We speak to Sylvia Muchai in our latest Women in Trading blog. Sylvia is the Founder and CEO of Sylvia's Trading Lounge, a forex trading community established in February 2017, which seeks to educate forex newbies and enthusiasts.
Our Women in Trading series is designed to give space to female traders in the industry - talking about their experiences of forex, training, and giving advice to other women interested in a career in trading. Read our Q&A with Sylvia below.
Want to read more from the Women in Trading series? See our previous Q&As here>>
Women in Trading: Sylvia Muchai
Could you tell me about your trading journey? What interested you about it in the first place?
My first interaction with forex trading was cultivated in 2014 when I was looking to supplement my income from my first job straight out of university. I worked in the Finance department for a start up in the media industry in Nairobi, Kenya. I knew early on from having sleepless nights that I wasn’t meant to stick to a routine job and that prompted me to seek alternative investment ideas online. The first Google search from the company desktop led me to a firm called Big Options. I started small with their minimum capital opening balance of then $250, registered, and my account was verified in a couple of days.
Later on, I then realised having lost the entire $250 that what I then naively thought to be a brokerage firm wasn’t quite it. Needless to say, I lost that money in less than a week thanks to my ignorance. I was a risk taker, I did not know how to trade and yet I thought a few buy and sell click signals would make me money.
It was that loss that got me intrigued about trading in the first place, and that prompted me to seek education first. I literally have word for word hand written notes from Baby Pips. I embarked on a learning journey after the start-up was shut down in 2015. To the present day, the journey is about learning every day. Markets are ever changing, uncertain and we have to keep adapting to be relevant.
"Women have a lot going on in their lives - and forex demands time to learn." Read our Q&A with Luyanda Shando here>>
How did you decide to start your business, Sylvia's Traders Lounge?
I started it off as network of eight friends who met every Tuesday and Thursday night between 8:00pm and 9:00pm via Skype to discuss markets and how to approach trading. In February of 2016, I saw an advertisement online about a forex seminar that was being held at Wetlands in Nairobi from a UK trader and invited three of my friends. We were sold the dream of working from home and becoming millionaires but we didn't know the time, skill effort and trading capital it takes to actually become successful at trading in the financial markets.
I remember going for not only one seminar in that year. I recall going to KICC, our (Kenyan) conference centre for Bitcoin and other financial seminars countless times. Sometimes I would drag my pals or go alone. There was a deep disconnect between what I studied in school as a Finance graduate and a need to immerse myself with others in the quest for trading in the financial markets. It was also in the same year that I was fortunate to get a Scholarship from WorldQuant University studying financial engineering and the first unit was in Financial Markets.
Long story short, I took a career gap and devoted myself to learning and studying and my curiosity became a never-ending learning process. In 2017, I would write a lesson every day on my Facebook about what I learned - this was later compiled to form a free e-book, #222Daysofforexeducation.
We formed Sylvia’s Traders Lounge with one of my friends who was part of the Skype network and is currently my business partner. There was a need to educate and share with others as we embarked on a self-taught journey. It has been a bumpy and interesting one to say the least. Sylvia’s Traders Lounge is now a growing community of traders who are passionate about trading and seeking the right information first before delving in the markets.
"If you have the dedication and persistence, you are more than equipped to succeed." Read our Q&A with Katherine Szewczyk here>>
In your experience, what is it like to be a female business owner in trading - which is quite a traditionally male-dominated industry?
To be quite honest, I do not pride myself in being identified with tags or titles. I see myself as a woman who happens to be in the trading industry with the same breadth that our male counterparts work towards building their career path in the finance industry. I believe with all my heart that there is nothing different about a relentless pursuit in one’s choice of a passion driven career path whether that person is male or female. Finance intrigues me and the beauty about the markets is that they present us with different opportunities to cash in as long as one knows what they are doing. The markets do not discriminate on gender and the respect that one gets has to be pegged on their skillset, it has to be earned over time.
Is there any advice you would give to other women looking to start a career in trading, or women looking to start their own businesses in the financial industry?
Yes. I would highly recommend that more women pursue this career path if they are deeply aware of the risks involved in trading. It is a normal occurrence that one can entirely lose their trading capital in less than a day. Therefore, one has to view education and learning how to trade as an investment to themselves first, prior to funding their trading account.
It also helps a great deal to learn from someone who has walked the journey before you to avoid certain mistakes. In the world of forex trading, blowing up an account (receiving a margin call from your broker) is sometimes referred to as the cost of your tuition in the markets. One therefore needs to shorten their learning curve and mentorship could be one such avenue.
At Sylvia’s Traders Lounge, we make this dream a reality by interviewing professional traders with decades of trading experience in forex, commodities, equities and stock indices on a bi-monthly basis. This helps members across the globe learn from other people’s mistakes and success journeys which can then be replicated if they suit one’s trading style.
"40% of all behaviour is genetic, and 60% is learned - which is good news, because if we’ve learned something, we can unlearn it to learn a better pattern of behaviour." Read our Q&A with trading psychology coach Mandi Rafsendjani here>>
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?
I think it has to start at the very foundations of education, when women select Finance as their career choice at university or college. You would be surprised at the level of disconnect between what is learned in schools versus what is practised at the job market. Needless to say, trading in the financial markets does not necessarily mean that individuals must have degree or diploma certificates in finance or math related sciences.
What is more important is the passion and drive one has to approach the markets as they are and know when to hold on during challenging times such as when one experiences drawdowns on their trading account even with a solid trading strategy tested and back-tested proven to work in the past. Adapting and knowing when to adjust one’s trading plan is vital and more women need to be pro-active in knowing that they too can take calculated risks and create a successful trading career by actively trading in the financial markets.
Psychology plays an important role in trading. What are the most common things, in your experience, that block a trader’s progress?
I believe that in this day and age we are bombarded with a lot of online information from our phones to the devices we use for work. Information overload and paralysis of information can cause psychological turmoil for traders. This can be to the extent that one is not able to execute trade ideas or closing trading positions for fear or lack thereof of what would happen on the other side of the trade, especially when real money is on the line.
Common biases that traders experience such as hindsight and confirmation biases could be driven by fear or greed. A trader needs to be very self-aware to know when they are not emotionally stable to trade and it does help taking a break from the markets once in a while as well being disciplined to staying true to a working trading plan.
"I never had reversal patterns explained to me, or divergences, or sideways markets, or support and resistance." Read our Q&A with Marina Villatoro here>>
What, in your opinion, are the essential elements of a good risk management strategy?
From my experience, a good and sustainable risk management strategy starts first and foremost by having a well-funded trading account, especially in forex trading. In as much as the brokerage firms give you access to debt equity by making use of leverage, being well capitalized gives you an added advantage and will enable a trader give enough room for the markets to do as they deem fit, entering into a bullish or bearish trading position. Secondly, one should not risk more than at least 1%-2% of their trading capital in every trade executed. Finally, a disciplined trader will have a risk reward ratio of at least 1:2 - so for every dollar you risk, you make two in return.