1. How and when did you first become interested in the market?
I have had three different career changes in my life. Tradesman until 30, Uni to be an IT Specialist until 55 and then back to Uni. to become a High School Teacher.
Throughout my life I always had an interest in the share market and approaching retirement I was looking for a new career that would not be full time and where I would not be tied to one location (i.e. I could travel).
2. And then what happened
Teaching the ASX School Share Market Game to students I became aware of options trading. It sounded tricky to me so after searching the internet over two years looking to improve my knowledge and to find what was really available, stock market course provider TradersCircle stood out as one that looked promising.
The initial training offered by TradersCircle where if after the first day you decided it was not for you, you could resign from the course and receive a full refund. Being unsure this looked like a good bet to me.
3. How have you been able to learn and educate yourself about the markets?
After completing the initial course I continued to read and research a variety of sources which all helped give me a broader understanding of the technical and fundamental factors that drive the share market and options trading prices.
I completed the Fast Track Programs about eight months after the initial Trading Mastery program. I found this helped cement my understanding of Options Trading.
4. Did you make mistakes when first starting out?
I did. When the paper trading challenge started and because I could not use PULSE at work even on my own laptop, plus various work commitments I did only one paper trade because I wanted to have winning trades.
In hindsight I should have been better organised and did a lot more trades. Having winning or losing trades was not I believe the aim of the exercise.
It would have been nice to win but the experience of placing trades and checking regularly to see if you needed to get out (stop loss) or stay in and make a profit is what it is all about.
5. Would you define yourself as a discretionary trader, a mechanical trader or a combination of both?
I am certainly a discretionary trader. In six months’ time I hope to be more a mechanical trader. I still paper trade a couple of options every fortnight just to be very familiar with the various trading strategies the Trading Mastery and Fast Track programs have taught me.
6. Can you give us a brief overview of your trading style?
At the present moment I have only picked two trades that did not comes as recommendations. Both were successful. I followed the rules taught to me by TradersCircle.
Following the rules is only part of it. To trade the option it must fit all the rules and if it does I also have to agree that other factors are in favour of the trade. Sometimes it is the fundamentals that disagree with technical analysis or just a gut feeling that this trade should not be entered into.
This is how I select the two paper trades a fortnight and it works for me.
7. Is there any one trade (win or loss) that had a profound effect on your development as a trader? If so, what did you learn from the trade?
About the third or fourth recommendation that was made was a bullish call on STO. At that time I was looking at that stock and thought a bear call was the way to go because even though the technical analysis said a bullish move the fundamentals and world oil scene were saying the opposite.
When the recommendation was made, I, through my inexperience thought bearish. I went with the recommendation and STO fell that fast there was no chance of recovering the trade.
It taught me two important lessons. Don’t follow other peoples’ advice if it disagrees with what you believe and secondly how quickly the market can turn a trade into a 100% loss.
8. Can you tell us about your best and worst trades?
The worse trade was STO. The best trade was CBA. It was sitting around $92 dollar and looking bearish. I thought it would get to $88. It dropped to be just above $90 but by the time late in the afternoon when I got a chance to check it, it had gone back up to $91.
I still could have made a profit but I stuck to what I believed and was watching my stop loss limit as it climbed back towards $92 dollars. I held my nerve and three days later sold out at just above $88. I made a nice profit but within a week it was $82. I could have made a huge profit if I had waited a bit longer but if the market turned quickly as it did with STO I could have made a loss.
I have learnt not to be greedy and take the profits when they are there and be happy.
9. Would you classify yourself as a short-term or long term trader? What advice would you offer to people getting started as traders?
I would classify myself as a short term trader. The more knowledgeable you are the better the decisions you can make. If you are using a new strategy, paper trade often and talk to the advisers during this period until you feel comfortable with the new strategy.
Talk to the advisers if you are unsure of your trade and if it is going down the gurgler the sooner you talk to the advisors the better. There is little that can be done if the trade is almost worthless. Stick to your rules and be consistent. Never get greedy.
10. What markets do you trade and which markets do you prefer? Do you have a favourite, and why?
I follow the options in the ASX and predominately the companies in the XJO. I look for a bullish or bearish trade and if they match my view of the market then trade if they fit all the rules.
11. What makes your trading style different from others? What sets you apart from other traders?
I am in no rush to make a trade. I follow a set of rules that defines what I will trade and if the company matches it then it is a possible trade. I look at what other companies in that sector are doing, how the market is performing overall and take into account financial news from around the world.
It sounds like a lot but I keep a current overview of financial news and markets. If the technical analysis confirms a trade and from my overview of financial news and markets raises no red flags then I will trade.
12. Do you have a favourite rule?
When in a trade I follow my two golden rules. Rule 1. Set a stop loss of 20%. If I get to the point where I am at a 20% loss I will get out. Rule 2. If I am at a 20-30% profit I get out. These strategies limit my losses and ensure I get out with a profit within a short time period of about a two to seven days.
13. Has trading effect your lifestyle?
Not as yet. I can certainly now see the potential for that to happen whereas 17 months ago when I stated out it was more of a fuzzy idea than the clear set of rules I have now. As I said earlier I will be semi-retired next year and am looking forward to the challenge of applying my knowledge and changing my life style.
14. What books, seminars and courses have you read or attended and which would you recommend?
I have attended two of the courses run by Carlo Castellano of stock market course provider TradersCircle. The first course the Trading Mastery Program explained the fundamental of option trading and gave you strategies to use and methods to follow with a good understanding of your risks you are taking with your money.
The Fast Track Program built on the first course and covered more strategies available in options trading to increase the variety of trades available and thus give you more choices in trading options depending on what the market is doing. I would highly recommend these courses to anyone thinking of trading options.
I have watched videos on options trading from other sources and learnt that there is a lot of conflicting information out there on the WEB.
15. What does the future hold for you?
I will be semi-retired in 2016 and am looking forward to having the time to look for trades. At the present moment I cannot use PULSE at work even on my own laptop. This will give me the flexibility I am now missing to push ahead and become a successful trader.
Next year will prove that what I have learnt so far can be converted into a successful new career as an options trader.