Dervla’s story is a fantastic reminder that trading success doesn’t require a financial background—it’s about mindset, adaptability, and learning from both wins and losses.
This month we get the opportunity to talk to Dervla Cunningham who is the winner of the Delta Index Sunday Business Post Financial Spread Betting Challenge. She managed to make a massive €59,831 profit from €10,000 starting balance. Dervela does not have a financial background and believes that trading is not rocket science…
Financial-Spread-Betting: What is your professional background? Have you studied investment or economics?
Dervla: Not at all I studied marketing. I am a director of a web design and applications company called Arekibo so while I have some basic business knowledge I am not an investment guru by any means.
Financial-Spread-Betting: How did you get involved in Trading?
Dervla: I have always registered for the Delta Index trading competition over the last few years but never actually got around to trading. This year I was on maternity leave and more as a way of keeping myself sane I decided to have a go. To be honest I was really just dipping in and out over the 2 months- I think only made 15 trades over the whole competition.
Financial-Spread-Betting: What markets did you trade?
Dervla: Well I decided to keep it as simple as possible so I focused on the Dollar and the Dow Jones index. I was tempted into trading oil once or twice by all the coverage in the media but I got all those trades wrong.
Financial-Spread-Betting: What was your basic approach?
Dervla: Well I don’t think its rocket science. There was so much negative publicity on the US over the summer I felt that the US equity markets were going to suffer and that the Dollar was going to weaken so I shorted both of them- that’s what really paid off for me. In this competition you have to take big positions to have any hope of winning so any profits I made meant I could take bigger positions on the next trade.
Financial-Spread-Betting: Do you have any trading rules?
Dervla: Ehh … not really.
Financial-Spread-Betting: So what kind of profit are you looking for on a trade and how much are you prepared to give up in downside if you make the wrong call?
Dervla: Delta Index have a great stop loss order system which means you can cut out if things go wrong but generally I would decide that something was going to happen, make the trade and then see how it felt- if it felt bad I would close the trade quickly if it started moving against me. On the other hand if it felt right I would let it run quite far against me before closing it.
Financial-Spread-Betting: Do you use Technical Analysis?
Dervla: What’s that?
Financial-Spread-Betting: Are there any trades that stand out as particularly memorable?
Dervla: Well I made about €20,000 on a Dollar trade so that was quite exciting. Actually it is the trades that went wrong that I remember the most like the €2,500 I lost on Brent Crude!
Financial-Spread-Betting: What do you think makes a great trader?
Dervla: Being able to admit that you are wrong. I think that might be why women make such good traders.
Financial-Spread-Betting: So what do you think of the US equity market now?
Dervla: I think they have problems that aren’t going to go away. A lot of the focus is on the aftermath of Hurricane Katrina and the price of Oil but I would be much more worried about the budget and trade deficits and the lack of leadership in the economy.
This interview with Dervla Cunningham is both inspiring and thought-provoking, especially for those interested in spread betting and trading. Here are some key takeaways:
- Simplicity and Focus
Dervla kept her trading straightforward, concentrating on just two markets: the US Dollar and the Dow Jones index. Her success demonstrates the value of focusing on a few markets you can understand and analyze, rather than spreading yourself thin across many instruments. - Adaptability and Intuition
While Dervla did not use complex trading rules or technical analysis, her intuition and ability to act decisively were pivotal. This highlights how a “gut feel” approach, combined with careful observation, can sometimes yield extraordinary results. - Risk Management
Her use of stop-loss orders to manage risk underlines an essential aspect of trading: protecting your downside. However, Dervla also let trades “run far” when she felt confident, showing a willingness to take calculated risks. - Psychology in Trading
Dervla believes that admitting when you are wrong is critical to being a great trader. Her observation about women potentially excelling in this area due to greater openness to acknowledging mistakes is particularly insightful. - Contextual Trading
Her strategy was influenced by macroeconomic sentiment, such as negative publicity on the US economy. This underscores the importance of staying informed about broader market trends and sentiments. - Memorable Trades
It’s telling that Dervla vividly recalls her losses, like the €2,500 loss on Brent Crude, alongside her wins. This ability to learn from mistakes is a hallmark of successful traders.
Lessons for Aspiring Traders:
- Start Small but Think Big: The competition format encouraged Dervla to take bigger risks as she accumulated profits. This approach could be adapted in a real-world setting by gradually scaling positions with increased confidence and capital.
- Stay Curious: While Dervla admitted she didn’t know much about technical analysis, her willingness to dive in and learn by doing is an excellent example of how curiosity and experimentation can lead to success.
- Be Critical of the Bigger Picture: Her concerns about the US economy’s structural issues show how broader economic insights can guide trading strategies.
