Trading currency in the foreign exchange market (Forex, FX, etc.) can be challenging. In this episode of How to Trade It, I chat with Etienne Crete about his trading strategies, the challenges he’s faced, the right mindset to have, and how to properly manage your money. You’ll hear his background and the ‘why’ behind his start in currency trading.
Etienne swing trades in the Forex market and is the CEO and Founder of ‘Desire to Trade’—a website and podcast geared towards helping serious traders quit their jobs and travel the world. He’s all about finding the freedom you desire and living the life you want and believes you can accomplish that trading. Listen to this episode for his strategies!
You’ll want to hear this episode if you are interested in...
- [0:28] How Etienne Crete started trading Forex.
- [2:00] The challenges Etienne faced.
- [5:30] The action steps to take to find success.
- [7:20] How to find mentors in the industry.
- [9:05] We talk about Etienne’s trading strategy.
- [13:17] Etienne’s trading mindset.
- [16:43] How to handle a losing streak.
- [19:18] Really good money management tactics.
- [21:30] How does a global recession impact trading?
- [23:05] Currency trading vs. stock market trading.
- [24:51] Where Etienne is focusing his trades.
- [28:25] Connect with Etienne.
The challenges Etienne has faced
Etienne started trading in 2013 as a hobby. He thought he could make money and wanted to prove to naysayers that he could make it happen. After 4 years of trading, he took a leap of faith and started trading full-time. He thought he had it all together and knew what he was doing. He was buying the S&P 500 before it crashed in 2015. At the time, he kept buying more. But the price continued to plummet—to the point his broker threatened him with a margin call.
Unfortunately, they dropped so low his trades were closed and he ended up losing 20-30% of his account.
He had to take a step back and reevaluate what he was doing. He knew he needed to find a mentor because watching YouTube videos wasn't cutting it. So he started emailing traders and founded a meetup in Montreal for people trading full-time. He knew that meeting more traders in-person and firmly believes being mentored or coached by others changes how we think and do things and leads to improvement. You have to be around the right people who push you to grow.
Step #1: Develop a Strategy
When traders are struggling, they always blame it on their strategy and believe that is the root of the issue. Etienne points out that it’s typically the last piece of the puzzle. But it’s still important to strategize effectively, which includes having a core strategy. Etienne is a big fan of multiple time frame trading.
He will look at different market conditions and look for reversals and trade those with the Bollinger Band. He’ll look at the market phase in a bigger time frame and look at a shorter time frame for trades—that lasts for a few hours to a few days.
On average, Etienne does 10 setups per week with a 48% win rate. He’s started to test a 30-minute chart and it seems to work fair but he’s still in the testing phase. Listen to the whole episode as he describes his strategy in detail. After you're done, check out this article containing the best forex trading strategies.
Step #2: Develop the right mindset about trading currency
Etienne believes that trading in the Forex is all about probabilities and numbers. People think they can predict where the market is going to go, but in reality, it’s not logical. It doesn’t operate predictably. Once he gave up trying to predict the market his mindset drastically changed. He started looking at the big picture vs. the success or failure of each individual trade.
He points out that you need to be able to take a step back, look at the probabilities, and detach yourself from the outcome. Once you’re in the trade, you’re either going to win or lose. Looking at the big picture helps you detach from the emotions. I asked him how he’s able to detach emotionally when he’s in a losing streak. He admits that it’s hard to swallow, but instead of walling he takes action.
He sits down and analyzes his trades. He'll even print them out on paper and look at his strategy to see where he erred. 80% of the time it’s something he’s doing wrong versus the market just being poor. He’ll find and correct his mistakes and has found this strategy helps him get out of a losing streak quite fast. Keep listening to find out why he believes it’s important to track your metrics.
Step #3: Focus on proper money management
Etienne shares that a classic forex money management strategy called the 1% per trade rule. But the goal of money management is to maximize your wins, minimize your losses, and utilize your capital in the best possible way. People often err and think, “Well if I risk more, the odds of making money are higher”. While this can be true, the higher the risk the more likely you are to lose it all.
Etienne points out that you have to learn when to cut your losses and recognize that a bigger loss could be coming if you don’t. So how does he practice money management? Sometimes, he’ll split his trades and put more money towards something with a higher win rate versus risking everything on one trade.
Listen to the whole episode to hear how Etienne believes you should strategize during a global recession, why he trades in currency versus the stock market, and trades that he’s looking at right now. You may also be interested in calculating your positions with our free forex money management calculator.
Resources & People Mentioned
Connect with Etienne Crete
- Sign up for his email list on the Desire to Trade Website!
- Subscribe to Desire to Trade on YouTube
- Etienne on LinkedIn
- Desire to Trade Facebook Page
- Desire to Trade Twitter
Connect With Casey Stubbs
- Trading Strategy Guides
- Check out Casey on Twitter
- Connect with Casey on LinkedIn
- Finance and Markets on Facebook
- The Finance and Markets Newsletter
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