Successful trader reveals his secrets and how he went bust 8 times

PHOTO: The China Post/ANN/ Business Today

TAIPEI - He came to Taipei alone at 17. He later started with futures trading, and at his peak held about 5 per cent of all yen futures on the global market.

His name is Huang Yi-hsiung.

"Don't deify me, please. Don't mislead the readers and make them think it's easy to make money in the financial market. In my experience, only two in every 10,000 can really profit from futures trading. The other 9,998 are all losing money. These are the real statistics," Huang says

"What most people don't know is that I've had my bank account wiped out eight times in my life."

It is after recalling these devastating lows that Huang gives his first pertinent advice of the interview: "There is no shortcut to wealth. This is why we should always seek correctness, not speed."

Huang says regretfully that the reason he ended up broke several times was because he was looking to get rich quick.

"You will never succeed in manipulating financial operations for a desire to strike it rich overnight. This is because your research won't be solid enough."

But on the bright side, he says as he reflects on earning his fortune back every time after going bust: "This means there are many chances to succeed in one's lifetime."

"If one can "focus on correctness" and find the optimal way to make money when young, then "it's OK to start slowly. As long as you grab several opportunities in your lifetime, you'll still have a good chance of making it (rich)."

Huang also shared another contemplation about risk: "Don't walk on the wire. Try to put on some steel plates at least."

In this metaphor, walking on the wire means operating without a safety net, and putting on steel plates refers to preparing sufficient funds to help you manage anything that goes wrong once you enter the market.

"You can still squat on the steel plate when the fierce wind hits."

But two in 10,000?

Modesty, perseverance and decisiveness

"It's a true number," he says, recalling that when he placed an order at Dean Witter Reynolds (Hong Kong), the company's data revealed only two true profit-makers among its nearly 10,000 clients - and he was one of them.

"There are so many greedy people who public books or hold classes to try to teach others about investing. Yet there must be a reason why nearly no one can implement these lessons and make money."

In Huang's opinion, personal traits are key. You need certain characteristics to master all the practices in the financial market. The essential traits to him are modesty, perseverance and decisiveness.

It was such traits and his own life experience that helped him withstand life in the futures market, even after several start-overs.

Modesty and perseverance are the most important lessons he has learned, Huang says, adding that only through modest reflection can one advance.

"Maybe it's hard to imagine, but I could trace for 20 years to compare international public opinions with mine, and prove the change of economy and the influence in the future."

This kind of self-dialectic and self-challenging is contrary to human nature.

"This shows the importance of perseverance. One has to persevere - to stick to difficult tasks, including learning."

Throughout his countless battles over the past 40 years, Huang says, decisiveness has always been his strongest weapon. He would be prepared for anything and would never hesitate when the right moment came. "Just pull out the sword and strike without hesitation."

Others agree that the key to Huang's successes is decisiveness; however, he knows that being decisive isn't as simple as most assume - it requires a foundation of modest reflection and discipline.

Necessary Practice: Read a Lot and Think Independently

"I started to read a lot at 23 when I stepped into the stock market," Huang says. Not only did he buy textbooks to study by himself, he also read newspapers. "You must learn everything to do with financial operations.

"Off all macroeconomic factors, the one that the stock market is most sensitive to is currency policy."