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Trader Interviews

John Jost: How To Become A Hedge Fund Trader

By Lisamarie Lamb on June 24, 2019

4 (80%) 4 vote[s]

From rookie to fund manager, we are joined today by John Jost from Colorado who, like many people, started their trading journey not knowing what they didn’t know! In John’s case, he has gone onto trading bigger money as a hedge fund trader. In fact, he is a fine example of someone who has shown he has the determination to prevail in an industry where a lot of people simply give up and walk away. He is also an ex-client of The Lazy Trader, showing that success is available to all.

Takeaways

  • If you want to become a hedge fund trader you need to be determined – it’s a hard path to go down but it’s worth it
  • Having a mentor in trading is crucial if you want to learn quickly and see success
  • If possible, make your own strategy rather than rigidly following someone else’s. Learning how to become a hedge fund trader is about your own personality
  • Remember that it’s not just about the entry point and the strategy – once the trade is on you need to know how to control your emotions and adjust the trade accordingly
  • Patience is one of the biggest elements to any kind of trading

Key Lessons

John Jost has got that special determination. This is the determination to succeed in an industry – hedge fund trading – where most people fail, or simply give up. His journey is trading is not typical; he made it through tenacity.

When he wanted to know how to become a hedge fund trader, it all started with dissatisfaction in his job as a chiropractor; he was sacked after he and his boss couldn’t resolve their differences. This was a shock, and Jost wasn’t sure what to do next. Rather worried about his future, he began to search online for jobs and ways to make money, and came across trading.

Jost was intrigued, but something held him back. There was a lot of conflicting information and not much help out there, so although it seemed like it might be a good idea, trading as a rookie was always going to be tough. But he tried anyway, starting with binary options. He suffered loss after loss and began to despair. That’s when he found forex. He had no idea what to do but knew he needed a good education about trading, and he found The Lazy Trader’s videos online and then he joined. His trading was then simplified – it had been complex and confusing – and it all started to click, and success followed.

Instead of rigidly following strategies, John Jost, in his mission to learn how to become a hedge fund trader, took elements of various strategies and created his own system that works for him. Not many people do that, but it’s a great thing and shows foresight. It shows engagement and confidence, and makes the trading journey much more exciting. After all, one size does not fit all.

how to become a hedge fund trader

Mentors are a huge part of trading, and everyone would benefit from one as long as they are legitimate and proactive. Learning from someone who has ‘been there and done that’ will help to minimize mistakes and cut down on the amount of time it would take to learn how to become a hedge fund trader or anything else, and John Jost would highly recommend anyone who wants to trade find a good mentor before they begin.

Size doesn’t make a difference to John Jost. He will still risk the same percentage trade no matter what size of return is expected – this is his system and it would be wrong to deviate from it just because he might be rewarded with more. Little and often is a much safer option.

John decided to learn how to become a hedge fund trader rather than any other kind of trader because it was the quickest way to get more capital and therefore build his portfolio. He wanted to make a living trading, but knew he wouldn’t until he had a much larger account, so needed to boost it relatively quickly to get started. The deposit you have to put up is minimal compared to what you can make, so although you will have to have some money to begin with (which is the same in all trading, in reality), if you do it right you’ll make it back easily. If you’re good, you just keep growing.

If you can be consistent in trading, money is not far away.

When you’re just starting out, what most people focus on is their strategy and the entry. That’s good, but it really only amounts to – in John Jost’s view – around a third of what you should be thinking about. Something else you need to think about is controlling your emotions after you’ve put your trade on. Not doing this can lead to mistakes that will cost you. You also need to change your mindset to work out how not to lose. It sounds easy, but it needs serious thought. Unless you can control this, the trade will easily go wrong.

Work out what your losing traits are and then take the time to learn how to manage it. Whether it’s moving your stop loss or trade less, or use a lower percentage or whatever it might be. When you do this and reduce the amount that it will hurt you will be able to manage things more easily. It’s this knowing what to do when the trade is on that is so important to learn. Trading will be more enjoyable and relaxing in this way!

Another key point if you want to become a hedge fund trader is not to look at your profit and loss sheets all the time – doing this will really mess with your emotions and your ability to trade even if you don’t realise it. Wait until the end of the day or the week (or whatever your time frame might be) and only then should you look. You’ll still have all the relevant information but you’ll also stop being quite so obsessed with it.

Something that is very difficult for many people to comprehend is that, unlike most other things in life, there is no such thing as instant gratification in trading. You always have to be patient, whether that is in relation to waiting for a trade to end, or waiting to be able to put a trade on at all. Patience is the key to reward.

Top tips from John Jost on how to become a hedge fund trader:

  • Join the Lazy Trader! Or at least find a good mentor
  • Have strict parameters
  • Trade small to reduce risk
  • Be patient
  • Be passionate and keep on going

Questions 

  1. Tell us a bit about your journey from how you went from total rookie to fund manager?
  2. What did you do for a living beforehand?
  3. How long did it take you to become consistently profitable?
  4. Have you found it harder to trade since trading a much bigger account size? Such as having fear of failure or even failure of success?
  5. Would you say that your style has changed since trading a larger account or is it more or less the same?
  6. What is interesting is with you is that instead of rigidly copying a strategy dogmatically – you have taken different components of different trading mentors’ strategies and have combined them in a system that has worked for you.
  7. So everyone has their own journey in trading and also their own end-game too. Some people are happy just to trade for themselves and maintain it as a discreet skill for wealth creation, others want to work for a major bank or financial institution…but you have gone specifically down the fund management route. Why?
  8. What were your main sticking points in trading?
  9. What were your main “break-thoughts”?
  10. For those who are listening who are looking to specifically go into fund management, what are your top tips?
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Lisamarie Lamb

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