Trading Interview with Chris Perruna

Interview with Chris Perruna

"The hard part would have to do with each individual actually following the rules without emotion when money is on the line."

** 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 use a combination of both technical and fundamental analysis. I use several computerized screeners to narrow down a list of potential buys each nigh based on fundamental criteria. From there, I highlight the best opportunities based on technical analysis which I perform myself by viewing the charts after the close every evening. Fundamental analysis tells me what may qualify as a possible buy and technical analysis tells me when and where to buy.

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 would call it a plan that continuously evolves. I currently trade stocks that are trending higher that are catching support near the 200 day moving averages or ones that are near a support level within 15% on a new 52-week high. I am in the beginning stages of writing a complete mechanical system that will trade based on several moving averages and an ADX indicator. Back testing looks good to this point but I haven’t traded it for real.

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 would rate my system closer to 1 as it is very simple to follow and teach. The hard part (or the 10) would have to do with each individual actually following the rules without emotion when money is on the line.

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?

Start trading what you think your system may be and then analyze what you are doing by going back and studying each step in the process you took for a certain number of trades. Write notes while making an actual trade and develop that into an outline and then a plan.

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