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Interview with Nial Fuller
** Trading Plan ** Q. We could spend days comparing technical and fundamental analysis, and many traders tend to favour one and dismiss the other – do you prefer one over the other? Do you use a combination of both? Briefly, why? I trade purely off a raw price chart, because I subscribe to the theory that price knows all. I certainly maintain awareness of news and upcoming data releases because these events drive price action, but I never base a trade decision on news itself. Only a fool would ignore news and data completely because as a professional, you learn to harness setups forming around news and data releases which often works in your favor, but for the new comer, it’s usually a trap and markets often behave in a contrarian, irrational manner, despite what the fundamentals are saying. Q. Do you have written trading plan detailing your approach? How would you describe it (e.g. long/short, detailed/broad, complete/work in progress)? I have several paragraphs in my trading plan which are more of a business plan than a hard fast set of trading rules. I don’t believe there is a “holy grail” mechanical system or single system or pattern in existence that works profitably over the long run, so my trading plan allows for flexibility and allows for my entry and exit criteria to evolve over time. The capital management remains constant. The plan itself focuses primarily on capital management , specifically, how much I risk per trade, the risk reward potential of a trade, rules for pyramiding into a winning position, and of course a simple checklist of rules for every trade signal Intend to place. Q. On a scale of 1 (simple) – 10 (complex), how would you rate your trading approach(es)? Do you have any comments on the simplicity or otherwise of them? I have 3 components in my approach - defining the trend, identifying the trends dynamics (ever changing key levels) and then calculating the risk reward components of a potential setup. In my opinion , it’s simple if you want it to be simple. It’s like the guy who won’t apply for a high paying job, he doesn’t believe he is worth the high salary, it’s a subconscious enigma, simplifying for me means believing your approach is simple and sticking with it. Q. Many traders acknowledge that having a trading plan is a key to success – it is essential. Yet, most people don’t know where to start to begin writing one, even though they understand the basics of trading. What would be your advice to someone stuck in this situation? Most of my experience with trading plans is that they are promoted and advertised as the grail of success, I whole heartedly agree. I disagree that a trading plan that just talks about trading setups will make you money. In reality, a trading plan should be a guide on how you are going to manage your capital, and what the basic idea of your entry and exit method will be. I prefer to have a checklist rather than a list of rules, and if I have more boxes ticked that agree with the plan than those that are not ticked, I will take the trade and implement my plans capital management model. Nobody is going to tell you how to trade, but they will help you understand the markets and there are many out there that will help you put a plan together. The method for entry is one you must keep simple and research for yourself. Read more from Nial in the Trading Mindset section ... Return to the Index of Interviews ...
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