Fear, greed, excitement, overconfidence and nervousness are all typical emotions experienced by traders at some point. Managing these feelings, the crux of trading psychology, can prove the difference between making money and going bust. Thinking like a trader involves harnessing emotion, reasoning quickly and exercising discipline.
DailyFX Strategist Margaret Yang thinks like a trader. Her days move from global media interviews to gold price analysis to tracking recent IPOs, such as China’s ride hailing company Didi, to raising her toddler.
The Singapore-based chartered financial analyst (CFA) never expected to go into financial trading. Yang studied chemical engineering at Nanyang Technical University in Singapore and mapped out a career in petroleum operations, until she landed an offer as an equities dealer, almost a decade ago. Today she’s a strategist at DailyFX with expertise in multiple asset classes, including bonds, forex, cryptocurrencies, commodities and treasuries as well as trading psychology.
Yang specializes in swing trading, and employs a medium-term trading strategy with a focus on macroeconomics, as well as fundamental and technical analysis, using tools like Fibonacci and Gartley patterns.
We spoke to Yang about how she went from chemical engineering to thinking like a trader.
Talk about your early years in trading
I originally graduated from Nanyang Technological University with a chemical engineering degree, but began my career as an equity dealer in 2011 – almost ten years ago. The first few years I was assisting clients in placing trades, corporate actions and account management. I learned their successes, their mistakes and after three years, I used all those experiences to build my trading strategy.
How did learning from mistakes shape your trading style?
I am a trend follower – I identify uptrends and downtrends to follow. I then use technical indicators to identify signs of a trend reversal. Top trade mistakes I’ve learned include emotional trading – that is, chasing up high in an overheated market or selling at the bottom when pessimism sentiment is dominating.
What came next in your trading journey?
I went into institutional trading, focusing on options, commodities, bonds and treasuries. This helped me greatly upgrade my trading skills. I was working on emerging and frontier markets. We had to be very sophisticated in how we placed trades without influencing market movements – we used a volume-weighted average order tactic to break up the trades.
I monitored positions and placed daily trades to buy and sell stocks for the fund manager. I remember placing millions of dollars overnight in US futures – I couldn’t sleep through the night. It was very exciting.
How did you progress to analysis after trading millions?
I gave birth to my daughter and changed my role from trader to market analyst. I kept a close eye on the market, wrote commentary, and shared my views with investors and the global media.
Has being a parent changed your trading approach?
It didn’t change my style of analysis, but I think being a mom has helped me better manage my work – raising a child has made me more resilient and patient. Previously I was an impatient trader, everything had to be done fast.
Do you think there are differences between how men and women trade?
There are fewer female traders, especially in institutional trading. I think the trading mentality between men and women can be different. I’ve seen female traders be less impulsive and more conservative with risk management.
What markets do you trade currently, and why?
My primary focus is equities and their indices. I look into the Asia Pacific, Nikkei 225, Hang Seng, Singapore’s Straits Time Index, and the US equity indices like Dow Jones, NASDAQ, S&P 500.
To trade equities, you need a good understanding of market sentiment and which central bank policies will affect a market’s liquidity. You have to consider geopolitical issues such as the Covid-19 pandemic, and the US/China trade war.
What’s your typical day as a trader?
I start my day at 6am when I go to my study to browse the news and prepare myself for the trading day ahead. I then spend time with my daughter, getting her ready for school and playing with her.
After sending her to school, I finish my morning report for journalists and our clients. By then I have a good understanding of overnight market movements, and how the Asia Pacific markets may perform in the upcoming days. 9am to 5pm is when I fully focus on work, analyze, trade, and attend media interviews.
What tools do you use to trade?
I need to make informed decisions when trading, which means I need a lot of information before I can start. I use DailyFX’s calendar and analysis, I also refer to IG’s trading platform for price quotes and charting tools and browse news sites like Bloomberg.
What’s your home trading set-up?
I think it’s challenging to work at home so I try to make my study as neat and clean as possible to limit distractions.
I have four screens at home, because as a trader we need a lot of information. Two of the screens are for market updates and news, and the other two are for trading.
How do you relax and rebalance?
It’s essential to control your emotions, as emotions can derail your trading strategy and lead to bad decisions. Keeping a healthy lifestyle and separating my work life from my personal life is important to me.
After a long day, I usually exercise or chit chat with my friends to rebalance my emotions – I have a tea table in my study, and a space for doing yoga when I need to refresh myself.
What’s your favorite thing about trading?
I think being a trader makes life more exciting because the market is very dynamic. You need to embrace new knowledge, and understand how geopolitical tensions can affect trade relationships and macroeconomic backgrounds.
Learn more about Margaret Yang and her work at DailyFX.
(This interview has been edited and condensed.)