The MarketDelta Blog

The purpose of the Trader X series is to get a glimpse inside the minds of MarketDelta clients that are profitable traders. Each trader that we profile will have reported to us yearly net profits greater than $100,000.  If you are interested in being featured in the Trader X series, please contact MarketDelta.

Trader X.2 Questions

Trading Experience:

How long have you been trading?

20 years. I started in 1989.

What do you enjoy most about trading?

Competition and freedom to do it my way. I can trade when I want and how I want. I like being self-employed.

What do you like least about trading?

Slow markets. It’s tough to adapt.

What are the top 3 factors that contributed to your success?

Developed my own trading style: Determine what works for you and maximize that style to fit into a contract or contracts to trade. Screen time is really important. Watch and study.

Discipline: Be prepared to play the game everyday. Do your homework. Know your points. Have a game plan to adapt if trades get away. Have discipline with overtrading. For me, my best days are when I trade the least.

Adapt to different conditions: Change your style when needed. 9 months ago, there were some 30-60 minute time periods with 40-50 handle moves in the e-mini S&P. Now, the handles are 4-5 points. It’s tough to adapt.

What weaknesses did you have to overcome?

Overtrading, I get too involved. Secondly, another weakness is not having enough screen time with new contracts I’m trading. I now use a simulator to test my system with new contracts. I need to see what the rotations are and what happens when things go crazy (big moves, news, etc.). I have to keep open-minded and try different styles/approaches. I pick up a couple things from different websites and trading rooms. I get a couple new tools in my toolbox so that I can maximize my profits.

I also need to get better at making money in both kinds of markets (fast and slow).

Trading Tools:

How long have you been using MarketDelta?

2.5 years

How does MarketDelta best serve your needs?

I can customize my screens any way I want. I really like the playback feature to analyze things I missed and see how I should have reacted. In playback, I see a clearer picture. I playback different scenarios like the Fed numbers, closes, opens, and news events.

What trading strategies do you use (be as general or specific as you feel comfortable)?

I use Market Profile as a guide. I look at volume and where price rotates to. I put that information together into a trading gameplan.

How has electronic trading changed your approach in the last 20 years?

It’s different now. You are unable to see the order flow and feel the emotion. It’s easier to get blindsided now. I trade much less electronically. In the past in the pit, you could see positions and you knew when someone was wrong and stuck. Now, you don’t see the players.

Of all the products I’ve evaluated, MarketDelta is the closest product to recreate the volume and atmosphere of the pit.

Trading Education:

What trading books, websites, or trading educators would you recommend?

I recommend Tom Alexander’s site and anything on Market Profile. I recommend the books written by Pete Steidlmayer. I was in the IOAMT room run by Bill Duryea and I picked up a few things. Once you have your own style, you don’t have to follow the teachers’ bible. Grab a few things from each person.

I also recommend Brett Steenbarger’s website. He has some good ideas on the mental approach.

Approximately how much money have you spent on external trading education? How many hours have you spent on education?

I spend between 3-6 hours each week. I search the web and read books looking for different ideas. I also talk with some of my trading associates.

Trade Management and Goals:

What advice do you have on trade and money management?

When you enter a trade, set a point when to exit the trade for both a winner and loser. The market can go further than your pocketbook. As a trader, you need to learn how to adapt to volatility and different conditions. Adjusting to volatility from day to day and market to market is always a challenge.

Did you set trading goals up front in a very structured way, or did they just sort of develop as you became more successful?

I set daily, weekly, and monthly monetary goals. I also rate myself on how I handled each trade and if I maximized my profit. How I handle losers has as much to do with my success as the winners. If I take 15 trades in 4-5 markets, I could have 11-12 winners but if I have one huge loser then I could lose money for the day.

Did you focus on good risk/reward trades? What timeframe did you trade?

I use 30 minute charts. I use a different style in different markets. It’s based on volatility. In today’s markets, it could take 45-60 minutes to make 4-5 handles. Being able to adjust to market conditions equals success.

Do you keep a trading journal?

Yes, I track the contracts I trade and how much I won and lost with those contracts. The journal also rates how well I handled each trade.

Any final thoughts or bits of advice?

Test your style on a simulator versus losing cash upfront. Learn how to react to different market conditions to avoid bad habits.