Our CEO Roberto d’Ambrosio was invited to the Finance Magnates panel held during the Asia Trading Summit in Shanghai on the 23rd of March.
The topic of the panel was “the importance of training for new investors”. This a very important topic for a market which is growing fast such as China, attracting all international financial players to offer their services within the Asian giant. The need for training and education is therefore very much felt by the Chinese investors.
The first question to Roberto by the host of the event was: “What processes do new investors need to go through when they plan to build Trading System?”
Roberto remarked immediately that, first and foremost, the key is knowledge.
The first step for all traders is to know all the characteristics of the market they would like to explore and of the tools that they will be using in going on the market.
Finding good, non-biased source of knowledge and education should be the very first concern, without trying to cut corners and avoiding by all means the temptation to jump necessary steps. All those entities that propose get reach quick schemes should be absolutely avoided. Trading is a very serious matter, and should undergo an appropriate learning curve as any other important activity in life.
Having a sound knowledge of the basics, will consent the novice trader to identify the trading style that better suits his attitude as an investor and trader and also identify their risk tolerance and appetite in order to develop an appropriate trading plan and money management rules, both in terms of risk management and position sizing.
A very important matter for novice traders, and even for intermediate and advanced ones, is a deep understanding of the psychological aspects related to trading, the evident ones, the less evident and the hidden one. Roberto personally delivers seminars on these topics al around the world, as we believe this is a milestone that marks the success of traders and investors.
Once the trading rules related to the most appropriate trading stile have been identified and a set of sound and adequately researched money management rules has been set as well so to have a complete trading plan, such trading plan should be tested on demo accounts, in order to get acquainted with all the technicalities related to executing trades and to get used to apply the set of rules consistently, with confidence and discipline.
During this period, it is of the utmost importance that the demo trading is executed trying to act as if the account would be a real one. It will never be completely the same, but the maximum effort to be disciplined and have the correct attitude during the demo period will give solid bases to the future live trading activities and will avoid being hit by the difference in terms of pressure that the real trading will bring.
Before going live, there is another vital variable that needs to be addresses with the maximum attention choosing the right partner for their trading, the right broker, which is capable to deliver the right guidance in terms of education and support to its traders, that is experienced enough to deliver a sound and secure trading environment and security of funds.
Roberto said: “I have the honour to lead Alpari Research and Analysis, which forms part of Alpari Group. Alpari is undoubtedly one of the most experience brokers out there and a leader in trading technology.”
The second question to Roberto was: How does Alpari help new investors?
As for the first matter, education and training, Alpari is offering quite a unique service to its traders, and even to the market in general.
Alpari is providing continuous educational support via a very large amount of live and recorded resources, having a dedicated structure with several years of experience and which is a leader in its environment: such structure is Alpari School.
Roberto remarked that the people working there are exceptional and they developed a learning platform of which finding peers is definitely a hard task.
But Alpari went even a step further.
It built a dedicated structure, separated from the brokerage structure, with the aim to provide the market in general and its clients the highest educational products possible, and unbiased and top notch market research and Analysis to the entire financial community. All this delivered by seasoned and reputable professionals along with a group of young and talented traders and analysts, which are traders and investors themselves, and which share with honesty and transparency their views and techniques.
This structure, which really speak volumes about the efforts and investments Alpari Group does in order to provide its clients with the best trading environment possible, at the same time contributing to the growth and maturity of the industry in general, is Alpari Research & Analysis.
Roberto mentioned that ARA Chief Analyst, the other local analysts of the structure and himself personally are travelling the world delivering unique kind of seminars and workshops, receiving enthusiastic feedback from the attendee which continue to relate with us even after the seminars, in a continuous exchange of views and insights.
The quality of our analysts is undoubtable, as our presence on all market media and mainstream media proves beyond any doubt. Roberto emphasized that he really has an exceptional team to lead.
As for the second matter, the appropriate partner to trade with, Roberto remarked that he did not chose the word “partner” accidentally.
The broker traders should chose should act like a partner to its Clients, willing to invest in their success and experienced enough to make them secure in their trading activity, allowing them to concentrate in what matters the most.
Roberto said that he can say with confidence that Alpari, being around for 10 years and a pioneer in trading technology and innovation, has proved to be that trustable partner.
Alpari has the experience, the know-how, the size and financial means to put traders in comfort that they are trading with the right partner.
The host then asked: Do you have some suggestions for those senior traders who want to optimize their trading system?
Roberto answered that the most important hint is to always be curious, and continue researching the markets even if the trader has developed a sound strategy and trading plan which proves to be adequate to their own characteristics and has proven to be profitable over time.
There is a fine line though between continuing to research the environment they operate in and going into over complicating their trading activity or over react to negative trade streaks as a result of mutated market conditions, especially for pure trend following traders.
What we always point out in our seminars is that trading needs to be simple, with a set of clearly defined rules to apply, both in terms of trading techniques to enter the market and the rules to manage the position.
In this respect, traders needs to adjust their money management parameters to the ever-changing market conditions in terms of volatility, in order to elevate as much as possible the return on the risk they are taking.
Of course, such optimization must not go as far as becoming curve-fitting, especially for those traders which use automatic systems of algos. It’s a difficult temptation to avoid though, as over optimizing historical data performance gives a sense of false confidence, which can lead to disappointment and unexpected losses both in terms of numbers and in terms of size.
Here again, if we keep things simple, the threat of over optimizing will be naturally reduced. If the parameters of which the trading system consists are only a few and the entry and exist rules are consistent one to each other, overfitting is not possible.
To avoid overreacting to negative periods, which can affect even the most seasoned traders, the trader needs to be resilient, by applying its money management rules strictly. By doing that, his strategy will be what Nassim Taleb, the author of “the Black Swan” calls an Anti-Fragile strategy that will never ruin the trader, as it will adapt to negative periods by automatically adapting the risk taken with each trade.
Roberto commented to us: “China has of course a huge potential, but Chinese investors need to start from the basics, in order to face the investment arena with confidence and the tools to make informed and rational decisions. This will also avoid them to fall within the reach of unfair market players, as too often happened in the past.”