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How to Learn To Trade The Right Way With Alpesh Patel – 1

Alpesh Patel on Trading for Profit

Anyone Can Learn to Trade

My wife asked me, “Listen, it’s straightforward. If I can learn to trade with you teaching me, you can teach anyone, right?” I thought what a great way in which to write this article. I’m going to explain it in a way that I’m teaching my wife. She’s the one in my mind, and I’m teaching her.

You might have thought, well, why haven’t you taught her sooner? Well, I wanted her to be doing other things, like her day job, and that’s the whole point. Most of you have got day jobs, and you’ve got better things to do.

You’ve got kids to look after or grandkids to play with rather than spend all your time trading. So the ideal person in my mind, to teach to trade, is somebody who’s got lots of other better things to be doing.

They’re not going to be geeks like me. And if I can teach you or if you’re already trading, make you profitable, then that’s my job. Essentially, I’m going to talk about how we’re going to use technology and strategies to increase our trading profit.

Students at my Trading Talks at Bloomberg

This was taken from a photo long before there were Tiers at Bloomberg, where I used to present my show.

The key thing I want to tell you all is the person I’ve in my mind that I’m speaking to, as I said earlier on, is my wife. Why? She’s got a lot of better things to be doing and trading, but she wants to learn. Okay, so that’s it.

The other thing I want to make clear to everybody is we’re not; how do we become a millionaire by tomorrow morning, or how do we buy the Ferrari by the end of the week? If that’s what you’re looking for, then forget it.

This isn’t the article for you, okay? I’m talking about how we learn the skills to gradually get to the difference between rich and poor, usually for most people at £500 a month or $500 a month. Some of you are from different parts of the world, £500 or $500 a month.


No Guarantees in the Market

Now, there are no guarantees in the market. You are not guaranteed an income from the market. If you think you’re going to get rich quickly and be guaranteed an income, forget it. What happens is some months you make more, and you save that for the month in which you earn less, so we’re going to iron that out.

Our ambitions are going to be very modest. Why? Because initial modest ambitions allow us to focus on the skills and not the money. If we focus on the skills and master those, then the money takes care of itself because it becomes a simple issue of just scaling up gradually and slowly.

When I first started out, I didn’t have loads of money, and I had no silver spoon in my mouth. I learned the skills so that I could go to friends and family and say, look, I’ve learned the skills, can you loan me some money? That’s how I built it up. That’s how most people are going to build it up.

The basic principle being if you can make 500, you can make 1000. If you make 1000, you can make 2000. And if you make two, you can make four. I don’t want you to focus on the money.

Don’t Focus on the Money but Skills

So already I’ve said things you don’t want to hear, which is don’t focus on the money, we’re going to focus on the skills, we’re going to start off with modest ambitions, and we’re not going to get rich quick.

I probably lost some of you already, which is good because I don’t want people who are here to gamble or people who are here to be irresponsible because you’re not going to make it that way. As a professional hedge fund manager, I’m telling you how I made it from being a private investor like you guys.

I was at university as a student and then built up the fund. I was good enough that the Financial Times found me, and they gave me a column to talk about my trades each week.

Bloomberg TV found me and said, “We want you on air and not just now and again, we want to give your own show,” and that helped raise the profile so I could set up the hedge fund.

I’m going to teach you the skills that I use and other hedge fund managers like me utilise. Because as private investors, there are a few things you don’t know. If you knew those, you’d be doing a hell of a lot better.

Can Trading Be Done Automatically

Can you Trade Automatically?

The other thing we’re going to answer is, can trading be done automatically? That’s the reason you’re here, and that’s why there are humans. If it could be done automatically, neither of us would need to be here. You might have heard of EAs and automated trading systems and robots and black boxes. Bullshit.

It can be done if you’ve got supercomputers and hedge funds worth billions who can put hundreds of millions of pounds into the software. Even mine can’t afford that. We can’t afford that. We can barely afford the overpaid staff that we’ve already got.

The point is, we’re going to use computing power but not automate it. We’re going to use it to automate about 90% of our activities. 90% will be automated, and the last 10% will be trade selection, which we’re going to do.

The trades I’m going to talk about, for instance, it’s like a classroom, and it’s like a one-to-one tutorial I’m giving you. Remember your old biology classes or cookery classes? These are the ones we’re going to focus on today.

There are Marks; there’s GBPNZD, EURUSD; we will look at Google, the NASDAQ, FTSE, Apple, Dow, Amazon, and Bitcoin. Those are the ones we’re going to experiment with, and I’m going to show you with those what trading involves.

All of this data is in real-time, and it’s free. Many brokers offer this kind of software, and my job is to give you free stuff. That’s what I used to do in my Financial Times column. I used to tell the traders who followed me, look, this is where you get the free tools from. I save you money a bit like that Money Saving Expert guy.

Trading helped me pay my own way to Oxford University

What I’m going to teach you is, well, I paid my way through university through training. My tutors will know this because I used to get little beeps now and again, telling them what to do in the middle of tutorials. I’m giving you experience and expertise from that, but not just mine.

Alpesh Patel became a barrister at 21

I loved this as a career. For some people, it is the best entrepreneurial venture they’ll ever do. That’s why I’m passionate about it, and that’s why I do these articles. That’s why I’ve written my 18 odd books.

You can probably see over my shoulder translated into five languages because I love this stuff. I don’t expect you to love it as much as I love it. I appreciate people like my wife. They don’t love trading; they just want it as a means to an end.

Best Entrepreneurial Business

But the reason if you’re looking for a side gig, as they call it now on TikTok if you’re looking for an entrepreneurial business, the reason this is the best entrepreneurial business in the world trading is this. There’s no cost involved. You can start with a demo account to learn the skills to see if it’s for you.

There are no warehouses, no staff, no logistics, no trucks, and no delivery. COVID doesn’t impact it, and it’s as simple as that. The great thing is that with it because you’ve got less risk involved and less risk capital involved, you can start small. You can switch off whenever you want, and there are no contracts involved where you’re stuck forever.

I think it’s the best entrepreneurial business globally, which is why I left being a barrister to do this full time. Trust me, as a barrister; I’m guaranteed to be a millionaire. Why would I leave a profession that guarantees me lots of money to go into something like this?

Because it gives me the three Fs, which are the three Fs of why we do anything in life: fun, fulfillment, and funds, it gives you lots of funds, and that’s the idea, money. So that’s what we’re going to do.

Trading strategies by Alpesh Patel based on his experience

Trading Strategies by Alpesh Patel

I’m also going to give you the strategies, not based on just my experience, what the hell do you care about my experience, but also from the world’s leading traders as it says in my book. Please don’t buy the book because I will give you the best bits in this article. ‘Lessons in trading strategy from the world’s leading traders’: Financial Times – Alpesh Patel.

The whole point is when you’ve got a credible source of data, a credible source of information, credible, proven strategies, which are published, and then on the back of it, people say yeah, this is bloody good, that’s all you need. That’s all you need.

That’s the starting point for any career. That is the starting point for any successful, proven strategy that you mimic, copy, and replicate. We’re not going to invent anything new. In my case, I’m just copying what those traders had taught me when I was at university 25 odd years ago. People like Bill Lipschutz, who’s that guy – he’s in the book, and I’m going to share the skills he taught me with you.

Things Alpesh Patel learned from Bill Lipshutz

So, all I’m doing is copying and sharing what I was taught. And what’s been published and proven to work and reviewed and endorsed. Warren Buffett was his chairman.

I’m also going to give you straight facts as I do on my BBC newspaper reviews, which you’re familiar with, I’m sure.

That’s my team outside Number 10. I’m good at what I do; that’s what I’m trying to say. I’m not bragging, and I don’t need more pats on the back. I’ve got enough, thank you very much. The reason I’m telling you is that you mustn’t fall foul of the nonsense.

I’ve never come across anybody on the internet, other than names I’m going to give you, who talk any sense about trading. The names I’m going to provide you with who talk sense about trading are David Harding, Winton capital, that’s one.

Jim Simons, Renaissance Technologies, that’s another. I’ll give you many others: Bill Lipschutz, Jon Najarian, Bernard Oppetit, who runs Centaurus Capital, and David Kyte – Kyte Security. There are very few people who know about trading because guess what they all have in common?

They’re all regulated hedge fund managers, and that’s the best proof of the pudding.

Typical Trading Scenario

Typical Trading Scenario

Let’s start with a typical trading scenario. As I said, I’m doing this as if I’m explaining it to my wife. So what does it look like? The reason why I’m doing this is as if I’m explaining to my wife if I can explain to her, and she’s a busy lady with a job and a kid to look after. Guess what; she does 95% of looking after the kid bit, so she’s got better things to do.

If I can teach her somebody with better things to do, then I can teach anyone. The first thing I’d say to my wife is this. This is what a typical month would look like – you’re not going to be stuck in front of the screen. I don’t want you in front of the screen, darling. I want you to spend time with me if you’ve got it, or on your job, or with our son.

The first thing we’ve got to do with any kind of trading for regular people is to make sure they’re not going to be screen slaves. Also, guess what? Trading isn’t what you thought it was. In this article, if you read things like darling and sweetheart, I’m addressing my wife and not all of you, good people.

So trading is not getting it right every time. This, she found surprising and thought my husband’s a genius. “I thought, Alpesh, if I asked you any question about the markets, you’re always going to be right.” I said, “Nope. That’s not what trading is.”

Because look, this is GBPUSD, and this was done quite a while ago. I did it just like a typical month, and I didn’t want to keep changing this screen because if I keep updating and changing it, then people might say, “Well, you keep changing it each month to show what a typical month looks like. That’s not fair.”

So I wanted to pick something which gave the good, the bad, and the ugly. Anytime you see a green arrow, that means we’ve got a buy entry signal. I’ll explain what that is, and I’ll explain how you can use the same strategy. All we’re doing is riding the big banks’ coattails and the big moves that other people are making, that’s all.

Vital Factors While Trading

I explained to her about certain vital factors that look; there was a small gain there. She was disappointed, and she said, “What? You don’t just make big money all the time?” She still married me. There were some trades where we didn’t get in at the top or out at the bottom; that’s a short trade – Down arrow: short trade.

We got out too early, and we got in too late, yet we made enough money. I said that’s how it happens and look at this same issue there. There it is. That was a small gain, and that we got in too late and out too early but still made money. Same issue there.

Here we missed this whole fall. Well, how good are you, Alpesh? You’re rubbish. No, that’s not just me. That is how it is. We only make high-probability trades. It’s not just that I’m speaking from my whole industry. I’m going to prove it because I’m going to show you slides from some of the most significant hedge funds, and people know what they’re talking about when it comes to trading.

So there look we had a small gain, that’s real life, and she was disappointed. That’s a small gain, small gain, and then we’re losing trades. That was a losing trade. That was a losing trade. I said to her, “Don’t worry, losing trades are small in size, short in duration.”

She said, “Well, if I’m not going to sit in front of the screen, aren’t I going to miss things?” I said, “No. I’ll give you a little plan,” where each day or each week rather because she doesn’t spend every day in front of a screen. She tries to do all the trades in one go. Where you’ll do it in one go, or if you want to do it daily, we try to minimize the amount of time you’re in front of the screen.

She said, “Won’t that make me rubbish?” I said, “No,” because the more time you spend in front of the screen, our research shows, published in the books I’ve written, the more time private investors spend in front of the screen, the more likely they’re going to make low-quality trades out of boredom.

Set Realistic Expectation

I have proof of it published by the FT on that subject. I’m just setting your expectations that real trading doesn’t involve being right all the time and big wins. I wish it did. There isn’t a single hedge fund globally, not even Renaissance Technologies, my role model, AHL, Winton, or Aspect, or Brevan Howard. Alan Howard, another person I would listen to all day long, knows what the hell he’s talking about.

Not anybody, not any of them, or Soros, is right all the time with big wins. Anybody who tells you that they’re doing that they’re lying to you. That’s the main problem with the internet when everything’s bullshit other than the sort of 0.01%, which is why you need to do even more due diligence. You need to know, are they regulated hedge fund managers?

Are they published by the Financial Times? Who is going to do the due diligence? Are they talking strategies from the world’s bloody leading traders? I’m not pushing at the book just to get an extra pound in royalties; I’m doing it because you need credentials now in the age of the internet.

Paying Clients of Alpesh Patel

Clients of Alpesh Patel

These are some of my paying clients. These companies have paid me to speak to their audiences because they know I pull them in and give them a good education.

That’s mine in Barclays. Now, I’m not doing this to get a pat on the back. It’s because if somebody can’t give you credentials, then switch off.

That’s me on the front cover of various magazines like Investor magazine and Merrill Lynch HSBC. Enough of that.

Please make sure a note of what David Kyte, one of my mentors, one of my advisors, or my gurus on trading, somebody who knows what the hell he’s talking about, said to me we’re here to make money. That’s his words.

We’re here to make money. It sounds crass, and it’s not the kind of thing British people like David would typically say, but when he said that, I thought to myself, why are we embarrassed to say stuff like that? What is wrong with it?

What the hell do you think people work down a coal mine for? For their health? No, they do it to make money to put food on the table. It’s the same principle that we’re doing this.

CEO of Praefinium Alpesh Patel

No Conflicts of Interest

I have no conflict of interest with you, so this is why I show this. My hedge funds are not open to retail clients because no hedge funds are allowed by law to be available to retail clients, and that’s why I have no conflict of interest with you.

We’re only by law allowed to be open to pension funds, sovereign wealth funds, ultra-high net worth individuals, and family offices.

I’m not a broker, so I am not trying to get you to trade through my brokerage. It’s okay to own brokers, but I don’t own any brokers or anything like that. I’m here to teach you how to do what’s right in this.

Finally, I’m not here to give you investment advice one to one because I don’t know who you guys are; it’s accessible to all. It’s not one-to-one financial advice.

70% of retail investors lose money trading