Photo Courtesy of MoneyShow
I recently had the opportunity to interview Ed Ponsi, a professional Forex trader who seems to be entirely immersed in the markets. In addition to publishing a book recently titled Selling America Short: The New World Order vs. The American Middle Class, Mr. Ponsi is also responsible for FXEducator, a Forex training course for new traders who are looking to gain a better perspective on trading the currency markets. Mr. Ponsi will be presenting at the Traders Expo Dallas in June 2012, along with Rob Booker and a host of exciting speakers. It was truly interesting and exciting to learn more about Mr. Ponsi's work and his views about the Forex world, and I hope you enjoy an interview of this fascinating and personable Forex Figure.
1 – How did you first get interested in the world of Forex?
I was a stock trader for a boutique firm on Wall Street, but I had a tendency to think in global terms. I was always tuned in to the international news, looking for an edge, and paid more attention to macro events as opposed to micro. Someone pointed out that my methods and demeanor seemed built for the currency markets, which is known to be news-oriented and for forming massive trends. So, I decided to investigate the currency market, and when I learned of its advantages, in terms of liquidity and transparency, I was hooked.
2 – What did you do beforehand?
I worked a summer job at the Philadelphia Stock Exchange when I was in my teens, and that's how I became interested in trading. Later I owned a small business but traded my own account on the side. I built up a pretty good track record, and used it to land an entry-level trading job on a Wall Street desk. It was rough at first, I had to adjust my techniques to comply with the company's trading profile, but after a rocky start everything fell into place. Once I successfully incorporated their techniques and risk management into my trading, there was no looking back.
3 – What trading methods or strategies do you use?
I don't use just one technique. I feel you have to be flexible in order to take what the markets are willing to give you. For example, I sometimes identify myself as a trend trader, but markets don't always trend very well - in fact, right now, the markets aren't trending well at all, so I'm focused on other techniques. I probably use seven or eight techniques in all, each designed to take advantage of a particular market tendency.
4 – What pair/s do you trade?
It varies. I don't believe you should specialize in one or two pairs; instead I trade whichever chart looks the best to me. I used to trade USD/CAD quite a bit, but now that pair has become dull. Most of the trades I've taken recently involved the USDJPY, the AUDUSD, the EUR/AUD, and the EUR/CHF. Six months from now, depending on how the market is moving, the answer could be completely different.
5 – Do you implement the same trades for yourself and your clients? If not, why not?
Yes, it makes sense. Trading with other people's money should be no different than trading your own; you should always try to make the best trade possible. I love the feeling of hitting a new high-water mark in the client accounts. If I see a great opportunity, I want everyone to enjoy the benefits.
6 – How many hours each day do you spend trading Forex?
It's funny, I guess it depends what you mean by trading. Some people think trading consists of pushing a lot of buttons, constantly buying and selling. I tend to hold positions for awhile, sometimes weeks, so I'm not constantly entering or exiting. I'd rather place one good trade than a dozen mediocre trades, because one good trade will make more money.
But if you want to consider preparation, which is 90% of the battle, as a part of trading, then I'm always trading. I constantly read, I study economics, fundamentals, technicals, news, speeches, everything. I don't keep track of how much time I spend doing this every day, because it's a constant process. As a trader, you really have to love what you do, so I wouldn't classify any of this as ‘work'. You learn everything you can because of a desire to know and understand, and of course to make the best trading decisions.
7 – What do you see as the biggest benefit of trading Forex? The biggest drawback?
The biggest benefit is the transparency. In the stock market, if you really want to understand what is happening in a company, you read the news, study the balance sheet, listen to the conference calls, and a dozen other things. These companies can play tricks with accounting, write off losses, shift profits from one quarter to another - and there are thousands of companies to worry about.
In the currency world, it's much simpler; every country releases virtually the same information; employment, GDP, inflation, manufacturing data, etc. There are only a dozen or so major currencies to follow, instead of a universe of 10,000 stocks. Because it is a much smaller playing field, it's easier to keep track of everything.
The biggest drawback for me was the lack of accurate volume information in Forex. With daily turnover at $4 trillion USD and rising, there is simply no way to keep an accurate count of all the trading activity in the forex market. Tracking volume in Forex is like counting grains of sand on a beach, so we have to base trading decisions on factors other than volume.
8 – How did you come to develop FXEducator? When?
I created FXEducator in 2005, because there was such a lack of good trading information available. I know exactly what traders need because I was in their shoes at one time. Traders need good, actionable strategies that work. They need to possess an arsenal of actionable strategies, and they need to know the right time to use the right strategy. And, they need to get solid information from an experienced professional trader, not from an experienced professional salesman.
9 – What makes FXEducator different from other Forex education systems?
There are people who understand how to trade, but can't articulate it well. There are also plenty of people who are willing to teach you how to trade, but many of them can't actually do it themselves. But there are very few actual traders who teach, and who are good at teaching. I'm lucky because I know how to make money as a trader, and I can explain it to anyone. People tell me this is a rare combination, and that's why FXEducator has been such a huge success. FXEducator has been around for seven years now, and in that time I've seen many competitors come and go. People appreciate quality in this business, a willingness to go the extra mile, and that's why we've been successful.
10 "“ Do you offer personal coaching or advising to your FXEducator students?
I haven't done that for many years, but we are always getting requests. Between my trading, writing, and television appearances, it's difficult to find the time, but we get so many requests, and I hate to let people down. Sometime later this year I might take a few students under my wing, if I can find the time.
11 – How, if at all, do you think the Forex world has changed in light of the Eurozone debt crisis? Where do you see the future headed?
There has always been crisis and change in the markets. Fifteen years ago, there was no euro, and fifteen years from now it might be gone, or survive in a very different form. The best traders are the ones who adapt to change. The game is always changing, and every time it does, some traders fall away, but the good ones always adapt and survive.
I can't predict the future but I can prepare for it by allowing myself to accept the possibilities now. Maybe Greece leaves the Eurozone and the euro currency rises; or perhaps Germany will leave and we will trade the Deutsche Mark again. Maybe someday the U.S. dollar will not be the reserve currency of the world. Maybe China will float the Yuan, what will that do to the Japanese Yen? It's an endless game of possibilities, and I'm fortunate to be able to play that game for a living.