Margin Call Podcast - S2 E2: Damien Loh | Chief Investment Officer of Ensemble Capital

Tom Williams ( @TomW_GOMarkets ) is the GO Markets Head of Trading. He started out as a dealer and broker in the excitement-driven city of London across equities, fixed income and foreign exchange. Learning the technical aspects of what is now a software-driven business has allowed Tom to lead all trading operations at GO Markets, literally keeping the show on the road.

Old Scouse loves a laugh and a pint and is always affable enough to show you the bright side of life (as Monty Python says). In this episode we'll cover: What brought Tom to Australia and what he misses about the UK His role as head of trading at GO Markets The Swiss National Bank Crisis The GFC and Brexit - Transcript Disclaimer: Go Markets is a derivatives broker and Jordan Michaelides is the managing director of Neuralle Media. All opinions expressed by Jordan and podcast guests are solely their own and do not reflect the opinions of Go Markets, an AFSL license holder.

This podcast is for informational purposes only and should not be relied upon as a basis for financial decisions nor as an indication of future performance. Clients of Go Markets may hold positions in the derivatives mentioned. A financial services guide and product disclosure statement for our products are available at the www.gomarkets.com website.

Jordan Michaelides: In this episode we spoke with Tom Williams. Tom is Go Markets head of trading and he started out as a dealer and broker in the excitement driven city of London across equities, fixed income and foreign exchange. Learning the technical aspects of what is now very a software driven business has allowed Tom to lead all trading operations at Go Markets, keeping the show literally on the road.

Tom loves a laugh and a pint, is always affable enough to show you the bright side of life, as Monte Python would say. This is a fascinating episode where we cover what brought him here to Australia and what he misses about the UK. His role as head of trading at Go Markets, particularly examples or crises like the Swiss national bank crisis, the GFC and Brexit, as well as what sitcom best portrays the Go Markets office.

If you enjoy this episode, subscribe on your podcast app and share with one of your friends, particularly those who want to get an understanding of the more technical aspects when it comes to trading and what goes on behind the scenes. With that being said, let's get into the episode with Tom Williams. Tom, thanks for joining me on me what has turned into a rather miserable Friday afternoon in the Go Markets office.

First question for you, how was the wedding? Tom Williams: The wedding was stressful, but, it was great fun. We went up to Queensland and got the families from New Zealand, from Queensland, from England, all over, and a lot of them met for the first time which was great, but stressful being centre of attention and having to entertain that many people for a few days.

Jordan Michaelides: How long had you guys been planning this wedding? How much time do you spend typically on a wedding planning? Tom Williams: For me, a lot less than my wife *laughs*.

I'd say I had a passive involvement in the organization of the wedding. Jordan Michaelides: I like that. I like that you're aware of that too.

Tom Williams: I mean, my wife's a florist, as you know, so from the events side of it she's got way more experienced than I have, I would have just messed the whole thing up if I had anything to do with it. Jordan Michaelides: Now, I want to get into how I guess a liver Puglian made his way here to Australia, but I'll give people a little bit of a background first. So, obviously you were born and bred in Liverpool.

From looking at your past history you spent about five years in the business in the city of London before you made your way out here, working in many different roles, but primarily as a dealer. Equities, fixed income, eventually CFDs as well, which is what Go Markets focuses on now. What was the catalyst that drew you out to Australia?

Tom Williams: The catalyst to go to Australia was and event that happened in 2012 when the company I was working for at the time went into administration, and there was a moment where I could either continue the daily grind in London, or take some time out and go and see the world a bit, which is what I did. I took nearly a year off and ended up in South America, which is where I met my now wife, in Peru. She was from Australia and I had to come over here to, you know, seal the deal.

Jordan Michaelides: So really it was like love that the drew you out here, you could say. Tom Williams: Well, I had no intention of moving away from the UK, you know, I never considered what it'd be like not working in the UK. I guess the opportunity was there and it seemed like the right thing to do and it's worked out pretty well.

Jordan Michaelides: Yeah, I would definitely say that. And it's so fascinating. I just look at it from your position and I don't think you would have ever expected to be in this situation five, six years ago.

Tom Williams: Absolutely. I couldn't have even imagined it to be honest. Jordan Michaelides: Also, it's interesting because of just where the UK is at and what Australia offers.

The other day I was looking at like immigration numbers the UK is still the biggest source in terms of growth through immigration, I'm pretty sure next to China. I think it's still the biggest because a lot of millennials like yourself come out here and there's just so much opportunity. You can speak the language, you get sun.

Tom Williams: Yeah. I mean the UK is a great place to live, but we just, we don't have the weather. I'm not saying that I'm much of a beach goer, but we just don't have the sorts of lifestyle that good, consistent, good weather brings.

We have long winters and miserable rainy days. Melbourne winter is considered a bad winter in Australia, but you still get lovely sunny days and it's just a more positive place to be, that people are more positive as a result of the lifestyle that Australia offers. Jordan Michaelides: And apart from your family, what do you miss the most about home?

Tom Williams: This is a question I get asked quite frequently and it's a struggle to answer it because there's not a lot that I do miss from the UK really, except family and friends to be honest. Jordan Michaelides: Not even football? Tom Williams: The football side of it, you just learn to live with it.

Thanks to Optus, you can catch up on demand pretty easily. So, to be honest, I don't miss a lot in terms of lifestyle or anything like that. Jordan Michaelides: Well, that’s good to hear.

And, eventually citizenship for yourself, like one of the other poms that we have in the office here would be good to see. I'm thinking about your family in particular, and I'm curious as I like to know from a lot of guests, if you can think back to your own childhood, and about your parents, is there a particular lesson or principle that you maybe hold with you today that you saw directly or indirectly from them, and you later realized it's a core tenant of your personality. Tom Williams: I suppose hard work, and discipline as well.

Growing up in a city like Liverpool, you could be led astray in a number of different directions. My father is a policeman, so he was always very strict and perhaps, saw me going in the wrong direction when I was younger. Nothing crazy, I'm talking just normal teenage stuff that you kind of get yourself involved in, but obviously he didn't turn a blind eye to that.

He put me on the right tracks. So, yeah, discipline, hard work. My father retired as a superintendent in the police, which is a pretty senior role to get to, and he worked very hard for it.

I guess that's always resonated with me. Jordan Michaelides: Now thinking about work, your role here is head of trading, which is a thing that people see a lot on different roles for people in different CFD and equity organizations, but they don't really know what it is. I thought maybe we'll just get into the nuts and bolts of that.

What does that look like? I'm trying to give people the context of 2003 to 2005, you would have still been on the phones a lot, taking orders. Now most systems are quite automated and electronic.

So what does your role of head and trading involve? Tom Williams: So, we try and focus on the overall client experience with the trading platform, whether that be from a cost perspective in terms of the spreads that they're paying, the commissions that they're paying, the overnight financing, all the way through to the quality of execution, so, how quickly are these clients able to execute? Are they able to execute during fast markets?

Are they able to execute around news, and we try to control the overall cost of trading to make the whole experience better for the client. Jordan Michaelides: So basically you make sure the shit doesn't hit the fan in a way. Tom Williams: Pretty much.

That's one element of it, for sure. As you touched on before, a lot of it is automated. All of our hedging algorithms, everything is automated.

It very much becomes autopilot to make sure that nothing goes wrong. And when stuff does go wrong, the most important thing that our team can do is make sure it's put right as quickly as possible. Jordan Michaelides: Are there any particular crazy stories that come to mind?

I know that in my time here we had some pretty stunning events where the markets were more than wild. I know in our last interview with Chris Gore, he spoke about dealing with the Swiss bank, taking away that peg from the Euro. I'm just curious, are there any crazy stories that you have in memory of the market just going absolutely nuts.

Tom Williams: There's definitely a few. There were a couple after the Swiss national bank crisis. Since then we've had a UK referendum.

We've had the election of Donald Trump. There's been a number of associated issues like a Sterling flash crash, which just came out of absolutely nowhere. Jordan Michaelides: When was that?

Tom Williams: That was soon after the referendum on Brexit. The market started to settle down and then out of nowhere there was a huge liquidity drain. Markets these days are so dictated by algorithms and high frequency trading systems that if there's a liquidity drain, it happens immediately.

It's not something that happens over time. So, yeah, we have witnessed a few occasions like that, but most notable is definitely the Swiss banking crisis, when the Swiss national bank just… leading up to the events, decided that they were going to tell the market that they were going to maintain this peg of 120 against the Euro and that they were committed to doing this, and Thomas Jordan, the chairman of the SNB at the time came out a week prior and said we're committed to holding this peg, then all of a sudden shocked the market and said that this is not something that we can feasibly do. I think it was the 15th of Jan 2015, so it was soon after the Christmas break, everybody was just getting back into the swing of things and all of a sudden, a phone call at 10:00 PM at night saying get into the office, the shit’s hit the fan.

So, there were a number of us in the office at the time, it was all hands on deck. Nobody really knew what was going on. The news was out, we knew what happened, but we didn't know how markets were going to react.

Nobody could really price where they thought the Swiss Frank was, banks in particular. There was a lot of uncertainty around where things actually traded, where the market is, where it should be. This went on for a week after the event, which markets have never seen before.

It was a crazy time. Jordan Michaelides: To me that’s very interesting. I mean, I've read about it, but we don't see behind the scenes, you know.

The things that you guys see. If you were to think of the most crucial aspect of your role, you spoke before about execution, liquidity, supervising, all that sort of stuff, what do you think is the most important? The number one aspect of being head of trading.

Tom Williams: I think without a doubt it's going to be attention to detail, being observance and not missing things. At the same time, it's important to remember what everybody's working towards and what the end goal is, which essentially for an online FX broker is to have a product which is efficient for the clients. The competition amongst the FX brokers these days is so… There's so many brokers out there, everybody's trying to compete on cost and these discount pricing models.

If you fall behind the wolf-pack you're going to struggle to get in front again. It's very important for us to just remember the end goal of what we're trying to achieve, which is to create this superior platform to our competitors. Jordan Michaelides: I think Chris Gore spoke about that last week that because it's so competitive now, the main advantage you have is just being trusted and people know that a company like Go Markets has been around for a while and can be trusted to maintain certain best practices or expectations through the market prices, or, the spreads that people get as an example.

I find it interesting that you said the most crucial component is attention to detail because if you think about the principles that you took away from your dad, it's working hard and discipline. And that is like the perfect thing for attention to detail. We were chatting before about what we want to talk about in this session and you spoke before about Brexit.

I feel like you would have had a bit of experience, just from memory. we had a chat years ago about the Lehman brothers collapsed and the 10 year anniversary of the GFC. The effect on the UK was pretty similar, although a bit different. The governments seemed to offer this money to these banks, but they wanted shares in return and I'm pretty sure the government did pretty well buying a large portion of Lloyd's.

I'm just curious, you got into the industry around ’09, what memory do you have of that period? Tom Williams: I was in the industry prior to ’09, I was in the industry from ’07, so I was around when all this happened but I was very young, and I wasn't in a responsible position, but I remember sheer, um, fear and. In the UK there were customers queued up at banks trying to withdrawal their cash, which obviously doesn't work because banks don't hold that amount of cash.

There were banks going into administration, there was footage all over the TVs of people packing boxes up, like Lehman brothers for example, was a huge tower in Canary Wharf which was just down the road from where I was working at the time. It was just like Armageddon, you know, people didn't really know what was going to go on after that, but things worked out okay. But you know, who paid for that whole crisis in the end, it was probably not the banks.

It was probably the people. Jordan Michaelides: Going back to that point I made about the banks basically having shares purchased by the government, it was the taxpayer's money. It went back to the government and then the UK went through a massive austerity process because it was part of the EU.

That's what you had to do. Tom Williams: Exactly. There were huge welfare cuts.

Jordan Michaelides: I reckon that’s actually why we've seen so many poms immigrated out here, simply because the opportunities dried up. It's easier to come to Australia as an Englishman and the opportunities are pretty great. There’s also a lot of family connections for a lot of people as well.

Tom Williams: It’s also quality of life. If you're a plumber or a carpenter, an electrician, a welder in the UK, your quality of life is dictated by the amount you’re able to earn in those roles in the UK. Whereas you come to Australia and everybody has a good quality of life.

There's a good sort of minimum earning for any role in. It turns out that the tradies in Australia probably do better than anyone else better. I've always loved that about Australia, the fact that there are equal opportunities no matter what sorts of road you chose to go down.

Jordan Michaelides: I'd definitely agree with that. Why Brexit came along, which I want to chat about, is because you know, you have all this immigration, austerity processes in the UK, combine that all together and you’ve got yourself the perfect storm for what happened with Brexit because if you're a plumber living in the Midlands and you're getting paid by the hour, and some guy from Eastern Europe has immigrated over and he's happy to work for 10 or 15 bucks an hour then life’s going to be pretty average, I'd say. Tom Williams: Yeah.

Brexit highlights some fundamental problems with the Eurozone, doesn't it? The Eurozone has always been criticized for being this huge block of very different economies which all governed by a single interest rates and it's always been a, a complex system from day one. The funny thing about Brexit was the lefties got behind Europe and they wanted solidarity with Europe, the city of London, which is a huge part of GDP obviously got behind Brexit because the lack of borders in financial markets is very important, but then it was the exact sort of demographic that you just highlighted, the guys who don't fit into those two baskets that I've just spoke about.

They think ‘what's in this for me?’ I suppose as with any of these decisions, it depends on what newspaper you read. If you're buying a tabloid for a pound with a page three girl and you're basing your political votes on a tabloid then that might be what happens. Jordan Michaelides: It’s interesting.

My view on it initially was this isn't a great thing, they've going backwards here. But then I've had the time to sort of process it, and, I like Nigel Farage a speaker, but, when you actually watch him in interviews he goes a lot deeper into some of the reasons why, and having been involved in similar industries such as Forex and Cryptocurrencies, we've now seen the city of London actually come out here. My own view is that the UK seems to be pivoting itself towards Asia.

And we've got these FinTech bridge, which is sort of like a compliance bridge through Australia. There's the free trade agreement which they gunning on. My own view is that actually it's probably going to turn out better for them, simply because they can use Australia as a stepping stone to the biggest market in the world, I think Asia now, without the Indian sub-continent I think is about 46% of world GDP.

So, it's the biggest market in the world, bigger than North America. How do you view it now? In hindsight?

Tom Williams: Day to day, it's purely the uncertainty surrounding how this Brexit is actually going to happen. Long-term it will work itself out, as all these things always do. It's not a case of the UK leaving the Eurozone and all of a sudden nobody wants to trade with the UK, it’s just ridiculous to think that.

I suppose it depends on the negotiating powers of the UK government, whoever's there at the time to be able to go and strike these agreements with Asia, as you've just suggested. Jordan Michaelides: It's going to be interesting. They’re not getting very far at the moment, I think it's March or something that it finishes up.

Going back to the industry now and then, last week we spoke about trends, obviously cryptocurrencies have been a big thing, I guess for the business here. There's also the fact that, like I was saying before, the role that you would have as head of trading being on a phone versus it more around automation now, I was chatting to Khim Khor before, who's one of the directors here, in charge of the Asia business, and we were speaking about the institutional side of things and APIs. I'm curious as to what you guys have done around that because he was telling me that you led something in that area in particular.

Tom Williams: So, as you know we've got a lot of retail clients in Australia and overseas and we've managed to, over the years, generate great relationships with the wholesale market in terms of liquidity providers, prime brokers, prime of primes, and, we also have a very healthy balance sheet which enables us to go and strike good liquidity terms with these counterparts. Our business has changed somewhat in that it's not completely retail led. We are approached by a lot of wholesale type clients these days, including funds, other brokers who are maybe smaller than us, who don't carry the same sorts of balance sheet, who want to be able to get access to very tight pricing, commercial terms that they might not be able to achieve elsewhere, so, we've transitioned from this purely retail driven model to now be able to compete as a liquidity provider ourselves.

Jordan Michaelides: Wow. I didn't know that. So, now if you had to break down the percentage of the clients, or let's say the amount of sales and volume of transactions between wholesale and retail, what do you reckon the percentages are?

Tom Williams: In terms of monthly turnover I'd say it's around 66% retail, 33% wholesale. I mean, the sheer volume that a wholesale client can do is obviously the reason behind that. They can have good months, they can have terrible months, but retail is still the majority of our business and that's where we try to differentiate ourselves away from competitors because it ties in with the whole online marketing and… Jordan Michaelides: It’s interesting to hear how the trading desk is changing in that regard.

It's one of those things you have to keep growing somehow. You got to keep doing new things. Tom Williams: Diversification of flow is becoming very important for us as well, because, retail tends to go completely one way and the whole retail market all read the same news so everybody kind of trades in a similar fashion, and for us to be able to reduce costs by internalization, we need to be able to see different types of flow from different demographics.

Jordan Michaelides: And put it put the opposing way out essentially. Tom Williams: Exactly. Jordan Michaelides: Interesting.

Now, what I'd like to ask each guest is, I'm giving the audience an idea of what the office here is like. I was saying to Chris last week that it’s a pretty impressive company, there's a lot of staff, I think there's like 40 or so staff now, a big office, nice officers. I just want to give people an idea of what the team is like and how… because we're so removed from seeing the people behind the business are actually like, and so I'm curious, if you were to choose one sitcom that represents the go market office, do you have one in mind or what would it be?

Tom Williams: Should I ask what Chris's answer to this was? Jordan Michaelides: Hmm. You don't want to know.

Tom Williams: Okay, well, my answer would definitely be the UK version of the office. I think we've think we've definitely got a David Brent character. Jordan Michaelides: Yes, and that would be Chris who claimed that last week.

Tom Williams: Did he claim it? Really? I must have drilled into him.

I like that. But no, the office, it's a great environment. It’s a fairly young demographic, it's not a load of old-boys sat there, it's new, educated, friendly people to work with.

It's a good place to be. Jordan Michaelides: We're running at a time, so I want to switch to some short fast, questions for you. What does your morning routine look like?

Tom Williams: My morning routine is very straight forward. I've just moved house, so my tram route to work has train changed slightly. I get into the office at around 7:00am and get in touch with what's gone on overnight. 7:00am is New York close, so there's not really a lot going on after that, markets have settled down.

Time to read some news, the ASX has still got a couple of hours to open, so, get to work, have some breakfast, get ready for the day. Jordan Michaelides: And the evening? How do you sort of decompress at night?

What's your go to for relaxing? Tom Williams: Go to the gym, go boxing, kickboxing, I do that three or four times a week. I head home, dinner will be on the table… no, I wish! *laughs* You know my wife, but no, she's good, she is good.

I just kick back most of the time. Most of the time during the week, it's an early night. Jordan Michaelides: What’s the most influential book on your life.

Let's say if you had to gift it to someone at Kris Kringle this year at Go Markets, what would you gift? Tom Williams: God, this could be controversial, couldn’t it. One that's always struck a chord with me is ‘The God Delusion’.

Have you read it? Jordan Michaelides: I just bought it. I go through this heavy process of building a list of books every year and then I buy them all at once after I cull that list.

I just got that one. Tom Williams: Well, being brought up in a predominantly Irish Catholic background in Liverpool, if you were seen walking around the streets with ‘The God Delusion’ in your hands in Liverpool you'd definitely get a few funny looks, but cosmopolitan Melbourne you can get away with it. Jordan Michaelides: Can you just give a quick little explain explainer for the audience what it's about.

Tom Williams: It's about the scientific approach to life rather than the religious approach, and how it’s completely different. They say never talk about politics or religion, so let's not go too far into it. Jordan Michaelides: *laughs* Yeah, it's a good book.

I bought that with ‘The Selfish Gene’ by Richard Dawkins which is pretty good too. They're good reads, I reckon. Another one for you, any favourite documentaries or movies, if you had to list your top three or five.

Tom Williams: I go through phases with documentaries in particular where I just binge watch something about a random topic. Jordan Michaelides: Are you a Netflix guy? Tom Williams: Yes, but, I find sometimes Netflix can just get sour, and there’s not a lot going on.

I move in trends from watching documentaries about guerrilla warfare in the democratic Republic of Congo to becoming completely fascinated with World War Two and all the things associated with it. Auschwitz is one of my most recent ones, which is a fairly morbid topic. Jordan Michaelides: Have you been there at all?

Tom Williams: I have not been, but I'd like to go. Jordan Michaelides: I'm actually in that stage again right now. I mean, I've had it over the years many times, you find a few good movies that really shows what it was like.

Schindler's, there was one called one the Wannsee conference with a brilliant English actor, Colin Firth was in it as well, just little films like that which are underrated. I'd think Schindler's list is a pretty well-known film, but just really gives you that perspective. Tom Williams: They’re completely eye, you just cannot fathom what went on.

So, to answer your question, a diverse range of documentaries. Jordan Michaelides: Last question for you, what has been the best purchase for you under $200 bucks? Tom Williams: Well, let's not talk about a purchase that I've made, what about a purchase that I'm going to make, that I'm on the verge of making?

Jordan Michaelides: It could also be a purchase that is an experience. It doesn't have to be a specific object Tom Williams: Well, we’re organizing, Fran and I, have started to organize a couple of life-size impressions of ours to send over to the UK for Christmas so we can sit them down at the Christmas dinner table and enjoy a bit of an over cook Turkey with the family. Jordan Michaelides: Wow, that's good.

I really like that. Tom Williams: So yeah, for a couple of hundred bucks, I think that will probably be the purchase of the year. Jordan Michaelides: You should start a little business like that for other experts.

Say, hey, you don’t have to go home… Tom Williams: I could be the go-to guy for life-size models. Jordan Michaelides: Tom, it's been a pleasure. We've already hit 30 minutes.

Thank you very much for joining us. Tom Williams: Thanks very much.

Vee Leung Phan is the Founder of TrackRecord Asia and former Head of Trading across multiple divisions for Deutsche Bank and Morgan Stanley. Vee made his way into the industry by chance, after realising there was no real opportunity back home during the 1997 Asia Financial Crisis. Fast forward 13+ years and Vee had co-founded a hedge fund, run multiple divisions for both Deutsche Bank and Morgan Stanley, and co-founded a machine learning tech startup.

TrackRecord Asia is a financial training academy for trading teams in banks and professional traders – designed to teach you the frameworks learnt in his days across first-class institutions. In this episode we’ll cover: Singapore and Vee’s childhood in Kuala Lumpur Uni life in Manchester and how he got into trading Lessons learnt from his mother Career path and insight into the industry Vee’s trading training framework The biggest mistake in the business. - Transcript: Jordan Michaelides: Margin Call is the podcast that gives you behind the scenes access to ups and downs of working in the Forex CFD industry. We interview the people that keep the show on the road, giving you insight into what makes the industry tick.

The series is guest hosted by myself, Jordan Michaelides, and produced by the team at Neuralle Media. To learn more, visit go www.gomarkets.com/podcast/ or take a look at the Go Market suite of products at www.gomarkets.com. Disclaimer: Go Markets is a derivatives broker and Jordan Michaelides is the managing director of Neuralle Media.

All opinions expressed by Jordan and podcast guests are solely their own and do not reflect the opinions of Go Markets, an AFSL license holder. This podcast is for informational purposes only and should not be relied upon as a basis for financial decisions nor as an indication of future performance. Clients of go markets may hold positions in the derivatives mentioned.

A financial services guide and product disclosure statement for our products are available at the www.gomarkets.com website. Jordan Michaelides: In this episode we spoke with Vee Leung Phan. Vee is the founder of track record HR and former head of trading across multiple divisions for Deutsche Bank and Morgan Stanley.

Vee made his way into the industry by chance after realizing there was no real opportunity back home during the ‘97 Asian financial crisis. Fast forward 13 plus years and Vee has co- founded a hedge fund, he's run multiple divisions for both Deutsche Bank and Morgan Stanley as well as cofounded a machine learning tech startup in Singapore. Track record Asia is a financial trading academy for trading teams and banks, and professional traders alike.

It is designed to teach you the frameworks learnt in his days across first class institutions that we cover in this episode today. Vee is a great guy with a wealth of experience across the industry. This is a brilliant episode where we cover Singapore and his childhood in Kuala Lumpur, University life in Manchester and how he actually got into trading, lessons learned from his mother, career path, his trading training framework from Track Record Asia, and things like biggest mistakes in this business.

Now, we have a special competition for you guys as well: Three listeners to this episode can win a free copy of Vee’s recommended trading book which is called ‘The Next Perfect Trade’, and that will be autographed by the author Alex Gurvich as well. Participants will need to provide their feedback on his episode via www.trackrecordasia.com/podcast/, all submitted entries will also receive a free 12 week access to Track Record Asia's weekly risk call recordings and the week ahead marker report, so, a nice little prize there for you if you're willing to give it a go. If you enjoy this episode, do subscribe on your podcast app and share with your friends.

With all that said, thanks so much for listening. Let's get into the episode with Vee Leung Phan. Vee, thank you very much for joining us on what I think is a very early morning in Singapore for you.

First question for you, and probably the most important one is, what frustrates you the most about living in Singapore? Vee Leung Phan: In Singapore, the most frustrating thing to say about it is the weather. It's unreasonably hot, sometimes hot and humid.

I think with better weather Singapore would be the perfect place on earth. Jordan Michaelides: I was going to say what's it like today? What's the weather like?

Vee Leung Phan: It's usually either hot or raining. It's not raining, so it's probably hot out there. Jordan Michaelides: Interesting.

Now you didn't grow up in Singapore, I think, from memory, you spent your formative years in or just around the suburbs of Kuala Lumpur. I'm curious as to what sort of your earliest memory of your own childhood? Vee Leung Phan: That's an interesting question.

Yeah, I grew up in a small town outside off Kuala Lumpur, my earliest memory is really fuzzy, it’s literally fuzzy because I had really bad eyesight when I was really young, but nobody knew this. So, I was just going around thinking that that is normal for me to not be able to see clearly. I found out when I was about 10 years old that my eyesight was really bad because the teachers then started to realize I couldn't really repeat anything on the board until I got really close to the front, and strangely enough even though my whole family is short sighted I was the only one who’s sight issue was not discovered because my mother kept thinking that because I could memorize most of the things I did see that my eyesight was good because I knew what was going on, but actually I couldn’t see much.

It was really strange. Jordan Michaelides: Did you get that fixed? Did you kick classes or did you eventually… Vee Leung Phan: Yeah, I got glasses when I was 10 years old.

I'm not sure how you guys score this but it was 400 for me. That's huge, because most people start around 50 to a hundred. Jordan Michaelides: Really...

Vee Leung Phan: Yeah. I eventually deteriorated to about a thousand, which is almost legally blind, so I'd had corrective glasses which are really thick, so I was one of those little kids with really thick glasses. Vee Leung Phan: *chuckles* I can imagine that, how cliché’.

That's hilarious. When you were growing up was there anything in particular that you thought you were going to be as an adult, like a particular job? Vee Leung Phan: Oh, yes.

I was a very determined to be Spiderman, until I realized that wasn’t realistic, so, then I thought I'll become a scientist because that's what Peter Parker was. I was very set on being a scientist. As I grew older, I realized that being in Malaysia if you're a scientist you probably end up researching about different strains of rice, rubber trees or palm trees, so I thought that's not realistic, I'm not going to make any money from that, so, then I decided to settle on being an engineer and that's what I studied in school.

At university I did a degree in electronic engineering. Jordan Michaelides: That's right, yeah. You mentioned the university of Manchester, the Institute Of Science and Technology.

You did a Bachelors Of Electronic Engineering, I think this was around the peak of the Asian financial crisis, right? Why go to Manchester, out of interest? Vee Leung Phan: Why go to Manchester?

I applied for Cambridge, they rejected me *laughs*. I wanted to go to Oxford or Cambridge, I decided to go to Cambridge because there was no test required during the selection process, I was quite lazy. They rejected me, so then, the best engineering school in the UK at a time, and probably still is, is the Imperial College Of London.

They gave me a deferred entry, so I would go the next year and I thought, wow, this is silly, I don't want that. So then I went to the next best, which was actually a very distant next best, which is the University of Manchester. Jordan Michaelides: Interesting.

I find it so funny that you mentioned that mentality, that Asian mentality, of not wanting to, I guess, waste your time and defer. I remember I had that as a kid, my family's Greek so it's sort of like a similar mentality that you get in those Southern European families where you just want to make money, and, I find it curious because, this was the peak of 97 when you graduated I think, or around that time, it seemed, at least in a few of your biographies, that there was a mention of no real job opportunities back home and you sort of stumbled your way into working for what was Chase Manhattan, now JP Morgan Chase, as you wanted to get in from a computer science perspective, but, eventually it seems you were working on the FX trading side. I'm curious, when you got into that bank, what were the elements that excited you enough to continue going on with trading, FX commodities and so forth?

I'm just wondering what was going through your head at the time? Vee Leung Phan: Well, I’d just finished school. I had no money at all, and they offered me a job and provided training, so I thought, that’s great, it pays way more than what I would have made as an engineer.

At the time it was the peak of the NASDAQ boom. I applied for IT, I wanted to be in the IT department but they said they had no IT jobs but how about trading they asked. I said I had no clue what trading was, but that guy said, just give it a shot.

I said, okay, whatever, I'll just give it a shot and see what happens. I went through all the tests, all the interviews, and truly I had no idea what I was in for. I told them as much at the beginning but said I have no clue what trading is, but I will learn if you are willing to teach me.

I think they probably liked that because most of the people that were going there were from finance backgrounds, finance majors, maybe had PhDs and everybody seems to think they have figured out everything about what trading was. So, I went in with and open mind and I stayed because the money was good and I was being paid to learn for three month. There was a classroom-based training, so I was going to classes and after that it was just hanging out with different trading desks to see what they do.

That was quite good for me, I thought it was quite cool given that all I had to do was turn up and learn and they're paying me for it. Jordan Michaelides: Happy days. I'm curious how you perceive yourself personality wise.

I mean, my experience in the industry is you get two types of people generally, the type that just love the excitement of the trade, you know, the market environment, the pressure involved in it. And then you get the other types who are very calm, cool, and collected no matter what is going on. I'm curious as to how you see yourself.

What sort of mentality do you sit within when it comes to trading the market? Vee Leung Phan: Good question. I would like to think of myself as calm and collected, like James Bond, but probably that's not true.

In fact I’m quite animated at work, some people think it's kind of strange that I'm always commenting on something, and, in fact, that's why I got many opportunities at the early stage of my career, because I was observing every single market even if it really had nothing to do with me, you know, I’d be making comments that this thing is higher, this thing is moving. I was basically, I guess, the loud speaker for Bloomberg news, right? So, I was in a days where headlines were kind of difficult to find, I would be commenting on every single headline that came out and why markets were moving.

That's why I got quite a lot attention as a junior trader because, I was with this kid, right, and people thought he seems to be seems to be aware of what's happening all around the world, but I was literally reading every single headline that comes out. Jordan Michaelides: That's, that's so funny. And how you put your name out there through that sort of externalization, I really liked that.

When you were growing up with the particular lessons that you hold with you today, maybe it's a principle, a lesson, maybe it was something that was taught to you directly or indirectly from either of your parents. Vee Leung Phan: I remember this one time my mother was driving me to school, she was always very suspicious of whether I was taking drugs or not because I was a really small kid and I didn't seem to be growing at all, I look really thin then, and I was really small compared to my peers. She was always worried that I’d be bullied or I’d join a gang or something like that, succumb to peer pressured to join a gang.

She said to me, uh, are you taking any drugs? I said no, we did that come from? She said I just wanted to make sure you know to never do drugs.

Then she says another thing that you need to know is never joined a gang. This was a huge problem in the neighbourhood school I was going to at a time. I wasn’t from a well-to-do family, we didn't live in the best neighborhood so the schools were not that great.

Right. There were gangs dominant at the time and is was either you were in a gang or you were being bullied by the gang, so she was always worried about that. Of course, I was kind of a nerd back then so that was very far from my, for my mind.

I mean, who would recruit me into a gang anyway. This is where it gets interesting, she said if you do join, don't be the henchman, you have to be the boss. Jordan Michaelides: Wow.

I liked that the first assumption was that you were doing drugs and you're in a gang. That's so funny. Vee Leung Phan: Yeah.

So, she says if you really need to join, you have to be the boss, you cannot be the henchman. At first this was really weird to me because I was very small kid, how would it be possible for a small kid to become the boss of the gang? She said to me, it really doesn't matter how big you are in life, it's all about how you carry yourself.

She said you are like a chilli, we have different types of chili and the spiciest is the one that's the smallest, she says you have to be just like that, you have to be the spiciest. That's a lesson my mom taught me. When I was really young, as I mentioned, my eyesight was really bad, so I did really poorly in school, I remember I didn't really know how to read when I was six years old, and when I went to a school after kindergarten, I only knew 26 words in English from being taught A to Z examples, right?

I only knew 26 words and I was really surprised when the boy next to me could spell boy, I was really stunned. I said, Oh wow, this guy's a genius. How does he know this?

When a teacher says, what's B, I say ball, that was the only thing I knew only thing I knew. He says boy, and I thought, wow, how does he know boy. Then some other people said examples and I thought they were all geniuses.

Then the teachers had a conversation who my mother and told her, your son is a little bit slow, he doesn't know much. That never deterred my mom, she always managed to convince me that I was doing really well, that as long as you do your best, it's fine. I was the worst in the classes in the beginning, until I had better eyesight, then I became a good student.

Through it all she never doubted me and never made me feel like I was an idiot. She convinced me that as long as you try you can be the boss. Right.

So, I grew up in a bit with sense that I was the chosen one, like I had this invulnerability and I could do anything that I want, I'd go try out for sports which I couldn't do because the other kids were so much bigger than me, but I thought, I’ve got to try. Jordan Michaelides: That's really interesting. So, your mother instilled this initiative to just keep keeping on, which is interesting.

She sounds like a great mum. I'm curious, when I got into the nuts and bolts your career, I mean, I went back and looked at your career and you've done a lot. If you look at just what's on LinkedIn you've worked across FX, interest rates, equity markets, multiple cities, London, Singapore, Hong Kong and Seoul for a while.

I think of your beginnings at JP Morgan, you eventually worked at Deutsche Morgan Stanley, you co-founded a hedge with your old boss from JP Morgan, so there's a lot going on there and I just wonder, looking back at your career, as both a trader and a manager, what stands out to you is the biggest insight from your time in the industry? Vee Leung Phan: I traded most of the developed markets and quite a lot of the emerging markets, and in different countries, as you said, and, it was very interesting for me that I could figure out the markets very quickly, regardless of their idiosyncrasies. I think that was because, at the heart of it, every market is still driven by human activity, right?

Human instincts, human behaviours, that’s the commonality that runs through every single market, so, it came to a point where in our philosophy at Chase at a time, it really doesn't matter what your background is. You could be an Asian guy, but you could be parachute into Mexico and figure out the markets within one week to two weeks and then be really good at it after a few months. Of course, at the time, in the London trading room, the Asian guy typically was the IT guy.

I always felt that maybe it was a bit difficult for me, but my boss, who I later co-founded the hedge fund with, he ran the Scandinavian interest rate desk at that time, I guess I was the first guy originally from Asia to be trading in the Scandinavian markets. At the time it was still an emerging market, almost all my colleagues were all blonde with blue eyes. For some of them the first time they saw me eating ramen they thought it was very strange stuff *laughs*.

Jordan Michaelides: And this is in the ‘80s, was it? Vee Leung Phan: This was in 1997. Jordan Michaelides: Interesting.

If I think of how much London has changed, even just in the last seven years when it comes to Asian food, it's quite amazing. You could see that eating that it would sort of open a whole new world, you know? Vee Leung Phan: I think they were really just not adventurous.

They're always having a salad or a sandwich. It was just a new experience for them. Jordan Michaelides: So you think the biggest insight then, from your time was that in the industry, is that companies are essentially able to build up a person with a certain type of framework or certain type of mindset or principles and that allows that person to jump into any market and do as they please.

Do you think that’s accurate? Vee Leung Phan: Yes. So, the commonalities of different markets are similar in a sense?

Of course, the products are very different, it’s actually easier for an interest rate trader to trade FX, than for an FX trader to trade interest rates because there are so many more dimensions in interest rates. But besides that, if you’re a trader in Singapore and go to Hong Kong, it should only take a very take a very short period of time before you can learn how to trade that market. Some markets are more difficult than others if the news is in the local language, so you have a slightly slower reaction time, but generally we want people to get to that kind of level of expertise which, like you said, is basically a framework, you learn a set of principles to trading.

Jordan Michaelides: That sort of brings me to what you're doing now, which is both Track Record and Shentilium. In Singapore, and after your career within the industry, you had a few years off, taking a sabbatical, you now essentially run these two firms and, form memory, I think Track Record is more about financial training, like a financial trading Academy, which essentially conducts training for trading teams and banks as well as training programs for retail traders. I found that really interesting because now that you've spoken about that concept of of parachuting someone into a certain market, no matter what, that you're sort of taking that same mentality and teaching people and saying, hey, it doesn't really matter what market you're in, so long as you find follow these guidelines and principles, you will genuinely be able to work your way into a market as long as you're passionate about it.

I'm curious then, what are your general principles, how do you sort of generally teach people about this sort of stuff in your programs? What are some of the general principles that come from that? Vee Leung Phan: After I left finance, after I left Morgan Stanley, I did all the usual stuff like travel, learning things I wanted to learn, doing things I wanted to do to do, but I also spent a lot of time thinking about if I was given the opportunity to talk to my younger self, how would I teach him?

How can I teach him to be a better person, a better trader? That's how I came up with the trading framework. I call it a framework because it's not like a set of rules, it's a set of principles where you can adjust based on your own personality and how you can become a proficient trader.

You mentioned it’s interesting to you that our philosophy at the time was that we have to reach a level of proficiency where we can be parachuted into any market, in case some people go on vacation or there is a crisis, we will to be able to trade different markets in a very short period of time. One of the most common questions I get when I talk to people about my training program is, they love to ask, especially from the retail sector, are you teaching FX or are you teaching interest rates? They don't talk about interest rates they always say FX, commodities or equities, and they are very confused when I say my trading methods are agnostic, it really doesn't matter what markets you trade, as long as you follow these principles you will be successful over long periods of time.

It's very different from the trading providers that are commonly out there, especially for the retail sector, where they focus on the product, which I think is kind of a waste of time in the age of Google where you can just go online and learn all the product knowledge that you want for free, I don't believe in teaching people stuff that they can get online and charging a fee for it. If they’re not teaching product knowledge then it’s usually something that's very specific, they give it a cool name, call it their patented whatever, or the 3 principle management method, all these esoteric names of trading methods, and I think this is what captures the interest of retail traders because they always think that there's a secret to the trading that professionals know which they're not telling us. It's like the Holy grill and this guy on the internet is going to reveal it to me.

It’s a silver bullet, a secret method, and they are only sharing with you because they like you so much or because they’ve already made so much money that now they just want to share because Wall Street is taking advantage of Main Street and now they want to give something back, but only a limited amount of time, so call us now, you’ll be one of the few people they want to teach. People believe this, I find that kind of strange. So, my trading framework is based on a set of principles where I believe that the training process is simple, but it is not easy, and it's not easy because most of the things that you want to do, that you are your engineered by your DNA to do, and your human instincts, your human tendencies are really bad for trading.

You tend to be greedy, you tend to be fearful, you tend run with the mob, rush with the crowd into different things. That's all instinct that served us well in the Savannah when humans we're evolving, but it's not good at all for trading. This is what my framework does, it gives you a set of principals, a set off methods that you can use to stop yourself from blowing it up.

Jordan Michaelides: Yeah, it's just preventing that. I remember when I first got into the industry, when I was a lot younger, I lost a lot of money trading oil futures and that was sort of the moment where I took a step back and realized that it's all about protecting that downsize. I read a brilliant book about this, it's called ‘What I learned losing $1 million’.

It’s by an old CME exchange executive and how he lost, basically his whole life, how he destroyed his life. It's very, very fascinating, it’s one of those things that people are so often looking at the upside, but very rarely looking at the downside, which sort of brings me to the thought, you know, of the people you see, whether they're in the banking industry or they're retail traders, what do you think is the biggest mistake or waste of time that people make in this business? Vee Leung Phan: I guess the biggest mistakes that lead to eventual financial ruin is vanity.

Again, it’s a very human instinct, they allow success to go to their head, this happens for retail traders and professional traders, they start drinking their own kool-aid they think they've figured it out. That’s why most traders go through periods of a success and then an extremely bad result. They start to make money, they become more casual in their risk management, they start to take a lot more risk and blow their bank roll.

That’s the case with every successful trading story that you here, all the guys who are really successful in trading have long successful careers that that spans a number of years, not a flash in the pan or catching a bubble. When asked for the secret to their success, they will always credit it to a similar incident where they nearly lost everything or they did lose everything and then they realized that the most important thing is to stay in the game. When you start to get over confident, your ego gets in the way, you start to believe that you’re the best ever, that you've figured it all out.

As I look back upon the years on my career I find that the times that I lost the most money was always after a period of success. Jordan Michaelides: That's very interesting. Now, we're already running out of time, I'm going to have to try and convince you to come back on for another episode because there's a lot here I wanted to cover on the market itself, cryptocurrencies and technical analysis, but I'm going to have to finish off with some short, fast questions for you.

What does your morning routine currently look like? Vee Leung Phan: I wake up and check the news from overnight. That's quite easy now because we have a forum for this and I'll just read through the forum and see exactly what's going on in the markets Jordan Michaelides: And what about in the evening?

How do you sort of decompress at night? What do you get up to typically? Vee Leung Phan: To decompress, I have dinner with my friends, I like to read a bit or maybe watch a movie, nothing special, there's no secret routine.

I do try a bit of meditation now and then, when I’m going to go to sleep. Just 5 or 10 minute of medication. It helps.

Jordan Michaelides: And if you had to give the book to the audience, if you had to choose one book for Christmas time this year, something that's been the most influential on you, what would that book be? Vee Leung Phan: If we are talking about trading, my favorite trading book is called The Next Perfect Trade, it’s by a friend of mine I worked with at JP Morgan New York, he was a kind of a legend on the floor is one of the most successful traders that I've worked with. He’s put down his thoughts on how to find the next perfect trade I've been witness to the real deals, seen the way he's conducted his trading.

There are a lot of books out there that are written a friend and people who profess to know what trading is, and there are some real good books about trading, but quite often it concentrates on the life of the trader. This book talks about the process of trading, it’s a good book to have if you're talking about trading. In fact, at Track Record we have a few autographed copies that we would they have to share with members of the audience who write in with any thoughts or questions they have about this podcast.

Jordan Michaelides: So that’s by Alex Gurevich, is it? Vee Leung Phan: Yes, correct. Jordan Michaelides: I'm going to have to check that book out.

Last question for you, what has been the best purchase that's had the most positive impact or something that affects your life in a big way? That's under $200 USD. Vee Leung Phan: I guess that would be an internet connection? *laughs* Jordan Michaelides: *laughs* I like that.

Now, where can people find you on social media? On other websites and whatnot. Vee Leung Phan: They can check out our website www.trackrecordasia.com, my email address is there, they can email with comments or questions.

Jordan Michaelides: And for social media, on Twitter and Instagram it's TrackRecordAsia. Vee, thank you so much for doing this. It's been a pleasure having you on.

Like I said, it’d be great if we can twist your arm to come back on because there's still a lot I want to cover. Thank you for getting up early and doing this with us. Vee Leung Phan: No problem at all, it’s been great, thank you.

Thanks for having me. I'd love to come back. Jordan Michaelides: Awesome.

Outro: Thanks for listening to margin call. Before you run off, make sure you subscribe on your podcast app to get first access to new episodes and consider sharing this with your friends who love the Forex safety game. Don't forget to like us on Facebook, Twitter, Instagram, or YouTube by searching Go Markets.

Until next time, thanks for listening.

Mark Austin ( LinkedIn ) is the Co-Founder of Magnetic Trading, a trading coaching and services business. With experience across prime institutions such as The Royal Bank of Canada and EFG, Mark’s unique insights have helped many discover what it takes to trade with a principled approach. In this episode we covered: Life in Thailand How he got into trading Magnetic Trading Technical vs. fundamental Publishing results with transparency; and Trading principles & mindset - Transcript: Disclaimer: Go Markets is a derivatives broker and Jordan Michaelides is the managing director of Neuralle Media.

All opinions expressed by Jordan and podcast guests are solely their own and do not reflect the opinions of Go Markets, an AFSL license holder. This podcast is for informational purposes only and should not be relied upon as a basis for financial decisions nor as an indication of future performance. Clients of go markets may hold positions in the derivatives mentioned.

A financial services guide and product disclosure statement for our products are available at the www.gomarkets.com website. Jordan Michaelides: In this episode we spoke with Mark Austin. Mark is the cofounder of Magnetic Trading, a trading, coaching and services business.

With experience across prime institution such as the Royal bank of Canada and EFG Capital, Mark's unique insights have helped many discover what it takes to trade with a principled approach. In this episode we covered life in Thailand, how he got into trading, Magnetic Trading and what it actually does, technical versus fundamental analysis, publishing results and transparency, and a course, trading principles and mindset. If you liked the episode, do leave a rating on your podcast app or share with your friends, post on your Instagram story tagging @gomarkets.

Show notes and all previous guests are available at www.gomarkets.com/podcast. With that being said, let's get into the episode. Mark, how are you?

Mark Austin: Great. At the moment I'm in Ko Samui and it’s a lovely day, looking forward to having a good conversation with you. Jordan Michaelides: Now, why move to Thailand, how did that come about?

Mark Austin: So from my earliest career I've always been in finance, and I got out of finance during the credit crisis back in 2008, 2009. I decided to leave the banking industry, I just viewed that I didn't want to be part of that industry anymore. I viewed, you know, pay was going to be reduced, bonuses were going to be reduced, and there was so much red tape coming into the banking institutions that I decided to leave.

At the time I was making as much money with my personal trading as I was actually working the bank, so the decision wasn't actually that difficult to make. I just took my laptop and my skillset and I headed off a to do a bit of traveling. The idea was actually to come down to Australia and maybe do some work down there.

I came to Ko Samui initially with a view of just spending a few months here. I was trading and I met a guy down there and he asked me what I was doing, and I said trading, that's how I'm making an income at the moment. He had a financial list and he wanted me to send my trades to him initially, and then his client list.

So I kind of ended up just slipping into this helping other clients make money on trading and with a lot of people following my trades purely by accident. I just fell into it really. I didn't really have any desire to go and do that.

I was just going to trade my own money. So that's how I ended up staying in Thailand. I set up that business and, you know, I travel a lot but Thailand is still my home, and has been for the last 10 years.

Jordan Michaelides: What do you think of the expat community there? There’s an area in particularly for Australians, I think, is it Chiang Mai? There are so many coworking spaces and tech companies there now, but, Ko Samui is also another one where you just hear of a lot of ex-pats linking up there.

How have you found it? Mark Austin: It has changed very rapidly over the last few years, actually. When I first came here there were a lot of Westerners, but actually the expat community has started to diminish.

I think that's because of the strong baht. Cost of living and the strong baht is not helping a lot of expats who are earning in their own currencies, be it the Pound, US dollar, or the AUD with the baht going up. So, we are seeing quite a few expats leave unfortunately at the moment.

Even if you look at the visitors coming into Thailand now from tourism it’s predominantly Chinese and Korean. A lot of Chinese tourists now visit Thailand. Jordan Michaelides: We have that here in Australia where, I think recently they just crossed over to the Chinese ex-pat in terms of, not in terms of visas yet, but, definitely tourism where they've overtaken the British.

The British were like the biggest bunch of tourists that we had. It's the old cliché, I work with so many people in finance and they come over and the first thing they do is they go work on these farms so they can stay in Australia a little bit longer. A couple of years later they wind up working in the finance industry because the weather is typically better than London, normally, if you're in somewhere like Sydney, the lifestyle is often better, now it's increasingly becoming more and more Chinese.

I think that will happen over time as their middle class grows as well. It's interesting that it's affecting, affecting there. I was in Vietnam a few years ago and noticed it seemed to be crossing over from mainly US and French tourists to large groups of Chinese tourists.

I guess it's just an overwhelming trend in the region. Mark Austin: Yeah, it's close as well, it's not too far away and as you said, the middle class is growing rapidly now so that they will have a lot more money. It's interesting, I find the Chinese stay more on the resorts, so, Thailand kind of feels quieter, but actually tourism is increasing here year by year, but it feels quieter because they tend to stay in the resorts or in their villas that they're renting instead of going out as much as the Westerners.

Jordan Michaelides: The analogy I've been thinking about recently is how in the of sixties and seventies you would have large groups of American tourists, tourists, that middle class was developing and they’d always go out in groups, now tour companies are the biggest beneficiary of tourism in Australia at the moment, particularly from that Chinese market because they come in groups of 20 or 40 and they come out as that group. I wonder over time though if their behaviors will become more like the Western tourists when it comes to the 90s where you get people just traveling on their own, and that'll be the key thing I think for tourism in Australia in particular. They're saying that tourism in the next 10 years could easily overtake mining.

I've got to ask, what do you miss the most from home? Mark Austin: Obviously I miss family and friends, they are the key drivers really. It's a struggle out here as well, I mean, I do speak some Thai but I'm by no means fluent.

Sometimes it's a struggle just to get by trying to deal in a foreign language, so it's nice to go back home, even if you're doing businesses, it's very easy getting something done back home. Things take five minutes whereas in Thailand it can take days. I don't miss the weather.

Summer’s in the UK are actually getting better, I went home in August for a month this year and that they had a great summer in the high 20s, probably as good as Australia really. Winters are a struggle, certainly they don't have the nicest winters, a lot of rain. I remember when I was working in the banks, you get up at six o'clock in the morning, you go to work in the dark and then you'd come home in the dark.

You don't see any daylight. Jordan Michaelides: Where did you grow up? Mark Austin: I was fortunate enough to grow up in Jersey.

Not New Jersey, whenever I say where I'm from people thing America, no, Jersey is in the Channel Islands, which are actually very near France. They are crown dependency, they use the pound there, very near France. Jordan Michaelides: Was your family local there or had your parents moved there for work?

I remember in my accounting job there were quite a few accounts that had worked in Jersey, accounting, banking, financial services in general. There's quite a large economy for that. Mark Austin: My father was actually in offshore finance, hence where we were.

I've literally grown up in offshore jurisdictions, so I'm used islands actually. Hence why I always spend some time in cities, but I'm always drawn back to the ocean. I do like to be close to the ocean.

Jordan Michaelides: Do you have any particular fond memories as a kid growing up? Mark Austin: My, my earliest memory as a child was in a place called Nauru. Given you’re Australian you would know Naura.

It's a very small Pacific Island, my father was based out there. I must live in around four, maybe four years old and I just remember the backyard and being on my bike there. I went to school there, or kindergarten, and I was the only white child there.

I can't remember the experiences there, but I remember my mother saying it was a little bit difficult for me there. Jordan Michaelides: Nauru is an interesting one. There's a funny relationship that Australia has with Narau.

Originally it was used for processing asylum seekers, but Nauru as an economy actually became very smart at acquiring land in Australia. Some of the largest REITs in Australia are predominantly owned by a sovereign wealth fund out of Nauru. There's all sorts, like Nauru house in Sydney is quite a massive building, quite an old buliding as well, The government's done pretty well.

Not many people know about it unless perhaps you're from Australia. Going back to your early career, you we're talking about waking up at 6:00am returning home at night, in the dark. Before we get to the GFC, I was fascinated by your career, you worked in the client services space for the Royal Bank Of Canada.

You worked at UBS, obviously you left it around 2008. What area did you typically work? Mark Austin: I started off with offshore tax planning, so trusts, and I moved into wealth management looking after very high net worth individuals.

I had a portfolio of clients in the middle East, predominantly Dubai at that time. Things were booming at that time and there was a lot of money and I think maybe you remember that property was, it was really hot at that time, but just before the crash and you know, people were making, you know 5% in a week on their properties even before it had been built. It was a huge bubble out there at the time which ultimately blew up.

That was another factor for me deciding to leave because not only was there was a financial crash, also the market that I was focusing on, in the Middle East, in Dubai, the property market just fell out, so a lot of people lost a lot of wealth who had invested in property there. Jordan Michaelides: And where you based out of London at the time when you're working with those clients in the middle East? Mark Austin: Yes, London and also Jersey, and I used to do a lot of business trips to Dubai.

Jordan Michaelides: And where did the trading come into it? For myself, before I even got into the industry, I was trading oil futures at university. Funnily enough I lost absolutely everything because, you know, you do when you think you know everything at the age of 19, and it was a very, very valuable lesson, but it's got me thinking about where your first entry into the world of trading.

Mark Austin: I got into it very early as well, also while at university at 20, 21 years old. My mother used to trade stocks, well known stock. She used to buy BHP Billiton and some of the big mining companies and she used to make really good money on it.

One day she said do you want to come in on this and learn it? I said why not? So as soon as I started to research this and I placed my first trade I was hooked, I wanted to just do that, really.

That's how I sort of fell into it and I was just obsessed with trading. I went into banking, but I was still always trading my own personal account. Jordan Michaelides: What did you learn from her mom in particular about trading?

Mark Austin: A lot of technical analysis at that time, that was the main factor I was using for my decisions to buy and sell stocks at the time. We'll talk about this later, but, technical analysis these days, it's one small component, I don't rely on that by any means now but back in those days it was just that, so it was kind of hit and miss. I think you'll agree it's actually better to get into trading before you've made any money.

I’ve known a lot of people that made a lot of money and then they come into the trading and they think it's really, really easy. They don't have any discipline and they end up losing a lot of money. I was like you, I lost small in the very early days while I was learning, which was good.

Jordan Michaelides: I definitely lost a small in comparison to what I would play with these days, I think I lost about four grand at the time, which for me was like all the money I'd saved and about a year or so, it was a very valuable lesson. The book I read after that was ‘What I learned Losing $1 million dollars, and you’re absolutely right about that point because this book is basically a profile of a guy who became a key member of the CME, or key trader at the CME, and how he had continued success and believed that the movement of the market and his ability to pick trades was really him and not just the market and got to a point where this guy was a multimillionaire and then in this space overnight, he'd lost absolutely everything. His marriage, house, it's one of the most fascinating books I've ever, ever read because this guy showcases that you have to have a system and a to be a trader.

You can't just go off status or previous successes. Mark Austin: That's the thing that we trading, it's not only a skillset of making money, but you really find out about yourself. All those weaknesses of your personality, you’re going to know straight away what they are; if you're not disciplined, or you don't like to lose, or if you're very competitive, it’s all going to be highlighted in a very painful way if you're losing a trade or losing money.

Jordan Michaelides: What horror stories have you got from the GFC? You moved into full time trading after that, we spoke to a previous guest, Tom, who works at go markets and he was talking about how he worked down the road from Lehman, and on the day that they went bankrupt, the chaos down at Canary Wharf was absolutely nuts. I guess I'm curious as to what that period was like from your perspective.

Mark Austin: Before we have the chaos, and we'll come back to that, I was right in the booming time. I was working actually in my very early twenties for a firm called Abacus, in Jersey. They managed the pension funds for the big traders, the big traders would get these bonuses and a lot of these traders were living in London, trading in London, but they were from different countries.

They would be able to put a very large proportion of this bonus money into these tax rapids and invest in them, and we were there to advise on which investments they should put it in. I was getting taken around and meeting some of the top traders in Canary Wharf at the time, and, in Lehman's predict particularly, so you have these guys who’ve just been paid 10 or 2 million dollars in bonuses, if you can imagine, and I remember at the time the guy who was the director I was going around with saying to me, you are never going to get access to this again in your life, never meet these top traders and the amount of money, you'd never been able to get near them. And he was right.

And, of course, five years later it all came out and it all crumbled. I remember the day Lehman's went down, the stock market, everyone, was just in panic. Nobody had ever seen anything like it.

But at the time it was also very exciting. Jordan Michaelides: Yes, if you're individual that can understand the markets and isn't overly exposed in certain asset classes or maybe you've got a nice pile of cash it was definitely an interesting time to be alive. I remember I'd just left high school and was super intrigued.

I remember I’d just got the sack from a hospitality job because the restaurant owner was paranoid that we were going to have a recession here and he wanted to pre-emptively make some measures, then lo and behold, nothing happened in Australia. We were so lucky, absolutely nothing happened. I mean, obviously the markets fell, but there was no recession.

We’ve not had a recession in 30 years, so I guess so locally that's what everyone's paranoid about at the moment. So, you left banking and financial services, you started trading on your own accord. We heard about moving to Thailand, how far from moving to Thailand did you meet Cameron?

Mark Austin: Cameron came to one of my seminars, actually. I was doing a seminar in London, I met Cameron and we just sort of hit it off and I really liked his ideas. He was from a business background, he used to run a multi-million pound distribution company supplying all the big supermarkets.

He got out of that for various reasons, a lot of stress, a lot of time, and he really focused on trading at that point in time. He came into my seminar to see if he could extract any more information to give him more of an edge in trading. At the time he was trading the American markets and I didn't really have any good contacts at that time of any traders that could successfully trade that markets, so we basically started a service for Cameron.

It was called Excelsior and that was trading the Dow Jones giving signals and on the Dow Jones. Jordan Michaelides: What have you learned working together with him? I'd say that any business is almost like a marriage these days.

Speaking from personal experience with the cofounder, what have you learned from working together? Mark Austin: It is like a marriage, yeah… a honeymoon period *laughs*. We were lucky enough that we get on well, we're pretty laid back and we're kind of aligned as to where we want to go.

Fortunately we just don't really disagree on too much or have any, you know, big arguments which a lot of business partners can do. Then they fall out which makes life very difficult. I think, from both sides, we were quite lucky to combine and I believe why we were quite successful with the Magnetic Trading.

We’ve both got the same focus of what we want to achieve. Jordan Michaelides: And I think as well, because you seem to both have unique skill sets, like yours is clearly coming from financial services where his is clearly from that business background. So you can see that if you guys get into an argument about XYZ topic, the person who's more passionate about it will obviously lead on that topic and you can just sort of move over it.

I think that's a key thing that a lot of co-founders is having someone that has an opposite skillset or complimentary skillset to you is crucial I think. Mark Austin: We do have very different skill sets, that's why it works so well, for sure. Jordan Michaelides: Now, magnetic trading, you guys run three programs now.

I know over the years it would have taken much time to develop these distinct programs in your mind. What were the early days like? Mark Austin: So the early days I used to just send an email out saying Buy, Sell, Target, that was it really, maybe with a little bit of analysis.

That was fine, but the problem with that is the reaction time, you'd have that time lag, so, someone would get an email, maybe they wouldn't have time to match the same entry as I was getting. That's why I moved into the live room where people can actually log in, see our trading screen and hear us, and they can react exactly the same time and we can give them a lot of information as to why we're taking the trade. I don't believe that someone should follow a trader blindly, I think they need to understand why they're taking a trade in the first place.

That's why the training room works so well. Jordan Michaelides: Did you start off with the trading room itself? I'm guessing you were still doing events on the side as well as that, right?

Mark Austin: The early days were just the emails and seminars in the background, maybe twice or three times a year. I think we've been doing the live room now for six years now. Six years ago we decided to transition from email alerts into a live training webinar, and it's far more successful and people can, can duplicate our results as well.

Jordan Michaelides: You now have three areas. You've got the live trading room, the whale trading program and the pro trader program. How do they differ, and what's the key thesis through structuring these three different areas?

Mark Austin In the live trading room we specialize predominantly for the first 30 minutes of the opening of the indicies. For those markets we trade the DAX and the FTSE which actually is pretty handy in Australia because it's in the early evening you guys. In the UK it can be tricky for some people because eight o'clock in the morning isn't the most convenient time in the UK, you might be going into work or you're taking the kids to school.

That's where people will just follow our trades, and those trades will be a mix of technical analysis, a bit of fundamental, and price action. We’ll trade for about 20 minutes really, when volatility is quite high. That's the live trading room.

Our whale trade, they are our nine highest probability trades over various index markets. For that program you don't need to log into a live room, an alert is pinged to your email and it says this particular trade is setting up. People know the rules, so they just log into the trading platform and then execute the trade.

Some of those trades have a 90% probability which is extremely high in trading. People really love that program and it's good if you're busy, we designed it as a lifestyle program, really. We believe that you shouldn't just be sat in front of the screens all day hunting for signals.

I think we'd all agree, there's more productive things to do in life than just stare at price action all day. That’s the basis of the whale program, for people that don't really have time for the live room and just want to be pinged two to three high probability trades a week get a really good return on them. Regarding the pro trader, that was set up because we noticed there was a void in the market for those clients that really wanted to take trading to full time, to become a professional trader.

I am against people that try and sell a program, a weekend course or a two day event and say, right, you can come here and then you'll have the skillsets become a trader. It doesn't work like that at all. So pro trader is really where clients work with us over the course of a full year.

Day in, day out, at least an hour to an hour and a half we will be touching base with our clients every day, teaching them or conversing in what we're going to do, or why we're taking a trade, and over the course of the year they basically learn everything that we know, they extract all the information we have taken out of the markets over the last combined 20 years, and we give it to them. That’s the way to learn, really. It's the old analogy that if you study for an hour a day over the course of the year, you'll become a master at that field.

And pro trader is exactly the same. That's why we set it up. Jordan Michaelides: It sort of seems like it's one on one coaching in a way, you're helping this person, keeping them accountable, that's the biggest thing.

It's almost like having a personal trainer, isn't it? Mark Austin: Yeah. It's someone looking over your shoulder.

We’ve had a lot of traders, bank traders, who have joined our program because they didn't have the discipline. Just knowing that someone is examining their accounts is quite important. Jordan Michaelides: From my own experience working on the market making side and managing liquidity, at the end of the day you've always got a boss and a boss will hold you accountable and it's very useful, even though everyone likes to whinge about their boss.

I find that whether you're a business owner, just having someone else there to hold you accountable and get you away from that sort of introspection illusion where you think that everything you see is correct and infallible. I think that that is really, really useful. Even if you're one of the top traders or bankers in London.

I love those sorts of programs because they really help with that. What sort of the overall asset classes that you're focusing on? It seems like it's primarily indicies?

Mark Austin: It is indicies, yes. It's the NASDAQ, your local ASX market, it’s the DAX, the FTSE, and we do a little bit of Dow as well. Not so much now, that market ist rickier to make consistent money out of because there's so many algorithms and institutional money manipulating that particular market, but yes, just the indices that we focus on.

I have traded Forex and commodities and shares in the past, but I found that I made consistent money more out of the indices than I did on other asset classes. I find it's a lot easier, more predictable. Jordan Michaelides: That's a key thing that we wanted to talk about, is technical versus fundamental.

With the indicies, at the end of the day you’re trading the underlying value of the businesses, so, there is an underlying value there. Whereas when I used to trade things like oil and gold, it's just an object that someone may use for something, but typically most of what it's used for in the real world is it's hedging out an exposure of some client, whereas in indicies there's actually something there. In some indicies as well, let's say you hold like a Vanguard of the world, they're actually paying out dividends.

I think it makes a lot more sense for whole bunch of reasons. I'm curious as to where you sit on technical versus fundamental analysis. Mark Austin Just coming back to the indices though, you're right, there are many reasons to trade the indices and A is because of the risk.

You know, if you're just trading one stock, you have the risk exposure to something going wrong with that stock. Whereas at least with the indices, you're trading a basket and really spreading that risk. But in terms of technical and fundamental analysis we actually have a third prong.

A lot of people, the mainstream media focuses on just those two areas. At magnetic, we focus on something called market function. Market function is actually the reasons why particular trades or particular movements in the market happen behind the scenes, what is going on behind the scenes with the banks and investors to make a market move outside of technical analysis and fundamental analysis.

If you take the example of the dividend you just talked about, the FTSE for example, will declare that a substantial dividend quite a few times a year. If you bought the index, you will be rewarded with that, you'll get paid that dividend. When there's a dividend of over 10, generally we'll get our clients long in the market.

There was a particular time in the day that we know the market is going to go up because investors are going to come into the market and get that dividend. We're literally taking advantage of that, and that's got nothing to do with technical analysis, nothing to do with fundamentals is just market function. I think a lot of people these days are focusing too much on fundamental and technical and really a retail trader does need that additional edge, which I believe is market function.

Jordan Michaelides: It sounds almost like market function is talking around structural issues in that specific market and things that may feed into that, whether it's interest rates or dividends or something like that, would that be right? Mark Austin: Yeah, and just the way funds operate. For example, we have another trade, it happens at the end of the quarter, so at the end of the quarter a lot of farmers will get rid of bad performing stocks or they'll take profits on their portfolio of stocks, so, you'll notice that there will be some profit taking and sometimes there'll be a squeeze as well at the end of the end of the session.

And again, we're just taking advantage of that because we know that the funds are going to get involved during the last half an hour of that session at the end of the quarter. Again, that’s nothing to do with technical analysis and nothing to do with fundamental. Jordan Michaelides: I completely agree, and it's a really interesting area because having moved into the cryptocurrency space now, the advent of futures for hedging your book and whatnot, and you can start to see it now in the movements of the market, when actual contracts are rolling over it can impact the market for that day and for that rollover period.

It's been very interesting. I’d just never thought about market function as a part of a key way of analyzing the market. You assume that's just the market and that's how Mr Market likes to move.

Mark Austin: That's what the whale program is all about, it's all about market function. It's got no fundamental or no technical analysis embedded in those trades. Actually, we do have an expiry trade as well, you just talked about futures rolling over.

When they roll over the markets will do something which we take advantage of. Every month at a set time for five minutes. And again, that's a trade which has a 90% hit rate.

Jordan Michaelides: Yeah, that high probability hit rate. You publish your results as well, which I found fascinating, it's great to see that. It's so rare to see someone who runs a program do that.

I don't think I've ever seen that before, what made you come to that decision? Jordan Michaelides: In the early days there weren’t too many scams around, but, unfortunately these days the internet is littered with people trying to sell programs or educational courses and the sad reality is a lot of these programs are run by failed traders or people that don't even trade; they're just marketers, so we really wanted to move into the space of complete transparency and real. We are real traders, so it's just how to get people to believe our results because that's a problem.

We have really good results but people who don't know us come and see these results and think, oh, that mustto be a scam. That's why we publish our results, and actually, going forward we’re going do a video log YouTube channel where every single trade we take on our own personal account, we're going to record, put it on YouTube, the good, the bad and the ugly. So people have complete transparency and you know we are real.

Jordan Michaelides: That would be fascinating. I was checking out your YouTube channel the other day and I quite enjoyed watching through it. To watch a vlog would be fascinating, even if it was on a weekly basis, it wouldn't have to be daily has a lot of logs are, but to see that on a weekly basis and the before and afters would be quite interesting I think.

That's what's great about the results, there are some days that are negative, some days that are positive. My favourite traders that I follow on Twitter nowadays do the same thing. They publish their results, they keep themselves socially accountable, which I think is the best way to do it.

When you think about trading plans, managing risk, I think that's sort of a key element of any strategy. How do you think about those overall principles in the way you approach trading? Mark Austin: Certainly the main principles we find with our successful pro traders are A: don't run losses.

The problem with the markets is they can move in a very tight range and a lot of time you can get away with not using a stop, but it's just that one time, that one time, I'm sure you've been there, I've been there certainly in the early days, that you don't have a stop. The market just takes off and you end up blowing your accounts. So number one principle, we all know it is never run losses, accept you're wrong.

The second principle is patience, be really patient for those easy trades because they're always there. Let the market come to you. A lot of people chase the market, they're trying to get instant results and they want instant money, we live in this world of instant gratification these days and everything happens so quickly.

But in trading, it's quite the opposite. If you're really patient, the money will come to you. I think the other thing for risk as well is, record all your trades because if you record all your trades, you can look back at your trading journal and say, right, this is working, this isn't working, and you also have some stats.

You'll be able to say this trade has an 80% chance of winning, I've been trading it and it works 80% of the time, that will give you a lot of confidence in your trading and that confidence is extremely important when placing trades. Jordan Michaelides: You touched on something there, instant gratification. I think practicing delayed gratification is becoming more and more important.

How do you manage your mindset, I guess you’re probably the generation just above me, gen X, so you wouldn't have grown up as much with these stupid phones and their addictive behaviour, but nonetheless, I'm sure you would find it just as addictive as I can at times. How do you think about that and how do you manage scanning over social media, looking at screens all day long and the like. Mark Austin: As you said it is, phones are addictive because.

It’s like your emails, you know, there'll be the odd chance that you'll get something that comes in, which is great, but then you'll have a load of issues that come in but you get addicted to those emails which are giving you positive rewards, and again it's linked to feelings. I just try and manage myself, but I do slip sometimes, it is too easy too to just keep looking at your phone. I saw some stats recently, I can’t remember exactly what they were but it was about how many times people look at their phone, it could be something like 400 times a day, something crazy!

Jordan Michaelides: I've been trying this a attention diet of late, where I’m only allowed to check my emails at certain times of the day unless it's relevant to a meeting or podcasts that we have coming up. Also social media, I've switched to documenting as opposed to believing that I'm there for consuming, I can only go on it four times a day. You'd be surprised how hard that is to instil.

It's that system one system two thinking, automatically we've become attuned with system one where we just jump on your phone, you'd know where the app for Instagram is and you jump into that. If you actually move it around into random folders that you can't remember, you actually then start to notice how much you're just going on your phone and wanting to click into stuff. I can see in a couple of years from now that you guys could have a program just specific to mindset, because I think more and more that stuff is becoming important.

For sure. Mark Austin: We already have it actually. We have a trading coach within our Pro Trading program, he specifically focuses on mindset and psychology because you right, it's 80, 20.

Everything in life is 80% psychology and mindset. And then the other 20% is your tools, your strategies. It is vitally important to your mindset.

I've always found the 1% rule fascinating, I’m almost obsessed with it. Why do 1% people excel over everything? I'm sure we've already heard about, you know, it's the top 1% of traders that make all the money, but then actually the 1% rule applies to everything.

You go into in the banks, it's the top 1% in the best jobs, getting them the best money. If you go into the world of sports, it's the top 1% excelling and at the top, whereas 99% of sports people are struggling. And again, for me, that is all because of this psychology and mindset.

Jordan Michaelides: I think the Pareto principle is always working. I remember reading recently someone had proven in biology how it exists or why it exists. I'm going to have to go back and find that.

I completely agree, it's always the top individuals that behave in a certain way and this is why I love profiling people around this sort of stuff. What does the future look for you guys, what does Magnetic Trading have planned for the next few years? Mark Austin: I'm really excited that we're starting this video blog where we are going to record every single trade that we do for our own trading account.

I think that will give people a lot of confidence that it can be done, there's always a lot of haters now on the internet saying that you can't make money in trading and that's not case. I'm quite excited just to show everyone that it can be done, and a lot of our clients have a lot of success now, we're changing lives. I went to a Tony Robins event recently actually, I've always, always been a great fan of him, he was saying that once you've made in money and you you've got your goals, what is actually going to give you fulfillment?

I know it sounds a bit cliche, but it's giving back, it really is giving back. We just really want to build our success stories, change lives and give back to the community. Jordan Michaelides: I think he's definitely right about that.

When you achieve around that $70,000 to $100,000 a year mark, not much else is going to give you fulfillment and all that's going to happen is you're going to build lifestyle inflation into your life. I think helping people is really where you get the greatest fulfillment. No doubt about that.

Mark Austin: 100%, I'm totally in agreement with that. Jordan Michaelides: Now, we're going to get into some rapid fire questions to finish off. First, what does your morning routine look like?

Mark Austin: Morning routine… Well, if I am in Ko Samui I will wake up, I will generally have a green drink, detoxify the body, go for a swim, do a bit of a workout. That wakes me up. I’m into health as well, I believe that you’ve got to start from the inside and that helps the mindset as well.

Certainly that morning swing really helps. If I'm in the city, my morning routine isn't as good generally as I'm rushing around, but I'll try and squeeze in a quick workout in the morning. Jordan Michaelides: And in the evening, how do you sort of decompress at night?

Mark Austin: The usual really. Chilling out with friends, go for dinner, movies, have a few glasses of wine. Jordan Michaelides: If you had to give the book to the audience for Christmas coming up, what would the book be and why?

Mark Austin: For trading it would definitely be trading in the zone by Mark Douglas, talking about the mindset. I would also highly recommend the Tony Robbins' books. He’s got Money: Master The Game… Jordan Michaelides: Awaken The Giant… Mark Austin: Unshakeable.

Money: Master The Game is a really good one. It gives you the strategies for growing your wealth and highlights why the majority are struggling to grow their wealth out there, the things to put in place, and highlights a lot of myths as well from the investing world. So that's a really good one.

Jordan Michaelides: I think if people are stuck on where they are going in life, Awaken The Giant Within in a brilliant book as well. Last question for you, what's been the best purchase for you under $200? Mark Austin: Again, it’s going to have to be a Tony Robbins course.

I find that it's given me to so much inspiration and helped me through throughout the last 10 years. Jordan Michaelides: Did you originally buy one of his tapes when they first came out? Mark Austin: It would have been an audio but it was downloadable.

It wasn't all early as cassettes. It was books and then audio. Jordan Michaelides: Everyone always talks about the cassette tapes, the CDs, the audio programs in general.

It’s a very common thing amongst people who've achieved something in their life is they all reference at an early age finding Tony Robbins or the ‘Rich Dad Poor Dad’ guy, that they obviously grew out of it as time went on but that opened their mind a bit. I guess that's what those guys do so well, is that they put it in lay terms and they make it quite simple. Right.

Thank you so much, Mark, for joining. Mark Austin: It’s been a pleasure. Jordan Michaelides: It's been very interesting.

For those listening, where can they find you? Mark Austin: They can search for the Magnetic Trading website, they can sign up to our newsletters and they can follow us on social media. Certainly check out the YouTube videos we’re going to start with our funds and trading accounts, displaying all our trades.

Jordan Michaelides: Mark, thanks so much for joining