The Trade Review interviews Rod about his CFD trading experience and why he prefers trading CFDs over shares.
Trade Review: How did you get into trading?
Rod Munoz: I was influenced by my brother who was having good gains during the dot.com bull market. I saw a lot of people making money and I thought I could do the same. As it happened I entered the market at the top (not knowing it was on its way down already).
TR: When did you start trading?
RM: I started trading in the sharemarket in 2000 with absolutely no knowledge. I was following a computer system that was not prepared for the bear market that would begin just a few weeks from when I started trading.
TR: What got you interested in trading?
RM: I was interested in trading because I thought it could offer a good income and freedom by working from anywhere. I also like the fact that I am responsible for my own success or failure.
TR: What are you trading now?
RM: Currently I am trading Indices. I trade the US30, S&P500 and the Aussie200. We are currently in a very volatile market and I find it easier to follow the market as a whole rather than individual shares.
TR: What is your routine in trading?
RM: I follow the Aussie200 during the day. I keep an eye on the US market and if I feel the conditions are right I place orders at the close of the Aussie200.
Very rarely I leave a position open until the next day. Most of the time I would close my positions before going to sleep (late) or just before the American market closes the next morning.
TR: As a trader, what have you learned so far or what are you learning still?
RM: Never stop learning, I have read more than 30 trading books, I sign for newsletters, I have watched DVDs, listened to CDs, you name it, but nothing beats the experience of your own trading.
I have learned to be a contrarian and I expect the market to surprise me every day. I have learned to have the greatest respect for the market with my losses and winnings throughout the years. I have become less emotional which has helped me a lot in my trading.
TR: How much or what is your biggest loss?
RM: When I first entered the market in the year 2000 I knew nothing about trading, I was trading with $18,000.00 borrowed money (from the bank) and lost everything on the 2000 – 2003 bear market by doing what most advisors said, not to panic and hold your positions for the long run.
I did exactly that and lost everything, I learned never to trust the so called expert advisors.
TR: How did you cope with it?
RM: Not very well. I was scared and did not touch the market for about 5 years. It was only when the suffering had gone that I decided I was going to learn about trading and started to educate myself by reading books and everything that was market related, even though I had a full time job I spent about 25 hours per week studying the market.
TR: How much or what was your biggest win?
RM: My biggest win was in February 2008 the market fell about 3% overnight and I was short in the Aussie200 and the US30, I woke up to around 600% increase on my account.
TR: How did you cope with it?
RM: I was very happy with the win and I remember thinking that it was the easiest money I have ever made. I was wrong about that because a few weeks later I blew it away in wrong trades. That also taught me that every cent made in the market is hard earned money.
TR: What is your current job?
RM: I have a full time job as a Project Manager in the Health Sector.
TR: What type of trader are you?
RM: I am a day trader, very rarely I hold a position for longer than a day. Most of my positions I close them within a few hours, sometimes minutes.
TR: How much time do you spend trading?
RM: As a day trader it depends how long it takes me to close my position, but on average I spent about 8 hours a day which for me it becomes a full time second job.
TR: What is your biggest challenge in your trading?
RM: Trying to develop successful strategies that work in different market conditions. As I have a full time job besides trading, time is also a challenge, it can become very tiring.
TR: How did you get started on CFDs?
RM: I read an article about CFDs several years ago and I got interested in it. I started trading CFDs because I didn’t need a great deal of money to open an account and I could leverage.
TR: Do you use stop loss orders?
RM: I always use stop orders. When I don’t use stop orders I hedge my positions which most of the time it works in the same way.
TR: What benefits did you get from trading CFDs that you don't have with shares?
RM: Leverage. No questions about it, this is an advantage that I could not get by trading physical shares.
TR: Do you think trading education is important to traders? What trading education have you done over the years?
RM: Trading education is essential, when I started trading I read many books and most mentors said that it would take about 3-5 years to become a successful trader.
I thought I was going to be different and do it in much less time by reading enough books, watching DVDs, newsletters, etc. I was wrong, I lost money the first 3 years and only recently I have developed my own trading strategies.
Nothing beats your own experience in trading. Emotions play a big role in trading and one need to have nerves of steel and that can only be developed with time.
For more information and guides to CFD trading, visit the BusinessDay Investor Centre
