DailyFX Analyst Tammy Da Costa on Her Day Trading Career

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WOMEN IN FINANCE

Tammy grew up in Johannesburg, known as the ‘The City of Gold,’ and the financial hub of South Africa. Post-Apartheid reformation shaped her early years, and she has tremendous hope for South Africa’s future.

Some friends have moved abroad to seek their future and she still enjoys debating them on different economic theories. Others have stayed in Johannesburg where they run businesses and mine Bitcoin. All are concerned about this year’s downward trajectory in the ZAR, or the South Africa Rand, which Tammy closely tracks relative to the US dollar.

WHEN DID YOU START TRADING?

I was studying economics and econometrics at university. A few of my friends and I got involved in the Johannesburg Stock Exchange (JSE) trading challenge, and we ended up doing really well. My interest in trading developed from there.

WHICH FINANCIAL ASSETS INTEREST YOU?

I’ve always preferred trading commodities, like silver. As part of our JSE trading challenge prize, we were allowed to join courses/seminars on trading. This is where my interest in trading silver developed. One professor discussed gold versus silver, and his outlook was silver would become just as valuable as gold. Or, in the future the disparity between the two will get smaller.

Hearing and understanding how much he was involved in market analysis intrigued me. I realized I had so much to learn, and decided this was the career I wanted for the rest of my life.

WHAT IS A TYPICAL DAY IN TRADING LIKE FOR YOU?

My day starts with exercise to clear my mind of any baggage which could be a hindrance for my trading or for my strategy. What's crucial is staying up to date with the news, seeing what’s happening in the markets – I’ve always got the charts and news on my monitor – and doing my analysis and preparing for what may come. And then the rest of the time is analyzing, adapting my strategy and writing articles on my laptop.

WHAT IS YOUR TRADING STYLE?

I prefer short-term trading like day trading or swing trading. All your positions are closed at the end of the day in day trading. With swing trading, you can keep positions from intraday to about two weeks.

WHAT TOOLS DO YOU USE TO ENHANCE YOUR TRADING?

I use technical indicators like Fibonacci, moving averages and the Moving AverageConvergence Divergence (MACD). In day trading, I don’t like using more than three indicators at a time because it gets too busy. I believe fundamental analysis definitely plays a part. I do a lot of research before placing trades, with news resources such as Bloomberg.

HOW DO YOU MASTER YOUR EMOTIONS WHEN TRADING?

I won’t lie, I haven’t mastered that technique yet. But, I’ve done a lot of research. There are many tools DailyFX offers to understand trading psychology. Most mistakes are made because of emotions, and the lack of discipline arising from it.

Often fear and negative emotions have a greater impact than positive ones. It’s very easy to adjust your stop in the hopes the market is going to come back. To actually be disciplined enough to step back and say “Okay, if my stop gets triggered I must accept the fact I may lose," is much easier said than done.

WHAT'S THE BIGGEST TRADING MISTAKE YOU'VE MADE?

I was trading Germany 30 – I had quite a big order and didn’t put stops or limits on my position. I think Trump sent a tweet or made an announcement and the markets went against me. The more it (the market) dropped, the more I thought “It can’t drop anymore.” So, I started adding onto my position … it didn’t end very well.

In hindsight, I learned a lot. You can’t afford to be complacent in this industry, or to be under the impression that you know everything, otherwise you’re going to fall short very quickly. I needed to wipe out my account and experience that pain – which hurt for quite a while, it still does – because I believe that’s how you learn.

ARE THERE DIFFERENCES BETWEEN FEMALE AND MALE TRADERS?

I was under the impression women are more conservative, with men being the bigger risk-takers. Over time I’ve realized it hasn’t got anything to do with gender. Women can be risk-takers, men can be conservative. I think it has more to do with your individual personality, and your preferred style than it does your gender.

WHICH WOMEN LEADERS IN FINANCE DO YOU FOLLOW?

The recent leaders and traders who have influenced me in some shape or form are:

• Christine Lagarde
• Kathy Lien
• Jennifer Fan
• Lauren Simmons
• Kamala Harris

Although there is progress being made to bridge the gender inequality gap, these women played a critical role in changing the perception of women in finance. They have triumphed over adversity and discrimination, playing a critical role in revolutionizing the financial sector.

Learn more about Tammy Da Costa and her work at DailyFX.

(This interview has been edited and condensed.)

 

DailyFX Analyst Tammy Da Costa, 19th November 2021.