Trader Talk: 10/20/2011
Speakers: Andy Carlsen – advancedtradingworkshop.com, Leslie Jouflas – tradingliveonline.com, Steve Thompson – dtitrader.com
How did you get started in trading?
Leslie – Fell into trading in the mid-90’s. Had some time off and wanted to learn how to make more money. Decided it was real estate or the stock market. Decided that the bull-market back then was appealing and likes the fact that the market is gender neutral. She started setting different methods and studied quite a few different things. She knew early on that she wanted to teach.
Andy – Got started “as wrong as you could.” Has always had a passion for the market. Got a finance degree in college and had a nagging bug about being actively involved in the market everyday. In late 1998, he decided to go for it. Because he didn’t know much about it, he was paying $35 per round turn, then he realized he needed an education. He found some education and got the foundation he needed through a mentor.
Steve – Intro to trading started back in the late 80s. Was involved in banking and looked at trading purely as a hedge. Saw trading as a way to manage an asset that he had a responsibility for. Decided that he could make money out of trading as opposed to a protective tool.
How long did it take you to find a trading method that worked consistently for you?
Steve – It took about 2 years to get to the point where he could relax. He has been actively trading for 6 years, and about 2 years ago, he was able to feel comfortable with trading and the integration of the markets.
Leslie – Came from studying a lot about the market and a lot of different methods and eventually finding her own technique and voice. Studying how to put together the pieces that she had gathered into a very simple approach. It took about 5 or 6 years to put together her current strategy.
Andy – Every trader is different, one of the things that makes becoming profitable so challenging, is because there is an idea that we are all so different and there is no idea that is for everybody. Understanding that you are an individual and that you do need a trading technique and strategy that has a quantifiable edge. Recognize and realize that your goal should be to want to become a trader, not to purchase the best indicator .
If you could only trade one setup from now on, what would it be?
Andy – Divergence would be the setup I would choose. The problem is that a lot of traders don’t know how to get it right.
Steve – The best trade will go in cycles. I do not think there is a static environment and some of the correlations and coordination will change. The one setup I would choose is European cash close. Between 10 and 11 pm/CT. Markets are smarter than the indicators are. Very time and event oriented in trading.
Leslie – AB = CD pattern would be the setup I would choose. This is a pattern that goes back as far as you can go on the charts. The psychology of traders forms this pattern in the markets. It is very versatile and can be used in trends and counter-trends.
Give us an example of a major up and down that occurred in your trading career?
Andy – The number 1 biggest up in my trading career was realizing I don’t have to depend on just myself. And finding a mentor and be teachable and listen to the wisdom of people that were here before me. The biggest down not being willing to be disciplined enough to have a specific maxed out limit.
Steve – To accept the fact that not trading is an act of trading was the biggest up.
Leslie - Having the wrong mind-set after a big win and then watching that profit go away was the biggest down.
Andy – What advice would you give a new trader on controlling risk with leverage provided by futures?
It all starts with a clearly defined written trading plan. You wouldn’t start any business without a business plan. The same is true with your trading business. Before you ever enter the market you need to have your objectives set.
Leslie – What advice would you give a trader that struggles with discipline?
Discipline to me, applies something that is forced. Whenever we try to force something, we get the opposite that we are looking for. Traders struggle with the environment of uncertainty. We have to learn to focus in on what we’re trading and start to see for ourselves, what works and what doesn’t. And then decide to change our habits.
Steve: What advice would you give a trader struggling to find success and ready to give up on trading?
Stop trading. Back up and re-evaluate why you’re doing this. Find some place that you’re willing to commit to for a long period of time where you can stop paying the market and start paying your brain. If you’re losing money, stop. Get a business plan and earn the right to trade more and trade more contracts.
If you had to pick one trade for today (could be long or short term) what would it be?
Steve – I like to look at market dysfunction, right now about 70% of the stocks on the S&P are moving with the average. Look for opportunities within those dysfunctionality segments.
Andy – My style is intraday. The market probably will not slow down in a meaningful way any time soon. I dive into reading volume and understanding smart money and combining that understanding of what the big players are doing and being on the same side of them. Find a style and method that is right for you.
Leslie – For me its pattern recognition. The particular patterns that I look for are daily, weekly, and intraday. I can identify potential trade set-ups in advance and determine my risk and exit strategy. I’m all about price, I don’t buy into indicators. Scale things down to as simple as I can make it. I don’t listen to news, and don’t want to know other ideas and opinions, because the patterns may say something different than the news. I don’t want anything interfering with my pattern.
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