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Traders at Work: How the World's Most Successful Traders Make Their Living in the Markets
Shortly after most novice traders discover how trading works and begin to realize that they have the potential to make unlimited amounts of money in the financial markets, they start dreaming the near-impossible dream. They fantasize about buying that condo in Boca Raton for their parents or surprising their son with a brand-new car on his 16th birthday. They even begin to imagine themselves opening their own trading firm or milling about the pit of the Chicago Mercantile Exchange, lobbying against other professional traders for the perfect entry into a once-in-a-lifetime trade. But then … they watch the markets lurch in wildly unpredictable ways, lose their shirts in a few live trades, and then freeze in their tracks, wondering if they will ever be able to consistently trade in a manner that can even loosely be defined as “profitable.”
To be sure, becoming a full-time, professional trader, working at a proprietary trading firm, or managing the trading activity of a hedge fund may sound like the perfect career, but it’s all too easy for beginner traders to overestimate their trading abilities, underestimate the movements of the markets, and find themselves in a financial hole of epic proportions after a few bad trades. So what does it really take to make a living in the markets? Tim Bourquin, co-founder of Traders Expo and the Forex Trading Expo and founder of TraderInterviews.com, and freelance writer and editor Nick Mango set out to answer that exact question in Traders at Work, a unique collection of over 20 interviews with some of the world’s most successful professional traders, from at-home hobbyists who have opened their own firms to those working at hedge funds, on proprietary trading desks, and in exchange pits.
What mistakes did Anne-Marie Baiynd make early in her career? What does Michael Toma wish he had known about trading? What trading strategies work best for Linda Raschke? How does John Carter remain cool, calm, and collected when the markets are sending mixed signals? And how did Todd Gordon make the transition from part-time to full-time trader? Bourquin and Mango ask all of these questions and more in Traders at Work and in doing so reveal insider insights on what it takes to be a successful trader from those who are living that dream. Fascinating, compelling, and filled with never-before-told stories from the front lines of the trading arena, Traders at Work is required reading for anyone who has ever asked themselves if they have what it takes to trade for a living.
To be sure, becoming a full-time, professional trader, working at a proprietary trading firm, or managing the trading activity of a hedge fund may sound like the perfect career, but it’s all too easy for beginner traders to overestimate their trading abilities, underestimate the movements of the markets, and find themselves in a financial hole of epic proportions after a few bad trades. So what does it really take to make a living in the markets? Tim Bourquin, co-founder of Traders Expo and the Forex Trading Expo and founder of TraderInterviews.com, and freelance writer and editor Nick Mango set out to answer that exact question in Traders at Work, a unique collection of over 20 interviews with some of the world’s most successful professional traders, from at-home hobbyists who have opened their own firms to those working at hedge funds, on proprietary trading desks, and in exchange pits.
What mistakes did Anne-Marie Baiynd make early in her career? What does Michael Toma wish he had known about trading? What trading strategies work best for Linda Raschke? How does John Carter remain cool, calm, and collected when the markets are sending mixed signals? And how did Todd Gordon make the transition from part-time to full-time trader? Bourquin and Mango ask all of these questions and more in Traders at Work and in doing so reveal insider insights on what it takes to be a successful trader from those who are living that dream. Fascinating, compelling, and filled with never-before-told stories from the front lines of the trading arena, Traders at Work is required reading for anyone who has ever asked themselves if they have what it takes to trade for a living.
- GenresFinanceNonfiction
222 pages, Kindle Edition
First published December 26, 2012
9 people are currently reading
78 people want to read
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Displaying 1 - 6 of 6 reviews
August 9, 2019
I love those books of interviews where traders give us their nuggets of wisdom.
Here are my copious notes on a book I will read again.
Wealthy traders are patient with winning trades and enormously impatient with losing trades.
If you have set stop losses, never move it in hopes that your trade will turn around.
Wealthy traders realize that making money is more important than being right.
Most wealthy traders will switch sides at a moment's notice if the market tells them it is time to do so.
Before the enter every trade, wealthy traders have a plan
Wealthy traders leave nothing to chance and plan every trade in its entirety before they even enter the market.
Wealthy traders approach trade number five with the same conviction as the previous four losing trades.
Wealthy traders are able to shrug off losing trades and enter the next trade with the same enthusiasm and confidence they had on the first trade.
Similarly, wealthy traders have mastered the ability to forget about the previous trade and focus exclusively on the next opportunity.
Wealthy traders use naked charts.
Wealthy traders are comfortable making decisions with incomplete information
Wealthy traders stopped trying to pick tops and bottoms long ago
Wealthy traders do not try to anticipate the top or bottom. They wait for it to happen and then capture the "meat", or the "middle of the move" after it has started.
Wealthy traders don't think of the market as cheap or expensive.
Wealthy traders are aggressive with size when they are doing well, and modest when they are not.
Dennis Gartman: "Do more of what is working and less of what is not."
Wealthy traders realize that the market will be open again tomorrow.
Wealthy traders understand that their job is not to be actively trading at all times, regardless of the market environment. Instead, their job is to wait for the right trades to come along and actively manage their positions during the right market environment.
Wealthy traders never add to a losing position.
If there is one thing that decimates trading accounts more than anything else, it's adding to losing positions or letting trades go beyond their stop losses. Wealthy traders do not add to a losing trade, period. They will often add to winning positions, however.
Wealthy traders judge their trading success on anything but money.
Money corrupts decision-making process because it is impossible to remove our emotions and desires from riches from the process of trading.
Wealthy traders read about mobs, riots and human psychology.
Wealthy traders practice reading the right side of the chart, not the left.
Wealthy traders have an edge in the market.
Wealthy traders determine positions based on risk, not round numbers.
Wealthy traders buy strong markets and sell weak markets.
Wealthy traders play the reaction, not the news.
A trade preparation is equivalent to course inspection for a ski race. What you are doing is taking mental notes and developing a strategy to account for the different types of terrain on the course. When comes the race, you are not going to have time to think about these things before reacting.
Trading is really the same thing. I look at the market from all angles, and I am constantly on the lookout for anything that could pop out during the course of my trade. If possible, I incorporate those factors into my trading plan before I actually place the trade. The fewer surprises, the better, and I know that, for me personally, I am going to react much more objectively while I am in a trade if I've already got a written game plan. Because inevitably, there will be things that pop up in the course of the trade and I will need to have my full attention to focus and make quick adjustments.
Some of the best trades are the hardest ones to put on. That means there needs to be a leap of faith. There is a point where you have gathered and assimilated as much information as you possibly can . You are never going to know everything.
Maybe that could also mean that the more obvious the trade is, the less profitable it might be.
Todd Gordon:
I am a big advocate of getting to know the personality of a market, getting a feel for the market you trade so that you can begin to anticipate reactions to news and demand.
I believe that with enough experience, you can begin to anticipate moves in whatever market you are trading just from watching how it moves day-in and day-out.
It is "adapt or die" in trading, and if you are not able to change or tweak your trading methods as times change, you will eventually stop making money. Nothing works for ever.
What we need to do is manage the trade well after the trade has shown evidence that it is working, and then quickly move the stop up behind us after it is working.
We also need to add to the positions that are working well and still show room to continue in the direction we favor.
So, we will trail the stop behind and get more size on in the trade, and then allow the trade to work. And that is going to create more dollars made per winning trade.
We need to be aggressive with our winning trades, and that basically comes down to adding money to them once they are profitable. We'd do all of that and still stay within our strict risk discipline. That can't change. We aren't willing to increase our risk on every trade and just hope it results in bigger gains. traders have been slaughtered that way since the beginning of the markets.
One thing I did not mention is that I rate each trade based on the conviction I have for that specific idea. It is my way of determining, before I put on the trade, the amount of confidence that I have in it working out favorably.
Linda Raschke:
What really remained the same for me was the approach of taking one day at a time and developing a routine for my trading.
There is either a support level or a resistance level to trade into. And you are either in a momentum, trending environment, or you are in a trading range environment.
The market tells me when it is time to exit. That is not something I think a trader should tell the market.
Bull trap: A bull trap would be something like when the markets flush out of a trading range and people get a little bullish on the false breakouts. then, when they start to come back toward the range, they tend to create little vacuums as traders who were fooled by the false breakout start to rush to close their positions. Experienced traders can be very aggressive on those types of trades.
It's those times where you have a good feel for the market and it is giving you those great opportunities that you make the bulk of your profits.
A traders, we all tend to see what we want to see in the markets.
Monetary goals are the most harmful thing a trader can do to their trading account.
The best thing you can do is to keep positioning yourself in the right environment, and when the opportunity presents itself, you need to be able to recognize it and get teed up to hit it big.
Think of it like a tennis game. You keep the ball in play. then, if your opponent makes an error or is drawn off the court wide, that is when you go in and hit the winner. You can't force your opponent to make that error. You can only position yourself to be ready when it happens and make that killer shot.
Setting monetary goals is totally inappropriate. I think a better thing to do would be to set goals for yourself to not make unforced errors. Keep yourself consistent and do not make spontaneous trades outside of your rules just because you think you should be in the market. make consistency in your decisions the goal, not the money. If you do that, the money will follow.
Serge Berger:
I will size a position much larger on a Tuesday, Wednesday or Thursday than I would on a Monday or Friday simply because of the number of false signals I tend to get on Mondays and Fridays.
The more I stick to my rules and do not focus on the P&L aspect, the easier I find it to make money. the other thing is not to over-trade. There is such a propensity to over-trade. Most of the time, that will do more harm than good.
Alex Foster:
The majority of my trades are naked puts. I am typically look at first or second months out but I might go further out if the long-term set up is there. Otherwise, I will try to take smaller bites just to get about 1% a month and save the bigger trades for when I see a strong set-up across the board.
He typically sells ATM for high conviction trades. Otherwise, OTM to take the time value at a lower risk.
Two different scenarios where I'd wait for the contracts to expire: they are still trading close to the price of the ETF and teh trend is intact and, two, if it is far enough OTM and the trend is still going strong.
I am first looking at what the overall long-term trend is by looking at a three-year-long monthly chart with multiple moving averages and Williams %R. If I see that:
One: we are in a bullish trend
Two: We are likely to move out of oversold conditions
Three: We have got the short-term moving averages above the longer-term
That would lead me to form an underlying thesis that over the coming months - with six months being the upper limit of that time horizon - the underlying asset is going to be higher than it is currently.
So I wait for the right opportunity where the shorter-term moving average - 10d, 20d or 50d if trading on a daily basis - are moving in the right direction.
Once I see that, i might go in the money on a naked put, and that will give me a chance to ride it up. And even if it does not move up before expiration, I will usually take the assignment so I can get a dividend while I wait for it.
He does not take assignment if he is going to roll the naked put lower. He is more likely to go long and hold if P/e is low.
Derek Schimming:
A trade does not need to look perfect when I get in, but I need for it to look better as i'm holding it, and if it does not, then I should get out.
As traders, we do not have to know what is going to happen tomorrow, but we do have to anticipate what the possibilities are and be prepared to react when a move materializes.
One profitable by 15 peeps, you should never allow that trade to go negative.
Peter Brandt:
I look at weekly and monthly charts and I use daily charts only for market signaling.
I hate trend lined and do not like the idea of trading them. For me, a break of trend line does not mean anything.
I prefer patterns with horizontal boundaries, as opposed to diagonal or slanting ones.
I am looking for big patterns, and my goal is really simple: at the end of the year, when I look back over the forty or so markets I trade (futures), I want to be able to pick out maybe twenty patterns that are the best examples of pure, classical charting principles - meaning that they were clear, they broke cleanly, and they ran to their targets.
I want to then be able to look at my purchase and sale data and see that at least 50% of my trading was in these twenty patterns and that I caught at least 50% of each move.
Our emotions tend to tell us to do the wrong things at the wrong time and often cannot be trusted.
He makes 1% trades.
He strips out half of a position, sometimes within a week or two of taking the trade, and that gives him sustained power to ride out the other half of the position.
It is about making money, and you have proven that by backing off your time frame to look at weeklycharts and making only five or six trades each month, you can still make a good living while also reducing your level of stress.
I think the key to trading is in risk management, not necessarily in signal generation. Keeping losses short and letting profits run is an all-too-common adage in active trading, but it can be difficult to do.
Rob Wilson:
The key is profiling the market.
If we are in a trending market, I will use dynamic support or resistance (using MA and Bollinger bans). If I perceive that we are in a range bear market, i am far more likely to trade from static or horizontal support and resistance.
He pays himself management fees and do not reinvest those management fees into the account.
My advice to a struggling trader would be to commit to learning to do one thing well.
John Carter:
TradeTheMarkets.com and SimplerOptions.com
You cannot sit there and try to pull specific sums of money out of the market.
The best thing to do is go into a market knowing how much risk you are going to take and with no upside expectancy.
In trading, you do not want to be the master of all trades. You just want to pick a couple of niches and focus on them.
Treat every trade like a professional trader would do.
I would favor the idea of scaling out more often, taking some money out of a trade, locking in some stop loss, and then just letting the rest go and checking on it once a day.
Anne-Marie Baiynd:
Even today, once I understand something, I try to expand upon it, and every day I look at the market, I learn something new. I am always looking at it in a different way and trying not to box myself in, and that is why I never wanted to learn to trade from anyone else.
A good trading system has a few indicators that complement each other, so when those indicators conflict, there is a real reason why.
Sometimes I would take the trade in anticipation of the rollover, but after getting blown out of those a few times, I learned to wait for confirmation before getting in.
It is important to size up the playing field, realize where your skill level actually is, and then try to find a mentor or someone who knows what they are doing to help walk you through.
Jeff White:
You do not want to be a one-trick pony. the market is not going to reward the same strategy forever.
Those that pick their spots and wait for the market conditions that best suit their style are going to have much greater success.
For me, it is all about finding a way to stay in my good trades longer. I am very good at cutting losses, but letting winners run is the part of teh discipline equation that I have a hard time with. To get better at that, I try to scale out of winning positions so I can satisfy the urge to book some profits but also stay involved in the trade if the move should continue.
Patrick Hemminger:
dirtyarbitrage.com
Two of the basic tenets of being a successful longer-term trader are, number one, realizing that markets have changed and, number two, being flexible enough to evolve accordingly.
I look at Bollinger bands not from a reversion perspective but from a momentum perspective.
Don Miller:
DonMillerBlog.com DonMillerEducation.com
In order to survive, jellyfish have to adapt. They have to be flexible, they have to eat wherever they're thrown into the ocean, and they can't provide self-momentum, so they've got to go with the flow.
It is not about us, it is not about our egos, and it is not about what we think ought to happen. it is about identifying and understanding what really is happening and aligning ourselves with that.
I am making sure that while I am chopping down tress in the forest, the forest is not burning down.
Charles German:
CharlesGerman.com
Systematic trader
You can use a reversal approach, where you are always long or short, a breakout approach, a momentum approach, or a combination of approaches.
I think the key is having a portfolio of markets so that, when these are doing poorly, these five are doing great, and these four aren't doing anything.
You want stop loss to be dynamic and adjust to market conditions.
If a trade starts to move and then immediately reverses, I just get out. Then I will wait for it to start the move again. once a trade is in and it hasn't hit your stop, you let it go.
Tim Bourquin thinks that one of the toughest things for newer traders to do is to take the stop loss and then be ready to take that exact same trade a day later, or ten minutes later, if the same signal approaches.
Whipsaw is part of trend following. Even when you get whipsawed ten times, though, if you have one good trend, it makes up for all of those small losses, because you are taking big wins and small losses.
Andrew Menaker:
AndrewMenaker.com Hedgechatter.com
The biggest winners are in the discretionary camp. In other words, it is harder to become a successful discretionary trader, but once somebody does, they tend to outperform the automated system traders.
Like in poker, where the real edge lies is in reading the table, being able to bluff, and reading other people's bluffs. i think markets are the exact same way.
In trading, it is all about the exits, right ? It is not really the entries that determine how much money you make - or lose, for that matter. It's about the exits.
Brian Lund:
BClund.com
I want to see some good action setting up on the smaller time frame chart that basically syncs up with the time frame on the larger swing chart.
if a stock moves up really fast and spikes out of a resistance level. To me, those are the moves that often give up and end up turning around.
The general rule that I follow is to never look at my P&L_at least not too closely.
When I am in a trade, I never look at how much I am up or down dollar-wise in that trade. I always look and see what the charts are saying, because the market does not care if you're up $100 or down $100.
Trading is one of the most counter-intuitive things that you can do. Everything we've ever been taught goes against a proper trading mindset.
Michael Toma:
I want to put myself in the state of mind where it's not about money; it's about implementing my trade plans.
Maybe I am a little neurotic about it, but I actually have penalties, and sometimes I have to go on simulation the next trading day if I've broken certain rules the day before.
In addition to my trading plan and my monthly assessments, I create a development plan every year.
The computers come in and probe an area below what retail traders consider support and then reverse back. That makes the retail guys get scared and cover their positions, and then the quant guys can ride the wave up.
Here are my copious notes on a book I will read again.
Wealthy traders are patient with winning trades and enormously impatient with losing trades.
If you have set stop losses, never move it in hopes that your trade will turn around.
Wealthy traders realize that making money is more important than being right.
Most wealthy traders will switch sides at a moment's notice if the market tells them it is time to do so.
Before the enter every trade, wealthy traders have a plan
Wealthy traders leave nothing to chance and plan every trade in its entirety before they even enter the market.
Wealthy traders approach trade number five with the same conviction as the previous four losing trades.
Wealthy traders are able to shrug off losing trades and enter the next trade with the same enthusiasm and confidence they had on the first trade.
Similarly, wealthy traders have mastered the ability to forget about the previous trade and focus exclusively on the next opportunity.
Wealthy traders use naked charts.
Wealthy traders are comfortable making decisions with incomplete information
Wealthy traders stopped trying to pick tops and bottoms long ago
Wealthy traders do not try to anticipate the top or bottom. They wait for it to happen and then capture the "meat", or the "middle of the move" after it has started.
Wealthy traders don't think of the market as cheap or expensive.
Wealthy traders are aggressive with size when they are doing well, and modest when they are not.
Dennis Gartman: "Do more of what is working and less of what is not."
Wealthy traders realize that the market will be open again tomorrow.
Wealthy traders understand that their job is not to be actively trading at all times, regardless of the market environment. Instead, their job is to wait for the right trades to come along and actively manage their positions during the right market environment.
Wealthy traders never add to a losing position.
If there is one thing that decimates trading accounts more than anything else, it's adding to losing positions or letting trades go beyond their stop losses. Wealthy traders do not add to a losing trade, period. They will often add to winning positions, however.
Wealthy traders judge their trading success on anything but money.
Money corrupts decision-making process because it is impossible to remove our emotions and desires from riches from the process of trading.
Wealthy traders read about mobs, riots and human psychology.
Wealthy traders practice reading the right side of the chart, not the left.
Wealthy traders have an edge in the market.
Wealthy traders determine positions based on risk, not round numbers.
Wealthy traders buy strong markets and sell weak markets.
Wealthy traders play the reaction, not the news.
A trade preparation is equivalent to course inspection for a ski race. What you are doing is taking mental notes and developing a strategy to account for the different types of terrain on the course. When comes the race, you are not going to have time to think about these things before reacting.
Trading is really the same thing. I look at the market from all angles, and I am constantly on the lookout for anything that could pop out during the course of my trade. If possible, I incorporate those factors into my trading plan before I actually place the trade. The fewer surprises, the better, and I know that, for me personally, I am going to react much more objectively while I am in a trade if I've already got a written game plan. Because inevitably, there will be things that pop up in the course of the trade and I will need to have my full attention to focus and make quick adjustments.
Some of the best trades are the hardest ones to put on. That means there needs to be a leap of faith. There is a point where you have gathered and assimilated as much information as you possibly can . You are never going to know everything.
Maybe that could also mean that the more obvious the trade is, the less profitable it might be.
Todd Gordon:
I am a big advocate of getting to know the personality of a market, getting a feel for the market you trade so that you can begin to anticipate reactions to news and demand.
I believe that with enough experience, you can begin to anticipate moves in whatever market you are trading just from watching how it moves day-in and day-out.
It is "adapt or die" in trading, and if you are not able to change or tweak your trading methods as times change, you will eventually stop making money. Nothing works for ever.
What we need to do is manage the trade well after the trade has shown evidence that it is working, and then quickly move the stop up behind us after it is working.
We also need to add to the positions that are working well and still show room to continue in the direction we favor.
So, we will trail the stop behind and get more size on in the trade, and then allow the trade to work. And that is going to create more dollars made per winning trade.
We need to be aggressive with our winning trades, and that basically comes down to adding money to them once they are profitable. We'd do all of that and still stay within our strict risk discipline. That can't change. We aren't willing to increase our risk on every trade and just hope it results in bigger gains. traders have been slaughtered that way since the beginning of the markets.
One thing I did not mention is that I rate each trade based on the conviction I have for that specific idea. It is my way of determining, before I put on the trade, the amount of confidence that I have in it working out favorably.
Linda Raschke:
What really remained the same for me was the approach of taking one day at a time and developing a routine for my trading.
There is either a support level or a resistance level to trade into. And you are either in a momentum, trending environment, or you are in a trading range environment.
The market tells me when it is time to exit. That is not something I think a trader should tell the market.
Bull trap: A bull trap would be something like when the markets flush out of a trading range and people get a little bullish on the false breakouts. then, when they start to come back toward the range, they tend to create little vacuums as traders who were fooled by the false breakout start to rush to close their positions. Experienced traders can be very aggressive on those types of trades.
It's those times where you have a good feel for the market and it is giving you those great opportunities that you make the bulk of your profits.
A traders, we all tend to see what we want to see in the markets.
Monetary goals are the most harmful thing a trader can do to their trading account.
The best thing you can do is to keep positioning yourself in the right environment, and when the opportunity presents itself, you need to be able to recognize it and get teed up to hit it big.
Think of it like a tennis game. You keep the ball in play. then, if your opponent makes an error or is drawn off the court wide, that is when you go in and hit the winner. You can't force your opponent to make that error. You can only position yourself to be ready when it happens and make that killer shot.
Setting monetary goals is totally inappropriate. I think a better thing to do would be to set goals for yourself to not make unforced errors. Keep yourself consistent and do not make spontaneous trades outside of your rules just because you think you should be in the market. make consistency in your decisions the goal, not the money. If you do that, the money will follow.
Serge Berger:
I will size a position much larger on a Tuesday, Wednesday or Thursday than I would on a Monday or Friday simply because of the number of false signals I tend to get on Mondays and Fridays.
The more I stick to my rules and do not focus on the P&L aspect, the easier I find it to make money. the other thing is not to over-trade. There is such a propensity to over-trade. Most of the time, that will do more harm than good.
Alex Foster:
The majority of my trades are naked puts. I am typically look at first or second months out but I might go further out if the long-term set up is there. Otherwise, I will try to take smaller bites just to get about 1% a month and save the bigger trades for when I see a strong set-up across the board.
He typically sells ATM for high conviction trades. Otherwise, OTM to take the time value at a lower risk.
Two different scenarios where I'd wait for the contracts to expire: they are still trading close to the price of the ETF and teh trend is intact and, two, if it is far enough OTM and the trend is still going strong.
I am first looking at what the overall long-term trend is by looking at a three-year-long monthly chart with multiple moving averages and Williams %R. If I see that:
One: we are in a bullish trend
Two: We are likely to move out of oversold conditions
Three: We have got the short-term moving averages above the longer-term
That would lead me to form an underlying thesis that over the coming months - with six months being the upper limit of that time horizon - the underlying asset is going to be higher than it is currently.
So I wait for the right opportunity where the shorter-term moving average - 10d, 20d or 50d if trading on a daily basis - are moving in the right direction.
Once I see that, i might go in the money on a naked put, and that will give me a chance to ride it up. And even if it does not move up before expiration, I will usually take the assignment so I can get a dividend while I wait for it.
He does not take assignment if he is going to roll the naked put lower. He is more likely to go long and hold if P/e is low.
Derek Schimming:
A trade does not need to look perfect when I get in, but I need for it to look better as i'm holding it, and if it does not, then I should get out.
As traders, we do not have to know what is going to happen tomorrow, but we do have to anticipate what the possibilities are and be prepared to react when a move materializes.
One profitable by 15 peeps, you should never allow that trade to go negative.
Peter Brandt:
I look at weekly and monthly charts and I use daily charts only for market signaling.
I hate trend lined and do not like the idea of trading them. For me, a break of trend line does not mean anything.
I prefer patterns with horizontal boundaries, as opposed to diagonal or slanting ones.
I am looking for big patterns, and my goal is really simple: at the end of the year, when I look back over the forty or so markets I trade (futures), I want to be able to pick out maybe twenty patterns that are the best examples of pure, classical charting principles - meaning that they were clear, they broke cleanly, and they ran to their targets.
I want to then be able to look at my purchase and sale data and see that at least 50% of my trading was in these twenty patterns and that I caught at least 50% of each move.
Our emotions tend to tell us to do the wrong things at the wrong time and often cannot be trusted.
He makes 1% trades.
He strips out half of a position, sometimes within a week or two of taking the trade, and that gives him sustained power to ride out the other half of the position.
It is about making money, and you have proven that by backing off your time frame to look at weeklycharts and making only five or six trades each month, you can still make a good living while also reducing your level of stress.
I think the key to trading is in risk management, not necessarily in signal generation. Keeping losses short and letting profits run is an all-too-common adage in active trading, but it can be difficult to do.
Rob Wilson:
The key is profiling the market.
If we are in a trending market, I will use dynamic support or resistance (using MA and Bollinger bans). If I perceive that we are in a range bear market, i am far more likely to trade from static or horizontal support and resistance.
He pays himself management fees and do not reinvest those management fees into the account.
My advice to a struggling trader would be to commit to learning to do one thing well.
John Carter:
TradeTheMarkets.com and SimplerOptions.com
You cannot sit there and try to pull specific sums of money out of the market.
The best thing to do is go into a market knowing how much risk you are going to take and with no upside expectancy.
In trading, you do not want to be the master of all trades. You just want to pick a couple of niches and focus on them.
Treat every trade like a professional trader would do.
I would favor the idea of scaling out more often, taking some money out of a trade, locking in some stop loss, and then just letting the rest go and checking on it once a day.
Anne-Marie Baiynd:
Even today, once I understand something, I try to expand upon it, and every day I look at the market, I learn something new. I am always looking at it in a different way and trying not to box myself in, and that is why I never wanted to learn to trade from anyone else.
A good trading system has a few indicators that complement each other, so when those indicators conflict, there is a real reason why.
Sometimes I would take the trade in anticipation of the rollover, but after getting blown out of those a few times, I learned to wait for confirmation before getting in.
It is important to size up the playing field, realize where your skill level actually is, and then try to find a mentor or someone who knows what they are doing to help walk you through.
Jeff White:
You do not want to be a one-trick pony. the market is not going to reward the same strategy forever.
Those that pick their spots and wait for the market conditions that best suit their style are going to have much greater success.
For me, it is all about finding a way to stay in my good trades longer. I am very good at cutting losses, but letting winners run is the part of teh discipline equation that I have a hard time with. To get better at that, I try to scale out of winning positions so I can satisfy the urge to book some profits but also stay involved in the trade if the move should continue.
Patrick Hemminger:
dirtyarbitrage.com
Two of the basic tenets of being a successful longer-term trader are, number one, realizing that markets have changed and, number two, being flexible enough to evolve accordingly.
I look at Bollinger bands not from a reversion perspective but from a momentum perspective.
Don Miller:
DonMillerBlog.com DonMillerEducation.com
In order to survive, jellyfish have to adapt. They have to be flexible, they have to eat wherever they're thrown into the ocean, and they can't provide self-momentum, so they've got to go with the flow.
It is not about us, it is not about our egos, and it is not about what we think ought to happen. it is about identifying and understanding what really is happening and aligning ourselves with that.
I am making sure that while I am chopping down tress in the forest, the forest is not burning down.
Charles German:
CharlesGerman.com
Systematic trader
You can use a reversal approach, where you are always long or short, a breakout approach, a momentum approach, or a combination of approaches.
I think the key is having a portfolio of markets so that, when these are doing poorly, these five are doing great, and these four aren't doing anything.
You want stop loss to be dynamic and adjust to market conditions.
If a trade starts to move and then immediately reverses, I just get out. Then I will wait for it to start the move again. once a trade is in and it hasn't hit your stop, you let it go.
Tim Bourquin thinks that one of the toughest things for newer traders to do is to take the stop loss and then be ready to take that exact same trade a day later, or ten minutes later, if the same signal approaches.
Whipsaw is part of trend following. Even when you get whipsawed ten times, though, if you have one good trend, it makes up for all of those small losses, because you are taking big wins and small losses.
Andrew Menaker:
AndrewMenaker.com Hedgechatter.com
The biggest winners are in the discretionary camp. In other words, it is harder to become a successful discretionary trader, but once somebody does, they tend to outperform the automated system traders.
Like in poker, where the real edge lies is in reading the table, being able to bluff, and reading other people's bluffs. i think markets are the exact same way.
In trading, it is all about the exits, right ? It is not really the entries that determine how much money you make - or lose, for that matter. It's about the exits.
Brian Lund:
BClund.com
I want to see some good action setting up on the smaller time frame chart that basically syncs up with the time frame on the larger swing chart.
if a stock moves up really fast and spikes out of a resistance level. To me, those are the moves that often give up and end up turning around.
The general rule that I follow is to never look at my P&L_at least not too closely.
When I am in a trade, I never look at how much I am up or down dollar-wise in that trade. I always look and see what the charts are saying, because the market does not care if you're up $100 or down $100.
Trading is one of the most counter-intuitive things that you can do. Everything we've ever been taught goes against a proper trading mindset.
Michael Toma:
I want to put myself in the state of mind where it's not about money; it's about implementing my trade plans.
Maybe I am a little neurotic about it, but I actually have penalties, and sometimes I have to go on simulation the next trading day if I've broken certain rules the day before.
In addition to my trading plan and my monthly assessments, I create a development plan every year.
The computers come in and probe an area below what retail traders consider support and then reverse back. That makes the retail guys get scared and cover their positions, and then the quant guys can ride the wave up.
February 23, 2020
This book is basically a more contemporary version of Schwager's Market Wizards interview series. Most of the traders in the book are average retail participants now, I wouldn't call them "World's Most Successful" as all of them are *if you don't mind me* "nobodies" (in comparison with traders interviewed by Schwager such as Ed Seykota, Paul T. Jones, Van K. Tharp or Mark Minervini). Albeit some of them have worked on Wall Street as a financial analyst, a hedge fund manager or a proprietary firm trader prior to trading for themselves. Most of them have a unique beginning. And they have a common similarity, that is - they are all profitable traders trading for their own for a living now.
Like most trading books of a similar nature, you will not find any secrets or Holy Grails to trading. But the only common trait for success in this business will never change - self mastery, risk and money management, a simply strategy to follow, discipline to follow the plan, patience to sit through ups and downs.
Like most trading books of a similar nature, you will not find any secrets or Holy Grails to trading. But the only common trait for success in this business will never change - self mastery, risk and money management, a simply strategy to follow, discipline to follow the plan, patience to sit through ups and downs.
March 10, 2022
I was a bit skeptical about reading this book. I read some interviewing books in the past (not related to trading) and it was a kind of every chapter was disconnected from the other.
But I gave it a try and it was completely different than I thought! It is a REALLY good book. I learned a lot from every chapter. Different point of view for each interview helped me to understand my approach to the market better and, most important, helps me to make a few important changes to my trading strategies.
Highly recommended!
But I gave it a try and it was completely different than I thought! It is a REALLY good book. I learned a lot from every chapter. Different point of view for each interview helped me to understand my approach to the market better and, most important, helps me to make a few important changes to my trading strategies.
Highly recommended!
July 8, 2014
I really loved this book and learned so many interesting things. It features interviews with a cross-section of traders who all trade different methodologies, timeframes, markets etc. I found myself constantly looking further information up and have definitely been enriched by this book.
This book would be equally great for beginners and experienced traders - there is honestly something from everyone. Trading can be a lonely business so learning and hearing about the success of others is very motivating.
I highly recommend this book - also particularly as it was printed in 2013 so it is suited to modern markets.
This book would be equally great for beginners and experienced traders - there is honestly something from everyone. Trading can be a lonely business so learning and hearing about the success of others is very motivating.
I highly recommend this book - also particularly as it was printed in 2013 so it is suited to modern markets.
March 1, 2017
I only read the answers of traders to one question - how to cut the learning curve for newbie traders. Most of the book describes each interviewed trader's psychology, history, how he came to the market, and his strategy.
It is just like "chat with traders" youtube channel - except in the text form. Plus it is similar to "market wizards" series.
It is just like "chat with traders" youtube channel - except in the text form. Plus it is similar to "market wizards" series.
July 17, 2014
Excellent book. Very practical information from actual professional traders in an easy to comprehend format.
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