Mark Williams Interview
Veteran member of T2W and site moderator, Mark Williams talked about the past, present and future of his trading career in this exclusive T2W interview.
How long have you been trading for?
Holding shares for 9 years, but only trading seriously for the last 5 years.
How did you first get involved in trading?
My parents were offered Norwich Union shares when they floated, and I brought £150 worth.
Do you remember your first trades?
Yes. I still have nightmares about them now! The strategy was to buy anything that was a takeover target. Very risky.
What were your first few months like? Were you profitable initially?
Mixed results. The profitable trades were more by luck than judgment.
Has your trading style changed radically from when you first started?
Completely. I now have a strategy!
How did you learn to trade?
I started by attending a taster session by Chris Manning, and practicing the basics.
Are you a self-taught trader, or did another trader teach you worthwhile lessons?
I have been taught by TheBlindSquirrel, who gave me the basics, and then later by Alan Farley. TheBlindSquirrel taught me the basics of technical analysis and Alan Farley moved my knowledge on further with the introduction of strategy building techniques and money management.
Trading – In Practice
What is your basic approach in analyzing and trading the markets?
My whole approach is based around technical analysis. Buying when price bounces off a support level or selling when price bounces of a resistance level.
How would you define your trading style?
How often do you make a trade?
1-3 trades a day.
Do you prefer to trade long or short and why?
Short. I was going long throughout the whole of the bear run when I didn't understand what I was doing, so now I have the chance to short shares - I can get my own back on them. I don't mind going long, but I prefer to short generally. The other benefit of shorting is that generally prices fall faster than they rise
Is there anything you can single out as the most important element in deciding to put on a trade?
2:1 reward-to-risk ratio. I must have at least 2 times more potential profit than loss. This makes sure that I only take trades that are worth my time taking. Although 2:1 reward to risk ratio is my minimum, I generally prefer to use 3:1 whenever possible.
Do you use trading systems?
"Trading Systems" is an area of trading that I have looked into. Trading system designing is something that I can see myself doing in the future.
How much do you risk on any single trade?
2% of my trading capital. 2% is high but I'm a fairly defensive trader, I will only trade when I'm 100% confident and then go in big.
Do you use chart patterns such as reversals and breakouts?
I use most chart patterns, as they are all variations on the theory of support, resistance and trendlines. My favourite patterns are double tops and double bottoms. I have found these to be very powerful and profitable.
Do you use Level 2 data to trade?
No. I understand how to use Level 2, but it is a very intensive style of trading and I prefer to take things easy.
Do you decide where you are getting out before you get in on a trade?
All the time. It's the only way to define risk for a trade.
How do you decide when to take profits?
When the risk outweighs the reward at any point.
Is slippage/bad fills a problem in your trading?
It is a problem, but I have come to expect it, and it is part of my risk calculation.
Do you use the opinions of other traders in making trading decisions, or do you operate completely solo?
Completely solo. At the end of the day, it's my money that I work hard for, and not someone else's. Having said that, I'm always open to ideas but then I will go and do my own research.
Trading – The Theory
What are the trading rules you live by?
Only take trades with at least a 2:1 Reward / Risk ratio.
Never risk more than 2% on any single trade.
Do you believe chart reading can be used for successful trading?
I know it can.
What are your thoughts about using fundamental analysis as an input in trading?
I can't use fundamental analysis. I know people who do use it profitably and if you can then great, but it's not for me.
Do you ever use contrary opinion as an aid to trading?
Sometimes, but my risk has to be very low for me to use it.
How important is having a sound risk/money-management philosophy?
Without sound money management you will get wiped out, no matter how good your trading is. Poor money management is the main reason why new traders fail.