Head of Trading at IC Markets: Our clients make +$80M in profits!!

Andrew, uh, the owner of IC, he asked me to check like who was who was the best like system.

>> And so I did a look and it was just this one guy. I won't say the country, but

one guy. I won't say the country, but he'd built the systems himself.

>> You could tell by the comment field.

>> So he'd written a specific strategy for like FX on a specific time frame. It was

typical kind of like homegrown, you know, programmer uh, comment field. Uh,

but he was the best performing and he wasn't using high risk. Is it true that IC Markets is the biggest Forex broker?

>> We do like 3 million trades a day. So,

we do more trades per day than most brokers would do like in a year.

>> Angus Walker, head of trading at IC Markets, one of the largest brokers in the world.

>> How do you manage this huge volatility?

>> We know what to do. We we're well capitalized counterparties, so it doesn't bother us if the position gets really really big.

>> What's the best way for beginners to start trading? The easy answer would be

start trading? The easy answer would be go to your website and buy like the top performing system and trade it with low risk.

>> Oh, now that's made in space.

>> If OddCAD drops 100 pips, let's say 150 pips because of a news release, >> right?

>> Wacka Wacker is going to start executing a few hundred million OddCat.

>> Now, if those trades went straight to market, they would move the market like 30 points, 50 points, right? The market

wouldn't absorb it. It would just go like, "What the hell's going on?" And

for a broker of our size, we can take it.

>> How do Forex brokers make money?

>> The only ways you can make money are That was me in 2009.

So quit my job, put like 10,000 in an account, and then I was just trading at home in the basement for like at my parents place. I was if you're going to

parents place. I was if you're going to sell surfboards, you need to surf, right? I would say if you want to trade

right? I would say if you want to trade with the high risk, there's a way to do it properly. Nearly everybody blew an

it properly. Nearly everybody blew an account at the beginning, lost some money in the crypto or in the commodities or in the stock market. So

my goal with all of these podcast is to deliver this message to the audience how to skip that, you know, how to immediately be the system trader from the beginning.

>> The best traders in the world come from China uh by far.

>> Is there a reason for that?

>> They're just uh they're just really smart. they're kind of like coordinated

smart. they're kind of like coordinated uh trading efforts.

>> What's the bare minimum amount? What's

the minimum?

>> I think realistically if it was like a momentum system which had a like reasonable stop-loss size, they could trade.

>> Angus Walker, you are the head of trading at one of the largest forex brokers in the world, and I'm thrilled to have the chance to speak with you today. We'll dive into more details

today. We'll dive into more details about how Forex brokers work and how traders, Forex traders can take the

maximum out of the market. So, it's a pleasure for me speaking to you.

>> Yeah, pleasure to be here.

>> Before I ask you the first important question I have for you today, can you tell me what head of trading does in a forex broker? Like what do you do? So if

forex broker? Like what do you do? So if

we think of like the trading department in a broker, there's technology and systems, there's operations, there's risk. Some people would have dealing

risk. Some people would have dealing separate from that as well. We just

include them as risk. So basically I sit at the top of that. I don't trade. Um

it'd be too distracting. My job is to essentially run the team. So there each of those are like independent teams. So I basically set the policy and oversee the team so that they can carry out

everything that you need to do to run a broker. So there's like ops engineers,

broker. So there's like ops engineers, there's quants and then separate to that in a trading team there is always kind of like the client interest and the business interest. So we have to kind of

business interest. So we have to kind of think about what do the clients want and how do we meet those needs and then what does the business want. Business wants

to make money, clients want to make money. We don't think about the business

money. We don't think about the business as much as we do the client. The product

hasn't really changed over the last let's say 10 years. You've probably seen the same spreads, the same number of price updates, the same kind of stability. So our job is to keep the

stability. So our job is to keep the same experience for clients on every trade um regardless of how many clients use like the same EA for example while scaling the business.

>> So >> So you're between the clients and the business and try to make the both >> parties happy.

>> Yeah. Well, it's cuz you can kind of think as those two those two could traditionally be like competing interests, right? We see ourselves as

interests, right? We see ourselves as kind of not so much sitting in the middle but we have to evolve the product and how we do things so that we can keep up with client demands while still

meeting the businesses. Like the

business has KPIs for example if you have a bad product clients will stop trading with you.

>> Absolutely.

>> So the product is always first and then you kind of figure out how to meet the business's you know wants.

>> And by the product you mean the trading conditions that you offer >> trading conditions >> to the traders. Yeah, but there's just a lot that goes on behind the scenes to make sure it all works like 100% of the

time. Redundancy, stability, and then

time. Redundancy, stability, and then trying to like add more products, add more leverage, you know, increasing necessarily the risk.

>> You've mentioned stability a few times, and I assume this is one of the hardest things that a huge broker faces because obviously it's hard to climb to the top,

but then it's really hard to stay there.

>> Yeah. Cuz I always say even for the small >> everyone's waiting for you to make their mistake.

>> Yeah. And even if you're a small entrepreneur, if you have a small business, it is hard to you know 99% of the businesses fail nowadays.

>> Yeah, >> it is hard. But being on the top and just staying there is even harder in my opinion.

>> So I've worked in a few shops now and I know people from all over the industry.

I'd say the the key difference between IC markets is the simplicity in the offering and u there isn't like a strong internal

discussion on how do we make more money from clients it's basically how do we just keep the product like reliable good and what clients want so clients open an account with IC because they know they

can get high leverage tight spreads good execution that's all the basics right and that's why we like quite popular with the EA crowd. But if we spent our time thinking about how much revenue we

can make per trade or per million and how we can optimize that at the expense of the client, then I think we would lose focus. So my job is trading is

lose focus. So my job is trading is actually a lot easier than someone in another broker that's focused on making as much money as possible.

>> Yeah. Well, everything you said doesn't seem easy. Doesn't seem easy, but I

seem easy. Doesn't seem easy, but I completely hear you. And is it true that IC Markets is the biggest Forex broker for algo trading for expert advisors?

>> I'd say like of the brokers that report, we're definitely the the largest. I think this month we'll do two trillion, which is a new record.

>> Two trillion in trading volume.

>> Yeah. So, as we speak, we probably just uh eclipsed it. So, it's been a big month for clients as well. They made I think like 83 million. So if you split the book between winners and losers,

which is on average, let's say about 35% cl of clients are profitable in any given month. Those profitable clients

given month. Those profitable clients this month made 82 million, which is like a a record, I think. So basically,

everyone just went long gold. Some

people went long at the top, which is unfortunate, but um >> it always happens.

>> Yeah. But it was the highest volume and the most profitable months for clients.

>> When you say most profitable months for clients, do you mean the profits they closed or withdrawals? How do you measure profitability >> when it comes to clients?

>> Yeah. Uh we do mark tom market. So if

you split the book between winners and losers, if you just look at the mark to market, which is like the change in equity uh for the profitable guys, that's how we consider that. So some of them might still be holding on to gold,

but we see those figures like month to date and they're like the highest they've ever been. But to your earlier question, from the stats we hear from EA

developers, we're significantly larger than the like second place um broker.

And I think I received a stat from someone, you know, yesterday that the lifetime value or like the the survivability of clients using their EAS

on our system outranked everyone else significantly.

>> Do you mean easy algos?

>> Uh yeah, it was wacka wacka. Yeah.

Wakawa before that was yeah Waka Waka Valer and then >> they created a new platform easy alos.

All right. We went in a very interesting direction because my first question was for all the traders not just for algo trading but when you say that it is

really interesting. One last thing here.

really interesting. One last thing here.

How do you manage this huge volatility when there is a hype on something like gold recently before was crypto? There's

always something on the hive, right? How

do you manage so many transactions happening at the same time on one asset, thousands of people trading with EAS?

>> How do you control that?

>> Yeah, a good question. When you get to our size, we usually have a lot of uh netting. So, for every buyer, there's a

netting. So, for every buyer, there's a seller and only at the extremes do we see the book uh become skewed in one direction. So basically to answer your

direction. So basically to answer your question like more thoroughly, we already have like a framework in place ahead of time, right? So we know what to do. We we're well capitalized all

do. We we're well capitalized all counterparties. So it doesn't bother us

counterparties. So it doesn't bother us if the position gets really really big, which it it did. So that's not a problem. But we know our like clients

problem. But we know our like clients and how they respond during market stress and uh and the highs and lows and we can generally see the book like the

long short position flip uh pretty reliably. I'm more concerned with things

reliably. I'm more concerned with things like the flash crash that happened the week earlier >> cuz that was drastic.

>> That was >> but uh we actually managed to avoid most of it because the provider that we use restarts on Saturday morning. Okay.

>> And they were offline. So it's it's a routine like break of trading, right? We

have it on our website. It's in the platform. So everyone knows it happens.

platform. So everyone knows it happens.

>> And right during that break, the market like fell like an extra I think maybe like $10,000 in Bitcoin. So we we missed most of it.

>> So uh our clients kind of saved a lot of money then which was good. Generally

being capitalized and so long as you can execute a trade when markets become really stressed so clients can always liquidate their trades, then I think

you're good. And we do like 3 million

you're good. And we do like 3 million trades a day. So we do more trades per day than most brokers would do like in a year. So our systems are designed for

year. So our systems are designed for throughput. Our counterparties know how

throughput. Our counterparties know how to handle large bursts of tickets. So

they can handle like whatever we throw at them, they've always been able to handle it. So yeah, we've just had a lot

handle it. So yeah, we've just had a lot of experience, a lot of practice.

There's been a lot of riskoff events, a lot of flash crashes. So we're getting better at it.

>> Yeah. Yeah, I think so. Yeah,

>> it looks so I'm getting to my first question now. Even those topics are very

question now. Even those topics are very interesting for me. I've never worked on the back end of a broker. I've worked

for brokers but never on the back end and it's really interesting for me to know how that works. But let's get to what's the best way for beginners to

start trading on the market based on all the experience you have.

>> So I I'm really biased, right? I've

looked at like hundreds of thousands of traders over the years. It's probably a lot more than that. And I've seen what works and what doesn't. And the client

who I would put my own money behind is the system trader. And then the discretionary trader is someone who looks good for a period of time and then blows up in spectacular fashion. But

I've seen it happen more times than I can remember. So, the system guys

can remember. So, the system guys generally trade like several thousand trades per month. They've got a really sharp mean. Um, they don't have like a a

sharp mean. Um, they don't have like a a really uh horrible left tail, so they don't have these outsized losses that'll just I don't know, wipe out half the account. Um, they'll have the odd like

account. Um, they'll have the odd like really big trade that'll uh do well for them. But, they generally have

them. But, they generally have performance that you could put in front of a fund manager and they'd say, "This guy's sharp." So I would encourage

guy's sharp." So I would encourage people that were starting out to divorce themselves from the idea of uh being a discretionary trader and sitting behind the screen and like buying and selling

at 3:00 in the morning cuz you think you might have an edge on Euro dollar like it's very difficult to do. I would

encourage them to uh think about being a system trader >> and then to be a system trader there's like the easy road and the hard road.

Yeah, I was about to say that because one if you just start, it's really hard to become a system trader immediately.

>> Well, because you don't know the difference between like a momentum system and mean reversion, the difference between different like money management strategies and how they can influence results or that like there's

such a thing called like risk and it'll blow up your account.

>> Yeah.

>> So, I would like the easy answer would be go to your website uh and buy like the top performing system and trade it with low risk.

>> Oh, an algo trading space. See that that was the idea why we created it to be honest because we receive if not thousands but hundreds of questions yeah

>> over socials comments like which system to start which robot to trade and we were spending a lot of time answering and then I suggest to my team okay let's display everything we have with track

records and EAS and everything public so people can just pick one and really this way the beginners can become system traders easily

Because so far most of the people that came to us were people that lost at the beginning. The same way you say just

beginning. The same way you say just trading overnight and during the night and they just lose money and blow one account, second account, bigger account and they become really frustrated.

>> And I honestly haven't seen long-term profitable manual traders for quite a while now. I don't know if you have

while now. I don't know if you have probably in the thousands of hundreds of clients you have, there are some.

>> Yeah, I'm sure I'm sure there's plenty.

But would you would you put your own capital behind them? No.

>> Oh, no. No.

I would never do that. No, no, no.

Absolutely.

>> Unless somebody controls them. They work

in a hedge fund. But yeah, that that that's a hard one. For those with more experience, what should be the goal? Let's say you already scratched the surface. you

already have your system. What should be the goal to quit 9 to5 job to trade as a hobby or just to have fun?

>> Assist like the previous question. I

think the first goal of trading should be not to lose your capital. So if you think of like the trading journey of not losing your capital, then you have to be a serious person and say am I going to

win if I discretionary trade? And the

answer should be no because you just don't have the knowledge. And then if I want to trade profitably and not lose my capital, how would I do it? And it the answer would be like system trading. Um

I don't see any other path that you could use, especially for a few years.

Um cuz that's how long it's going to take to get up to speed. For someone

that's more serious, let's say they've been trading for, I don't know, a couple years, I would say don't quit your job. Do it as a side

gig. I've seen this come up a few times

gig. I've seen this come up a few times now. So, back to what I was saying about

now. So, back to what I was saying about um the really good guys have several thousand trades per month, the really sharp mean. Generally, what they'll do

sharp mean. Generally, what they'll do as well is they'll have a portfolio of strategies instead of just like one EA, they'll have like several >> running uh at the same time that aren't correlated. And if you can stop thinking

correlated. And if you can stop thinking of yourself as a trader and start thinking of yourself as a manager, then you only have to spend a short amount of time every day to manage your account.

>> That's a very good point. If you trade with low risk, then when Trump gets on the wire and says something crazy and you know your account loses like 5% in a day, you can stomach that, right?

>> Yeah.

>> If you trade with high risk that happens, you lose like 30% and then you've got to make back, you know, like 50 to be at break even. So, a portfolio of strategies uncorrelated low risk,

that would be kind of like the next step. And if you can do that for a

step. And if you can do that for a couple of years, then I'd say it's really just how well can you scale it.

If you're working on the side or still working at your main job, you can keep adding to the account, keep building confidence, and that that is kind of like what I would say is the path to success.

>> Yeah. I also suggest something very similar. The people that ask me when or

similar. The people that ask me when or how they should quit the 9 to5 job, I'll say don't quit. Yeah. until you make more.

>> Well, it's it's very it's very stressful >> until you make more from this side hustle thing you have, no matter if it's trading or not, right? But and it shouldn't be just one month cuz if you

just make luckily profits for one month and you quit your job and the next month you blow your account, then you have to go for an interview, right?

>> That was that was me in 2009.

So quit my job, put like 10,000 in an account, and then I was just trading at home in the basement for like at my parents place. I was like early 20s. And

parents place. I was like early 20s. And

I was doing that for a while. And I was loving it, right? Cuz it was a lot of fun. I was that guy that I mentioned up

fun. I was that guy that I mentioned up at like 3:00 a.m. trading Euro dollar cuz I thought I had an edge. Uh

overtrading, overleveraged. Uh

eventually blew it up. And then I was like, "What now?" And that's when I joined uh IC Markets like in 2010 as like a salesperson. So

>> yeah, it happened for a reason.

>> Yeah. Yeah. Yeah. So

>> we wouldn't be having this podcast if this didn't happen to you. But that

that's my point is nearly everyone I speak to went through that, right?

Nearly everybody blew an account at the beginning, lost some money in the crypto or in the commodities or the stock market. So my goal with all of these

market. So my goal with all of these podcasts is to deliver this message to the audience how to skip that, you know, how to immediately be the system trader from the beginning.

>> Yeah. Just put I guess put your energy into understanding cuz I think to be a system trader, you still need to understand the types of strategies.

>> You need to know the difference between mean reversion and why it's more like it's not an edge to be like a mean reverter in a lot of cases, right? It's

like Martin Gal. Yeah,

>> you might have a different opinion, but generally unless they have like some sophisticated volatility stuff behind them and like market regimes and stuff, it's uh they're prone to having like

really big draw down and blow up.

>> Yeah.

>> Uh momentum, you know, kind of not trend following necessarily, but along that thread. So if they can understand that

thread. So if they can understand that then they can begin to understand the different types of strategies and how they can mix and match them across different markets to like build a

portfolio that that still takes time right the bare minimum amount you think even not just the beginners but more

experienced people who let's say spent a few months a year on a demo learning experimenting building a portfolio of EAS or manual strategies or whatever

ever they found and then they decide to go live. What is the minimum they should

go live. What is the minimum they should consider? And of course, it's not going

consider? And of course, it's not going to be a piece of advice to our audience like based on your experience.

>> I think realistically, if it was like a momentum system which had a like reasonable stop-loss size, they could trade a $1,000 account or smaller

probably with a micro loss >> and they would be like well within risk limits. I think if it was mean reversion

limits. I think if it was mean reversion then it might be it would be more challenging because the position sizes get too large and you'd be risking uh too much of the account I think but I

would say a thousand you could again you could do less than that the less capital the less strategies and the less trades you would think >> right >> which means the more risk because the less diversification

>> and you've mentioned your client's profitability 82 million what was that >> uh yeah so it's the the average would be kind of like 35% in any any given month.

And if you look at like the European brokers, they generally have that kind of range, right? So it's like 60% of clients, it's between 60 and 75% of clients lose money when trading with

this broker. It's on all the advertising

this broker. It's on all the advertising material.

>> Yeah.

>> So that that's that I gave you. That's

all like of the entities.

>> It's not just Europe. That's all

entities. So it's pretty reliable. What

range of trading accounts are more profitable? Are the small guys

profitable? Are the small guys profitable? Those that are trading 200

profitable? Those that are trading 200 or the bigger guys?

>> Yeah, I'd say the uh well, in terms of absolute profitability, it's definitely the bigger guys. The uh the best traders in the world come from China uh by far.

Um >> is there a reason for that?

>> They're just uh they're just really smart.

>> All right. and uh they love gold and they they do some stuff that might be a little bit uh naughty, but they're just really smart >> and disciplined, I can say.

>> Uh they trade with lots of risk.

>> Oh, do they?

>> Yeah. But it's I think they've got like when I say they're really smart, I mean like too smart.

>> Okay.

>> Yeah. So like almost like they're they're kind of like coordinated uh trading efforts.

>> Mhm. So yeah, I don't want to go too much into it, but they um they're really good. And I think when you think of like

good. And I think when you think of like 82 million was made from the profitable guys this month, there's definitely some some whales in there that contributed a lot to it.

>> Okay, but again, you wouldn't put your money behind these people because if you were to ask them what's their edge, they couldn't tell you. Some of the Chinese guys are really good, but for the most part, the ones who make a lot of money, they're doing stuff that they can't

explain to you because it just I think it's questionable.

>> They're just so smart.

>> Yeah. And then, but then there's some Chinese guys who are just they they've got the model that I talked about.

Thousand thousands and thousands of trades per month. Sometimes tens of thousands >> trades per month.

>> Yeah.

>> Do they trade as a group?

>> Uh well, >> it's just an assumption. No, the the really good guys generally trade alone.

>> Okay.

>> Yeah. The best EA on our system, Andrew, uh the owner of IC, he asked me to check like who was who was the best like system.

>> And so I did a look and it was just this one guy. I won't say the country, but

one guy. I won't say the country, but he'd built the systems himself.

>> You could tell by the comment field.

>> So he'd written a specific strategy for like FX on a specific time frame. It was

typical kind of like homegrown, you know, programmer uh comment field. Uh

but he was the best performing and he wasn't using high risk. And then the commercial EAS were way down.

>> Yeah.

>> Uh the the list. So

>> I hope he's watching this podcast and he will approach me so we can make his system more popular. What I've seen from the Asian guys is that I didn't know

that about the Chinese, but like the Japanese I've made um seminar like live seminar back behind co uh in Japan and

Tokyo and I saw some really really uh disciplined people and even today when uh we were uh walking around by with uh my family, I saw such polite people. I

said to my wife, listen, look at that.

He's either Japanese or South Korea. He

was from South Korea. They're just so polite, so disciplined. And I think discipline is also a very important part in trading. And obviously when we use

in trading. And obviously when we use expert advisor, we can stay more disciplined because we trade automatically right?

>> It's uh I mean it's programmed into it to a degree.

>> Yeah.

>> But I think the best example um I can give for like discipline with EA's uh Wacka Wacker again. So we did a analysis of their clients. Uh I don't

know if I'm supposed to say this but I will. So 50 it was about 50/50 the

will. So 50 it was about 50/50 the profitability for the system. So we did like all time on our on our brokerage at IC like what was the profitability of

wacka wacka clients and it was 50%. I

like let's just call it around that figure.

>> Okay.

>> But the ones who'd lost they'd lost well in excess of the winners. The winners

were all using the system on a low risk and ones who had blown up, they were all using high risk.

>> Yeah.

>> So it was kind of like the system works if you give it like enough discipline and like low risk, but if you want to double your account a year, then yeah, you you'll run into trouble.

>> Absolutely. And even I didn't know that data you're just mentioned. I've seen it from the comments on many of my YouTube videos that I recorded because some people just say I blew my account. Uh

what's your >> use high risk and you don't have maybe enough capital.

>> Absolutely. So it's it's it's one and the same EA but it's really depends on how you're using it.

>> It's just like you drive a sports car, right? You can drive smartly with 100

right? You can drive smartly with 100 hours probably enjoy it rather than crushing it. It's the same car. So it's

crushing it. It's the same car. So it's

the same EA and it depends really how you are using it.

>> And to the to the first question, so for a beginner, it would be easy to go to your website and buy the best performing EA. I think biker was number five. But

EA. I think biker was number five. But

ultimately, if they don't know how to tune it and they don't know that if they use too high a risk setting, they'll blow up. It's not it's not if, it's

blow up. It's not it's not if, it's when, right? So for a beginner to go

when, right? So for a beginner to go into it with a mindset of I'm going to blow up unless I put kind of risk first

and uh you kind of have to think about like survivability and uh when you begin trading you trade because you want to make money not because you want to survive. It's not even in the frame of

survive. It's not even in the frame of mind right.

>> Absolutely. So to maybe people have to blow their first account before they can be like oh >> yeah yeah I think so the price it's the price they pay

>> to realize that and to understand that and uh realistic expectations I think is also very important that's why we've made all the accounts public so they can

see exactly how much the EAS can make.

But of course if they grab it and they double the risk or triple the risk it will blow sooner or later. I would I would say there's a way to if you want to trade with the high risk there's a way to do it properly and I don't know

you I think you've even done this right so if you've got risk capital of let's say 10,000 you don't risk 10,000 you risk 1,000 on super high risk right >> and then it's kind of like flipping a

coin you'll make money or lose money but you want to give yourself 10 chances to >> make money as opposed to just do it all in one hit right

>> so that is a better way to kind of like divide your risk capital. Uh use smaller accounts with the risk across them with different risk settings. And that's one

way to kind of program discipline.

Although it's not discipline in the normal sense, but we see clients doing that as well.

>> And just focusing a little bit more on the smaller clients. I don't want to say smaller, but uh just focusing a little bit more on the people can that can

afford let's say up to $1,000 account.

>> Yeah.

>> If you have $1,000 account, how would you approach to it? How would you trade with that?

>> Uh I'd use momentum systems only. You

make the most money from momentum. So,

for example, when gold goes from 3,000 to 4,000, that's gigantic, right? You

can make a lot of money doing that. Can

you make as much money by being mean reversion? No. Right. And uh that

reversion? No. Right. And uh that probably would have unless you had a really top strategy that would have been really challenging for you, right?

Especially on a smaller account. So mean

reversion systems that trade like breakouts, they might have a lower um hit rate, but you'll be able to assess the performance every day and your draw

down will be like in a tolerable level and you won't be in you won't be in a period of long draw down which can obviously weigh you down.

>> So for a small account, if you've got $1,000 and that means a lot to you, you don't want to wake up one morning and see draw down of $200, right?

>> Yeah.

>> So that would be scary.

>> Absolutely. But if it's a momentum system, you might wake up and say, "Ah, I got stopped out like on three separate trades overnight, total risk of like

$30." And it's like, "Okay, I can

$30." And it's like, "Okay, I can stomach that." And um you'll have much

stomach that." And um you'll have much more time to adjust course, adjust risk, turn the strategy off by using low risk per trade momentum systems. And I think

there's plenty out there. It was one of the first lessons I learned in London back in the time when I was studying there. An experienced trader told me if

there. An experienced trader told me if you don't have money, you don't have to trade every day. Even a small account breakout system, wait for it. Even you

open a trade once a month, that's okay.

Grab the opportunity, use the volatility on the market, and then just pause and wait for the next opportunity.

>> Yeah. But uh we recently had a podcast with the founder of another brokerage and he mentioned this dopamine click

that comes into trading. You know just people get addicted. They like to trade even though even they know it's not

going to be profitable. They quite often open the trade just because they want to be in the game, right? They want to be participating. Yeah. And that's um that

participating. Yeah. And that's um that that's usually how manual traders blow their account because they get addicted to trading not because they're >> I think you have to

>> controlling the risk properly.

>> I think you have to be interested in the process with system trading. I recently

tried to uh build a system in chat GBT which was I just did it for the shits and giggles. Right.

and giggles. Right.

>> Okay.

>> It it if it worked it worked. If it

didn't it didn't. Um, and I wanted to test a theory that I had because I just I see charts during the day because you just kind of you see stuff, right? You

just have to open up chart to understand what's going on. And I'm like, "Oh, that looks like an interesting setup. I

wonder if I can code it up." So, I used CHBT and I could code it up, right? It

wasn't that difficult. But then the expectancy of the system was a positive because even if you could open the trade successfully, the management of the trade thereafter was actually quite

difficult. So even if you're a

difficult. So even if you're a discretionary trader and you want to get that dopamine click, >> I'm guessing when you click the button, you don't have a positive expectancy because you just wouldn't know, right?

>> Yeah.

>> But then there's just so much more kind of like study that needs to go into the trade after that.

>> Yeah.

>> I I think being a system trader makes you think about those things and uh yeah, that's why I have a lot more respect for it.

>> And I really want to ask you one question. What is the one key piece of

question. What is the one key piece of advice you can give to all traders?

Something they will remember from today's podcast.

>> The most important thing is uh don't lose your capital.

It's simple as that. If you think about that continually and you think about surviving, then you will realize that you don't have to be in the market every

day. You can take days off. You have to

day. You can take days off. You have to be picky about the setups that you go for. And if you're not picky, you will

for. And if you're not picky, you will lose your capital, like guaranteed. And

if you trade without um if you trade without an edge, uh that's a guarantee. If you trade without risk, guarantee, discipline,

guarantee.

So if you focus on that and know that if you don't have that front of mind, that you definitely will blow up. And maybe

from a psychology perspective, that's not the right way to approach things.

Like you don't win a race by thinking about not losing, but you ultimately you have to know that the market will like eat your life if you don't focus on risk

and know that you will lose everything unless you put 100% into it.

What you say just makes perfect sense to me because what I see is usually people start trading with the only goal and desire and dream to make money but not to

>> not lose.

>> Maybe maybe a better way to say we don't I mean you trade because you want to make money but if you are trading uh to make money then it probably won't work out for the better. So the people who

are really good they focus on the process because they focus on what are the like if they're doing a back test for example they'll do it in such a way

where they are very confident that it's going to have the same performance live.

If you were doing discretionary trading you're not doing a back test presumably so you're just winging it and the results are going to be patchy and I think it's almost guaranteed that you

blow up.

approaching like system trading with like a real professionalism so that you back test thoroughly. You know what to expect

test thoroughly. You know what to expect when you go live. Uh the live results mirror what you expected and you go from there.

>> That's a point we have just discussed recently with my team and it's crucially important because many people they back test the EA they start trading.

>> Yeah. But they do not compare if that matches with the back test. Right? So

the first important thing to do after a week or after two weeks from live trading is just compare and you see if this aligns with your back test. Yeah.

>> Anyways, you're taking the risk that the CA was overoptimized for a certain period of time >> in sample out of sample like >> absolutely that is very important. But

still for everybody who's listening today and never tried with EAS back testing is not perfect like there are many pros and cons and it does not

guarantee but it is something much more that we have compared to just manual trading right where we don't have back tests >> to to >> it's more it's just more

>> to the uh previous point about the process if the process doesn't interest you so if you don't like the idea of doing a back test and then analyzing the

results and then if you if it's your own system, you have to debug obviously and you have to understand why it isn't firing as prescribed and like there's a lot of nuance that goes into it, right?

Mhm.

>> And if if that doesn't interest you and if the idea of back testing in and out of sample data doesn't interest you, then I mean system trading is not going to work because you won't have the you

won't apply the right rigor to it to trade with the right risk and know when to turn it off, know when to, you know, turn it up and down.

>> Yeah.

>> So that that's why it's a process. You

do it to make money, but you're more interested in trading and the process behind it as opposed to making money. Yeah,

absolutely. I'm actually very happy that we are having this conversation about trading. Yeah. Um, even you work for one

trading. Yeah. Um, even you work for one of the biggest brokers in the world, if not the biggest, but anyways, I see Marcus doesn't really need a promotion.

You guys are famous enough. But, uh, I really want to ask you this question.

How do Forex brokers make money? Really?

We know spreads, swaps, commissions. Yeah. Is

that the only way or >> so the the only ways you can make money are spreads, uh, swaps, commissions, and then risk. So when I say risk, it's

then risk. So when I say risk, it's market risk. So there's always someone

market risk. So there's always someone in the supply chain taking risk. Retail

especially, right? IC markets quote a spread of 8 cents on gold. That's our

average. the primary market is 20 cents on gold. And that's one of the reasons

on gold. And that's one of the reasons why the Chinese are so good because they're they know they're getting the best deal in the world because they're executing on a retail spread when they should be trading on a institutional

spread and in the primary market like on futures and so on. So when we quote Euro dollar at zero pips or gold at 8 cents, the only way we can do that is to take

risk because the primary market is several cents like wider. So if we were to STP trades uh then you in some cases

can be taking a loss. So generally what all brokers will do is they'll aggregate trades and then they'll hedge them or else they'll sit on the risk indefinitely. There's different business

indefinitely. There's different business models. The broker's risk appetite kind

models. The broker's risk appetite kind of determines where exactly they fit.

But yeah, we generally make money the most of the money that we make on any given month comes from spread commission swaps. Swaps is very small. And then

swaps. Swaps is very small. And then

risk is really kind of like how well do you want your operations and then how much you prepare to take.

>> This the first time somebody talks about risking the the brokers uh on my podcast and it's really interesting for me as well. That means that you are actually

well. That means that you are actually covering some of the spreads for the clients when you take this risk when you quote at zero pips. So you're taking the

risk of what? Covering the spread in general because of our trading volume.

So this month it'll be uh 2 trillion and there's just so much volume on our platform going through that uh most trades net off like very very quickly.

it's only on like a lesser traded product like let's say I don't know Euro knock for example that um there wouldn't be enough two-way flow that you'd have to hedge right >> okay

>> so and for anyone that doesn't know hedging is simply just sending the trade to NLP >> liquidity provider >> yeah so if you've got enough two-way flow you have to go to market less and

therefore you don't need to um how do you say it you don't make a loss by trading on the primary market for a broker of our size we're like we're quite lucky in that respect. So, the one

of the reasons why we like are quite famous with the EA traders is because many brokers are kind of on the same level in terms of the conditions we offer, but we're able to offer really

good pricing, really good execution.

People generally know what they what to expect when they trade with us in terms of the execution, and that's possible because of our scale. Other brokers

might have issues and that's why the conditions can deteriorate and strategies can't scale as well. Uh but

because of our scale, it allows us to do things that others can't.

>> Can you explain the scale? What exactly

you mean by scale?

>> The ability to take on really, really, really, really large trades.

>> Okay.

>> Yeah.

>> Which are a combo of many traders.

>> Yeah. Many traders. But then for example when the best example and I sorry to keep bringing them up if OddCAD drops 100 pips >> let's say 150 pips because of a news

release >> right >> wacka is going to start executing a few hundred million oddcad >> now if those trades went straight to market they would move the market like

30 points 50 points right the market wouldn't absorb it would just go like what the hell's going on >> and it would actually cause like >> so And for a broker of our size, we can

take it.

>> Okay.

>> Yeah, >> I got your point now.

>> Yeah. And the ability to kind of execute an order without creating significant market impact or stress or us taking losses or the clients taking losses or

the LPs taking losses. That's something

that comes with scale, >> right?

>> Where a small broker, they wouldn't be able to execute the trade because one, it would breach their limits at their counterparties. two, it would breach

counterparties. two, it would breach their limits internally, and three, they probably just wouldn't have the systems to to do it.

>> And in one of my previous podcasts, we explained what is a book, Book.

>> Yeah.

>> And we saw plenty of comments where people are in general afraid to use brokers that have BB book.

>> Yeah. But from what you just said, it makes sense to me that if the broker is big enough, if it is a regulated broker, it doesn't really matter what happens

with my trades. If they go a book, Book, as long as they are executed, >> I think that's the right way to look at it. The right I guess the right way is

it. The right I guess the right way is to, you know, how long's your broker been around for? Um, are they regulated? Uh,

around for? Um, are they regulated? Uh,

is my money safe? Like, is it with reputable banks? And that was my next

reputable banks? And that was my next question actually, how people should choose brokers.

>> I I guess so you kind of just focus on those things, right? And then and then it comes down to okay, I've narrowed my list of brokers that I'll do business

with uh to this. What is the pricing and execution like? And

execution like? And for the most part, I like unless it's a really bad broker like a bucket shop, a small company, or even maybe like I don't think there's too many larger

brokers left these days who do things that are really bad. Yeah. I think focus on the pricing and execution and things like A and B matter less. I know in IC markets case, we don't look at client

profitability and and be like, oh, this client's a book, this client's b. So,

it's generally not looked at in terms of like profit or nonprofit. It's kind of provide the environment that allows clients to trade and let them do their

thing and then risk and risk management is uh like a function that occurs independent of that because that's governed by things like limits and policies. It's not you know whether a

policies. It's not you know whether a client's making or losing money. It's

like a limit driven kind of thing >> and um and therefore it's kind of trader agnostic, market direction agnostic.

It's managing the flow like the markout profiles of clients and then just managing limits to make sure that uh

yeah I guess you uh you're optimizing how much money you're making and how much risk you're taking. That's how like an investment bank or a really large broker looks at the world, >> right?

>> Yeah, >> that makes a lot of sense. Yeah, they

they you know, you can imagine if you're I don't know, name any investment bank, they're not profiling hundreds of thousands of clients, right?

They don't know who's on the other end a lot of the time. So, they just say what's the value of this flow over x seconds, x minutes, and they'll manage it from there. So, that determines how

long they should hold the trade before it like passing it off. Um how

aggressively they should um try and get out of that risk. So most brokers have I guess a similar kind of worldview. I

hope many brokers will be watching or listening so they will learn quite a lot from what you said because I'm pretty sure the small brokers are not looking

at it in this way the way you described it which is normal as >> I wouldn't trade with a small broker because unless you knew them really well

and by know them really well I mean like knew the owners knew how they did business and were very comfortable with them but a small broker I wouldn't trust them. It's

them. It's >> but they still have clients, right? They

still catch the people via marketing channels.

>> I think ads.

>> Yeah, I think they small brokers generally do profit share deals with IBS that basically seek to exploit naive traders.

>> Yeah, >> that's how they make money and they make a lot of money. I don't think it's good.

>> I thank you for your transparency and honesty today. And one last question,

honesty today. And one last question, when you were getting into this, what was your dream? That's a question I like to ask. And did you achieve it? And

to ask. And did you achieve it? And

what's the dream from now on?

>> So when I >> after you lost the money in your parents' basement.

>> Yeah. Yeah. Um I mean, so I'm not trading at the moment and the reason for that is because it's too distracting.

>> Okay.

>> So what I'm doing on the Cyber Chat TBT, that's purely just a hobby. I just had an idea and I had to see if I could prove it or not. And I'll still keep playing with that just because it's interesting and it allows me to have

conversations with people like yourself and know what I'm talking about.

>> Okay.

>> I one thing I always say is like if you're going to sell surfboards, you need a surf, right? If you play golf, like if you're going to sell golf, >> absolutely. Yeah.

>> absolutely. Yeah.

>> So if if you work in this industry and you don't know like what it is that you're actually what your clients are trying to do and you don't feel their pain points, you don't internalize that, then you're just a saleserson and you're a bad sales person because you don't

even know the product.

>> So that that's why I still engage. I

don't have any personal training goals right now.

>> But I mean in terms of the company, >> what's the big dream?

>> The I mean for you we've achieved so I see Marcus has achieved a lot of what it wanted to.

>> Okay. Andrew scribbled on a whiteboard in like 2013, "We will be the largest Forex broker in the world, right?"

>> And I remember some guests from another broker actually came and visited us and they laughed cuz I see markets used to be really small, right?

>> Like you have no idea. It was the world's shittest office. We had maybe like 20 people, no volume, poor product, white label everything. And uh so we

kind of it seemed like a real pie in the sky idea. But I guess through

sky idea. But I guess through persistence within four years we were the largest in the world. It like that was a that was a pretty fun ride. The

last couple years like according to finance magnets were still very large but we're number one by volume but it doesn't kind of feel like it. Now we're

starting to put the foot down again. Uh

more focus on product. It's the first record we've had in a year. So that

always feels good. Yeah. I think we want to take it to the next level. Uh, I

think we're like on the precipice of a really interesting time in trading. Like

the convergence of AI, I don't know what's going to happen. All I know is that the volumes are going to go through the roof. I think it's basically

the roof. I think it's basically systematize or die. And um, yeah, I want to make sure that IC markets is front and center and able to take advantage of that.

>> I will share with you I'll share with you why I ask this question at the end of every podcast. The reason is because my team they always ask me the same thing like okay Petco what's the goal for this year what we are going to

achieve this year and quite often I tell them I don't know I have no idea let's focus on the product let's see what we can do and let it just happen right

sometimes you just let it go and it happens when you put consistency and persistence as you said it just happens let's see how far I see markets uh can

go and what dreams you guys can achieve and I thank you very much for accepting the invitation for the podcast and I hope it was useful to everybody listening today. It was pleasure

listening today. It was pleasure speaking to you.

>> Thanks for having me.

>> Thank you very much. Thank you. It was a pleasure.