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In this special episode of Truth About FX, Walter is joined by a colleague and a professional fund trader, Denis Switalski. They dig into the psychology of trading and how it differs for everyone, and support and resistance and how that reflects your life. Denis also shares his story of how he got the attention of three major private funds and his journey as a protrader.
You will also get the chance to a catch a glimpse of his most talked-about trading method among retail traders and how psychology plays a critical role in his success.
Download (Duration: 52:30 / 60.0 MB)
In This Episode:
01:29 – critical to success
04:10 – bias thinking
06:52 – systematic and discretionary
10:05 – mistake to browse
13:02 – feedback
16:22 – commission and activity
19:22 – raw behavior
22:32 – drawdown to solve
25:02 – same trade but different
28:06 – location
31:58 – universal concept
34:02 – chart popularity
37:27 – financially immature
39:49 – be prepared
41:42 – time consuming
45:20 – be skeptic
47:01 – infinite risk
48:47 – patience
51:10 – a little world
Best advice: be a naked trader [Click To Tweet].
Be patient and build your own system [Click To Tweet].
Success occurs when opportunity meets preparation
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Announcer: Sometimes, forex trading can be a wild and wooly place to be but, forex trading doesn’t have to be the bad lands for your partner. Instead, hunker down and bend your ear. You will be burning the breeze in no time here at the Truth About FX Podcast.
Walter: Welcome! It’s Walter and today we have a very interesting trader, Denis Switalski, who trades very similar to the way that I do. But, beyond that, I think that Denis has some really interesting things to say around the psychology of trading.
We are going to talk about the psychology of trading and how it differs, how what we want to do as traders is not always something that’s going to be the most profitable for us. Denis is also going to talk about support and resistance in the world and in the trading world in our charts and how that reflects throughout life.
He is also going to talk about how he got the attention of three private funds. Denis, today, is now a protrader and he’s going to talk a little bit about how that happened for him.
He’s also going to say a little bit about why he doesn’t listen to the comments that he gets from retail traders when they are talking about his method of trading. And, he’s going to show you little bit about the psychology of trading, the way that he does, and why this is so critical to his success. So, welcome to the podcast, Denis. It’s great to have your here.
Denis: Hi, Walter. Thank you. Happy to be here.
Walter: So, tell us a little bit about your background. How did you find yourself in the trading world?
Denis: It’s a good question. In the first step, I was an IT guy, just an IT developer. I had some experiences in IT security and I’m still right now a pen tester. My job is to test the security of the application in the network and just like that.
One day, I wanted to focus on the trading. What was the financial markets and I wanted to see if it’s possible to earn money, really, despite of the all the scam and the fake advertisements we see on the web. I’ve started with my IT background to see if I could be profitable just to code some EA and some robots.
I quickly saw that it’s not possible so I began my trading journey to become profitable as a discretionary trade. During the first few months, it was very hard because there is too many trading system and one day I was lucky enough to see your website.
I subscribed to your personal trading program. It was in 2011 or 2012, I think, and since this moment I did some major improvement in my trading. I focused on my backtest and I focused on my psychology test so now, I’m a profitable trader and a protrader. I’m earning money from the financial market.
Walter: Yeah, that’s excellent. I just have a quick question just to rewind here a bit. You mentioned that you were looking at getting into automated systems, what was your experience there? Why did you decide that it was not going to work for you: the automated style of trading?
Denis: As an experienced IT guy, I was a pen tester. I have some good skills in programming and development. I think all IT guys have special psychology called bias thinking that we can trade. It’s easier to trade fully automatically but I think, it’s wrong.
I tested a lot of systems and I saw that even if I change every criteria of my system, every factors always the same will occur. Some program will be profitable during some good period of time. Sometime, during few years but at one moment big drawdown will occur and, psychologically, it’s too hard to endure.
That was my way to decide that it’s not possible to have a full automatic system and my guess was if I’m not able to trade the market manually, I will not be able to trade it automatically. That’s how I’ve decided trading automatically the market is not possible for me. In fact, over the long run I think, it’s not possible at all. That’s my standpoint.
Walter: Right. That’s interesting because so many people talk about discretionary trading in the same way. They say it may be possible to — especially the people that are robot proponents or EA proponents, –they’ll tell you that it might be able to make some profit as a discretionary trader but eventually it will catch up to you and you will lose so, that’s an interesting take.
Denis: I think EA and robot can be profitable but just for a matter of time. It’s really interesting because now we have some website like “myfxbook” where you can monitor a lot of robots and EA. You can see, it’s about four or five years that I’m in the trading market and I saw so many trading system, automatic trading system failing. It’s really easy to see on this kind of website.
To be honest, I don’t know any automatic program which is profitable over the long run. It’s very important to say it over the long run. It can be profitable on short-term, I think. It’s just my standpoint. That is why in the presentation in June, I will show some interesting things. I will show how to create a good trading system with systematic criteria and discretionary criteria. It’s really important to have both to be profitable.
Walter: Oh, that’s interesting! Why have you decided that you need both criteria the systematic and the discretionary? What brought you to that point?
Denis: As a trader, we always want to have the simplest trading system as possible so I think it’s pretty usual to think that we want trading system the most systematic as possible. Because, when you are trading, you are afraid to make some errors and you don’t want to fail.
There is a crucial event when you’re trading as a professional and this is the drawdowns. During the drawdown period, you have to endure some tough period but if you are able to endure it you can go on and you can be profitable over the long run.
So, I wanted to have… In fact, it would be perfect to have a 100% systematic trading system but — as I will explain during the presentation — for me, my personal standpoint is it’s not possible.
I decided to have the maximum percent of systematic side in this trading system and I injected some discretionary criteria which is essentially based, mainly based on the price context, the price structure — I will describe in the presentation. I think, it’s balanced. It’s very important to see, to understand in your trading system balance between the systematic side and the discretionary side. Hoping that the systematic side is the major, is the main component.
Walter: That’s interesting. You would describe your trading currently as purely naked trading, I suppose. Are you using any indicators or you are just using price action?
Denis: No. As you taught me, no. I don’t use any indicator. I’m pure naked trader. I’m only using the raw information on the market. It’s just the price action and with this price action information, I really like to use the time too because there is two information.
If you just clean up your chart, you would see just these two, raw and main information, the price and the time. Using them together, it can show a lot of opportunities and interesting thing with a major edge on the market, I think so, no. I’m a pure naked trader without any indicator.
Walter: Right. And, when you first started trading, were you using indicators in the beginning? Was that something that you were looking to use in your trading?
Denis: When I started my trading journey, before knowing you, I made a mistake to browse regularly the Forex Factory Forum. I don’t know if you know it but it’s really a famous forum, Forex Factory. You can Google it and you’ll see plenty of trading system. Of course, bad trading system, majority. You will see some — it’s impossible to describe it — some really awkward indicator and it’s just a mess.
It’s just so complicated to understand the indicators can work and it’s really important to understand that every indicator will be based on the raw information which is the price action.
MACD, RSI, whatever the indicator you use, it’s just derivative from the raw information, the price action. So, instead of using some derivative from the raw information, you can use it from the beginning and just looking at your chart properly just to see the price action, the good one.
Walter: Yeah. You don’t really need to massage the data, do you? Like you say, you get all the data in the actual price actions. There’s no real reason to massage it. Now, Denis, what’s interesting to me about you is you’ve forged your own path as trader.
You’ve taken it to this place where first you started offering your trades on some of these signal sites where subscribers can subscribe to your trades and then they can follow you. You’re on Signal Start and, what’s the other one you’re on?
Denis: Simple Trader and Signal Start for the retailer customers.
Walter: Yeah, Simple Trader and Signal Start. Obviously, I get a lot of comments from traders who say, “Oh, you don’t trade often enough” or whatever. “There’s never enough trades,” or something like that. What’s interesting to me about you — I’m looking right now, as we’re recording this. I’m looking at your stats on Signal Start and most traders would say, “I’ll take that 60.2% gain with a 5.7% drawdown.” Even if I only trade, even if I do only trade one or two times a month or whatever it is — I don’t know what you’re averaging now. Do you average about 2 trades a month or something like that?
Denis: Yeah, something like that. It’s really interesting what you’ve said because I’ve met the exact same remarks from the retail side. In my presentation in June, I will show some experience feedback to the audience.
To explain that there’s a lot of difference between the retail and the institutional side of the markets because I’m a swing trader just like you, Walter. I like high-probability set-ups so this kind of setup don’t bring very often, even on the forward chart and daily chart.
I spent a lot of time to wait, just to see some high-probability setups. A lot of customers, especially retail customers, can send me emails saying, “Hey, you don’t trade too often. Why don’t you trade right now?” And I explain it. Always, as usual, I’m in formal chart. I don’t like the setups and I will not until I see a perfect setup for me, for my trading system. I know that’s a lot of people.
I think, common psychology called biases the overtrading and a lot of customer and a lot of traders want activity trading and I think they can be wrong because we have time, and I’ll show this in the presentation. The time is really an important. A very efficient weapon as a retail trader because we can enter and we can exit the market when we want.
Walter: That’s a great point. I think you’ve touched on a really important point in terms of the psychology of the trader. A lot of people… In fact, this week a trader told me that he had defined in a formula, the perfect trading system which is based on essentially how many trades it takes. Everyone can have whatever they want and that’s the great thing about trading.
If you’re trading very often, that also means you’re paying a lot of commissions. If you’re taking small little profits, that means you’re paying a lot of commissions in terms of the amount of the commissions and how they eat into your profits that it becomes a significant factor on slippage.
All that stuff you have to worry about when you’re taking these quick little short trades. That’s one of the things I like about your trading. Obviously, it’s very similar to the way I trade but you’ve got a very analytical mind from your background and the way you are approaching this.
I’m looking forward to hearing how it sounds like you’re going to talk about the event is how we have advantages as retail traders and how you can use those advantages in your tradings. That’s pretty exciting.
Denis: To add up to what you’ve said, a lot of people like activity and they don’t understand if you’re not trading right now because there can be some opportunities on the charts. The retail trading business relies on the commission and on the activity.
With experiences, I had some feedback when I wanted to open some managed accounts and a lot of broker will tell you that it’s not even my system. It’s profitable, it’s swing trading system but, it’s not interesting.
Why? Because I just take in a range one, two, three trades per month and it’s not interesting for this kind of broker. In fact, it’s the major retail broker in the retail market. Even the foundation of the retail market ask the trader to trade often. It’s interesting to see this.
Walter: Yeah, absolutely. My first job as a trader… Essentially, my boss told me — this was a retail managed account — and he basically told me, point blank — this is right before I quit. He said it doesn’t really matter if you make money, you just need to keep trading because they were making money obviously on every transaction so, that was their whole goal. It was to turn the account. It’s crazy.
To be fair, though, some traders when they get into this, they feel like they need to be doing something. I think you’ve touched on this too. It’s like this: if you come from a job where you are working all day long, you were working 8, 9 , 10 hours a day and then all of a sudden you quit that job and now you’re supposed to be a trader.
Well, how can you be a trader if you only take two trades a month? You’re not doing anything, right. That’s the other mindset is that you should be busy doing something. What do you do with your time? Do you do a lot of backtesting? How do you approach it?
Denis: Exactly you say, it’s to be busy. A lot of people don’t understand that we’re not busy but, in fact, we are in front of our chart. We are looking for some profitable setups, high-probability setups. When there are no setups, we don’t trade. The fact that we don’t trade when it’s not necessary is as important as when you trade when you see some setups.
As you’ve said before, being profitable is very, very important. A very strong step is to backtest a lot your system. By backtesting your system, you’ll see the statistics of your system. You’ll build confidence in your system and I think it’s the most important for me.
You’ll see by just typing your space bar under Forex Tester, you’ll see the market moves and you’ll see how it’s moving, what is the raw behaviour of financial market. You’ll see that we can have some catalyst. Some entry helper, like Kangaroo Tail and Big Shadow — because I tried, just like you, Kangaroo Tails and Big Shadows.
With backtesting, you’ll see that the price, there is some hotspot. There are some very accurate occasion and we can see there is some price structure. I’ll introduce the price structure in my presentation in June. It’s in fact the context of the price to see if the Kangaroo Tail or the Big Shadow is very interesting and if it’s a high-probability setup.
It’s just like you, Walter, when you trade something like the last keys. It’s, for me, a price structure. It’s, for me, a very important context to trade because it’s just a consolidation retest of the price. This is just an example.
For me, the backtest brought me that very interesting context to all side of the market. It’s very important to backtest and after, there are lots of other step before being profitable and the main is the psychological aspect, of course. It’s very important to backtest to build confidence and to make a trading system your own.
This concept, I will go in details during the presentation in June too because for me, it’s very important. It’s crucial to have your own system because I think that you cannot be profitable over the long run if you just accept, if you just use another trader’s system. When you are in a tough period of time during the drawdowns, you have to stick with your system. If it’s not coming from you, you’ll tend to… You’re very likely to turn your system.
It’s very important. I’ll introduce this concept during the presentation. For me, it’s important to build more than your system. You have to build your own world, your own trading environment, your own trading workflow. Even after you see that you’re profitable, you are to build an environment where you’re very cool and you’re feeling good because you can have a lot of pressure.
Just like we’ve said before, some email clients — we just spoke about some clients — asking why we don’t trade as often as they want but it’s important to see that it’s just one email. When we you are public and you have lots of customers, you can have plenty of emails. Even if you don’t want that to happen, it can put a pressure on your shoulders and it can be very important to trend and you have the drawdown to solve. That is an important thing.
Very crucial for me is to build a trading environment while you’re very strong and you can endure the pressure, the drawdowns, because when you’re in trouble during drawdown period. During some tough period of your trading system, you’re already alone in front of your charts.
You can’t say to the trader — where the original trading system is coming from — you can’t say, “Hey, your system is not working.” No, this is your system. You have to make your own system because — I’ll explain in the presentation in June too — it’s very important to understand that, as human being, that we have some psychological bias. It’s easier as a human being to accept something that is coming from us and not from outside.
That’s why, I think it’s very mandatory to make your own system, your own standpoint, your own belief on the market because it’s coming from you and you can have confidence in it. There is no really trading system, there are only traders. For example, Walter, we are trading a very similar system and — thanks to you — but I think it’s two different system because we are two different traders.
Even if we are similar and there are similar approach in the trading point of view, it’s different because even if we are trading the same concept, same trading with Kangaroo Tail and Big Shadow, we can see that our track record is very different.
We can ask a lot of people to trade the same system, you’ll see that their track record will be different. For me, it’s my personal standpoint and again, I think that there are no trading system just traders.
Walter: Why do you think that is? Is it because, essentially, we all see the market through different filters, through different experiences? Is that basically how you view it?
Denis: Yeah. I think it’s all about experiences, a personal experience. For example, for just one single trade exactly the same trade for two different traders, the experience can be different because the emotion, the feelings can be different. The state of the mind, the mindset can be different.
I think it’s very relative to the trader and its feelings, its impressions. It’s all about psychological bias as we have told before. I think, and I said before, the Kangaroo Tail and Big Shadow can just be catalyst but the most important — I think you’ll agree — is the context. We will not trade these setups every round the charts and the interpretation of good location can change between traders, I think too. So, it’s very related to own beliefs on the market, I think.
Walter: It’s interesting that you say that. I’ve come to believe that this is one of the reasons why it’s so difficult to create an EA or an automated system that trades in a way that a discretionary trader does because I think there is that information that you take in when you look at the charts, Denis.
You know when it’s a good setup and when it’s not. It’s really, really difficult, I think to one: to find what that is and two to code it up and create it, put it in sort of an EA and add it to a robot. That’s quite difficult.
Denis: I fully agree.
Walter: Do you agree? That’s interesting. I think that’s why a lot of mechanical traders or automated traders, they see something on the charts and they’ll go, “Okay, I’m going to code that up.” And then, when they do, it doesn’t really work out that well. I think it’s because they’re missing that context that they see in the charts. It’s not translating.
Denis: Exactly. I think for me, it’s a battle between the systematic and the discretionary standpoint from the trading system. Instead of just using one side, just systematic with the full automatic trading system or full discretionary system, we have to use both altogether to build the best possible advantageous form for the trading system.
As for the trading Kangaroo Tails and Big Shadows, we inject some systematic criteria because we enter the market only with a beautiful Kangaroo Tails inside within the bottom third of the Kangaroo Tail with the Big Shadow. You’ll think, maybe the previous 4, 5 candles.
For me, this is the systematic side of my trading system. How’s yours? The discretionary side is, what is the location? I’m looking for some location on the chart. If a Big Shadow will print on this location,I’ll be sure to take it. This is for me the discretionary side and we have to find a balance between these two sides of the trading system.
Walter: Yeah, it makes sense. Just curious, his is something that I have thought a lot about and I’m just wondering what your take is on this. Why do you think it is so critical to take the swing trades at this spots on the chart? Why is it so critical that you take for example, you take a Big Shadow trade in this spot on the chart? Why do you think that is?
Denis: By backtesting, we can see when you start to backtest a trading system. I think, when I started, this approach will only be 100% systematic way of seeing the market so every Big Shadow, every Kangaroo Tail I took them and I saw that. It’s not very profitable, it’s not very interesting. It’s not high-probability setups.
By backtesting, you see the market moving. You see different price structures, the consolidation, the bearish flags. You can see a lot of things. When you look properly at the charts during the backtest, you can see that this price pattern are very, very profitable, are very high-probability.
To win, to see the price reaching you defend before because the location of the price is very, very effective and the lot of price structure when you can see it’s very profitable. It’s very likely to see the price rise or to drop so, to answer our question, it’s by backtesting. We can see that thing, some very accurate setups on very accurate location can give a lot of profitable trading.
Walter: Obviously, I agree. I’ve seen the same but it’s interesting because some people will tell you, they’ll say, “That maybe the case but it’s just short term edge and it’s going to evaporate.” Those sort of things. What do you say when people say that?
This is something that people will say, they’ll say, “Look, there’s no such thing as high-probability trade. This support and resistance is just something that you see. You’re making it up in your mind”. So, what do you say to that? How do you deal with that? It’s like anything, people they are going trade their beliefs.
Denis: It’s a good question. I can answer that if we can backtest since… So, my forex tester I have something like, I think now 15 years of data of price action. When you backtest, you can see that your trading system work right now. It worked 10, 15, or 20 years ago and it can show you that the concept of support and resistance was there.
Before I started the trading journey, I think that the support and resistance concept will be all there. Why? Because we can wonder what is support and resistance and it’s just my personal standpoint. Again, that is related to human of psychology and for me the support and resistance is a universal concept that you can find not only on the financial market but on all the information related to the price.
You can take all of the markets, maybe the — what do you call it? — the house markets and you can see all even some web search like the price of some, I don’t know.Some toys, some objects during the time, we can see that the price is always moving in the same way.
There are always consolidation after aggressive moves so it’s not relating to the financial market. I think it’s something very universal. It’s something human and can be awkward when I say but you can see this kind of pattern on the equity curves of trading system.
I know it’s very weird but, in fact, I think the support and resistance… For example, the concept of trendline or price structure, you can find it, you can see it. For example, for my trading system, my equity curve, I can draw some trendline. I can draw some resistance. I know it because they are from me.
In 2016, the previous year, I was not flat but not very, very rising trading gain so, for me, the reply is it’s a concept of universal. It will be there over the long run. It was already there before I was born. It will be there after I die, I think.
Walter: Right. It’s an interesting thing. It reminds me of Robert Prechter who wrote a book on the Elliott Wave. He was talking about how he sees Elliott Waves everywhere and he said that even his popularity, he could chart his popularity as a trader and a guru or whatever and he said that he would see Elliot Waves as if he were to do that as well.
It’s interesting. I think you can see it everywhere when you look at it. I think that is one of the nice things about seeing the market through this filter. If I see a chart in the newspaper and it’s not a candlestick chart, it’s just sort of a line chart or something, I can still make my mind up on that market. It’s great.
Denis: Exactly. You can take every chart right into the price. Few months ago, I was looking at the Bitcoin market and this is exactly the same. It’s a very volatile market and it’s not very mature right now but you can draw some trend lines. You can draw support and resistance and I think you can just trade it as usual but it’s instant. Now we can see this kind of concept everywhere when you see a chart. It’s very funny.
Walter: Absolutely. One of the other interesting thing that I’ve found out about you, Denis, is you’ve dipped your toe into the institutional world as you got some of these positions now . Where some of these private funds are seeking right that at least 3 of them that I know of that you are are working for.
So, can you talk a little bit about how that process got started for you? Because, this is something that is a goal for a lot of traders, just to get to the point where people are essentially paying them to trade. Can you talk a little bit of how that started for you?
Denis: I’ll speak about it in the presentation in June too because I think it’s important knowing how we can become a pro and how we can become an institutional trader. In fact, few years ago, I decided to become public. In fact, it was to test me.
I have a website , “bitoucher.com”. I decided to put my track record on my facebook and it’s free public. Everybody can see my trades in real-time and with the risk exposure. If some customers don’t want to subscribe to my signal, they can monitor my facebook account and they can have my signal for free.
The aim was to be public and to test me because I wanted to see, to feel the pressure of being public and to see what can happen. It’s not in few days that you can meet institutional risk manager but with the time with my website, with my public track record, with some public forums too, I received regular emails. Some of them I’ll show them during my presentation in June because some of them are funny.
You can receive emails like you’re dumb, your system doesn’t work anymore because I was in a drawdown period or maybe I had two trades, two failing trades in a row so, I lost a 4% of an account. You can receive this kind of email from I think some financially immature trader.
And, you can receive email from a risk manager saying, “We like your trading style. You’re under monitoring. We monitor you since few months and we’ll see if you are able to be profitable over the long run”. Over the time, long process not short term, you have to wait. You have to be patient and, even right now, I‘m currently building some partnership and I’ll see in one year if it’s interesting or not for the Risk Manager, for the other trader, for the institutional contact to see if it’s very interesting.
It’s something building over the long run. It can take a lot of time. Some trial period can last at least one year. It was coming for me from my emails, from my exposition on internet. It’s very interesting because you can meet a lot of people, you can share knowledge with a lot of people.
As I said, some emails can be very weird because I receive a lot of email like, “Hey, I’ve got a great idea. I want to build the best, the dream team trader and I think you can be a part of it.” This kind of email I received several of them and it’s always funny for me because, in fact, everybody has the same idea but the people who have the opportunity the possibilities to build this kind of team or just to have some funds to allocate you. It’s pretty rare.
With the time, you’ll meet people very interesting people and you’ll have some opportunities so, the key is to be patient. There is a famous quote saying that success occurs when opportunity meets preparation so just be prepared, just wait. Trade with your trading system which you feel good with and just wait for opportunities to knock on your door and you’ll be successful if you’re a profitable trader. If you have a good and if you efficient trading system.
Walter: Absolutely. Thinking about that, all those people have been contacting you and so few of them had led to anything. Do you think that’s because when you’re spending a lot of time in the retail forex world that attracts a certain type of trader or investor or something like that? If you want to get, grab the attention of the institutional world, it’s because they are not necessarily always dabbling in the retail world. Is that why you think that is or is there some other reason?
Denis: I plan to speak about it during the presentation, again. For me, the retail and the institutional side are very, very different. On the retail side of the market, the retail customer I have on the Simple Trader and signalstart.com, for example. You can have, as a trader, as a professional trader, you can have have a lot of education to do. You have to explain a lot of things to the traders or to the customers because they don’t know a lot of things.It can be surprising.
I received so many emails from traders who are saying that they’ve lost a lot of money because they were not able to trade properly without proper risk and money management. It’s very different. The retail side, it’s very time consuming. You can have a lot of contacts from retail side saying, “Oh, your system is just a bullshit. It’s a short term. You’ll fail.”
The opposite side, you have the institutional market and it’s very, very different. In fact, institutional side with my institutional partners you have — I will not say no contact at all but you have some emails, 1 email every 1,2,3 months sometimes. You can see that the trading process is very mature because the accounts are synced with my public accounts.
There are some native security process. We can’t risk more than 2,3 ,4 % per trade and just this concept of static risk percentage per trade in the retail side, you have to explain to the customers to show that it’s, again, my personal standpoint. I think it’s very efficient to risk on the static risk per trade but, on the retail side, you can chat with traders can call them traders. Trading without any stop loss.
You go to the institutional side, it’s just unbelievable to trade without any stop loss and the trading process is very mature so, it’s very two different worlds. The retail side can be very time consuming. By being public like I did, it’s interesting because it’s just like meeting from these two different worlds. I think so. I think I’m going to share them during the presentation because some of them are very funny but I met very immature and very mature financially speaking people and traders.
Walter: That’s interesting. S,o is there anything that in the institutional world with the private funds and anything about that experience in working with some of this people that surprise you?
Denis: For my current partners, no. In fact, it’s not very surprising. Maybe, as I said the contacts which are not very often, but it’s good that they can take some news time to time. Or, you can have some emails during the tough period during the Brexit saying I can’t trade because it’s too dangerous or we can’t change the risk exposure per trade for some partners. It’s 3% risk per trade. Me, as usual, it’s 2% per trade of risk.
I had some surprises with the institutional actors because in fact they accepted and I checked as I could. To be honest, it’s very important when you received incoming emails saying, “I’m an institutional Risk Manager. I find your track record interesting or maybe we could work together.” You have to check yourself if it’s not scam or if it is not bullshit because you know this whole industry, there’s just so many scam. You have to skeptic all of the time.
It’s very important to take on your side, to see if the contact, if the institution, is not just a scam because I had this kind of email. I was surprised to see some very proper institutional Risk Manager to accept traders with very risky system for me or using some kind of grid system and accepting some traders without any stop loss.
For me, this is just insane. This is just crazy but I was surprised to see even on the institutional side of the market that sometimes some Risk Manager are not able to see coming a margin-call from a grid or no-stop-loss trading system.
Walter: I agree. I’ve tested some of those before. Those things that… It’s always the point is, if you don’t have stop loss you’re, essentially, allowing yourself infinite risk and it just doesn’t make sense. Doesn’t it?
Even some institutions will talk about how using stop losses will reduce the profitability of their system and they spread their risks across as many markets and that’s how they handle the risk and all that stuff. To me, I still can’t, I really can’t justify having infinite risk on any trade even if it is balanced out by other markets. It just seems crazy.
Denis: Exactly. Just like you, I can’t understand even if it’s institutional, it’s professional investor. I can’t understand. This is just like poker with an all-in. You just cannot enter the market hoping that the price will go in your favor because when you enter the market you have to expect always the worst. Just not using stop loss, or using maybe some kind of edging but it’s under the world for me. It can be very, very tricky to being able to use it properly.
But without stop loss and without edging I repeat it’s very hard for me to have a good skills of edging. It’s, for me, just insane. There are some professional investor investing in this kind of trading system which is insane for me.
Walter: It’s crazy. This has been really good. Sounds like you have a lot of great stuff planned for the event. I’m looking forward to your presentation and seeing you there. Is there anything that you want to sort of leave listeners with? Let’s say, somebody listening here is new to trading and they haven’t really found their way?
Is there anything that you would suggest to traders who are new to this and are trying to make this work? What’s something that you can say, “Look, try this. Look at it this way. This is something that has helped me.”
Denis: There is some key, I think. The first one for me is the patience. You don’t have to rush your trading. You don’t have to put a pressure on you to become profitable. If you want to be successful, take your time and with the time, always say the same but the time is very important. With the time, you’ll be successful if you take the time to backtest. If you the take the time to improve yourself.
So, the first advice I think, is take your time. Be patient. It will come if you put enough energy in your trading to become profitable. If you are the person listening, is a naked trader, is part of the naked community, I say in fact that he’s lucky because it’s very good place and it’s the right place to become profitable.
I was very lucky when I met you, Walter, on your website, your personal trading program because when I see with all my feedback and experiences, all the scam, all the bullshit on the internet, I think I was really lucky to find your website because, outside, there’s very great. And , I think I tell you very regularly the naked trader community is very, very great because it’s very cool.
There are a lot of good traders, very optimistic, very positive and without any scam, without any bullshit. We can see lot of track records.
So, my advice: first, be patient. The second, be a naked trader. Be part of this community because if you go outside this naked trader community, you’ll see plenty, plenty of scams, of bullshit, of crooks. You can go to Forex Factory to Donna Forex. A lot of trading crooks are just bullshit.
This community is very great, and again I thank you, Walter, to create this and to maintain it because it’s just like a little world where it’s very exceptional compared to the rest of the internet and the retail forex scam we’re used to see.
So, first advice, be patient. Second advice, be a naked trader. Always stay in the community and you’ll learn a lot of thing. Be patient. Build your own system because one day you’ll have to be an independent thinker. One day, you’ll have to keep the link with your mentor because, as I said before, when you’re in trouble you’ll always learning from review chart in your system. I think the main advice is be patient. That’s it.
Walter: Excellent, Denis! Thank you so much. We’re really looking forward to your presentation at the event. Thank you so much for your time and thanks for all that you do for the traders and I’m really looking forward to it. Thanks so much, Denis. Will see you soon.
Denis: Me, too. Thank you.
Walter: Take care.
CLICK HERE TO MEET DENIS AT THE LONDON CONFERENCE
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