Trader Talk – January 12, 2012
James Hyerczyk – www.autochartist.com
Mike Hamilton - www.tradetheeasyway.com
Chuck Crow – www.dtitrader.com
How did you get your start in the markets?
James – I started to work with two excellent floor traders who steered me in the right direction to build a good trading career. I did have a back ground in studying general market theory. I was generally interested in what was going on in Chicago.
Mike – I started in a slightly different market. When I left school, I was trading on the floor of Lloyd’s of London. I walked away with an attitude that anyone can trade. Trading is very simple. You’re in a market place that buys and sells. I went off into a completely different career, went to art school, and started a branding business.
Chuck – My start was in stocks and the investment side. My father came into an inheritance back in the 1980s and he had decided that he would give that inheritance to each of his four children. At 10 years old, I was introduced to a 22 year old broker in New York. My father told him to teach me about stocks. What I learned is, that if you invest in a stock, it better be something that you will buy.
What strategies have been most consistent for you over the years?
Chuck – In terms of consistency, I think that we’re always trying to reach that level, where we have that main consistency. Right now I’m paying attention to the Euro, the most consistent thing I can tell you about being a trader is that you’re always trying to develop. It's an ongoing process. If you’re interested in purchasing a product, chances are, most people are as well.
Jim – What I try to do is break my trading into phases or analysis in trading, then after trading. I pay a lot of attention to statistics. I know that there are a lot of ways to get in this market, but at the end of it all I pay more attention to average win than average loss. There are certain things that I do avoid, I’m not a passive bidder. I wait for markets to come into zones, then I read the market in that zone. I also break down the trade. I want to know what time of day I’m making money. I look at volume on that day, my average wind, advertising that I’m getting, etc.
Mike – I think one of the things that I realized when I was teaching beginners is that people really love things that are complicated. My philosophy is to keep it simple. After a lot of back testing, back ground reading and all, I just went back to my roots. What’s been successful in my life is buying low and selling high. A classic example this week is Cocoa. Cocoa had a major major downside. In two days, I was up from 2030 to 2328. I have a short checklist, it met all the criteria, and so I placed the trade. That’s my most consistent strategy throughout. I mainly trade Forex and Oil, but I’ll trade commodities if they look very good, like cocoa this week.
What strategies do you recommend for beginning traders?
Mike – I would just recommend that set-up. The other thing I would suggest is, looking at other traders. Some people call it a wedge or triangle, that’s the other thing that’s very prominent in my trading. These climactic breakouts are huge. And they are so simple.
Jim – I would keep it at simple, I think everyone should have a trend indicator and I think you should make a chart by hand. I think a lot is learned about the mechanics of the market by looking at charts and making them by hand. The other thing is, its really important to use stops. Always know what your exit is before you get in. If you know where your exit is first, its really easy to get in. Spend some time breaking down the numbers at the end of the day. Don’t depend on the system to do it for you.
Chuck – I think if you have a strategy that works, you should go with it. And like Mike said, keep it simple. I think the biggest mistake is that beginning traders treat the market like a lottery ticket. If you approach the market that way, then it becomes a learning curve. The more you know, the better you’ll be as a trader. Keep it very simple, I don’t think you can stress that enough. You as the trader have to be able to make an informed decision. As easy as that sounds, it is a lot easier to blow up and account than to build up an account. That is the most important strategy, have a goal.
What is the biggest struggle you faced as a trader and how did you overcome it?
Mike – The biggest struggle I had was trusting set-ups. Understanding what a set-up is, how it works, and trusting the set up. You immediately start to question your set-up.
Chuck – Getting to much into a strategy and into trading, I’ll get into a trade and it won’t do what I want it to do, so I get out of it, then two minutes later it does what I wanted it to. So now, once I place that trade, I take the analysis out, take my hand off the mouse, and just observe. Instead of trying to dictate what my trade does, I make the plan before I place the trade.
James – I had to learn what time period I wanted to use. You don’t want to trade too many, but you don’t want to trade too few. One thing I struggle with is trailing a stop. You can really mess up trades. I treat all trades as separate trade. Once I make a decision to start exiting stuff, I get out of everything. I struggle with leaving a few trades on and taking others off. Small losses doesn’t make me a loser, it just keeps me in the game.
James – How do you balance an overall macro view with shorter term fluctuations in the market?
I look for short opportunities on a smaller time frame. If I’m going counter-trend, I’ll set targets. When I trade the trend, I look for bigger moves.
James - How do you apply time and price to your favorite patterns ?
It's almost like a trend line, you’re drawing a line from a major bottom or top and you watch how the market adheres to it. If its above or below it, I look for intersections.
Mike: Why do you feel the currency market is such a good market to start with? I think Forex is a brilliant market particularly for beginners because its so huge. Its very technical, it’s the only market where you’ve got specific items of news that will drive specific charts. This makes it very easy to pick your screens at the right time and capture those moves.
Chuck: What is one lesson you have learned in trading that you wish you knew 10 years ago? 10 years ago, that was about the time of the Nasdaq crash, so I wish I had known that markets can go down as fast as they can go up. I was still too young and still in school when that happened to really be effected, however, I did learn that the market doesn’t really care. I think the main thing that I didn’t know 10 years ago was how to recognize a really big down trend that is going flat. It wasn’t difficult then to get in the market and make money. And in the last 10 years, we’ve seen a lot of movement, a lot of up trends and a lot of downs also.
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