Welcome Traders! Happy to see you back with our Trade Secrets.
This month, it’s our pleasure to bring to you another successful Leeloo trader, David.
In his interview with Leeloo, David tells us how he self-taught, his strategies, risk management and shares five helpful tips to consistent trading.
Interview With Leeloo Trader: David
How long have you been trading?
I started trading Forex in 2011. In 2016, I moved to U.S. equities, then shortly after started trading options. In May 2019, I started learning futures and I spent most of the summer with a trading simulator to get the feel of it.
How did you get into trading?
It was always an interest of mine, but it wasn’t until one day, when I saw someone at work looking at some charts. I asked them what they were doing and they said “Trading”. I’d never met a trader until then, so I asked them to teach me.
They provided me with some websites to use to learn on my own. I spent the whole weekend learning everything from these sites and when I came back into work on Monday, I asked for more learning material – and that’s how it all started!
What’s your favorite thing about trading?
The opportunities it gives to individuals.
How do you manage your trading psychology?
Tough question. In my opinion, trading is 20% technical/skill and 80% psychology. Reading charts, looking for patterns, executing and managing trades is simple once you learn the skill. But the mental battle is certainly where all the pain comes from in trading.
If I have a winning day, I usually treat my family to something nice. If I have three losing trades in a row, I know myself (after 1000s of hours of trading), that I will keep losing if I trade. I know I need to stop, back away and then do some sim/back trading on the losing day, to learn from my mistakes.
If things in your life are hectic outside of trading, then your trading performance will reflect that. You need to be in a good mindset and a good environment to fight the neverending battle with your mind.
Do you have a specific strategy you’d like to share?
I LOVE playing breakout strategies, however, on products like ES, it’s usually tricky. So instead I will look for a retest of the breakout. I also love hammers on continuation plays.
What makes you a consistent trader?
Always have a stop, never average down. I know what I’m willing to risk on each trade and I know how much I’m willing to risk on that day. If I reach that limit, I’m done for the day. Guess what, the market is open every day, Monday to Friday, so come back and try again!
What advice for other traders do you have to help them focus on consistency?
- ALWAYS have your stop and never widen it. If you’re wrong on the trade, you are wrong
- Futures are highly leveraged. Going all-in on the big trade is a one-way ticket to your max drawdown
- Log EVERY trade in a journal. All of them. Write down the entries, exits, screenshots, but most importantly, why you took the trade. Write down what you were thinking before, while, and after the trade. Do this for one month, then review every single note. You’ll learn what your weaknesses are and what you need to focus on to improve
- Don’t focus on the money. Focus on the trade. If the trade is good, the money will come
- During your downtime, don’t watch TV, go practice in a trading simulator
How do you manage risk in your account to stay successful?
I know what my stop is and what I am willing to risk on each trade. It’s the same for every trade. I make sure I stay under my daily drawdown by a fair amount. I only look for ‘A’ quality trade setups where I know I have an edge; this helps me reduce my risk because I have the probabilities on my side.
What’s your top tip to other traders to manage risk?
Very simple. Know how much you’re willing to lose. Before the COVID-19 market turmoil, ES daily range was very little. You could, for example, use a three-point stop and maybe two contracts. When volatility hits, you need to widen those stops. Now you could use a six-point stop with one contract.
If that’s not enough, then switch to 5MES contracts and use a 20-point stop. You’re still risking the same amount, looking for the same types of trades that you were before, but now you’re able to trade in volatile markets.
What’s the best piece of trading advice you’ve ever received?
Write down your trading plan and follow it. Write down what criteria are needed for you to take a trade. Print it out, put it on your desk and make sure that, before you go into any trade, all the boxes are ticked.
Do you have a business that you’d love to tell our community about?
Absolutely! Reallifetrading.com – all the trading education you’ll ever need – for free!
Why do you work with Leeloo?
I like the longevity account. I also like how your systems are easy to integrate with my trading platform, Sierra Charts.
What have you enjoyed the most about Leeloo?
What took me by surprise and what I certainly enjoy is how helpful the team at Leeloo is. They’re extremely nice and quick to answer any questions I have.
Is there anything that you’d just love for the trading community to know about you?
Most of my equity and FX trades are automated. While I’ve been manually trading ES for the past several months, I’ve been slowly building this work to be fully automated!
Is there anything you’d like our community to know about your trading community?
Finding a good community can be tricky. There are lots out there, most are probably bad. They only focus on getting your money or it’s all about bragging about who made the most money. The community I’m in is pretty much the opposite. We help other traders improve their skills, support each other, share ideas and support each other.
What’s your top trading tip?
Don't be afraid to demo/sim trade. This is where you practice your skill. When I’m done trading for the day, I’ll pick a random day in the past and replay that in sim. During the weekend, I replay the Monday open from two weeks prior and practice while trading live – just like sports athletes!
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