This is a guest post by Liora Dovrath-Goldring. Liora is the Head of Trading projects at eToro, leading various strategic aspects of trading including hedging strategies planning, monitoring & analyzing, managing relationships with liquidity providers. She is also in charge of trading education, ensuring a high level of training materials and services for traders. Liora started her career as a futures trader in the European markets. She has more than eight years of experience in the financial industry, including in trading, research, analysis, composition & maintenance of financial instruments, management and training.
Making trading decisions as an individual can be a challenge. What are the best opportunities? How much to invest? What currency? What risk level? When to cash in on your earnings? Well, imagine the complexities of deciding as a husband and wife trading team. But along with the difficulties also come the benefits.
Santosh and Poornima Tekurshivashankar have been raising a family and trading foreign currencies together for the last four years. Their trading journey, like all adventures, had its highs and lows, but they learned many valuable lessons on the way.By leveraging their collective market knowledge, they have managed to build a profitable portfolio, while accepting and respecting their different trading styles.
Converting a Skeptic
Santosh was the first one in the family to have an interest in online trading. But he was a bit cautious to let his wife Poornima in on his latest discovery.
“Santosh stumbled across online trading while looking for exchange rates to complete his expense reports for international travel”, Poornima said. “He was downloading and comparing platforms, without telling me. He knew that if I knew what he was up to, I would never let him go through with it.”
Santosh realized that it was in Poornima’s nature to be skeptical, and she would have to be convinced about the value of online trading. As a QA engineer, Poornima was responsible for finding errors in Santosh’s products. She used to joke with her peers that she has the easiest job in the world, “finding defects in her husband”.
She laughs about it now, saying that Santosh knew she was extremely conservative but given a logical argument, she could be convinced. He explained to her that foreign exchange trading to him was not about making short term, risky transactions. Instead, successful long term traders, as he was aspiring to be, use science as the basis of their decisions. This was beginning to make some sense to Poornima, and so she decided to investigate the opportunities and risks on her own. She not only agreed it was possible to make money trading online, she decided to join him.
Separate Accounts are Recommended
As they first began to trade together, Poornima and Santosh shared the same account and took turns watching the market, in shifts, morning and night, almost 24 hours a day. At eToro headquarters, they were convinced the couple was using a trading robot because the trades were being executed all night long. Poornima explains that for her this was natural – “We were used to working long hours in our industry, so putting in the time was easy. We became so fascinated by the market that we didn’t want to miss a thing, and started watching the market around the clock so as not to not miss a move.”
Poornima doesn’t regret all those hours staring at charts and graphs. She believes that by absorbing all that data, she developed an instinct for predicting future movements in the markets.
In time, it became clear that Poornima and Santosh had very different trading strategies. Poornima had clear profit and money management goals that were inflexible. Even if she made her target and the market was still moving up, she would still close her trade. Santosh preferred higher risk trades and was willing to improvise on his strategy if he saw the right opportunity.
And so, they agreed to disagree and opened separate accounts, letting each person trade the way they feel more comfortable.
Does Poornima give Santosh advice? Poornima replied, “I learned early on that this was not such a good idea, I would just send him small hints, like a text message saying, ‘Have you seen what is happening with British Sterling?'”.
Poornima believes strongly that people should trade in currencies where they have an intimate knowledge of the originating country, its market and its economy. This is why she has a strong preference for trading British Sterling, because beyond an isolated statistic such as unemployment figures, she has a feeling for the overall business climate living and working in the UK.
She also believes proper money management is the most important element of success. She never invests more than 10% of her liquidity in a single trade, and she never trades more than 10% in the same direction. She also hedges her open positions.
Investing time in learning the fundamentals and formulating a clear strategy is essential. “Look at it this way”, she explains. “You are getting the basis of an MBA without paying for a degree and making money at the same time! Can’t beat that.”
So what’s next? Poornima sometimes dreams of retiring from her day job and trading full time. But she admits that she is still too young to retire, and she loves engineering too much to quit her job. So in the meantime – trading will continue to be a second line of income and a common interest she can share with Santosh, even if at times they agree to disagree.