Discover how trading the market has given one man the financial freedom to choose his lifestyle.

If you could choose how you would live your life, what would it look like? Would you want more time to do the things you want to do? You know, the things that are really important rather than what seems urgent. Imagine if you could hold the remote control to your own life, what would you get it to do?

If you had the chance to talk to someone who already holds the remote to his life, what would you ask them and would you do what they told you? As one man found, it took a leap of faith to get his remote control to change his lifestyle in a dramatic way.

I’d like you to meet Alex Constantidis.   Alex took that first step in 2005 when he realised that the share market was the vehicle that would give him choices about how he wanted to live his life. He has never looked back. He says sadly many people don’t take the first step because they are too afraid to believe it is possible. Following he will share his story…..

Q.  How long have you been a share trader?
 
A.  I was first exposed to the share market during the tech boom in around 2000. This was a time when you could throw a dart at a list of stocks and select a winner. I remember thinking, how long has this been going on and why didn’t I think of doing this earlier in life? At that time I had no idea about the mechanics of the market and didn’t understand what technical analysis was.

When the tech wreck hit, soon after I learnt the hard way that just as the market can provide rewards, it can also bite hard! Seeing my fortunes fluctuate so widely with the market is what drove me to learn to trade. I knew it was possible to make a lot of money with the right approach and so in 2005 I left my job of 27 years to focus on my trading goals, and I have relied on the markets for a living ever since.

Q.  How has your knowledge of the share market helped you? How has trading affected your lifestyle?

A.  The markets have removed the shackles and given me the freedom to really enjoy life the way I think it’s meant to be. I can go where I want to go, I decide who I want to spend my time with and what I want to do and that is a liberating feeling. I believe the majority of people work because they have to, and not because they are doing what they truly want to do. That certainly is the case amongst the majority of people I know.

One of the things I have realised from trading the markets is how it is so unfortunate that at school we are taught very few, if any, of the life skills or the money matters that are necessary to do more than just survive. This is why I see mainstream education as being geared up to preparing people to get a well-paid job so they can buy a house and be tied to a mortgage for the best part of life.

Q.  Who have been some of your mentors and role models?

A.  The first person who changed the way I thought about things, not just the markets but about life, was a gentleman by the name of Ivan Krastins, author of the book ‘Listen to the Markets’. He was a consultant to the Sydney Futures Exchange as well as many other institutions around the world, and a foundation member of the Australian Technical Analysts Association (ATAA). He introduced me to mechanical trading, and I also have an interest in W.D.Gann and immersed myself in his teachings.

Q.  How did you find out about Wealth Within? What course did you complete?

A.  In late 2010 I was at a Sydney seminar sponsored by my broker, who I had wanted to meet face to face, and Dale Gillham happened to be guest speaker. I liked the way Dale presented as he talked about the realities of the market rather than making a big sales pitch and I really liked the idea of having a mentor which Wealth Within provide. From there I made the decision to invest in myself and began studying the Diploma of Share Trading and Investment. I happily completed the course in August 2011.

Q.  Would you say that the option to trade from home has helped you in parenting terms? How?

A.  Not too sure if it had a big hand in the parenting side of things when the children were younger as the mould was well and truly formed by the time I started trading full time. However, an obvious advantage for any parent is to get the chance to spend quality time with their kids and not some hurried exchange after a hard day at work. I think the more time parents can give to their children the better the outcome for all.
Renate, my wife, retired from work when pregnant with our first child Amanda, and has not worked since. It’s hard to believe that was some 23 years ago, and in looking back I wonder where the time has gone. My daughter Amanda is working as a registered nurse at St Vincent’s Hospital in Sydney and our son Mark, who is 20, is studying Commerce with a major in Financial Planning. We are very proud of our children and their achievements.

I recall back when Amanda was born I was on shift work and really didn’t want to come home to an empty house, so we decided that the best decision for the family was for one parent to work. In those days we didn't want for much, not like young people of today who seem to spend a lot. As long as the mortgage was being paid and we had some time together we were happy. I recall at one time we had to pay 17% in interest on our mortgage which is just crazy!

Looking after our two children and the house has kept Renate busy enough and I think that our kids have benefited greatly from having their mother at home. I know I have too and can’t imagine what it would have been like if we chose differently. I see people today, the way that both parents are trying to work and I wonder if this is really how they want to live.

Q.  As your son is also interested in the market - what are the differences in your approach to trading?

A.  Mark was so interested in the Diploma course material that he then read my Gann books. When he told me he wanted to trade for a living I was afraid that he might have thought trading is the “easy option” for a career choice. He has seen how the family has benefited, but he hasn’t experienced all of the ups and downs that I went through along my trading journey before I got to this point. It’s so true that “you can’t put an old head on young shoulders”, you have to let them learn for themselves.

I told Mark if he wanted to trade I would help him, provided he started from the ground up and learnt the different areas in finance first. This is what led him to study Commerce, majoring in Financial Planning. As a parent, my main concern was for him to have something else to fall back on if he decided that trading was not for him.

We have been working together back-testing and developing a trading plan for CFD trading and therefore I wouldn’t expect too much of a difference between our approaches initially. There are times when he is much more black and white about what he expects to see unfold on the market, which I observe with interest. As I have done, he will over time evolve as a trader and determine the approach that works best for him.

Q.  Could you describe your son’s trading style/strategy, and your own? How do they differ?

A. The plan we use for trading CFDs is a short-term strategy designed to generate cash flow or an income stream. The benefit with CFDs is that you can buy very small positions which is great for Mark to cut his teeth on in the early stages of his development. Our aim is to grow Mark’s CFD account so that he can then trade his own longer term account independently from me, in a way that best suits him.

The idea is to make it as mechanical as we can to eliminate emotion as much as possible. The way I trade now using CFDs is very different to my original approach prior to the GFC, as it has a much greater focus on managing risk and my money is exposed to the market for only short periods.

The analysis is centered around price retracement levels of previous trading ranges as a stock moves up or down, combined with a recognised pattern formation to trigger an entry in either a long or short trade. Given that CFDs are a leveraged product, we place a stop loss as well as an entry trigger for each trade, therefore the risk is known before the trade is entered and we never risk more than two per cent of our bank.

The reason for encouraging my son to build up a longer term trading account is because I made the majority of my money holding longer term and following a major trend in an underlying index, sector or commodity like gold and riding the stocks in that sector.

Q.  Do you consider it a bonding experience with your son to be able to do this together? How is your interaction as traders?

A.  In how many things can a father and son hold a common interest where they get to discuss ideas? Trading has become a common interest for us both which is great. I think parents that have children in their late teens to early adulthood can relate when I say that kids at that age spend less and less time with you because parents are seen as boring, uncool, or not really “with it”. But we know that’s not true, right?

Q.  Do you make completely separate decisions when trading?

A.  We operate the one CFD account. Sometimes Mark will place the trades, at other times I will do the trading, this depends on his uni schedule or what I’m doing. Generally we check each other’s work to make sure the trades qualify. For the longer term trades which are bigger positions and employ a different strategy, I keep them separate. I do however ask Mark what he thinks prior to a trading decision because he is good enough to give me a meaningful opinion and I see it as part of his development.

Q.  What is the one piece of advice you would tell others wanting to get into trading?

You need to know that trading is not as difficult as you might think, so try it yourself. I know of many careers that are much more complex than this. To be a successful trader you need discipline and anyone can get there with the right trading education. Once you have the knowledge you need to develop a set of tested rules that will work for you and stick to them. As you learn you find out pretty quickly what your comfort level in the market is, in terms of the amount you are prepared to lose and still be able to sleep at night.

Most importantly, don’t try to rush your trading journey by pushing yourself beyond your comfort levels as this is where a lot of traders go wrong. Remember to let your position size, or how much you invest in the market, grow as your experience and comfort levels grow and not only will you see the bank account reflect this, you will know what to do to protect what you have.

Q.  If a trader could have a perfect trait or make-up in their personality, what do you think that would that be?

A.  This is my short list:

•    A healthy ego is really important as people with a big ego will get themselves into trouble very quickly. As a trader you need to be able to get past your ego and accept the losses as you WILL be wrong at times.

•    Confidence in their ability and a positive attitude goes a long way and comes with knowledge and experience. When you have a tried and tested plan that you have developed for yourself, it changes your psychology around trading.

•    A trader needs to develop respect for the market and be open-minded as you never stop learning. If you trade against the market it will teach you a lesson.

•    A trader should be a self-starter. Once you complete the Diploma course there is no one watching over your shoulder to see that you are doing the right thing and following your plan.

•    The saying “Patience is a virtue” is very true when it comes to trading.

To hear about the important things you must know if you use or intend to use margin lending, visit our website to listen to the free podcasts in the Trading Room called Margin Lending Explained Part 1 and 2. 

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