I stumbled upon a pretty good article at SMB U, written by Bruce Bower, an ex-FX trader at Citigroup (link here). It writes about lessons that he learnt from the top FX trader at Citigroup.
Here’s a short summary, but I recommend to read the original article.
- If you don’t have a strong view on any market, don’t trade.
- It is better to have no position than a dumb one.
- Wait until the really profitable trades appear and bet big.
- When you have a high degree of conviction, bet in size
- To be a big winner, you need to be willing to carry a large position for scenarios with the best risk/reward. You have to pile in when you see a great opportunity.
- You need to have a system to judge how good an opportunity is. When all the stars are aligned, have the courage to put in a gigantic position.
- Calmly sit through corrections if the reasons for putting on the trade are still valid.
- Keep asking yourself whether the reasons you got into a trade are still valid. Think through various scenarios to figure out where your investment thesis might be wrong.
- You do not want to close your position in a small correction and miss the broader move.