we'd we'd get filled on a bit and if we can sell the one tick higher, that's our entire goal. So I just you know

came in and queued every single price. Um, you know, up and down. Obviously I was very diligent in managing so I don't get run over on them, but I was literally waiting for the system to, you know, fill me for free and then just quickly get out of it. So were you on both the bid and the offer? That's that's right. So I I'd queue probably four four down, four up from the market. Um so if wherever m we move, I've got somewhere. I've got an order there that could get filled by a lucky system.

Okay. So if you get filled on the bid then you're just hoping it's gonna come back and Yeah. Uh well usually when I get filled on a bid, it usually be like a crazy bid. There might be ten thousand lots there. The offer will be choice. You know, no no bids or offers there. So I'll be the only person trying to sell. And usually there's enough randomness in a market for me to get rotate that, which is you know, take for a point.

Okay. And it's probably also worth pointing out like if you're doing this in the bank in bank bills. the range on any given day is quite small. Oh, very small, yeah. Bank bills. So it sounds crazy to just go for one single ticks. But, you know, bank bills, even in the old days you're looking at four to five five to six tick ranges on a non sort of tier one data or if there's just nothing crazy happening in the world, right?

Nowadays it's even smaller. You know, you're talking about two to three, some that's something that's one. Yeah, that's crazy. That's gonna sound really insane to some people listening to this. Yeah. Um, who are who are like very unfamiliar with that market. Yeah. Um so So so what happened? Like how come like you said you were trading that way for about six months or so and then you had to change things up because you

Stock making money. So a c couple of things came into play. One, there were less free orders. I think the executors, you know, in the immensive banks, all the funds, they started getting a little bit smarter. um about how they execute. And the other thing is our market became sort of more people joining. There was more algos who who would be much faster than you at getting Q at a price. Um so

And also as you trade bigger, um, you know, the the random clip sizes that fill you, they're pretty small. You know, it's quite hard to get a big clip away, um, hope on lucky fills. Um so all these factors together made me not that profitable anymore. Also it's very hard to go become a better trader. You know, if you talk uh of all the say some of the biggest traders you've interviewed, that is definitely not what all they do, right? It's Right, yeah. And you said also that you got clipped up um

quite quickly. Yeah. Which uh for anyone listening who might not understand that terminology, it just means that your risk limits were increased. Yeah. And you were allowed to uh take larger size positions essentially. Yeah. Um Did that become an issue for you because you were allowed to trade bigger and bigger and bigger uh and then after six months or thereabouts, uh you began to find that your strategy or the way that you had been making money was becoming less effective.

Uh, did that cause you any grief like because you were now trading bigger?

And it wasn't really working. Oh, absolutely. And and that that's where I think the initial part of my career almost ended. You know, I I hit a plateau. You know, I couldn't I I just I just I just couldn't bypass a certain sort of level of income and I I sort of knew what it was and I started to train deliberately for it. And you know, it is very important. So I realized I didn't know how to really

trade aggressively into the market. Right. I was just sitting passively on queues waiting for lucky feels. Um so I I took two months off to practice that. Um when I say Two to two months off as in. I'm still trading, but I recognize it's not about profits. So I force myself to not. do what wasn't working, what I was comforta it what it wasn't not working, right? It was just less effective. But I decided to just cut that out. I was like, look, it's not about the money for these couple of months.

I'm gonna go to the right. Work hard on sort of aggressive style trading, going to market, you know, trading the momentum, trading the flow rather than sitting passively. Obviously that's not great for my PL for that two month, but I thought that was a very important lesson for me to be able to practice this deliberately. Okay. And were you on sim during those two months or is it still real money? Yeah. I I I'll say once you've gone live, there's very little point going back to sim because

all of the problems that come from trading is is probably to do with mentality, to deal with money. Right. You know, the losses, the wins. Yeah.

And you were at Allium for how long before you went to Macquarie? That was your next move, right? So I did that for two and a half years. Um, and you know, I would I'll say I I was still stuck at my plateau, despite having made a few breakthroughs in my sort of trading style, but I was still really plateauing and I wasn't sure why I wasn't happy, which is funny because I figured that out after I went to Maccore.

Okay, so what were you doing at Macquarie? Like why did why did you want to leave? Like why did you want to make that move? I mean I think t the answer's a lot less noble than any of the other things. It it just sounds awesome. Like I just wanted to be an investment banking trader.

Um, it sounds good on paper and you know, it's something I've always wanted to do as well. Um I've never been, you know, inside a trading floor for investment bank on see what it's like. I know they deal with l huge institutional clients. huge orders. I want to see what is what that's like. What sort of trading like were you doing there? Like

Were you working orders for clients? Or so it wasn't actually proprietary trading there? No. They I I don't think many Messen Banks has proprietary departments, if if any, um, at all. Um yeah, so I was an equity portfolio trader. Um but by trader, obviously not proprietary, it was broking. So I I, you know, looked after large clients, which you know, funds and global funds and stuff like that mostly.

And they'd have something say to do and then ask me to execute for them and they all give me what sort of result they want to achieve'cause there's a lot of different ways you can get filled. Or sorry, a lot of different ways these uh um funds want to be filled. Um and they'll give you the strategy and you work it for them. They might ask for your opinion, they might ask um on your thoughts and what you hear in a market, stuff like that.

Okay. And y was this in equities or was it in futures? Okay. So that must have also involve bit of a learning curve because you were at Alliom you were just doing futures, right? Yeah. I I would say the biggest learning curve was learning you're not prop anymore. Okay. And just stop trying to put forward your opinion. Because I mean as a prop, if you don't have an opinion There's no point, right?

So how were you judged? Like what obviously when you're a prop trader, you're kinda ultimately you're judged on your P and L That's right. Yeah. How were you judged at uh well I don't know if judged might be a bit of a harsh word, but how how's your work monitored? Yeah. Um To be honest, uh pretty much there's two parts to it,'cause there's also a sales aspect, as you you can imagine, being a broker, right? You've got to generate.

new clients or at least expand existing clients. Um and you're judged on commission, right? You judge on how much commission you bring in. If everyone executes through you and they're all massive orders, you look amazing. Now, obviously if you're not really good at executing

After all, people are gonna stop giving you orders. You know, if you keep trashing if you keep giving bad calls and you keep trashing their orders, it's that's gonna affect it. But ultimately obviously it came down to pure the commission dollars. Um and that, you know, that that was different for me. Uh that's that's the biggest part I struggle with. You know, I'm I sort of pride myself in having my own view and like you said, you know, based on PNL.

Which is something very few people really cared about over there. Yeah. You're a bit more in control of things, I guess, too. Yeah. Yeah. Are you ready to get serious about trading? Then join Tasty Trade, Investopedia's best platform for options trading in 2026. Stocks, options, futures, and more. Tasty Trade has everything you trade all in one platform. Get low commissions, including zero commission on stocks.

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So uh you made the return back to prop? Yeah. When was that? That was in December sixteen. Yeah, December sixteen.

You know, like so I I realised having done that, and d this is actually a really big turning point in my trading career, because having done that, I'll you know, I had this dream job in my head. And I've gone and done it, I was like, Yeah, it's all right. It's I I actually didn't enjoy it as much as I thought I would. Um and so having done that, it's kind of crossed up my mind. And then I sat back and go, mate, what what do I actually know how to do? Like what am I good at?

I think trading, that's it. There's nothing really else, you know, I really want to be doing. So when I came back, I came back with a very different mentality. And I think this is one of the sort of things I do want to tell people about is like trading's not a let's test the waters kind of thing. In the beginning, sure. Like especially if you've got financial constraints. But

You need to commit completely to it. And when I came back from Macquarie and I realized this has to work now. This is all I'm going to be doing. There's no backup. If I leave here, yeah, uh, you know, I'm probably qualified to get an analyst job somewhere. But I'm gonna hate it. I'm gonna absolutely, right? And and it's not gonna be great. So I really don't want that to happen. So in that respect, this became a must work kind of thing and

I'm devoted to it, I'm committed to it. And that changes things because when you're just testing waters, you're s you're unsure of whether it's going to work or not. So you're You know, y as soon as you hit something like a big obstacle, a big drawdown, a big loss streak. You start looking for things you were good at. You start thinking about your backups. If you don't have a backup, then you're thinking about how I'm going to get guest rooted.

And that changes a lot. Yeah, okay. So how did you treat things differently when you came back? Like were there any noticeable changes? Like you said. It's like like you just said, like you could go get an analyst job if worse comes to worse, but you said you would hate it and it's not something you want to do. You really wanted to be trading. How did you

How did you change things or how did you do things differently this time around to make sure that you wouldn't have to resort to an analyst job? Yeah. I think the f the first thing was I I stopped trying to maybe prove

Like when when you start a trading geek, right, and you you're unsure of of what you what you want to be doing, I think w you know, you you try to play safe. You try to play not to lose. A little bit. So I mean, not for everybody necessarily, but um especially when you come into a firm like this, you know, you you you don't wanna be the first guy to get fired, uh,'cause you've lost everything.

But when I came back, it was I realised, you know, I this is a job that I'm you know, this is not an eight hour job. This is I mean, twelve, sixteen, twenty, you know, depending on w you know, which month of the year. It it's crazy, right? So I was much more committed. I I I w I wanted to go f much

further ahead than than I used to. And all right, this must work. So I started looking for many ways to improve my trading rather than just look good, have a look good track record. For me, whatever was happening now, this is a process. I'm I I want to be there. Um and that that was important, having that goal in mind. So the the results of my trading in the short term actually didn't matter as much. Um and all I'm looking for is ways to improve myself.

I was much more open. I started talking to a lot more people about how they trade, started, you know, testing, being more active about my own trading and how to improve it. Can you just go into that a little further? I think that's that's quite an interesting point and y the way you phrased it as well, you at the beginning you were sort of playing not to lose.

So I guess what that means is you were quite conservative in the beginning? Yeah,'cause I mean uh'cause people take different things into trading, right? Whether it be pride, whether it would be, you know, um I don't know. You're like I'm a smart guy. I don't want to look stupid or whatnot, you know, because most people don't really sort of go through things where the outcome is not um necessarily directly correlated with the effort you put in, right? So that there's a lot of pitfalls.

Um so in the beginning, you know, you you come into it feels like a very competitive environment. You know, there's six other guys that came in with me in the same group and I'm there going, Okay, I don't I don't wanna be last. I don't wanna be the first to get fired. Right. You know, I I wanna make the most money out of these people. So so it's all about the results. All I'm looking about looking for is the result. Um but when I sat down and go, Well, it's gonna be a lifetime career now.

You know, the short term doesn't really matter. It's all about the long term development. It's all about where I'm gonna be in three to five years.

Okay. So you're willing to give up a little bit of PL in order to try new things, kind of expand your In a way mentally I was thinking like that. But what I found actually, it's quite the opposite, your PNL doesn't actually suffer because of that. Um, the less you actually care about your PL, I think the better your trading will be I uh over a decent sample size.

Um,'cause that's where the mentality problems are. You know, all the things you hear about the greed, the stubbornness. Like why are people stubborn, right, on a trade? They're not stubborn because they they got you know, they have this crazy view about where the I don't know, let's pick a currency where the Aussie's gonna be.

It's more like I don't want to lose and right now it's a paper loss and they haven't lost money yet. It's not realised. That's right, you know, th that that's that's where a lot of these things come from, right? It's all when they think about money. I don't wanna lose money. It'll come back. I mean And and then it obviously dies on you. But the reason you had that decision was'cause d you didn't want to lose money.

or or y or y you know, you take profit way too early because you just wanna lock it in, put that money in your pocket. But if you're thinking about how to improve your trading, what's the best thing to do? You know, that changes sort of a lot of ways you can look at trading significantly. And that I reckon that single handly can take out a lot of the sort of typical mistakes and that includes the things I've mistakes I've made earlier in my career.

If we had to just uh pick on some of those, I mean I know you've already spoken about some of them, but what would you say are some of the Your most memorable mistakes maybe? Yeah. I'll have to bring bring it the first one, I'll gotta bring it back to um before I joined Alien, how I blew up my account.'Cause That was really memorable. That that probab I'm actually quite glad that happened to me before I joined. So what happened was uh that was when the Aussie dollar was at above parity. And

And I was like, this is crazy, why a wear parody? So I just had some crazy view, right? And so I had a five grand account, right? And I was only risking about two hundred dollars a trade. And I sold some at one oh one, one oh two, got to one oh three, sold some more, got to one oh five, sold some more, stopped out at one ten, and I'm pretty sure that is literally the highest Aussie dollar is since then, and that's six years ago.

Blue my came one trade, even though I've been actually somewhat consistent in the three month leading to that. So so that that's probably my most memorable thing. I go Yeah, something about this is not right and I need to learn about the mint mentally why this happened. Yeah. So so that's that's definitely a memorable mistake.

And if you were starting out again like today, and you had uh sort of most of the knowledge of what you had now, what sort of things would you do to help you gain consistency?

I I I think the m most important knowledge I have now, over then, is is My mentality and psychology. And I'll go into them a bit separately, right? Um, so mentality-wise, I think going into trading, um, When I when I started, I always was looking for a strategy, you know. A strategy, a system, how to make money. Biggest breakthrough I had was Tra trading's a skill. And it's sometimes hard to really identify it. Um so you know, nowadays I give people a sport analogy.

that if you were um you know to tr'cause sports is obviously s completely skill based, right? So if you are gonna become a, you know, professional mm, basketball player, right? You know, what what would you be doing, right? You'd you'd straight away think about, okay, you'd get a coach, you'd you'd um well at the very least you start f getting research on how to become a better player.

Um, and you start practicing, right, in, you know, some very, very basic stuff, whether it's dribbling or just straight away, you know, free throws, whatever it is, right. You're not thinking about trying to win. You're not thinking about the NBA. Now the crazy part about trading is

Doesn't matter how new you are, the only place you can play is the NBA. All right. And and people need to realize that. It's like this market, there's no here's here's here's where the not so good people play. There's one market and most of the people in this market are you know some of the smartest you know, most brilliant people in the world who's done this for decades on. Right. So day one, you're competing here.

So thinking about how to win is crazy talk, right? And or focusing on it. Yeah, you wanna win, but if that's all you're trying to do, you're missing how you should be training. You're missing

you know, skills and there is so much skills, you know, market reading, flow reading, pattern recognition, execution speed, accuracy, um, and obviously psychology, which I'll go into a bit later, you know, that's these are all skills you need to develop. And No matter how good your strategy is, it's pretty useless without skill. Um and and so that is how I would go back and tell myself to approach trading. You know, don't come in here thinking you're you're here to, you know.

sort of just straight away win or make money. You're here to develop a set of skills. And if you treat it like that, then you'll probably practice in a correct way. You know, you look at your your you know in the beginning, you look at your winners and your failed trades.

in a critical way. You know, what could I have d done better there? Y the outcome's completely relevant. My next point was um then the psychology bit. All right. So And and I think this will be really useful for um sort of people starting out, um, who struggles with winning and losing, like the emotions that come with it, right? Um, I I look at trading as a probability based activity. You know, there's never an absolute, right? Because no matter how

much you think the market's gonna do something. It potentially takes one guy to prove you wrong. Like one guy with a lot of volume. And boom, you know, your entire theory, everything you've built up up to this point is now disproved. So so it's a probably a base activity and to truly treat it like that is um I I use my um sort of blackjack dealer analogy and this is why I teach my new traders as well. Um so imagine if you're the

blackjack dealer in in a casino, right? And you're dealing out hands. Now you have absolute edge, right? You got fifty-one percent. That's that's already known, or depending on the rules. Um you've got the edge, so you do the hands. Now the outcome of these hands are completely irrelevant, right? You know, that is not the point, the outcome of the edge, because over a hundred, a thousand trades, your edge will shine through. Um

Compared to say someone trading, it's actually the same thing, right? So so he's say he's you know his deal he's five hands and he busts. He doesn't go cry in the corner. He doesn't go blame the table. He doesn't go blame the game. He doesn't blame anyone, right? He's he just keeps dealing. Because he knows his edge is absolute.

Um and that that takes a lot of the sting out of your losers, right? But if you can think like that because obviously you need to find your edge and and how, you know, what w why do you know edge being, you know, the probability of your trade coming out better than fifty fifty, right? Why you have an edge. And you've got to define it. But once you do,

you know, the the outcome is completely irrelevant. You're here for the hundred of thousand trades. One trade changes nothing. And the crazy part is that allows you to stop thinking about money He's you know, the the guy who's tied by the casino. All right, the casino doesn't go to a deal and go, make me money. Cause he knows he it's not about that. Just just go and Do the right do do the good traits, right? What you know works. Do that those traits and just keep doing them in relevant outcome.

And I think uh, you know, if if anyone who's listening wanted to look that up a bit further, they could probably research the subject of law of large numbers.'Cause I think that's kind of exactly what you're talking about there. Yeah. You know, getting into the long run. Uh what else did I want to chat to you about? Um Oh, that's right. I wanted to pick up on something um you said just before. Yep. I think it's really interesting how you said that.

Trading is a skill and it's not so much just about having a strategy. Yeah.

I think that was a really good point. Um so I just wanted to point that out. Where would you say your edge is today? Like how are you trading nowadays? There's probably two parts to it. First part for those who are interested in the bills and bonds in straight market, I can be a little bit specific. So The bills market, um, you know, we trade the futures contract, we trade the first eight calendars, right?

When hold on, let me just interrupt you right there. When you say the bills market, what actually are bills? So ninety-day um interbank well bank bills, that's the full term. So they're a futures contract. on, you know, the ninety day bills that banks lend to each other. Okay. Pretty much. Yep. Um and so we trade the future contracts of those and the expiry is every three months. So we trade

The f well, I mean I don't know what other people trade. I trade the first eight calendars, right? So what are we now? We're in uh November, so December's the first expiry and they'll go up for, you know, in three month increments up to two years out. Um so Having the benefit of sort of eight.

Contracts in the same product but different expiry means we have very natural hedges. And our hedges are often very absolute. Well not absolute, but it's it's very correlated. It's pretty much the same product. Y um unless someone you know, unless the expectation of interest rates is different And specific to one month in particular, that isn't gonna break down anytime soon. So one of the edges we have is the ability to, you know, not lose money when you're wrong.

um because we use we're trading spreads, right? Um so if you buy something and a market goes against you, you can sell s a different contract Assuming you can't sell back at the same price, right? So you can't scratch anymore or get out for free. You can sell a different contract.

And that spread is something potentially that allows you to get out of this shitty situation l down the track without losing any money. So that in itself is a big edge. It's I mean it it's a bit more complicated than than that, but I'm just trying to give, you know, a very basic idea of that's one edge that's specific to this market.

Okay. So can you just give an example of that? You know, we don't need to go into nitty gritty detail. But like let's say you're uh you're long the front contract and it starts to go down, what are you gonna do in a a situation like that? Just Yeah.

And this is very specific, but I can't just say'cause I'm sure there will be other bills trader listening to this. So the front's a bad example'cause it that's really pinned. Okay. Um, because you know, interest rate's not gonna hike or cut. So let's say, you know, the fifth or sixth contract. Um yeah, if I buy something.

I would've already had know what was my so called exit, right? The exit being something to sell if I'm wrong. Um and when I'm wrong I mean properly wrong. You cannot sell the original price back and if you don't hit that exit, you're gonna have to puke or lose money on the trade. Now, after hitting this other contract, I'm now in what we call an offside spread. Right. Now, because

Um so spreads the spread actually has a market in the bills, right? And it it's a tradable contract in in our market. So there's two ways you can get out. Maybe the spread itself will trade out and allow you to get out for free. Maybe you'll have to get back into it again later. um through to outrights. The benefit of having this is you've got timed on your side. So once you're hedged, right, even if it's a really, really crap position, like from a spread point of view.

You've got time on your side. So if you're long, the market is crashing down, you don't have time. You know, this could be seconds and you'd you've already lost money. But now that you're somewhat hedged, you've got time to evaluate it and wait for an opportunity potentially. to get back out of your original crappy spread. Okay. So are you starting off Now no this isn't going to be completely accurate because

In in your situation and the way you trade, very rarely are you flat. And we'll we'll get into that. But when you put on a position, just in that example we gave before, it almost sounded as though you were originally you had an outright position. That's correct.

So I mean, we we can talk about sort of how how I trade, right? So I trade what I'll what I'll call inventory style. So by inventory I mean I put on sort of structures. around my expectations of where the bill yield strip is going to be. Um, but I don't expose myself to the outright movements, right? In case something crazy happens, you know, North Korea launches a nuke, China's trade wars, whatever, right? The that that

that sort of outright risk is something I don't want to take. So I'm gonna pull on these structures. However, to put them on, I have to leg them or, you know, buy something, sell something. And during that period, obviously I will be outright. Um Oh quite often for only seconds. Okay. But so that that is definitely where I would have outright. But the majority of what I do is

I put on, you know, a lot of these inventory with a view on them and then I'm allowed I'm, you know, able to wait and s until it's favorable to get out of those inventory. Okay. And with This type of style of trade, like you have quite a large position on it, like all the time. Yeah. But you're constantly hedging through various contracts across the strip. Yep. I'm not sure where I was going with that.

So just so if if someone's listening to this and it's a little bit confusing what I teach to m to the people who sign up. um to become traders and this is a four week full time course. Yeah. Um To try to easily explain it. So where are you actually making money?'Cause you're like work in this position and you you're never really getting flat, are you? No. So you're just continually Well, to give you an example, right? So

To be very specific, right? So let's say I'm looking at so two spreads make a butterfly. So p some people will know that, right? Um I tr right now I have a big position in the fifth butterfly. Um it's just a two point range. You know, um you try to sell at positive ones and get out at neg ones. That's literally all I do. I try to put on as many positive ones as I get out and then when the opportunity comes I'll buy back at neg ones.

And that's two points there. Now if you do that on enough inventory, that's that's you know, that's a decently good trade. So how long until you let's say if you're in at what was it? Positive one. Yeah. And you want to get out at negative one. Yeah. Uh how long might that movement take? Like that's not gonna happen in trade, is it? No, no, no, no. So so um these inventories anywhere between couple of weeks to up to, you know, two, three months.

Um it really depends. So and that's where imagery comes. helps with trading is that it allows you it gives you time. You get to wait until Something's a bit whack and you're able to get it away almost freely. And that's one of the things, you know, spotting these opportunities.

You know, you might be able to get positive ones away very easily and you would just load the boat up. You would, you know, completely max out your limits on those positive ones. Um, because that's been the rain for last say. Oh twelve months. Probably probably more than that to be honest. Um and

It's probably gonna be very hard to get them out in at once because, you know, everyone's just put them on. You can't you can't get them out. But now you have time to wait because you have a very safe structure. Right. And, you know, a month down the track, it might be just

you might not even need to leg it. You might be able to just go to market on a bid and an offer and get our neck ones. And and that's that's what I really look to do. You know, I don't want to take that much outright risk because of what I what I really, you know, what mainly makes me money is the inventory.

What's gonna cause you to lose money? Um, a big shift in the um bills yield curve would would would uh would probably put me under some pressure.

Um, especially if there's if the yield curve forms some sort of an inflection point. Right. So for example, you know, right now it's a very stable, um, you know, normal yield curve that goes down. If for whatever reason, you know, RBA comes out and says We know for sh sorry, IBA will never say that, but the whole public decides We're hiking rates in exactly December nineteen.

And everyone's convinced of it. And nothing else will change. That's probably gonna screw me up a little bit. But but that is sort of where the skill lies. I think the a big part of the skill is how to not lose money, then how to make money. Because we have to say, if you make money, you're you're lucky. If you don't lose money, that is skill. Right? If you're wrong and you're in a shitty position, but you're able to work out of it.

Like and not not not to hold on, right? So so I wanna clarify that for people listening. So that's not what I mean, right? I mean, you know, if you're in a crappy hedge position, how to work out of that complex structure. Right. That's that takes skill. Um, so I guess I just back myself to get out of these heavy inventory should that time come, and until then I'm happy to, you know, stay in them.

Now you you spoke just before about having a structure on or at least a position in the fifth contract. For example, like what drove that trading decision? Like how come you were interested in the fifth contract?

It was available. Let's be really honest. Um it you know, I'm always looking at all the different butterflies and, you know, other structures that are available across the bill strip. And my own philosophy, trading wise, is you know There's no point really going for the really hard trade.

Just just why make your life difficult, right? It's if it becomes available and easy to leg and by legging, you know, when I was talking earlier, just the the first initial outright exposure to get into these spreads. And then if you got put two sprays together, you get into these butterflies, right? So some sometimes those are very easy to do. Um, for example, right now, um

So I've been short, the second butterfly, for a couple of for probably one and a half month. I was in initially short at PARS. Um, just yesterday, um next threes were at literally at market. Um by that I mean no risk. Buy an offer, sell a bit. Bang, exit my entire inventory. You know, it's it and that's just become available.

Okay. So when you say it's available, you mean it's it's trading on the bid at you know, a price that you want to get for That's correct, yeah. Yeah. Yeah. Interesting. And you're also so What we've been talking about here is predominantly uh the bank bills. That's correct. You also trade in the bonds. Oh bonds. I also trade a little bit in the bonds as well. The Aussie threes and Aussie tenure bonds. Yeah. How much of your trading would you say that makes up? Well, during rolls

It's a huge part of what we do. Um I can talk a bit about that later. But outside of that I'd say maybe Fifteen percent. Okay. Max. So it's very little. Yeah, yeah. Um okay. Well yeah, what are what are the roles? I mean, anyone who's not in the Australian futures industry is uh A lot of this conversation I think is very technical.

For for a lot of retail traders though, they're not exposed to this type of trading. So I think it's interesting that they do hear about this sort of thing. That's yeah, no, that's fine. To sort of know that there are other strategies and other ways of doing things out there which aren't entirely directional. So yeah, explain to what explain to us why you decide to get involved in the bonds during the the roles period.

So the rolls period is literally when um the futures contract expire, right? So most of the time now I mentioned, you know, in bills we've got eight contracts. That's always actively trading, right? Whereas in bonds, it's always just the front contract, right? Most of the time no one's trading the back or say right now, you know, the December contract. No one's trading the March contract.

Um now during rolls is when people who are in a December contract they need to, I guess, roll over their position into the March contract. For f for the more long term traders or Actually they're not there might not even be traders. There could be like central banks.'Cause we're talking about government bonds here, right? Like so as to who needs to hold these, you know, right? To central banks, large investment firms.

um, managed funds, you know, they might all need exposure to bonds via futures, right? And they don't really care about day to day. But they've got a sizable position and they need to

they can't let it go to expiry. All right. So they need to roll it over too much. So that's what happens. So the reason we trade that is for two reasons, right? One, during that period, there is a lot of free opportunities because You know, this and this will almost go back to almost what I was talking about in terms of when I was trading institutional at Macquarie is

Different people, like the large guys, they don't care about a couple of ticks. They just need to get done, right? And this is you know one week where everyone who anyone has any exposure to the bonds, you know, longer term needs to roll over. So they just need to get done. They don't really care about a couple of prices.

Whereas that's our livelihood, you know. So there's a lot of free orders, a lot of free money, so to speak. You know, at least there's a lot of activity. So that's one to start with. It's the most intense week in a quarter. Um I you know, I typically trade twenty to twenty two hours a day during that week. So In a row. Like non-scale. Yeah, that's right. So Monday to Friday. So I I'll probably get about ten to fifteen hours of sleep that entire week.

Okay. Wow. I imagine that must have some challenges in itself. Oh, you get used to it. The first time wasn't fun. Um after a few rolls, you you your body's ready for it now. Okay. Yeah. And and how do you find trading the roles has been for you? Because I I believe it's become much more competitive over time. It's changed quite quite a fair bit. I mean

There is definitely, you know, um now roles used to move a lot, the book, right? The actual roles um contract. Whereas now, you know, it's you're kinda stuck at probably maybe, you know two prices. Which is fine, which means you just need to adjust your strategy. Right. So for me that just meant I needed to to, you know, adjust from um holding onto a lot of roles and letting it collapse in my favor to legging in and out as much as I can, you know, and not taking any directional view on the book.

I just wanna make sure we don't uh we try not to lose as many people as possible here. So when you're talking about legging in and out Can you dumb that down a little bit? Sure. Um all right. Well I'll I'll explain what we do during roles, right? So during the roles, the back contract comes alive for the bonds, right? Which usually isn't there, right?

So instead of having, for example, just a three-year and a 10-year contract, now we have two three years and two 10 years, which means we can we can now hedge. the front against the back three years, right? And because they're the exact same contract well, sorry, the exact same product with different expires, they move mostly in tandem. The Rolls Book is the price differentiation between those two contracts. Um so for example, the Rolls Book might be um, you know.

Halves at halves at one, right? So halves bid, one offered. Now June rolls, that book will be massive. So typically in three year, you know, you're looking at you know, a couple of thousand contracts aside. But in the r during roll book, this can be a couple of hundred thousand a side in a book. So you've got m a lot to lean on, so to speak. Um so if there's one offered, then you will try to leg that spread. Alright, by buying the back three years, selling the front three years.

Hopefully at the price differentiation of one. Now you might screw up and get halves instead. But either way, you're not short rolls. Um so you try to leg as many ones as you can. Now typically you might wait for halves to trade out, you know, before um when they use the collapse. Now you might not have the luxury. You have to leg halves back out.

That is a more dumb now, but I'm not sure that's yeah. No, I think that's good. That's good. And and you know, this is this is very kind of common stuff in prop trading, isn't it? And I I think it's good that people hear this because For a lot of retail traders who don't know anyone in the prop world or what have you, you know, it's th this sort of trading they're probably oblivious to and it's it's

Like most of the prop firms down well in in Australia, all the prop firms are pretty much in Sydney. Mm-hmm. Most of them are doing this type of trading, right? Fair amount, yeah. Yeah. But the the point I'm trying to make here is it's a very prominent style of trading in Australia. A and also, you know, there's huge firms in Chicago who are doing the same thing in uh, you know, the US futures and

Yeah. You said before trading yeah during the rolls period, you're obviously very busy trading sometimes twenty two hours a day. Uh even in your day to day trading of the bills, that market trades

Uh it stops um once in the afternoon and then once in the morning for about as an hour each time. Yeah. So it trades that also trades what, twenty two hours a day. Yeah. So how does how do you manage that? Um well a few things, right. One, you know, minimizing your exposure to a large event of any kind. Um so stay staying hedged. We don't use I don't usually hold much outrights overnight. And obvio and two is, you know, being with a profrum, we have the benefit of having a desk.

um a broker desk which services mostly the firm itself and you can leave various instructions, orders, or even core levels with them, right? So someone will ring you up you know, if if three years break through a new price or or something changing a spread or something like that. So that's a twenty four hour desk, which is the benefit. Now, obviously

it means you you were gonna you're gonna get some calls at some weird times and it's it's a that's a lifestyle. You know, that's that's the thing with trading, you know. Um there's no such thing as a part time trader. I mean, unless you're well you know, into the veteran stage and and you just wanna, you know, relax and not trade as much. But if you're starting out there there's no such thing. It's it's a twenty four hour market. You need to be ready at all times. My phone's ready.

If I'm out at dinner I'm I might need to run to the office or home. You know, have I have a home set up as well so you know, wherever I am, I I'm I'm gonna need to be aware of where things are. Okay. So most of your trading is obviously done during the the day time. That's correct, that's what that's where all the liquidity is, mostly full of bills during the day. Um Also'cause you know, I do need to stay sane. So I've you know, so majority of my focus trading is during that say

ten hours, you know, between eight and six PM and then if something big happens then I'll have another look during the US or Europe session. Okay. On that note, is there anything you do outside of market hours which you find helps you during market hours?

Um I mean market hours when you're talking about the bills market and the the bonds, it's a twenty two hours. But that's like you get where I'm going with this. Oh, you mean like things you do outside to to just help? Oh I

I I think y people need to learn to also switch off. Like if you're in a full time commitment trading, switching off is really important. You know, doing something active, man. Like something so I I do a bit of Muay Thai and it's great for releasing some, you know Pent up anger, um, steam. Um, I I think sorry, it it's as good as it's gonna get, right? Other things people might you might need a people might go to gym, go for a run.

For me, you know, kicking the crap out of a heavy bag is helps out, you know, gets the blood flowing, gets your mind off, especially if you've had a really bad run. You gotta you gotta go you know, take a walk or something to change your mentality'cause keeping It's all in here, man. Like I'll say seventy percent of trading, you know. Yeah. Yeah, no, totally, man. Uh what have I got here? I'm just as we're sort of touching on psychology, I'm just

I I've I've got a in I I can I've got a thing I wanted to say there. If you go.'Cause earlier I was talking about psychology in terms of, you know, believing in um sort of the uncertainty, right? That anything can happen. You kinda gotta believe that. Now, because if you do believe it, then you're not gonna be stubborn when it happens, you're like, Okay, fine. That was a f it was a ninety five five percent trade. The five percent happened.

Fuck it. It happened. Right. And then you can you're at peace with it. Now I would say the next step is, you know, you should reward yourself in a way that's consistent in in how how you sort of want to.

how where you want your psychology to be, right? For example, you don't want to be just jumping for joy when you make money and Going to a deep depression in the corner when you lose money, right? It's'cause if you're rewarding yourself based on the money amount of money you've made, it's actually better to reward yourself based on the quality of the trade.

Um,'cause that will make your actions and your psychology consistent with where you're trying to be, right? You don't want to be the guy who just celebrates making money. You you want to celebrate making good trade. If that means losing less money, you need to celebrate it. You know? Whereas if you make money,

on a shit trade. That's that's w that's where it's really dangerous. So how do you how do you differentiate between the two? Because that can be that can be quite difficult. Um I've got a good one. Um It it's been so long that I don't think the firm will care anymore, but I never told anyone this earlier, right? So for example, we we trade Tier One Australian domestic data, right? We try to jump right on that for a second.

So when I first started and I'll probably about five months in, all right, there was one time where we were all waiting for the unemployment figure, the largest figure in Australia, right? Now, you don't want to go into that win and out, right? It's crazy. It's and back then it would gap ten points each way and that's huge, seeing that most trades you're trying to make one or two.

Um I apparently I I jumped in, right, well when I thought the data was out. So the the market gapped three prices down, right? And I was like, oh, it's out. We're going down. Oh no, I wasn't in yet, right? So I'm waiting for the figure to come out. And then the market m this is all within like seconds, obviously, right? The market moved gapped three prices down and I go, Yep, it's out. So I went unsold.

And then it paused for what seemed like an eternity. It was only probably another second. Because it was a bit weird. I was like, why is it paused? And then it collapsed like there's no tomorrow, right? Um it clashed so much I didn't even know what price I got in. I had to go check because my DOM was refreshing so fast I couldn't even see the price.

Now, I was lucky because I was right. So I made ten ticks in an instant trade. Right? Like it was probably a second. What actually happened is I uh I bet I placed a uh ten grand fifty-fifty bet. Right. That's a shit trade that I made money on. Yeah, okay. Yeah. So so so so obviously there are there's very clear ones and I thought I should have sorry,'cause it's funny. I mean, they'll hear about it now in the firm. But if they went the other way, I might not be here talking to you anymore. Yeah.

And that's the thing as a trader, like I I did a a podcast just yesterday, it'll come out again. It'll come out, you know, in the next couple of weeks. Yep. Um probably by the time this time this this episode airs, but like In some instances all it can take is just you to be off guard by just a little bit.

Um, and yeah, you can be find yourself in a very different situation. Yeah, it's it's actually all about risk management. It's it's because vi you know, it's not everyone's like, Yeah, that's how to make some money. It's more about not dying. Yeah. Yeah. Yeah. Man, that's crazy. You yeah, you're very lucky that went in your favour. A absolutely uh to this day I recognise that. I got there's two things in my career could have ended my career. I'm just

So it takes a little luck to get to not get completely crushed. But that being said, I've also had a lot of

Bad luck. I just don't remember that.'Cause these are the better stories. Yeah. Like But that's it as well. Like you do also have a lot of bad luck as a trader, or it seems like you have a lot of bad luck that when you do have some good luck it's worth um enjoying it. Yeah. No, why not? You know, I I c I couldn't tell anyone that story,'cause I figured they might uh look unfavourably, but no I I'm pretty sure it's fine now.

Well let's hope so,'cause uh a lot of people are soon to hear it. What about in examples where it's it's not so obvious, just on like sort of day to day trading? Yeah.

I I would say that the probably rule number one, and I'm obviously I'm assumed the people who's gonna take advice from this are relatively new to trading, right? Is Following not following your plan, right? Because in the beginning I would I would hope that is gospel. You know, if you have a plan. You know, where are you entering or what needs to happen for you to enter a trade and then, you know, where are you taking profit? Where are you?

Um and and why and what for whatever anything this happened, right? All of these should should have been planned out before you enter a trade. Now if you entered a trade and you don't follow that plan, that's a shit trade. It doesn't matter how much money you've just made, right? Um

Now the reason I say that is because in the beginning it's more often than not that y uh mid trade decisions are usually not good ones. Right. Whether you're under the pump, right, and you know a typical example would be you you'd you get into what would seem like a short term trade and it's starting to come close to your stop.

You know, yeah, but on a bigger time frame, this looks all right. So this now is turned into a long term trade. Now no one turn changes a short term trade into a long term trade when they're winning. Right? They or get to your take profit, you're like, great, happy days, I made money. to trade workout. You only do that when it's completely going against you. So th that's a really good example. Like you don't re in the beginning you don't really want to be changing your plan. Now

If your plan is crap and that's fine, you know, then you still need to follow that through because discipline is really important as well, having that discipline to follow your plan. Then when the trade's over, you're not in the heat of the moment anymore, you can objectively assess your plan. Maybe it was flawed, but that's fine. This is why you're here. You're learning. You know, it's not about making money in the beginning anyway.

Yeah. And as we're kind of on the the topic of psychology here, I did want to ask you, how do you deal with uh periods where you're perhaps underperforming and not doing as well as you'd expect to be doing? Um z from a P N L point of view or from a from a Yeah, I g I guess we could sort of talk about both, but yeah, mostly from a a PL point of view, like let's say you're just on a bad run and

Yeah. I mean I don't know um, you know, what your bad runs in the past have looked like, but let's just say, you know, there's been two months go by and you've you know y you're not really up. Yeah. Oh no, that's yeah. Um I think Uh I I think um and I read this in in one of these books, I can't remember what it was. It it says Success is perishable, mastery is not. Might have been like a book called The Trading Athlete or something. Um I f I find it really important, right? Because

Uh you you know, we we value ourselves and and this could even go to day to day life, right? On something. You pride yourself in something, right? Um, you know, whether it's your job, your money, whatever, your looks, could be anything, right? How well you dance. Now if you if you you know if you value yourself based on something that's

Perishable.'Cause you think it's not, but you know, it can. Like any physical thing is perishable. Whether it's yeah, it's a f if it it's your house, it's your money, it's to be to be honest, you know, your girlfriend or something, right? Then when that perishes you're gonna you're gonna be in a deep state of distress or or whatever it is, right? So I guess I've always looked at myself and pri pr prided

Sorry, proud what's how do we say? Yeah, yeah, what's the right word there? I don't know, right? I'll try to say pride myself in it. Yeah. So pride mys Yeah, let's go with it. Pride myself in my abilities, right? And both the ability to climb out of holes, like you know, PNR holes, as well as that, well, okay, I've had two, you know, some bad runs.

If I if I look at it and go, was it really am I really doing the wrong thing? And that's why I asked you to clarify, you know, that question. Now, if I'm doing the right things by my edge and I've assessed that there's nothing wrong with my trades, it's just that I've taken on, you know, two months of eighty twenty trades and they've given me two months of twenty percent outcomes. then that actually

doesn't really affect me as much, you know. I I I I get really annoyed myself when I, you know, do the wrong things, the wrong traits. So So therefore I'm like, okay, I've lost some money or whatnot, but I'm still the same trader. You know, therefore I can still hold sort of my head up high and go into again and just go, that was the twenty percent. Whereas if I you know, if I was pride myself in my accountant,

then maybe not so much after that too. So I think that's that's how I deal with it from a psychology point of view. I just I really focus on sort of what I can control, which is my skill and how I trade.

Not the market. Now, Jack, I'd like to go into probably the last subject which we'll get into. Talking about minta capital. Yep.'Cause I think this is really cool and this is quite interesting, what are you doing there? What's the idea behind it? So minta capital is sort of what I've taken from, I guess, my last five, six years of prop experience. I think this is what's gonna improve

the success rate in the industry and I want to, you know, give people sort of a much better development sort of experience. Right now, um I think it's no it's no surprise that even in the prop industry I think the success rates I don't know what that is, but one in ten, one in twenty, something like that, right? Um and you know, I have my thoughts on it, especially given I've just finished sort of

This is quite fresh for me. You know, I'm only five years in. I'm very junior in this industry, um, compared to all the the other senior guys. So I've just gone through the program. I've been through the program myself and there are there are some thoughts that I had there. And For me a couple of things was the um one is I'm you know

I have a very small group. I it's there's only four guys that I'm hiring at each intake at most, right? And because I wanna do that because I wanna give them actual sort of more a more close mentoring guidance rather than sort of having people you know, having a big group of people and seeing how how how they turn out, sort of thing. Um and the second, I guess, thing was

I wanted to be able to give them mentoring and so just currently m myself and another person who is mentoring them. Um and the di biggest difference is we're both active and profitable traders.

Um and I don't think that's actually very common um in the industry. Like you might get mentored from specific men you know, people who are hired to mentor you. I'm not saying they they might have been profitable traders before, but the fact we're still right now full time trading, I think that adds another level of insight to what we can teach the new guys. Um, as in, you know, the way I came up was I I pretty much never had any help to be really honest.

Um, you know, I've there was a few good guys who gave me a few tips here and there. Obviously Mark helped me out, but you know, in the grand scheme of things it was very self driven and I think I wanted to give them that Um and the last th last thing is, you know, really, really putting together a tight team environment. Um, you know, trading prop trading is such a lonely job. You know, it's your own book.

Your own losses, your own gains. Like you can make a million dollars and you might not have anyone to celebrate that with. You know? There's no team. No one else cares, right? Um, but if you have but to put together a team and just really have them bounce ideas off each other, have the what am I doing with my life?

conversations which you always you if you haven't had that you you haven't gone deep enough into prop trading, right? Um but it's but I think that's what's gonna really help people develop. So I'm really sort of So I'm changing I guess the model a little bit and going I'm gonna invest a lot into fewer people and try to bring them up to be successful traders.

Okay. So what's kinda motivated you to do this?'Cause obviously you could just continue trading your own book and, you know, happy days. Uh, but you've decided to Branch out and do something a little bit bigger than just yourself? Um, I think I think for two reasons. Um, one, I you know I was lucky that I had people that I can really connect with thro in my trading career and they really added a lot of value to to my trading. You know. Um

I mean, you know Kai, so you know, we used to trade very closely together um when he was still at Genesis and then obviously Mark helped out a lot as well. So I wanted to create, I guess, another environment like that as well. Um I think Both for myself. It sounds a bit selfish, but you know what one one of these guys gonna be my trading buddy. Um and and, you know, bounce ideas off each other and stuff like that. Um so that's probably one of the main motivations. Um and I do find that

You know, I I enjoy actually contributing. Like this is it's gr it sounds a little cheesy, but this can be life-changing for somebody, right? They they've they've done some nine five job, they hate it. You know, if I can help make one person a senior trader or, you know, consistently highly profitable trader, their life's gonna change forever. You know, and and I I'd really enjoy that as well.

Yeah. Yeah. I mean it can be very rewarding to see other people who you've invested time in or helped out. Yeah. And then, you know, they take the things that you've helped them out with. And they really make something of themselves based on that. Like, yeah, I I totally get that.'Ca'cause th I can tell you it's it's definitely not about sort of

um w uh you know, what what this business can bring. It's really a a rewarding way as well for me because You know, when I'm constantly teaching I remind myself to not be able to do that. Do stupid crap. It's like I've just said to him don't do that. And I go and click it, I'll be like, that was really stupid, you know? Um, but yeah, it is so rewarding in that respect.

Um yeah. Now this might be a bit of a a personal question. Feel free, we can skip over this if you like. But I I'm curious to know because it probably says a bit about you. How is this kind of structured like? Because obviously you're with Genesis. I know you've got some sort of partnership with Genesis. So what's how does that kind of work there? Well, I mean in in short, so Genesis, you know, is pretty much backing me to do this. You know, if you really want to think about it is

I'm just simply responsible for training these guys. We are in Genesis office. You know, we're trading Genesis platforms. They're on Genesis Capital. Let's be really honest. You know, that's that's sort of how how this entire thing works. And and are you responsible for their risk? Like if one of these guys blows up?

Yeah. Or, you know, loses too much money. Do you have to wear that? Yeah, I do. So so I'm responsible for their so when I say genesis capital, I mean the margins and all that, right? They sound but Yes, uh so I'm I'm entirely directly responsible for sort of their risk, which which makes sense because you know, I'm developing them. So it goes both ways, obviously.

No, I think that says a lot about you, man, because like that's that's real skin in the game there. You know. Yeah, no, that's that's that's true. Yeah, there's uh That's uh as as they bleed out or as they become successful, I'll definitely be uh I'm very much wi in them on that. Yeah.'Cause you've got four uh

There's four guys. Four guys, that's right. And they're all do they have any trading prior trading experience or fairly new to it? Oh I mean, you know, rudimentary, like just like myself with my C F D accounts at best. So how did you pick these four guys?

It was actually um it was actually a very long recruitment process. There was a lot of interest. Um I think I got like four hundred applicants. Did you really? Yeah, I put I put on on s put up on seek for a month and it was pretty crazy. Man. Um And but I really wanted to find I had type of person. You know, to me like education.

Like when I say education I mean like official education, right? Like whatever your degree was um and whether you've done trading before, that comes secondary to your the personality, right?'Cause to to be a successful trader you've just got to have grit. You know, you gotta go through the dark days, you know, like every successful trader would have been in a massive hole at least twice in their career, you know. So t whereas the other ones just die off.

in that hole, right? So so if you don't have the grit, you you're not gonna be around for long. You know, so that grit and competitiveness, you know, and not not just ever everyone says they're competitive, but not not just like the kind of you know, verbal competitiveness, like real competitiveness. I.e., if you know, we play something together and I win, you're gonna spend the next two weeks practicing that to come back at me.

You're not gonna just trash talk, you're literally gonna spend your entire time focusing on improving yourself and coming back at it. You know, trading's like that. Because you're gonna do well do you get crushed. You're gonna you could just s you know, mop about or you spend, you know, a whole week thinking about how you can improve. So so so those specific characteristics. Um I interviewed like fifty two people.

personally um and and really, you know, wanna look at their character more so than um sort of Other attributes. So how did you judge that? Like what what type of questions did you ask during the interview? Really, I guess really life. life decision based, um sort of not sorry, not life decision, life experience based. So I had one guy who told me about, you know, sort of all like Supremo asked him, you know, in you what what's one of the hardest things you've

in your life and how do you bounce back from it? You know, these kind of questions. Um, because I'm looking for people who's actually done something competitive as well, uh, whether it's in sports or Even gaming, like um not not casual gaming, I mean like properly professional gaming, um, sports, poker, something where you're putting something on the line, pride, money,

And you can lose. You know, that that that takes a certain kind of person. Um, so that experience was really people who had that are obviously looked, you know, favorably upon.

And and what's the process been like from bringing these guys on? Uh, how long ago did they start? Um this is all quite new. This is very new, yeah. So they went live in November. Um I started training them midway through September. So what happens is um I had

Um, it was scheduled to be seven. They ended up only being five, all right,'cause people changed their minds. Who were going through what I call the training program. So the training program is a full time program for six weeks where they do demo training. as well as, you know, I have classroom elements. Uh to teach'em all the strategies and and actually all the mentality and psychology that trading involves. And but I'm also assessing them during that period and then

you know, once they've finished it, if they passed, then they get offered a contract to k to start trading, which started at the beginning of November. So how have you structured the training program? Because obviously you know, you've been through a program in the past, uh, which was your foot in the door at a prop firm. So how are you structuring your program, you know, with that experience and with five years uh trading behind you now. Um

Is there any is there anything you've done differently compared to how you were trained or um Yeah, yeah. So I guess the first thing is I I for me I think li going straight into the deep end is is very important. Like you just gotta start trading, whether you're making or losing money, you gotta get involved. You don't learn trading by reading books. You know, you gotta you learn trading by through trading. So

So they start on demo pretty much day one, right? Whereas I think I would have s I started maybe two, three weeks in. Um so there's so we're teaching theory alongside um uh, you know, demo trading whilst, you know, they're getting taught sort of I guess real feedback from active trading, traders like myself and the other person who's teaching. Um the second thing is I

You know, I've I've I've made this a bit more structured to help people ease into this kind of lifestyle'cause the trading lifestyle's different, right? Uh after you become profitable, no one really cares. Like you can become a millionaire or you can stay where you are. You gotta drive yourself. It's all in business, right? So

You know, we we've we've got a this sounds a bit cheesy. We've got a belt system at Minta Capital, right? Like you've become a you start like a m in a martial art way, right? You start at a white belt, eventually when you make seven digits, you you're now a black belt.

Um and and you know, so this this goals and setting goals for people to achieve. And that's what I found was one of the things that lacked for me. After you've reached a certain point and for us at Allium that was like probably forty lots, training forty lot bills.

Which means you have access to everything else, right? You can trade the curve now, because the curve minimum is thirty-three, three years by ten, ten years, right? You can't really trade if you don't trade that size. So once you've gotten to that point, kinda that was it. You know, um so I wanted to give people a real sense of progression as well. Um so they've got active goals to w work towards and they and something to celebrate.

Yeah, that's cool. That's cool. So did you say you had five people initially and then it Uh drop to four. Yeah. Okay. So what happened to the fifth person, do I ask? I I could talk about it. I d uh I I mean there's no hard feelings in in in in trading, you know. It's one of the least bureaucratic industries, right? It's it's very definitive. It's it's on a statement, you know. Um no, it was just the sort of the risk tolerance.

Management for me wasn't really there for the person. Um, but you know, but and that's unfortunately I only have six weeks to look at something. All right. And this is where I make a decision whether I'm gonna risk you know, twenty five grand on a s on a single person. So, um, at the very least I wanted to see, you know, good risk management during during that period. Um, and that's something unfortunately, you know, didn't work out for that particular individual. Okay.

And will these people, uh uh these these four people who you've got starting with you now, um, are they trading the same products as you? That's that's right. So The idea is that they are gonna trade using my strategy. Well, it's not mine, but you know, the way I trade. Yeah. Um simply because it's it's proven. You know. Um they they have free reign once they become profitable traders to do how they wanna do.

But if they can get this down, make it their bread and butter. You know, if you if you if you've got like you know, a couple hundred grand coming in from one trading strategy and you want to go do something bit crazy. May be my guess, right? Like but at least this is happening. You don't want to do the the crazy thing day one, right? So they're gonna they're trained in the exact same way as I trade.

Um, and you know, b and it's just this this has like the biggest sort of success rate for beginners, this type of trading.

Uh ha do you have any expectations on how long it'll take them to reach a certain level of consistency or profitability? Um typically it takes I'd say at least six to twelve months to become consistent. Um, but it can be longer. Um and and that's that's the crazy thing with training. It doesn't really there's no set path. You know, there's some people that make money day one and then there's some people um, you know, who who I know this individual who

Maybe eighteen month and then has just f skyrocketed, you know. So so there's no real it's not a linear career path. Yeah, by any means. But I'd say typically you're gonna expect probably six or twelve month. Okay. At the very least. So what's your longer term vision for the for mentor capital? Like where do you think this will be in, you know, the next five, ten years?

How they I'm sure you've thought that far ahead. Um to to be really honest, you know, I to me it's more like one trader at a time, you know,'cause so I'm I'm not gonna take in traders every quarter because that's too much and I can't focus enough on the existing guys. So at best once a year, I would say. And then from there, you know, I I'm just gonna keep generating this these traders. Now, you know, if they wanna take on traders themselves, they can.

Um sounds a bit like a pyramid scheme, but I just realized that did that how that image came up. But no, but you know, or so it'll be like a very organic growth kind of thing. You know, it's for me it's really about just

taking on one trader at a time. It's not gonna be like some empire. That's not where I want to take this. It's more about me helping out people and then you know, being able to take on a few traders and create a good environment for people who really want to be traders. Okay. Solid man. Very cool. Um, I think I've just looking over my notes here, I think I've pretty much covered everything I wanted to

Chat with you about uh plus more. I don't know. I know you've got a couple of notes over there. Is there anything we've uh it's pretty similar to what you had.

I think one final thing would be, you know, for for traders who's who's in this right now and they're doing it tough, right, because that first year is is It's like borderline depressing. Okay. You know, you're you're trying to learn, right? And but because progression's not linear, you know, like I think you can imagine if there's a point here, right, where after this point you start making money, right? And you start here, it doesn't matter if you're here, you're still making nothing, right?

To to really be patient with themselves for traders, you know, like don't don't set yourself too much like obviously people have life, you know, circumstances, financial circumstances. You know, don't set yourself sort of limitations and time to hit some something. You don't want the pressure of that. It doesn't help. Um you have to be patient with your development.

a get it's not a get rich quick scheme, you know, so to speak. So um that that'll be my advice for people who who's in that middle period. You know, I I was lucky I had a few people I can depend on. And I'll tell you, you know, I've had more than one, what am I doing with my life kind of sh conversations.

It's it's but you know, then you pull through next next week and keep coming in, you know, eventually it comes in, comes back to you. But at that point it wasn't that apparent. I have to say. Yeah, of course. Of course, man. So if uh uh anyone wants to find out more about what you're doing or uh connect with you online, is there a way they can do that? Are you on Twitter, LinkedIn?

It's probably a bit hard to search for me on Google. That's the problem. You know you type in Jack Ma I'm on page sixty seven. Right.'Cause The Alibaba guy. Um I said to my mate, um, oh do you know Jack Maher? He's another uh trader in Sydney here. I said, Oh, do you know Jack Maher? I'm gonna be doing a podcast with him. And um

He goes, Oh, the Ali Barber guy. And I I know. Yeah, he's like, Ari, you've done well for yourself, mate. I mean I didn't know he was a trader, but yeah, that's a good interview, mate. Like that's pretty hard to get. Um you can f um you can find me on LinkedIn or you know on my on Minter Capital website if you're interested in it. It's just mintercapital.com dot au

Or, you know, can drop me an email if people want to discuss about trading. That's fine as well. And your email address is that on the website or you wanna give it out? Yeah, I can give it out jack. Okay. And Minta, just to be clear, is spelled M I N T E R. Yep. Minta Capital dot com dot AU

Okay. Um well I'll put these links in the show notes, like on the Chat Traders website. So it'll be there anyway. Um yeah, I appreciate you doing this, man. It's been a lot of fun. No, mate, thank you very much for uh having me, mate. It's my pleasure. You've reached the end of this episode of Chat with Traders, but rest assured there are more.