Cynthia is an expert in FX trading based in Nairobi. For the latest addition to our Women in Trading series, we asked Cynthia how she became interested in trading and what it takes to join the foreign exchange world.
Women in Trading: Cynthia
Could you tell me a bit about how you began trading - and what interested you about it in the first place?
I've been interested in the financial markets since I was a child, but my true passion for them didn't begin until college. I was inspired by my Aunt, who was working in the financial industry. I completed an MBA in the USA and had some savings, so I opened up my first forex account. With little knowledge and trading without a plan, I quickly lost most of my initial investment, but that didn't stop me. My hunger for learning more came from a lifelong passion.
I got started in forex again after spending a year at a banking analyst firm in Nairobi. I began my career as a trainee financial analyst but eventually ended up on the prop trading desk. I decided to do it after being asked if I wanted to learn to trade forex.
As it turned out, I learned the trade well enough that they eventually hired me full-time. I've experimented with various trading strategies over the years and now primarily trade the forex markets. I'm also a member of a group that helps young women in the financial services industry advance their careers. In a nutshell, I fell into it and then climbed what appeared to be the next logical career rung.
In your experience, what is it like to be a woman in trading - which is quite a traditionally male-dominated industry?
Being a woman in trading is definitely interesting. The world of trading is just like any other world, except that it's completely male-dominated. This means that some individuals may assume that a female trader may not know as much or be as good as other traders. They may also be surprised or curious about how a woman became a forex trader at all! In trading, if you succeed, it is because you are good at what you do. I cannot think of anyone who became a top trader purely based on gender.
A lot comes with being a woman in this industry, especially if you want to be an independent trader. It can be overwhelming at times, but I enjoy what I do and the people I work with make it easier. This industry has been far more accepting than I had anticipated.
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Why do you think there are so few women in the trading industry, and how do you think the industry could be more open and welcoming to female traders?
To be honest, it is a predominantly male-dominated field. Traders are individuals with a competitive advantage, and the majority of them are men with high-risk tolerance. Most females are more conservative in their trading and investment decisions. Traders may also work long hours, which could be less appealing to women. However, there are many female traders out there, and I am proud to be among them.
I believe in promoting education for all traders, and I think that education can help create a more open and welcoming environment. The more options traders have, the better.
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Psychology plays a vital role in trading. What are the most common things, in your experience, that block a trader's progress?
First and foremost, traders must define their goals and objectives. Many traders get caught up in the "routine" of trading without realising why they are doing it. Some have a strategy but haven't given it much thought, so when things start going against them, they don't know what to do. Others do not have a plan; they simply "wing it" and hope for the best. Have a specific goal in mind! Know what you want to achieve. Create a plan to get there. Put it into practice, and you will learn!
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What, in your opinion, are the essential elements of a good trading plan?
A good trading plan should be diversified, with clearly defined entry rules that allow for flexibility when the conditions are not right. There should be an exit plan in place, and money management rules outlined to protect against drawdowns. Too much or too little leverage can also make a big difference.
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Could you tell me more about how you developed your own trading strategy and how you taught yourself?
The forex market is far more volatile than the stock market, but it also welcomes newbies and allows them to learn on small accounts. I began with a strategy that had already been developed and back-tested. Then, based on my experience, I tweaked my system even more. But, of course, each method has its own set of risks that must be considered before implementing it. That is why risk management is so important. You will never understand how your strategy will work daily if you do not understand your risk management factors.
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In your opinion, what's the main reason such a huge percentage of traders lose money?
I believe it is due to a lack of education. There is a lot of information out there, and much of it is not scientifically based or supported by research. As a result, people are left to their instincts. Trading can become dangerous because people begin to make decisions solely on intuition and gut, and the decision-making process becomes very sloppy.
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You often hear traders saying you need to put the time in to become a consistently profitable trader - but what does this mean to you exactly, and where should a trader be putting in the most time?
Of course, to be a good trader, you need to put time into learning all the basics and reading as much as you can about trading. However, I also think it's essential when you first begin trading to pick a mentor and to ask them questions regularly. There is so much to learn that it's pretty easy just to give up if you do it yourself.
For me, the most time is spent on preparation and research, and I would recommend that most traders prioritise their time in this area. Reading books, researching what other traders/analysts are saying about a market, checking your charts and indicators, and staying up to date on news events are invaluable tools for being prepared for the markets.
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Is there any advice you would give to other women looking to start a career in trading?
None of the women I work with can recall a time when they were unfamiliar with the concept of trading. Instead, they just knew it was something they wanted to do. This type of innate drive, in my opinion, is almost as important as any other type of preparation for entering the world of trading.