Frequently Asked Questions

Can you teach me how to trade?

No. And in fact no one can. Having a mentor is a benefit but it doesn’t solve your internal mindset and work ethic. Trading is actually pretty easy if you think of it scientifically. You create a hypothesis, you test this hypothesis, you act on this hypothesis with limited risk to turn it into a viable theory. If it works and makes money on a big sample size then fantastic, use it. The variance comes in when you add self doubt, fear, greed and anger into the equation. This is when you start to lose money. Master a disciplined strategy and you’ve mastered your emotions. Learning this is about reading a load, trying things out, and at the end of the day taking calculated risk.

What do you think of Binary Options?

See post here. You can trade real options with the London Capital Group. Vanilla options are more complicated than Binaries, however you have a better chance of winning as they aren’t a totally fraudulent product…

What strategy do you use?

Wyckoff + COT data and low volume rejections on volume profile. Follow my ideas and it is pretty easy to pick up.

I don’t want to use a market making broker. What do you suggest?

Firstly, you need to know the set up of brokers and how they make money. They run an A book and a B book (sometimes a C book). An A book trader has their trades sent by the broker to the liquidity provider (LMAX or CFH for example) who are connected to other liquidity providers and prime brokers. These institutions make up the pricing in the market. They are required since FX is decentralised. If you are an A book trader it means that you are profitable. The broker then takes some volume/spread markup as commission. Brokers also run a B book. This means that they hedge your trade internally. This is most profitable for retail brokers since 80-90% of retail traders lose money. People like to blame the broker when they lose and say that the broker is running their stop or is manipulating the market. This is not true, you just have your stop where everyone else has it and the market goes for these areas of liquidity. Stop blaming the broker and take responsibility (in some cases there is cause for concern as the broker may be running MT4 Virtual Dealer which can increase latency and prevent limit orders being hit).

If you want to totally avoid this hybrid model, look at using an STP or ECN broker. FX Pro’s CTrader account offers this.

Which site do you use for charting?

I use TradingView. Really intuitive and ‘pretty’. You can use it as a journal tool as well as once you have uploaded a chart, you cannot delete it. You also have access to economic data via Quandl, which provides you almost anything that you can think of.

I did an interview with the guys from Two Blokes Trade who produce a weekly podcast that you should check out.

Here’s the interview.